A Pervasive Hesitance In California
The San Gabriel Valley Tribune reports from California. “‘In terms of activity, we continue to see a slowdown throughout California’ said Robert A. Kleinhenz, CAR’s deputy chief economist. ‘We had initially said sales would fall 7 percent this year, but we revised that to 14 percent,’ Kleinhenz said. ‘The subprime story has had an adverse impact on the market outlook by consumers. We’ve had all these stories about weaknesses in the economy…and that’s had a bad hit on the psychology of the economy and the housing market.’”
“Norman Cox, regional VP for Coldwell Banker Town & Country in Covina, agreed psychology is playing a big part in the housing market’s performance.”
“‘The market is edgy,’ he said. ‘This is the third down-cycle I’ve been through, and each time we go through this you take a look and see what’s disturbing the market more than anything else, and that’s uncertainty.’”
“Ten communities in the San Gabriel Valley and closely surrounding areas registered year-over-year declines in their median price in the month of May, according to DataQuick.”
“The declines were led by El Monte, which saw its median price drop 10.1 percent to $444,500. Other cities with price drops included San Dimas (down 9.1 percent), (Covina (down 8 percent) and Claremont (down 6.6 percent).”
The Record.net. “In the Central Valley, which in the boom years saw one of the highest inflationary rates in the state and now is seeing one of the highest deflation rates. In the Valley, sales in the same period plummeted nearly 35 percent and the median sales price fell 6.7 percent to $331,580…according to the California Association of Realtors.”
“Jerry Abbott, president of Coldwell Banker Grupe, Stockton, said in this super competitive market, prime homes priced below the bottom of the market are still selling, a few even with multiple offers. But buyers know they are in a good position these days, he said, and they’re tough.”
“‘They are definitely shopping before they buy,’ he said. ‘They are easily looking at at least 10 homes before they buy. That’s high.’”
From KPBS TV. “Home sales in San Diego continue to plummet and one local economist says this means a turnaround in the real estate market will likely take longer than expected. The latest numbers show that home sales fell 16 percent in San Diego last month compared to a year ago.”
“Marney Cox is an economist with the San Diego Association of Governments. He says the new information changes predictions about the housing market.”
“Cox: ‘What this new data shows is that home sales weakness has broached over into the existing home sales, and that’s actually the largest part of the market. That represents 84 percent of sales that takes place each year. New sales represent only about 16 percent. So this new data says there’s potential further downsliding than what we’ve seen so far.’”
“Cox says originally real estate watchers believed the lagging housing market might bottom out this summer when home buying season is in full bloom. But the fact that existing home sales are falling means that the softness is likely to continue into 2008.”
“Cox: ‘If it remains relatively slow, the air is let out slowly. We’ll probably see another 5, maybe 8 percent drop in the medium price of homes. If things come crashing down, meaning we actually go into recession, unemployment rates rise, there’s a lot of job losses in the San Diego area. We’re likely to see a 15 to 20 percent drop in home prices.’”
The Daily Pilot. “”Orange County should see a drop in new residents over the next few years due to a slow-growing economy, according to Chapman University researchers.”
“A problem for the county, according to researcher James Doti and Esmael Adibi, was the housing market, which was slowing due to high mortgage rates and a decrease in the population, between the ages of 25 and 49, that usually bought homes. Adibi said the average Orange County family paid 49.8% of its gross income on mortgage payments last year, a record amount.”
The Desert Sun. “Leslie Appleton-Young, chief economist for the California Association of Realtors, said sales volumes in the Riverside and San Bernardino markets should remain significantly below levels of peak years, which is what local real estate professionals anticipated.”
“‘Any time you’re coming off a record-breaking market, there’s always kind of a market readjustment,’ said Sam Schenkl, executive officer of the Palm Springs Association of Realtors. ‘When you take the last three or four years out of the picture, this is a good market.’”
“Schenkl said the difference in today’s market is that investors, speculative buyers and ‘flippers’ largely have exited.”
“‘We thought going into the year that we’d be somewhere around 4,000 housing starts,’ said Fred Bell, executive director of the Building Industry Association’s Desert Chapter. ‘We’re probably now forecasting we’ll end up doing somewhere below 3,000 for the year. That’s based on first quarter numbers, which were off about 75 percent from the previous year.’”
“Buyers and sellers also have watched nervously as home prices have fluctuated, real estate agents said. Exuberance lingering from the boom years in 2004 and 2005 has meant a reluctance on the part of some sellers to lower prices, real estate agents said, which in turn has caused many prospective buyers to balk.”
“‘People were increasing their prices when they should have been coming down to meet the buyer,’ said Carlo Lombardelli, a Realtor who has weathered numerous ups and downs in the valley’s real estate market over the past 18 years. ‘It’s taken 14 or 15 months for things to settle’ for buyers on the sideline to wait to see prices make the appropriate moves and adjust downward.’”
“Berkemer said home sales volume likely will need to increase before prices do in the months ahead. With some 8,896 homes on the market in mid-May, plenty of incentives from new-home builders and relatively low interest rates, Berkemer said it’s a good time for buyers.”
“Whether home buyers can overcome a pervasive hesitance remains to be seen. ‘Every market is influenced by perception, and sometimes perception is reality,’ Berkemer said.”
The Press Enterprise. “Brian Weide, a director of the Inland Empire Chapter of the California Association of Mortgage Brokers, said too often people who stretched painfully to buy homes with 100 percent financing wrongly assumed they could refinance in a couple years.”
“Weide said homeowners may find they can’t refinance because they have poor credit or because stagnant or falling housing prices have left them with no equity to borrow against.”
“‘A big thing is that many of the subprime programs we had are no longer available,’ Weide said, because failing mortgages have made lenders more cautious.”
“‘There are no loans out there anymore for people with low FICO scores,’ said Robert Kapel, a certified consumer credit counselor in Riverside.”
The Sacramento Bee. “Residential finance companies fueled the winning streak in recent years as they flocked to South Placer County’s booming housing market and drove demand for office space. But from that peak, net absorption plunged to a seven-year low in 2006, as the housing boom ended and the companies that supported it downsized or, in some cases, went dark.”
“‘They’ve almost all cut back. Some put their space on the market, subleased or closed,’ said Jon Walker, a senior VP at Grubb & Ellis’ Roseville office.”
“One broker predicted that well over a third of available office space could go unleased and that a rebound could take years. ‘It’s frightening,’ said Elaine Hartin, a broker with 17 years of experience in Roseville.”
The Bakersfield Californian. “A steep but cyclical decline in real estate advertising has forced The Bakersfield Californian to eliminate 40 positions, company CEO Richard Beene announced Tuesday.”
“Between 2004 and 2006, The Californian enjoyed strong profits largely because of an ‘exploding real estate market,’ Beene said. But recently, real estate agents, home builders and others in the industry have scaled back their advertising, he said.”
“Lennar Corp. has dominated the Bakersfield homebuilding market since it bought local builder Coleman Homes in the spring of 2003.”
“At its peak two years ago, the company took out 1,042 permits to build homes in Bakersfield, according to a report by Ticor Title. Last year, Lennar took out 500 building permits through May. This year, the company pulled 176 during the same time period. In April, the company took out just one.”
“Around town, homebuilders have started offering concessions and price cuts to move homes, said Jairo Duenas, an agent (in) Bakersfield who specializes in new home sales.”
“‘The newer homes are probably easier to sell now with all the incentives they’re giving now,’ Duenas said.”
“Some builders have been offering $10,000 to help with closing costs, as well as providing free appliances and mini-blinds for a new home, Duenas said. Others are slashing prices. Some builders are offering $15,000 to $20,000 price reductions on $250,000 to $280,000 homes, Duenas said.”
The Voice of San Diego. “Lennar Corp., the second-largest U.S. homebuilder, posted its earnings for the second quarter, a net loss of $244.2 million in the three months ending May 30. That breaks down to nearly $3 million per day, calculates Peter Viles, at the LA Times’ real estate blog.”
“In September, we found that a local Lennar office had switched its break room coffee from Starbucks to Folgers, and that catered lunches had become once-a-month pizza day in light of the uncertain market. Now, nearly a year later, we wonder if even Folgers has become a distant memory.”
‘Beazer Homes USA Inc. said on Wednesday it fired its chief accounting officer Michael Rand due to violations of the company’s ethics policy stemming from attempts to destroy documents.’
‘ Beazer is the subject of several lawsuits as well as a U.S. Attorney’s investigation into practices related to its mortgage-origination business.’
Arthur Anderson???
More local pain - title company closing 3 local offices
http://www.bakersfield.com/hourly_news/story/175523.html
Hey crispy&cole,
Can’t resist…since your a local…and all real estate is loco…
“Lennar Corp…“At its peak two years ago, the company took out 1,042 permits to build homes in Bakersfield,…In April, the company took out just one.”
1,042 units to ….in 24 months…1
Bakersfield…2007,
Oil, carrots and pesticide dust & 1 new Lennar built house.
Hey crispy&cole,
Can’t resist…since your a local…and all real estate is loco…
…“Lennar Corp…“At its peak two years ago, the company took out 1,042 permits to build homes in Bakersfield,…In April, the company took out just one.”
1,042 units to ….in 24 months…1
Bakersfield…2007,
Oil, carrots and pesticide dust & 1 new Lennar built house.
Was out in Tehachapi for a wedding on Saturday. On the road through town we got stopped at THE red light. On one corner is a “First American Title” and on the opposite corner is “Chicago Title”.
Since when does a town of 11,000 people need 2 title companies.. heck, there could have been more.
[Does search]
Yep.. look, there are 4.
http://www.tehachapi.com/chamber/members/cw_1235.htm
11,000 people = ~4,000 households. Moving once every 7 years should equal about 570 house sales a year. Divided by 4 companies = 140 per company, per year. Less than 3 a week.
Shouldn’t they be doing that per day, per agent?
Seems to me that Tehachapi should need 1 or 2 title agents, not 4 title companies.
Darrell
- You don’t know how to ‘Think Big’. How can a cow town / agriculture center grow bigger if it does not think big at every level?
Right! If you think in pennies, you get pennies. If you think in dollars……
Actually, we have 5 stop lights. You didn’t get out much on your visit. And we now have a Starbucks. The population of the whole valley (not just the city limits) is over 30,000 (including the 6,000 at the prison). That correction made, you are right otherwise. Too many title companies, too many real estate agents, too many contractors. In the last four years house prices have tripled. Everyone seemed to be putting up spec houses, especially real estate agents/contractors. This, in a town where the main employers are the prison, cement company, and wind generator farms. Everyone else drives down the hill or tries to come up with some kind of home based business (like home building?). But there’s hope - a glut of overpriced homes on the market and nothing - nothing - is moving. Maybe the plethora of ugly for sale signs will keep the LA, Ventura and SLO crowd from cashing in and moving up here for the gorgeous views and picturesque deer.
Actually, we have 5 stop lights. You didn’t get out much on your visit. And we now have a Starbucks. The population of the whole valley (not just the city limits) is over 30,000 (including the 6,000 at the prison). That correction made, you are right otherwise. Too many title companies, too many real estate agents, too many contractors. In the last four years house prices have tripled. Everyone seemed to be putting up spec houses, especially real estate agents/contractors. This, in a town where the main employers are the prison, cement company, and wind generator farms. Everyone else drives down the hill or tries to come up with some kind of home based business (like home building?). But there’s hope - a glut of overpriced homes on the market and nothing - nothing - is moving. Maybe the plethora of ugly for sale signs will keep the LA, Ventura and SLO crowd from cashing in and moving up here for the gorgeous views and picturesque deer
“Lennar Corp., the second-largest U.S. homebuilder, posted its earnings for the second quarter, a net loss of $244.2 million in the three months ending May 30. That breaks down to nearly $3 million per day, calculates Peter Viles”
can we expect lennar to start leasing out these fine homes to bitter renters? thats all i can think of when i read this stat.
also my new phone number is ryland’s old number. i get a lot of calls from angry trades people leaving messages. i really liked the threatening one saying he’s taking me to small claims.
i really liked the threatening one saying he’s taking me to small claims.
And did you call him back and tell him “You don’t have the guts to take me to small claims, punk!”
LOL
“Well, do ya punk, DO YA?”
“‘They are definitely shopping before they buy,’ he said. ‘They are easily looking at at least 10 homes before they buy. That’s high.’”
Hey buddy, with prices so high one should wait two years and then look at twenty houses before they even think about buying. We are talking big bucks here in CA.
No doubt, the fact these people are obviously desperate to purchase a house and have to look now is their only saving grace. If they can wait and are looking now….here’s your sign.
10 homes high?!?
My wife and I looked at 30+… with no intention of buying for a long time. This was just to get used to the Realtor ™ tactics and see what kind of homes were in which areas…
Too many people buying now will go underwater.
I love that quote “volumes must increase before prices do.”
Yep… Funny the LA Times doesn’t get that…
Got popcorn?
Neil
I thought looking at ten homes was a ridiculous stat too. I looked at about 40 the first time I bought. My ex was an agent and his first client viewed 60 homes with him, and THEN made an offer on the FIRST one he saw.
Now, that’s more like it!
The above was posted by a different Incredulous.
do we have evil clones here then?
Make sure that you make the salesman drive you around. Save your gas.
Bubblefucious say:
Man who get in Realtors’ car sure to be taken for a ride.
Touche
Your so right Neil, Being an agent I was allways amazed at buyers looking at 5-7 homes and buying. It is nice instant money for the agent, but crazy! I allways encourae my buyers to pick an area they like and look at all that is available there and wait for a new one to come up that was a better deal than what they had seen. It takes me little time to pop clients through homes and I would rather them wait and get a good deal that they are happy with. Happy clients lead to easy referral money in the future. My exception to this has been the flippers from the bay area coming to speculate on overpriced RE, they are just asking to get hosed so I aim to please.
Looking at less than all the homes in your chosen area just seems scarry to me. People have come to treat RE as if it is a game of Monopoly, ITS NOT! This is serious business and all these FB that thought different will soon learn that lesson the hard way.
Right, the economic principal here is that information is a scarce resource and therefore has value. Spending 20 minutes looking at a house at an implied opportunity cost of $10 or so generally makes economic sense up to a relatively high number of homes in some target area.
10 homes is a joke… I looked at 30 homes before I rented.
Optimal choice theory says you should look at log(N) the number of houses in your target neighborhood, then choose the first house that’s better than any you’ve seen.
No, no, no. What’s “high” is the people who are still paying anywhere close to bubble-peak prices.
A drop of 50% or more before buyers in any number return to the market. Only a fool buys when prices are falling and the “botton” is years away. California always was first in many ways.
“Some builders have been offering $10,000 to help with closing costs”
Hmm..just what kind of or size loan are you taking, when you need $10,000 for closing costs?
The builder might be offering to pay points to buy down the interest rate. Two points (2%) of a $300k loan is $6k. It adds up fast.
Angela
Buy downs are very expensive and you get far less than you would expect…How about 5.5 points to buy down a fixed rate loan by 1.25%….
500K loan by the way….
Buy Down = Reem Job
good point, but I don’t think that knocking 1/2 point off of the interest rate on a $300k loan, is going to help much in making the loan affordable or with qualifying.
“‘They are definitely shopping before they buy,’ he said. ‘They are easily looking at at least 10 homes before they buy. That’s high.’”
No - *you’re* high.
Exactly. Wow - I can’t believe someone would make a comment like that - even in a *good* market.
Before we bought our last house we looked at about 150 houses online, and about 30 in person. 10 is nothing.
I looked at more than 500 online, did all the legwork myself, arranged my own financing (30-year fixed, 6.125%), and said ‘adios!’ to the real estate agent. Saved myself thousand$.
I think I realize the real estate clerks marketing plans.
On the way up it is “fundamentals” and on the way down “psychology”.
Unfortunately, both are a lie!
It was psychology (mania) on the way up and epiphany on the way down.
Either real estate clerks are blindingly stupid or don’t have an ethical bone in their body.
“…you take a look and see what’s disturbing the market more than anything else, and that’s uncertainty.’”
No, it’s a growing certainty that prices will drop.
It’s a certainty that prices are dropping. Case-Shiller Index.
Fedex clerks, grocery clerks to RE Clerks… clerks are clerks. I would say both blindingly stupid and missing the ethic bone.
So we only “think” RE is overpriced….but it really isn’t.
IT’S A GREAT TIME TO BUY AND BESTOW THOUSANDS OF DOLLARS ON A RE PROFESSIONAL!!!!
The Chapman Univ and statement from Gary Watts are contradictory for the OC. I know I posted the answer Watts office gave me earlier. But it is here again to compare. Any comments welcomed. Like someone else also mentioned, I love really good CA stories. The juicier the better. Vindication for all of the years of ‘Why don’t you buy, look at how rich we are, etc” - and then now seeing it was smoke and mirrors (which is what I thought then).
Orange County should see a drop in new residents over the next few years due to a slow-growing economy, according to Chapman University researchers.”
From: Gary Watts [mailto:gary@impactre.com]
Sent: Friday, June 15, 2007 3:14 PM
To: ‘Donna’
Subject: RE: some questions on OC real estate going forward
Alan,
When I have time, I answer some of the more sincere emails and I find yours to be one of them. The first thing that I noticed is the 10 years you did not buy California real estate. It might have been because of what the San Francisco Examiner had forecasted in 1996: “a home is where a bad investment is!” That line may have kept you and others out of the housing market. Had you bought that $400,000 home, then sold in last year in California and moved to Albuquerque, you could have purchased at least 3 to 4 more homes, had no mortgage and more monthly income. I am happy that you did finally buy and that you love it there. In the future years, you should find that you made a great investment decision.
In California, the days of really big housing price run-ups are over for now and probably for quite a few years. However, despite what you read or hear in the media, the Bay Area and southern California are holding their own. Last month the Bay Area, even with declining sales, posted a new peak median sales price of $660,000 which represented a gain of 3.4% from May of last year. In southern California, even with declining sales, the median price rose 4.9% over the past 12 months to a new high of $505,000. Here in Orange County, our price was up but barely at 0.01% from last year. This is not bad when you consider all the media news about foreclosures, late payments, sub-prime collapse, etc. There are still so many buyers fence-sitting but I assume that a couple of more months of prices continuing to increase versus the same period last year, will get them back into real estate homeownership before interest rates begin to rise.
I am not naïve about the problem areas, especially the newer communities where a lot of building, exotic loans, and rising house payments are hurting buyers. When you look at the numbers, they are very small compared to all the homes, condos, mortgages that exist in this State. Today, the notices of default for the last quarter totaled 46,760. While that seems like a huge number, it represents only 0.008% of all mortgages in California – a number too small to effect or affect home prices in any meaningful way. Also, I should point out that only 11% of those “notices” actually end up as a foreclosure. The other 89% were successful is stopping the foreclosure by obtaining new financing or selling their home. By the way, last month 24 states saw a decline in their foreclosure starts. Maybe, just maybe things are near the end for those individuals who purchased a newer property near the beginning of 2005, with little or no money down, using the exotic loans. The good news is that when you measure those types of loans versus all mortgages in the U.S., they represent only ½ of 1% of all loans in the U.S.
I hope this clarifies some of your issues and in another year, we can once again compare notes and see how things are going. A year ago, many emailed me about the immediate Housing Collapse. Here it is a year later and despite what they have read in the media, most of the housing market is still in good shape.
Gary Watts
P.S. To address your other statement about people moving out of California, you are correct. Maricopa County in Arizona received 11,375 Californians in the past
year. Yet with all those departures – even to other states, the State of California and especially southern California still had positive population growth.
“Today, the notices of default for the last quarter totaled 46,760. While that seems like a huge number, it represents only 0.008% of all mortgages in California.”
If 46,760 is 0.008% of all mortgages in CA,then there are 100×46760/0.008 mortgages in CA = 584,500,000. Wow.
So the average Californian has 16 mortgages?
Or, the average Californian has 2 mortgages each on 8 houses?
If you count credit cards
I know you have an immigation problem - but 584 million? Where are you hiding all those people?
Yes OB, I saw that too. Clearly an error. He meant to say .8% I think. So nearly 1% of all loans in CA went into default last quarter. I suggest this is a huge number and it is growing. If it keeps up this trend, 4% of all loans in CA will go into default in 2007. That will have an impact he may not be able to quantify on any historical basis, because it has never happened.
I agree Jingle. The key that we here keep harping on is that the real economic downturn hasn’t even started yet. So what will the rate of NOD to foreclosures be when things really get ugly. Somehow I think it will be more of an exponential change than a linear one.
Just yesterday and today the MSM is acknowledging “worse than expected retail and consumer confidence reports”. So the downturn is just getting underway. Lots of pain ahead for many in this country I fear.
And then today the Dow rockets up? I really don’t understand the market lately.
The sub-prime meltdown, has been re-contained.
“…mortgages in CA = 584,500,000. Wow. ”
Ah yes, no speculation right???? Right????
You know you’re a professional “economist” when you’re too lazy to perform even the most perfunctory calculations before posting completely-pulled-out-of-your-ass “statistics” to the entire world.
Sad and true
Either he was mistaken or doesn’t know math. in this case, I fear it may be both.
Given the default rate will continue to rise for a while, it is probably we will see 200,000 defaulted mortgages in CA this year. Many of these will end up in Foreclosure. This is a staggering number.
The time machine argument is the last bastion of a scoundrel who is wrong with a broken forecasting model.
Not to mention the out of date and wrong foreclosure stats.
Good point, sunset beach. All of these ecomomists are basing their predictions on — if not plain old “gut feelings” — then models that are outdated and inapplicable. All of the old models were based on an assumption of responsible underwriting. But as we know, that aspect was totally absent during the housing boom. So all of the new assumptions based on old models are garbage in, garbage out.
– Judge Smales
“You’ll get nothing and like it!”
What’s with all the officers and deputies, in matters real estate and economics?
“‘There are no loans out there anymore for people with low FICO scores,’ said Robert Kapel, a certified consumer credit counselor in Riverside.”
Excuse me, Bob. There are loans for folks with low FICO - They only need to bring cash to the table to get the proper ratio’s.
cash? what’s that?
is that like that rare element called unobtainium?
Cash is something only renters have.
ROTFLMAO!
Cash is that rare element homoaners have when the mix a MEW with a HELOC. The element usually only lasts for 2 months. However, the half-life with residue (interest) is infinity!
Could you clarify that? I’m in an interesting situation — less than perfect credit (no mortgage default, foreclosure, BK, etc., but some big medical-bill lates thanks to a screwup with my wife’s Wells Fargo health insurance right before the complicated birth of our daughter — long story) but solid income (around $125K). We’ve been renting a good-priced condo ($1500 in Newport Beach) and saving some decent money.
My question, for anyone with mortgage experience, is this: Assuming I seek a loan well within my affordability envelope (i.e. total debt payments
hmm … last part of post got chopped off. Should finish like this:
…less than 25% of gross income) and bring a decent chunk of cash to the table, am I still going to get hosed on the interest rate?
I should also clarify that I’m not looking to buy for at least 18 months, and probably more, based on what happens as the subprime resets peak this fall.
you might want to establish a relationship (checking, savings, etc.) with a local bank in your area, then when it comes time to buy, speak with a VP in the mtge loan dept, explain your situation, and ask if they can do a portfolio loan with favorable terms. A portfolio loan is kept in-house at the bank, rather than being bundled up for resale.
I would write to the 3 big credit agencies including documentation of the insurance error, it should be corrected on your report within 3 months.
agree with HOZ, if you keeps at it, it will be corrected, I have been through this before, just make sure to prove your error, check which credit agency is reporting the late payments, put it in writing like HOZ mentioned and they have to respond within a certain amount of time, in my case 30 days.
btw, do not take “WE INVESTIGATED AND FOUND THAT YOU WERE LATE” answer, that is BS, ask for proof such as statements or whatever documentation in your case.
That’d be nice, except the “screwup” wasn’t the insurance company’s, it was mine — as in, I thought we were still insured when we weren’t. Oops. There went $20K.
18 months is plenty of time to rebuild credit. Make sure you have at least 3 open trade lines. How long ago were the lates, are they paid? You’re probably in better shape than you think.
Good comments above. I will add: continue making good payments on everything else. If the problem was limited to the medical situation, that can be explained. I assume most of the rest was OK. Plus, 18 months puts this further in the past.
At my bank, with 2 years history as a good customer (some deposits, maybe auto deposit paycheck and/or a credit card), and a branch managers recommendation, it would probably be approved. Add a 680 score and 20% down, and we can do stated income, at the usual prime A+ low rate and fees. There are a few banks like the one I am at here in Calif that keep all their loans and help customers.
FHA all the way, if you are full doc and you fit under the maximum loan amount.
Ajas, that is probably a good point. In a year or two, the prices should be in line with FHA maximum loan amounts. That is probably one measure (of many) of when we know we are close to bottom.
I’m one of those people who aren’t sweating the interest rates as much as many because we’re going FHA (full doc 780, 10% down with 6 mo earnings in savings). I don’t think the FHA folks have seen people like us in a while.
You’d need an earth scraper to peel the bodies off the street if that happened.
“In a year or two, the prices should be in line with FHA maximum loan amounts.”
“You’d need an earth scraper to peel the bodies off the street if that happened.”
LOL. Bring on the earth scraper. I’d love to see prices crater like that.
nearly impossible to qualify for an FHA loan if you can afford to buy full doc in southern california. unless you have a huge down payment. Max income you can make is under $80k for a single person with a limit of $400k for a condo. I went through the steps to only find this out at the end since my overtime pay put me way out of this range and couldnt qualify anymore. This is for LA County area.
FHA has no income caps that I’ve ever heard about.
travanx, you’re probably talking about fannie programs or something similar. They have the maximum loan amount, but also have a max income (like 140% of region’s median or so).
“A steep but cyclical decline in real estate advertising has forced The Bakersfield Californian to eliminate 40 positions, company CEO Richard Beene announced Tuesday.”
1/8th of a workforce gone, because of lack of real estate advertising.
I find it interesting that the CEO pinned it specifically on RE. Perhaps he’s saying: Pony up more ad cash or we’re gonna start publishing the unvarnished truth?
Advertising is all the newspapers have left…
And once it goes away in toto, they can have a grand expose of how the housing bubble caused us so much grief, and they’ll bravely tell the story, and then…
They’ll all go out of business.
Gee, any chance that much single-source income influenced editorial bias? Do you think that a local politician with that kind of massive exposure would have been absolutely skrewered by the ‘ol Californian?
They shot their wad in trying to change buyer psychology this spring selling season.
Aren’t they using MORE space, not less?
“Leslie Appleton-Young, chief economist for the California Association of Realtors, said sales volumes in the Riverside and San Bernardino markets should remain significantly below levels of peak years, which is what local real estate professionals anticipated.”
It is? I seem to remember her and others like her saying things like permanently high plateau?
“Schenkl said the difference in today’s market is that investors, speculative buyers and ‘flippers’ largely have exited.”
Yes, but the prices they’ve helped inflate have NOT!
As somebody keeps saying, the flippers have exited the buyer side of the demand pool. They haven’t exited the seller side. They’re still there, listing their overpriced flips at wishing prices, hoping with increasingly desperate hope and throwing good money after bad.
As a case in point, consider San Diego’s Rancho Bernardo West zip code (92127), where the median SFR sale price for May 2007 was $816,000 (see http://www.dqnews.com/ZIPSDUT.shtm ) and the current SFR median list price on ziprealty.com is $1,430,000, the highest level since I started tracking the median list price earlier this year. I take the $614,000 gap between current median SFR list price and recent median SFR sale price as prima facie evidence that high-end flippers are trying to cash out of their investments, but running into a shortage of multi-millionaire buyers in the process.
maybe that should read, “As a casey in point,”..
LMAO…
Someone that can afford a $1.4M house in todays mortgage environment is probably quite a bit smarter than the “high-end flipper”.
That somebody is also probably more comfortably housed than what they could purchase for $1.4M in today’s market.
Funny, I have a friend who bought a $600K house (hasn’t sold his $300K house yet) under the rationale that 20% growth on $600K is more than 20% growth on $300K.
He wasn’t amused when I suggested that a 20% loss on $600K is also more than an equivalent loss on $300K. I may not have many friends left soon.
You’re probably right, even though trying to pull someone back from the precipice seems a lot more “friendly” to me than standing idly by, smiling and waving, while they plunge to a certain death. But human nature being what it is, we tend to regard viewpoints that agree with our own as more “friendly”, regardless of accuracy.
True, eventually they’d recognize your efforts. I’ve many friends who gave me advice that I later had to admit would’ve been the right move.
I would also add that in this case (casey) the CHANCE of a 20% dip on a $600K home is more probable than that on a $300K home.
GS’s comment above made me think of this story since it seems more of the specuvestors I know have “graduated” to trying flips on more expensive property for the perceived increase in reward.
standing idly by, smiling and waving, while they plunge to a certain death
In my humble opinion, proceed with extreme caution when offering advice. If it’s contrary to the listeners belief system, it will only irritate. To find an open mind is rare… funny isn’t it? People generally only see what they already believe is there.
So unless it’s family or a close friend, or an intelligent open person, just smile and wave.
“…but running into a shortage of multi-millionaire buyers in the process.
No,No,No,…GS…they’re running into a shortage of people that qualify on “stated income”…The multi-millionaire buyers that already have x3 residences and x5 vacation homes..are just “digesting” their appetite for more…”homes”
That’s right, Thomas. I love it when REIC fools says the “flippers have left the market.” No, they’re TRYING to leave the market, but they’re trapped with an alligator (or two, or six) to feed. They’re no longer flipper. They’re accidental landlords, and none too happy about it.
– Judge Smales
“You’ll get nothing and like it!”
Adibi said the average Orange County family paid 49.8% of its gross income on mortgage payments last year, a record amount.
Holy #@$& Batman! 50% of gross income on mortgage - that’s ridiculous! Does anybody know if this is an accurate value? If so, OC is more skrooed than I thought.
Wow, that even shocks a major housing bear like me…dammmnnnn there is going to be some major pain the OC soon.
Yes, the OC is different - “It’s gonna get hammered.”
Let’s see, ASSUMING that they meant PITI payments when they said “mortgage” payments…
A 600k mort would be, what, 50k a year in total payments (back of the envelope)?
So, that means they’d be grossing 100k in income. After state and local taxes, yer looking at maybe 80-85k in take home (totally guessing on exactly how much that MONSTER mortgage payment helps on taxes).
2 Questions: How the HELL are they saving for retirement? And, do these people have kids?
You need to take into account that not every “homeowner” has purchased recently at inflated levels, so I don’t think you can use a figure like $600k.
OC Reg claimed recently the average mortgage payment (actually it didn’t say if it was median or average mortgage payment) was something like $3050. If that’s 50% of gross HHI, then we’re talking about $73,000 per year, for the average mortgage-payer.
These mortgage payers will be in a range of situations, like those that are near paid off on their mortgage, and those that are underwater. Likewise they will have a range of incomes, say some will have $30-40k annual HHI, and some will be upwards of $200-300k.
What’s shocking is that 50% figure of the average mortgage payment. That means that some people, say, are paying 30% of HHI and others are paying 70%, perhaps more. Of gross! That’s totally ludicrous and unsustainable no matter how you look at it. (Actually, maybe it’s sustainable if you buy into price appreciation of the homes at 20-30%/year forever.)
While I agree with you Home a Loan about the wide range of situations people are in, I can tell you that at least the central and southern parts of this county are fried. People have been buying at 600K-800K for 2 years. Fo you realize how many of these people are toast. On top of that in RSM and MV, homes were going for 400K 5-7 yrs. ago in the ritzy areas of those towns. This is gonna be a big mess.
Also, don’t forget the numbskulls who took out HELOCs. I wonder what their sitchs are? Could they be as high as 60-65% of gross. I am at 38%, but the wifey stays home and some days I am troubled by it, but it pans out for the amenities and lack of responsibility I have to contend with. Also, debt free and 4 miles from work. Great to go home for lunch or see the family here at the job.
They used to. Got a good price for them to help pay for house. Saved on Xmas presents as well.
I don’t believe this number. Some qualification is left out, such as, “…family who purchased their OC home in the past two years…”
how can anyone be shopping in stores then…renters only??
That really doesn’t seem possible. The “average?” What about the people who were above average? Were they paying 60-70%? That strikes me as impossible.
OC is screwed.
Regarding the numbers, Adibi was looking at what it would cost for a buyer making the median HHI ($77k, I believe) to buy a house at the median price, using current figures for both (HHI was for 2006). And the 49.8% of gross income (which is for PIT - it does not include insurance) assumes that the buyer puts 20% down and takes into account the expected tax deduction on the interest and property taxes.
By way of comparison, Adibi also calculated this same percentage for 1990 (end of last boom in OC) and 1996 (last bottom), and they were 23.3% and 33.3%, respectively. So, at the end of the last boom, we were spending 33.3% of gross income on a median home, and now we are spending 49.8%. As Thornburg said, Orange County is different, it is going to get hammered.
Oops. That should be 23.3% for 1996 (last bottom) and 33.3% for 1990 (end of last boom). I got them reversed.
San Diego & Immigration. Maybe the commute from Tijuana to San Diego can be legalized allowing the craftsman to live in Tijuana and work in San Diego allowing for minimum wage builders building McCastles.
“…allowing for minimum wage…”
here’s the thing.
If you legalize them, the cost of hiring these “legals” will rise.
A new batch of illegals can and will then offer their services at a lesser cost, and the newly-legal-illegals will be out of a job.
You obviously have a clear understanding of the big picture. Do you work for the Senate?
Obviously not!
LOL thats the truth
“…Adibi said the average Orange County family paid 49.8% of its gross income on mortgage payments last year, a record amount.”
Bingada… Bangada… Boom!
Boy, that leave’s ‘em all that CASH to pay for their credit cards & Hummer payments.
Most are living on their credit card minimums. I see it all the time. I’m surprised in the OC that number is not higher. I would have guessed 56 or 57%
To quote txchic: “you’re too early”
It’s only because that number is assuming a 20% down payment and it takes into account the expected tax deduction for interest and property taxes. How long until folks just can’t afford those CC minimum payments anymore?
‘The subprime story has had an adverse impact on the market outlook by consumers. We’ve had all these stories about weaknesses in the economy…and that’s had a bad hit on the psychology of the economy and the housing market.’
Why do these people keep harping about psychology? Didn’t they ever hear of budget constraints? Is it that hard to connect the implosion of the subprime lending industry to a lack of buyers armed with loans that enable them to purchase houses they cannot afford?
it’s psychology in this way. homes went up so the psychology was buy buy buy(booya!). psychology changes and it helps drive prices down.
I just don’t see the prices driven down much yet, nor do I see sellers who have moved from the denial stage to the wild-eyed panic stage. In due time, psychology will definitely play a major role.
Stucco, this to me is one of the big two questions. If and when there will be a rush for the exits, and how far down is the bottom. Shiller talks about market psychology…
Question: What caused the stock bubble, and why did it end as it did?
Shiller: Some sociologists talk about collective consciousness. We humans evolved to be very closely linked, and our minds focus on the same ideas. Those [ideas] get reinforced because we hear them all the time.
Back in the late 1990s, you kept hearing that you had to stake your claim on the Internet or you’d miss out on the future. No one cared about the present. Then something happened around March 2000. There was an acceleration of public talk about doubts. You could no longer declare at a cocktail party that Internet stocks were going up. Such statements had become embarrassing - and just like that, word of mouth changed.
Embarrassment is a powerful emotion.
The fraud ended the stock bubble just as the fraud is ending this bubble, just as the fraud ends all bubbles.
I’m thinking that “buyer psychology” and “buyer hesitation” must have been on last month’s talking points memo to member Realtors. What’s implied by this language is that there are plenty of qualified buyers out there, they simply CHOOSE not to buy.
In the current mortgage market, I don’t see how there can possibly be enough buyers in California with enough cash or documented income to make much of a dent in the inventory at these inflated prices. So who is the REI trying to spin? They’re giving sellers false hope.
False hope it is… Once they took away the 580 fico 100% loans and requesting 680 fico scores for stated refi’s party over no matter how you slice it.
Giacomo, I think you’re right about the talking points. All of the recent stories are hammering on not only the psychology angle, but the impact of the “subprime stories.” In a way, it’s a roundabout way of using the old trick of criticizing the media, which almost universally popular. It’s as if the REIC fools are saying to potential buyers, “Don’t you let the MEDIA talk you out of the American dream.” They act as if it’s not the crash of subprime that’s “hurting” sales and psychology, but all of the “negative stories” about subprime. G@dd@mn media! If they’d only stop writing these stories, buyers would start rushing back into the market. NOT!
– Judge Smales
“You’ll get nothing and like it!”
“…net absorption plunged to a seven-year low in 2006, as the housing boom ended and the companies that supported it downsized or, in some cases, went dark.”
Went Dark!!!!!!………..
;-O ;-
At Ben’s HBB… it gets better & better every day!
O.K., single malt Scotch & PayPal donation time to Ben’s Blog…Thanks for all your efforts Ben…
‘If things come crashing down, meaning we actually go into recession, unemployment rates rise, there’s a lot of job losses in the San Diego area. We’re likely to see a 15 to 20 percent drop in home prices.’
Not to suggest this could ever happen…
I know all of us here would like to see a 40% - 50% price cut, but I’d settle for 20% - 25%. That would put me in a very nice house here in MA, with a very manageable household budget. I have my own wishing price, but I have to be somewhat realistic, so I am not holding my breath for it. Keeping powder dry, yes. Holding breath, no.
I do not want it but I would not bet against it. I bought in 88
but I have to be somewhat realistic
Why should a lesser cut be considered more realistic? The only unrealistic assumption is that of homeowners thinking stratospheric pricing is here to stay.
How will you feel about paying 20-40% less for your house only 1-2 years after you bought it? I think you will be pissed off.
And that is how it will go. Those that buy on the way down will replace their pre-purchase remorse (I have to get in) with post-purchase remorse (wtf was i thinking?), when they realize what they could have bought for the same money.
“when they realize what they could have bought for the same amount of money”….
That’s how I feel joe mommma. It would disgust me no end to throw my money at something “acceptable” and then find out a year or 2 later that the same amount of $$ would have bought me exactly what I want.
Then again, I’ll be more than shocked if prices don’t go down at LEAST 50%, so it’s easier to just hang tight and wait for the inevitable.
We’re in a recession here (Michigan) and we only had a fraction of the bubble that S.D. had - prices easily down 20-30%. Back to late 90’s prices in many cases.
“Lennar Corp…“At its peak two years ago, the company took out 1,042 permits to build homes in Bakersfield,…In April, the company took out just one.”
1,042 units to ….in 24 months…1
Bakersfield…2007,
Oil, carrots and pesticide dust & 1 new Lennar built house.
“In September, we found that a local Lennar office had switched its break room coffee from Starbucks to Folgers…”
Having gone through layoffs and downsizings, its ALWAYS the coffee that goes first. That is all the writing on the wall any employee should need to see, get out into that job market before your co-workers do.
When do we sell Starbucks short? Where’s TXchick when you need her?
“When do we sell Starbucks short?”
When they start re-brewing yesterday’s grounds. You KNOW they’re in trouble then.
I think you’re a little late on the SBUX short. The stk has declined from 40 to just over $26 in 8 months. Could it go down more? Sure, but it looks like the easy money (it’s never really easy except in retrospect) has been made already.
“Coffee is for closers!!!”
“its ALWAYS the coffee that goes first.”
yes… and then they take your stapler….
ha! it’s true about the coffee though…and the quality of the plastic silverware in the company cafe. really.
“Leslie Appleton-Young, chief economist for the California Association of Realtors, said sales volumes in the Riverside and San Bernardino markets should remain significantly below levels of peak years, which is what local real estate professionals anticipated.”
Sorry, I can’t let this one go. It really irks me. Does anyone have a list of all the sound bites she’s given the past 1.5 years?
When all of this is said and done, even the biggest RE cheerleaders (including our own friends and family that we tried to steer away from buying) are all going to twist history and say that they called this downturn. Aaargh!!
The contrary evidence is all on the blog archives. I hope Ben keeps a copy off line for safe keeping, as it contains a gold mine’s worth of evidence on REIC mendacity.
luckily we also have the google!
“Price increases will slow, and may even be flat in some areas of the state, said the speakers, including Leslie Appleton-Young, chief economist for the California Association of Realtors. However, they said, economic fundamentals state and nationwide appear strong enough to prevent a downturn. And San Diego County is likely to put in a solid performance, although there’s reason to worry down the road.”
http://www.nctimes.com/articles/2005/12/15/business/news/20_24_0212_14_05.txt
even better!
Economist: Slight decline in home sales likely
By: BRADLEY J. FIKES - Staff Writer
SAN DIEGO —- California’s real estate market will peak this year and existing home sales will decline 2 percent next year, the chief economist for the California Association of Realtors said Wednesday at the group’s centennial meeting at the San Diego Convention Center.
“2005 will be the top of this cycle,” Leslie Appleton-Young told more than 1,000 guests during her economic forecast for 2006. Sales are projected to reach nearly 631,000 next year, according to the forecast. The median price this year, estimated at $523,000, is expected to increase an average of 10 percent. However, prices in low-cost areas of the state, such as the Inland Empire, will increase by a higher rate, while prices in coastal areas will rise more slowly.
Appleton-Young dismissed the idea of a housing “bubble,” referring to next year’s outlook as a “soft landing.” While the median price of homes in California is far above that of the nation’s median of $188,000, California’s shortage of housing, strong demand and fairly strong economy guard against any precipitous price drop, she said.
She added that the somewhat perplexing low level of interest rates has made the market stronger than she had anticipated last year.
Both Appleton-Young and the association’s deputy chief economist, Robert Kleinheinz, who spoke earlier, described the national and state economies as growing at a sustainable rate, providing a solid underpinning for the real estate market.
Injecting a note of caution, Appleton-Young said home sellers must understand that the market has undergone a “transition” to a slow-growth mode, and small price declines can’t be ruled out.
“It’s very important to realize the housing prices do go down,” Appleton-Young said, pointing to a 3.5 percent decline in 1993. However, she said, that was during a recession with massive job losses. But today, job growth is steady, and is expected to remain steady next year.
Hurricane Katrina’s aftermath will cause moderate disruptions to the national economy in the next two quarters, Appleton-Young said, but will not derail the economy’s mainly positive course.
Complicating that hopeful picture, Appleton-Young said some marginal buyers who bought under easier loan requirements may be unable to make their payments.
“In a few years, there may be perhaps a noticeable increase in defaults and foreclosures,” she said. “I don’t believe we’re going to see a tremendous impact overall, but it will be something we will take note of.”
San Diego County should bear up well, despite being a pricey market, Appleton-Young said in an interview after her speech. At most, she said, there might be a slight decline in prices. As with the state, a strong economy in San Diego County, in addition to its desirability as a place to live, should keep up property values. And the Southwest Riverside County cities of Temecula and Murrieta will continue to be a “tremendous” market, as people priced out of San Diego buy there.
http://www.nctimes.com/articles/2005/09/22/business/news/92105185029.txt
“Both Appleton-Young and the association’s deputy chief economist, Robert Kleinheinz, who spoke earlier, described the national and state economies as growing at a sustainable rate, providing a solid underpinning for the real estate market.”
Are they really that clueless, or are they highly-paid liars?
How can a economist not factor in the effects of a financial meltdown in making their forcasts? This mess is not just a inventory cycle like Ms. Applenon-Young would like us to believe, It is slowly developing liquidity crisis of massive proportions. You don’t need a PH.d in economics to figure that out.
“Are they really that clueless, or are they highly-paid liars? ”
Check the date in the link.. this was from 18 months ago. Presented as refutation to her recent “we expected this” comment.
I didn’t think even a realtor “economist” would be using the term “soft landing” anymore. People quit believing that BS at the end of last year when home sales came to a virtual halt in most markets.
so-called “experts” are usually just narrators who will smoke you with statistics an math, at least that’s what taleb told me in “the black swan.”
“Our inability to predict in environments subjected to the Black Swan, coupled with a general lack of the awareness of this state of affairs, means that certain professionals, while believing they are experts, are in fact not based on their empirical record, they do not know more about their subject matter than the general population, but they are much better at narrating-or, worse, at smoking you with complicated mathematical models. They are also more likely to wear a tie.”
“Are they really that clueless, or are they highly-paid liars?”
Actually, this is the root of it. Initially, she says everything’s fine. Now she says we knew everything wasn’t fine.
I don’t doubt that she knew things were amiss. So, I’m going with highly paid LIAR. Highly paid liar that helped people destroy their financial well-being for the rest of their lives.
Every word out of Apple-head’s mouth has been a sound bite. she is the poster child for the term “lying, no-shame shill”. I’m not sure why the REIC continues to send Apple-head out to speak anymore. The more she speaks the more her nose grows.
I was thinking about that today sleepless. Trying to figure out how to remain cool, calm and gracious when all these friends and family start patting themselves on the back for calling the turn in the RE market after a couple years of being just short of accusing me of being a whacko for telling them what was coming down the pike. People who were so disdainful they couldn’t even be bothered to come to this blog and check facts.
Fact is, it’s already starting, which is why I was thinking about. If you can believe it, I’ve got people emailing and sending me articles about the “RE downturn” - stuff we read on the blog months and months ago….aaarrrghhh…
Maybe the next step is we all develop some kind of support group to deal with our feelings towards these numbnuts (lovable though they may be) rather than exploding on them with rage when they expound on how astute they are/were.
I’ve been in the investment biz for 30 years. One thing I’ve learned is that in hindsight, everybody was right. That’s just how it is. Don’t sweat it - just congratulate them for their “brilliant” call and ask them what the stock market is going to do tomorrow.
“Residential finance companies fueled the winning streak in recent years as they flocked to South Placer County’s booming housing market and drove demand for office space. But from that peak, net absorption plunged to a seven-year low in 2006, as the housing boom ended and the companies that supported it downsized or, in some cases, went dark.”
That was predicted on this board how many times?
This quote made my day. A lot of the other stuff coming fast and furious is just a dribble in the bucket compared to this and BS.
(When you take the last three or four years out of the picture, this is a good market.’”)
honestly, these people can’t go away fast enough.
Well Doctor., if you take away the cupcakes, burritos, cheetos, jack daniels, pizza, big macs, whoppers, fries, pizza, ice-cream, donuts, fritos, then yes, I have been following my diet.
In 2012 the clown will be quoted as saying:”Well if you take away the last 11-12 years 2012 is looking really good”. LOL.
Sorry, but the IE/Riverised/SB/Coachella Valley is going to get crushed. These areas were crushed back in the early/mid 90s through 2000 and will be crushed worse this time around. Bank on it.
MY CAR WAS BRAND NEW !! (when I bought it 3 years ago).
So, what is going to be the fire insurance cost changes in wooded places like South Lake Tahoe after the effects of this fire start rolling in? What will become of the value of the homes that didn’t burn going to do? How far down will they drop in SLT? Comments?
I would LOVE to buy a house in SLT.
I think the NV side is supposed to be cheaper than the CA side. Probably due to p13 effects.
I really dont expect any effect on prices from the fire HOWEVER there will be some burned out lots for sale if you are interested in building. That might be a great opportunity, dont expect to make money building nowadays.
The Daily Pilot. “”Orange County should see a drop in new residents over the next few years due to a slow-growing economy, according to Chapman University researchers.”
I’m cornfused…do they…the “Chapman-no more sponsorship-money-from-New Century-Ameriquest-researchers” mean: a drop of new residents that can afford a…$650,000+ new home?
FUNDWATCH
Subprime woes aren’t over, fund manager warns
Bond market at a crossroads, TCW’s Gundlach says
By Murray Coleman & Jonathan Burton, MarketWatch
Last Update: 8:04 PM ET Jun 27, 2007
CHICAGO (MarketWatch) — An end isn’t anywhere in sight to the meltdown in subprime mortgage markets, the chief investment officer at Los Angeles-based TCW Group Inc. warned a gathering of investment professionals on Wednesday.
In his keynote address and an interview to kickoff the 19th annual Morningstar Investment Conference here, Jeffrey Gundlach pointed to continued pressure on subprime lenders.
“The subprime market is a total unmitigated disaster and it’s going to get worse,” Gundlach told money managers and financial advisers.
“The delinquency rate is still climbing,” he added. “At the same time, the ability of people to refinance is also going down. It’s just not a very attractive situation.”
http://tinyurl.com/2bhkea
TCW is a very well respected firm although I don’t know much about this guy. TCW is HQrd in downtown LA and has been around for a long time.
These are some very strong words:”The subprime market is a total unmitigated disaster.” First Pimco’s Gross and now TCW. The smart $$ is quickly walking for the exits. Some people are whispering “fire, fire” in the theatre. Who will be the first to scream it aloud?
This guy seems to be yelling “fire!” pretty loud with words like “total unmitigated disaster and it’s going to get worse”…
and in a pretty crowded theater (key note speaker at a conference of 1500 investment professionals).
This is not a problem of confidence. This is a problem of vacant homes, empty condos, prices of of line with fundamentals, a huge inventory of homes that can’t be sold for what is owed on them, builders desperate to sell dumping houses, tighter lending standards cutting out buyers…..
This can’t be fixed with a $3.2 billion, or is it $1.6 billion bail-out of a single Bear Sterns hedge fund.
“The delinquency rate is still climbing,” he added. “At the same time, the ability of people to refinance is also going down. It’s just not a very attractive situation.”
And neither is the picture of housing tracts half empty, painted with graffiti, weeds growing in the yard. They’ll be like tinder boxes inside in the desert areas, maybe even in the wetlands filled with mold. The further away from urban areas the more the blight. Dope dealers, crackheads and vagrants will homestead some. Fire insurance policies will go much, much higher in unoccupied residences. Yeah, not a pretty picture indeed!!
“We’ve had all these stories about weaknesses in the economy…and that’s had a bad hit on the psychology of the economy and the housing market.’”
What about the psychology of housing on the way up? And by the way, it has yet to really hit the psychology of the economy; housing and subprime yes.Gotta lov the vision that conjures up!
“This is the third down-cycle I’ve been through, and each time we go through this you take a look and see what’s disturbing the market more than anything else, and that’s uncertainty.’”
What an absurd statement. Is he suggesting that when prices go up, that’s “certainty” and when they go down that’s “uncertainty”?
I’m extremely “certain” that prices are going to drop further. See? There’s no “uncertainty” here.
I too am very “certain” about this market. No uncertainty here at all. ….feels great!
I consider today’s housing market very rational, except for seller pricing. Sellers should consider; The market can remain rational, longer than they can remain solvent.
This doesn’t sound too good:
Beazer Homes Fires Chief Accountant
The Wall Street Journal
Posted: 2007-06-27 22:26:13
Beazer said it fired its chief accounting officer for trying to destroy documents as it faces a federal mortgage-lending probe.
http://tinyurl.com/2gsnzj
“Beazer said it fired its chief accounting officer for trying to destroy documents as it faces a federal mortgage-lending probe.”
what? wasn’t he shredding fast enough?
Forty people laid off by a newspaper because of slackening RE ads sounds surprisingly high.
I always knew the local papers touted the local RE because of ad revenue but this explains the situation better than anything else.
Wouldn’t it be incredible if the newspapers just quit advertising RE altogether and reported on what’s actually happening in the market instead?
There’ s already the internet and those little free RE booklets at every grocery store.
This has been a major conflict of interest and a lot of ‘05/’06/’07 buyers have really been screwed because of what they read about the RE market in their local schill paper.
Forgive me for reposting this question, but isn’t there MORE RE ad space now, not less?
Don’t know about your specific area, but the Seattle Times Sunday RE section positively ballooned for a long period last year. Suddenly became twice as thick as normal. Now it’s gone back to regular size, despite the fact that inventories have risen like 60% or something ridiculous. I think during the “balloon” stage a lot of condo developers were taking out full page ads. Now they’re squeazing 6-8 on the same page.
i like to think the founding fathers regarded “freedom of the press” as absolutely necesssary for those rare times when the shit hits the fan and vital info needs to be spread quickly…
But otherwise the average rag always was, is and will be just slightly worse than useless.
“Brian Weide, a director of the Inland Empire Chapter of the California Association of Mortgage Brokers, said too often people who stretched painfully to buy homes with 100 percent financing wrongly assumed they could refinance in a couple years.”
And where did they get that idea from, eh Brian?
Remember the Northern California Auction? They still have 25 homes that “didn’t end up selling”. Make an offer:
http://www.ushomeauction.com/postAuctionSales.php?auctionID=H-002
Was in Laguna Beach yesterday for the Art-A-Fair opening night. We arrived a little early to do some shopping in town, and immediately noticed a number of “For Lease” signs on shops. Wyland’s Forest Avenue shop is going away, the Jamba Juice and Jolly Roger on the Coast highway are boarded up, several other small clothing boutiques have gone/are going away. We’ve been going to Laguna for many years and have never seen anything like this. Just wondering how far from $900+ per square foot the SFR’s can fall. Nice area to have a 2nd home someday, to rent out and live in maybe 1 month out of the year. Too elitist to live year-round.
Oh no, not Jolly Rogers
Yea, they rocked for breakfast!
Adibi said the average Orange County family paid 49.8% of its gross income on mortgage payments last year, a record amount.
Jesus Jumping Christ. Meanwhile, I’m paying 15% of my gross income on rent, but somehow *I’m* the one who is throwing money away?