An Affordability Problem In California
The Contra Costa Times reports from California. “With the housing market in a slump, Martinez’s strategy to revive its downtown may be temporarily stunted, but the city staff said it is not at a standstill. After years of debate and readjustment of the city’s Downtown Specific Plan, the blueprint sanctioning an increase in housing by as many as 700 additional units was approved by the City Council in July 2006.”
“It passed just as the housing market peaked, said Albert Lopez, deputy community development director for Martinez. ‘The city doesn’t have its own ability to do our own projects,’ Lopez said, adding that it relies on outside developers to take interest.”
“Just as the specific plan was ready to be implemented, interest began to fade. ‘The timing is off for (developers) to be trying to pursue something that big,’ Lopez said. ‘The level of interest right now is pretty cold.’”
“Albert Turnbaugh’s four-story commercial and residential building are steadily navigating the city’s permit channels. Turnbaugh said although plans are moving along smoothly, he’s not pushing to get his project off the ground as soon as possible.”
“‘It is causing me to scrutinize things more than I would if the market had been different,’ he said.”
“Although he has focused on making the 14 condominium units appealing to buyers, he’s not worried about the state of the market. ‘The housing market goes up and the housing market goes down sometimes,’ Turnbaugh said. ‘Just because you hear the housing market is down, you can’t say it’s down everywhere.’”
“Economist Christopher Thornberg disagreed. ‘That’s one of the big real estate myths,’ he said. ‘There is no safe haven. These markets move together.’”
The Acorn. “According to the California Building Industry Association and other housing permit data, production for both single and multifamily units remains well behind last year’s levels. Permits in May were pulled for slightly more than 7,000 single-family homes statewide, down 40 percent from May 2006.”
“During the first five months of the year, production began on 54,300 homes and apartments, nearly 29 percent less than last year’s total. ‘Statewide, the number of new projects has dwindled,’ said Alan Nevin, the Building Industry Association’s chief economist.”
“Robert Rivinius, president and CEO of the California Building Industry Association, said more than 200,000 new homes, condos and apartments are needed each year to meet the state’s housing needs.”
“‘What’s pressing is the need for housing in the entrylevel market,’ Rivinius said. ‘Unless major reforms are enacted soon, it’s doubtful we’ll meet that need in the near future.’”
“On a statewide basis, only 11 percent of California homes are considered affordable. ‘In California , there are only two metro areas- Chico and Redding- where affordability even topped 25 percent,’ said Wes Keusder, a Southern California homebuilder.”
“Oversupply is a main reason why local housing sales have fallen, yet prices in east Ventura County and the Conejo/Las Virgenes valleys haven’t dropped in tandem because the region remains a desirable place to live.”
The Press Telegram. “The California Association of Realtors has found itself in a sort of catch-22 situation, but in a sense you could consider it mathematically squared.”
“The group not only stands in opposition to a law that will tighten a legal loophole that allows people to place a limitless tax on a property each time it sells, but in doing so the association faces off with a pair of opponents who make the least likely bedfellows: The building industry and environmentalists.”
“As it stands, the bill would cap the tax at 2 percent, and limit the life of the tax to 99 years. The bill also would require the money for the tax to be used to serve a public benefit.”
“So why would CAR oppose the bill? ‘It’s an affordability problem,’ said Alex Creel, CAR’s senior vice president for government affairs.”
“‘We think that 2 percent is totally unpalatable as well,’ Creel said. ‘If a home sells 20 times, 2 percent of the sales price has to be paid as a private transfer tax each time.’”
The Modesto Bee. “Auctioneers’ calls for bids on used cars and unsold furniture soon will ring out more frequently at The Auction Park in Modesto. In a sign the valley’s economy is cooling, The Auction Park’s owner, Roger Ernst, said his 22-acre site is filled with repossessed vehicles and furniture ordered by retailers but never sold.”
“The Auction Park, which usually holds sales twice a month, will begin weekly auctions Saturday. ‘Physically, we can’t do it in two weekends (a month),’ said Ernst, who founded The Auction Park 20 years ago. ‘This is the first time there’s been this much product.’”
“When the Northern San Joaquin Valley economy hummed along a few years ago, he said, many consumers bought vehicles with little or no money down. As a result, many people got in over their heads, and vehicle repossessions have doubled over the past four months, Ernst said.”
“‘Now people are getting a reality check,’ he said.”
“One of the hot economy’s main factors, the explosion in real estate, helped spur a corresponding flood of unsold furniture. Stores bought a lot of furniture from Asia, Ernst said. But because sales slowed as the housing market cooled, he said, there was no market for that new furniture when it arrived.”
“His facility has 100,000 pieces of new furniture, and warehouse manager Joe Gomes said it’s almost impossible to fit everything indoors. ‘We’re receiving more than we’re able to sell,’ Gomes said, adding that he’s noticed fewer buyers at recent auctions.”
“He said that’s depressed sale prices at The Auction Park, which often are below normal retail prices for such merchandise.”
“Gomes said he recently saw a coffee table that normally would retail for $125 go for $25 in an auction. ‘Whoever’s out here, if they put up their hand, we’re going to sell it to them,’ he said.”
“While the flood of inventory is great for buyers, Ernst said, it’s less desirable for sellers. ‘We tell the consigners, if they put out an item for $10,000, we’re just wasting time. It won’t go for that,’ Ernst said.”
“The yard, which opened in 1987, has had up-and-down cycles but never with this much inventory, Ernst said.”
‘America’s largest real estate auction firm of foreclosed property, will auction over 400 northern California homes on July 17-22, 2007. The homes have been repossessed by banks and other national lenders.’
‘Ontario-Montclair School District officials are dealing with the dilemma of too many facilities. Because of steadily declining enrollment over the past five years - amounting to the loss of 11 percent of its students since 2002 - the district now has far more buildings than it needs.’
‘Hal Shimmin, district director of information services, said the cost
of living is pushing young families with children eastward or out of state.’
‘Letters to the Editor: How ironic that on Wednesday, June 27, The Tribune wrote about the huge income disparity in San Luis Obispo, and then on Saturday, June 30, the paper is stuffed with hundreds of real estate ads for homes nobody can afford to buy.’
What does this guy Shimmin mean by saying “…the cost of living is pushing young families with children eastward…”. East of Ontario? Does this guy mean Fontana? As if Ontario is upscale to Fontana?
Ontario and Fontana are as cheap as you get in California, and people can’t afford to live there. Ontario/Riverside/Fontana is a 2 hour drive from the job centers of Orange County and Century City/Wilshire Corridor.
California is a stupid place. Stupid people living in Fontana, Palmdale or Stockton will drive for two hours one way to get to a stinking job. What are these people thinking? Why did they come to this state if they knew this was how they were going to live?
There is nothing, and I mean nothing in Ontario, Fontana, Palmdale, Landcaster, Stockton, Tracy and God knows where else that is worth suffering through a 2 hour one way stop and go commute.
Sir, there are some very fine lizards out there and on behalf of the blue belly lizards - I take exception to your blanket statement!
Clear, sometimes they are natives and they stay for family, school, church, friends etc. I’m lucky (sort of) in that my wife and I are not very close to our families and as such we talk all the time about upping roots and moving on. There is nothing that holds us here. 108Degrees today BTW. We rent and are damn proud of it!!
Just have to reply to this one. Literally and figuratively the I.E., esp. Fontucky is toast. We lived there for 10 years and sold Jan. 06 to move within 4 miles of my job here in Ranch Santa Margarita. We now rent here and I go home for lunch or have the family come visit me.
I know you guys (me included) dis the OC, but hey, a 4 mile commute vs. the 65-mile (each friggin way) I did for 3+ yrs. Well, that was a no-brainer when everything else was added in.
I just don’t see how the I.E. commuters can keep going until retirement in 20-30 years, if they can retire. Even if I owned outright, I would try to move closer to my work, esp. with temps in South OC 10 degress lesser than the furness known as Fontucky. My Gawd, how long can people keep taking that blast from He11? I know, I did it, but eventually realized that living there was not worth it.
When the RE craters in SB county, look out. Things will get really bad for everyone out there. Well, as they say, “lock and load.”
OCDan, oh wow how nice, my inlaws live in Dove Canyon and we are in Ladera Ranch. I sometimes drive up to the high desert as my mom is out in a city called Ridgecrest. Driving up there, I pass through Cucamonga and Fontana, and I am so glad not to live in those places. We rent here in South OC, one of the best areas in CA IMO. RSM is an amazing city and would be a great place to raise a family if it wasn’t so expensive now, super clean and safe. Oh man, just contrasting that with Fontana, I can only imagine what that was like. It wouldn’t take my wife and I even ONE second to leave the state rather than live in the IE, that has to be one of the worst places in the country to live, hot, crime, smell, gangs. There are some nice areas, and a lot of good people, but the climate is terrible and traffic worse. I can think of about 10,000 other places in the US that are far nicer and cheaper to live in.
Good show to you for cashing out when you did and coming to the beautiful OC!
Hi OCMetro, I love the concept of Ladera but the traffic getting in and out of it…yikes!
I am right down the hill from both of you (Mission Viejo at La Paz and the 405).
I couldnt imagine living in the IE compared to here.
Wow, we should have a South OC bubble party. Wood Ranch in RSM is great, Riptide is fun.
Hehehe, nice to see so many South OC’ers
Actually, we could meet at It’s a Grind in Mission Viejo, or head out to Fashion Island for a lunch.
Ahh, OC is a great place to buy 5 years ago or rent today!
The Orchard Hills shopping center is open, and there is a Peet’s Coffee there. I have been going there a lot since they opened: for the coffee, for the Golden Spoon right next door, and to check out the construction progress. The signs and the Orchard Hills Update website indicate that the first homes will be opening next summer, and they will be “luxury” homes starting well above $1million…since I plan on buying in 2009/2010, I am optimistic that by then, I will be able to afford one of these “luxury” homes (which in Irvine basically means bigger than 1800sf and not attached to your neighbors or with a microwave at knee-level)…
So maybe we could meet at Peet’s? My only problem is that I’m supposed to stay anonymous since I posted my financial info too frequently last fall on
http://www.irvinehousingblog.com...
OCMetro, you know what Ridgecrest is like and you are dissing Fontana? Are you serious? Fontana is definitely worse than a lot of places, but definitely not Ridgecrest.
Yea, Orchard Hills is nice, Peet’s is great. That would be fun, perhaps someday when Portola Springs is down another 100K. I love Portola Springs, too bad it is so high priced. Wasn’t there a poster here named Melody that had a HBB party in Laguna Niguel?
Look at all the idiots living in Vegas and Arizona…and then ask why people live in the I.E….of the ugliest, most repulsive places I’ve ever seen. But then look at the types who live there…
Carlsbad,
Actually the demographic makeup of Fontana makes it MUCH worse in my mind than Ridgecrest. When I was there, my mom, who worked as a scientist on the base there, China Lake, had friends who were in the same circle. Most of my friends parents were engineers and scientists. In Fontana, the only thing I see are gang bangers and people who left the worst parts of LA and have nothing better to do than tag and scratch their names into every bathroom in the city, very childish and disgusting. In many places in CA you can’t have anything nice because gang bangers destroy anything of value and steal the rest. Really really sad. When I was in Ridgecrest, it was a MUCH safer community than the IE could ever hope to be, it has its problems, but the circles I was in were all highly educated people who built their community rather than destroy it.
Don’t leave yet !
I’m sure some developer is eyeing Death Valley for affordable luxury condos and a waterpark
It’s unfortunate you feel that way, because it appears that those are the only places this bubble has had any effect, and might be the only places (along with a few LA ghetto areas) that will be affordable to buy as a result.
Did we used to be married? You digest information and come to stubbornly wrong conclusions in spite of overwhelmingly contrary evidence nearly as well as my Ex.
lol
ROFL
Did your wife divorce you for telling her she was wrong about things without proof?
Is your real name Rosie O’Donnell? I have a hunch that it is.
No she divorced me because she is a stupid shrew. Best thing she ever did for me by far.
Hey LAinvestorgirl, I have a Tickle Me Elmo, Cabbage Patch Kid, Pet Rock, set of slightly moldy tulip bulbs, Rickey Henderson rookie card, XBox360 and a collection of Beanie Babies I would like to sell you. They are a great deal.
It would be great if you were NYCityInvestorGirl so I could scream at you in person.
You’re so smart, you’re so freaking savvy. If LA real estate is such a bargain, why don’t you come down here with your big NY money and buy something.
LAgirl, you might want to adjust the meds. There is no shame with doubling the dosages.
For your information the crash will be a long drawn out process, filled with pain and suffering, much like trying to reason with you. I wouldn’t buy a doghouse, outhouse, warehouse or birdhouse in NYC, LA or any of these other places. I will leave the Donald Trump seminars up to the best and brightest like you that can see the hidden value in places like Washington Heights and Compton.
Key words there are “will be”. In other words, you’re speculating. That’s nice, speculating can be fun as all the flippers have shown us, but I’m dealing with reality, and it’s nearly impossible to find a decent 3 and 2 in West LA for under a mil. Many areas are still rising in price. Try to think about that while you’re all doing your circle jerk victory dance…prices down in Fontucky, woo hoo!!!
The housing price decline will extend to at least 2011, IMHO.However, in early 2008 there will be a Bull Trap in housing, with a slight uptick in prices and volumn, then down down down to the bottom in 2011. There I just did a Lareah. No facts ,just b.s., but it sounded good, didn’t it ??? Don’t all reply at once and jam the server. hehehehehehe
The same B.S. I have to listen to every day in this city.
All right, chill out you two, and help me figure out what I’m gonna do with all these “Free Paris Hilton” T-shirts.
LAIG, I think I remember that you are looking for an investment property, and those kinds of places have not come down in price yet. But I get listings from a realtor almost daily, and now I am beginning to get lots of “price reduced” listings in the marginal areas of Westwood, Mar Vista and Cheviot Hills. All of a sudden there are remodeled houses around 800K on Westwood Blvd and nice small single families in Mar Vista for 725K. I haven’t seen any of them because I don’t like the locations, but if you were here in July 2005 the only conclusion is that something is beginning to change big time. I am also impatient about all the time it’s taking, but I have no doubt it will. By then, I may have given up on housing altogether, though, who knows.
LAIG, practice patience. This thing can’t turn around overnight. There is absolutely NO WAY west LA is going to hold onto those insane prices. No way, no how. It’s just going to take some time. If I recall correctly, you already have a home, and are looking for multifamily investments anyhow. Either go to sleep on that idea for another 3-5 years, or line up for a shearing like the other sheeple.
No offense, Ben– even free I wouldn’t want Paris Hilton.
Yeah, I’m sitting here in LA still looking at 3-4 caps, so pardon my lack of enthusiasm. This is a totally unreasonable amount of time to be sitting around and waiting for anything, not to mention holding cash, but what choice do I have. I’ve been on this blog or at least calling it a bubble since 2002, so that’s why I’m a little fed up at this point. Bear’s right, I need to take 3-5 off, I need a hobby, maybe a Paris Hilton blog is just the thing.
while you’re waiting InvestorGirl, here’s something to worry and occupy your time with….
they found West Nile Virus in mosquitos pools in the freshly reclaimed ballona wetlands, on lincoln, across the street from Play Vista. that oughta help prices there and on the west side
Are booze and gambling off the table? That always made the time fly for me anyway. Just trying to help is all.
LAgirl;….I am not sure where you are (Chronologically) but, I have seen a lot of very shrewd investors going into high quality TIC’s….Particularly the bigger one’s (30 mil +)….I recently flew with a investor/friend/Client to Arizona to look at several shopping centers…The question for him was, do I chase my own gig, or do I “set it & forget it” in a high quality TIC ?…The TIC is somewhat limiting but still provides for exits which usually is the biggest issue…These TIC’s provide a face CAP of 6 to 6.5 but one big advantages vs. going it on your own is the cost of funds for these bigger deals is well below the CAP thereby driving the “cash-on-cash” rate of return significantly above the face CAP rate…Just a thought and a possible option…By the way, my guy (very astute Real Estate attorney) went with the TIC and placed 3.5 mil in it….
In spite of declining enrollment, and more buildings than it needs, you can still count on bond propositions in every election to deal with overcrowding in our schools.
Now you’re telling me there’s an affordability problem in Calif? WTF!!! How can that be!! I don’t get it, for the love of Jesus!! Calif RE never goes down and everyone there is friggin rich, so I’ve heard. I’m calling BS on this one. LMFAO
“Calif RE never goes down”
I worked with a guy down south that had bought in California (Los Angeles area) in 1989. He sold in 1994. He vividly recalls having to scrape up $20,000 to bring to his closing to relieve himself of the burden. Luckily, history never repeats itself.
Thank goodness for that. My AMZN stock is at a trailing P/E of 116. Luckily, we know that history doesn’t repeat itself, ever.
With a forward P/E of 52.17. Boy I’d really be in trouble…
The last Northern California Auction still has 47 unsold homes.
http://www.ushomeauction.com/postAuctionSales.php?auctionID=H-002
Makes one think.
“The yard, which opened in 1987, has had up-and-down cycles but never with this much inventory, Ernst said.”
Nothing to see here… its all contained. We’ve hit bottom. Move along… thank you very much… just keep moving along.
Time to go furniture shopping. We want a couch and a coffee table. Oh… and are willing to wait for the Labor day sales (or auctions).
Got popcorn?
Neil
I watched Kudlow and Co. today (don’t know why because I can’t stand him) and find it staggering how people can ignore what’s really happening with the economy right now.
The 10-year was up 9 basis points today and the market, including HB stocks were up. That’s 3 up days for the week. Let the contagion continue.
Hilton Hotels were up $9 and change on the buy out. They own very little RE, they are basically a service/management company for their franchisees. Stock market is still popping in isolated spots. Feels like ‘99.
I live about 40 miles from Auction Park so I shoot over there on occasion. And everything this guy says is dead on. The amount of material, cars, new furniture and odds and ends are getting mind-boggling. It’s really is a window on the credit bubble.
Whoa….whoa…WHOA!!!!
Wait a second did I just read this correctly?
“Economist Christopher Thornberg disagreed. ‘That’s one of the big real estate myths,’ he said. ‘There is no safe haven. These markets move together.’”
Is there hope for economists?
Probably not, Thornburg is one of the few not bought off to spread lies
Didn’t Chris leave UCLA in order to have more flexibility to say what he really thought? Since leaving UCLA he’s been extremely outspoken and direct. My guess is that most economists are too beholden to their financial supporters.
“when you ain’t got nothin’
you got nothin’ to lose”
The sad reality of this world is that only a poor man, or a man not afraid of becoming poor, can really speak the truth. Personally, I’d rather have my integrity than buckets of money. That is why I will probably never have buckets of money.
You too can be like LIAG, don’t give up hope.
To NYCityBoy:
That’s why Socrates was so dangerous to Athen…didn’t have two drachma to rub together, but they still had to order his execution/suicide.
To NYCityBoy:
That’s why Socrates was so dangerous to Athens…didn’t have two drachma to rub together, but they still had to order his execution/suicide.
“His facility has 100,000 pieces of new furniture, and warehouse manager Joe Gomes said it’s almost impossible to fit everything indoors. ‘We’re receiving more than we’re able to sell,’ Gomes said, adding that he’s noticed fewer buyers at recent auctions.”
There is a furniture inventory crash, and few sales because of reserve prices on the furniture that are too high to attract much buyer interest. Do I detect a slight parallel here to the residential housing market situation?
I’m looking for a near new Porsche 911 (2003 or 2004 year) that runs like new for $20,000. I think I may find some in the $20k to $30k range in Phoenix at a similar auction within the next four years.
Clarification: I will be looking for a 3 or 4 year old Porsche 911 for that price range. It could take a few years. I have the $, and I also have the patience.
if you spy decent 911s for 20k, let me know
Just wait that fishing boat I wanted for 120k…I bet you I will be picking that up for under 40k!
“SOLD to the man in the back eating the large bag of popcorn!”
Whiskey Tango…
I’m not shopping for a boat!
Got popcorn?
Neil
A fishing boat for $120k. A fool and his money were surely parted.
dang it
off?
ill off
Wtf? lol!
Quit leaving skid marks on the forum Lee Harvey! Heh!
Hmm..
Back in ‘92, I was buying a car and the finance guy at the dealership ran my credit report. A mtge at an odd sounding bank popped up and he asked me what it was, I replied that it was my boat loan, he then chuckled and said, “if you have a boat loan, then a car loan won’t be an issue”. I asked what he meant and he told me that something like only 1/2% of people qualify for boat loans (back then).
Point is.. imagine how things have changed. 15 years ago, it was a hard to get a boat loan for a little ski boat/runabout with a stabbin’ cabin. 15 years later, one could buy a house with no money down and no documentation (income or citizenship). Also, I wonder how many boats with financed with home equity (hey, it’s deductible, right?).
Buying a house..use a 15 or 30 yr fixed
Buying a car..use a car loan
Buying a boat..use a boat loan
Home equity..leave it alone, in the home, where it belongs, the tax deduction on the interest is not worth risking your home.
I bet a boat is a better investment than a house right now in OC…that would be a big WOW!
The best thing about having a large boat the is the day that you SELL it.
kinda like a McMansion with the fancy pool, hungry “friends” and relatives …without all the lifejackets
Don’t hold your breath.
If you own stock in a furniture company whose sales are mostly domestic, three months ago would be a good time to dump it.
How about 30 years ago? All of the little manufacturing outfits in VA and NC used to be publicly traded and even heavily-followed by analysts - Ladd, Bassett, Lane, the list goes on and on, and most of them are long gone. They made beautiful stuff, but it got cheaper and cheaper trying to compete with the imports. Even with non-union labor they couldn’t compete with Mexico and Asia. Loss of the furniture manufacturing business in the U.S. is underrated (relative to textile business) in the demise of many towns and small cities. These also tended to be somewhat more craft-oriented jobs than shirt and sock making jobs. Some of the high-end manufacturers still turn out some nice Made in USA stuff - like Ethan Allen (ETH) - but, yep, you’re right - that stock is looking pretty miserable.
Ethan Allen’s shutting plants, too.
Another problem with this sort of auction is that it requires that the buyers have CASH.
It’s hard to compete with the no interest/no payments for 12 months that is widely available at most furniture stores and I suspect your FICO isn’t all that important. I bet that the markup on the cardboard furniture is such that if the store get a payment or two or three out the buyer, plus the 20 cents on the dollar when the account is sold to the collections agency, then they are in the money.
“Another problem with this sort of auction is that it requires that the buyers have CASH.”
Right. The people who have the extra cash to spend on big ticket items number very few. I’m sure a decidedly large number of craigslist posters are finding this out. If J6P can’t finance something, he’s done shopping.
There’s nothing funnier than seeing all these a–holes putting their Chipotle burrito on their credit card at lunch. And “no”, it isn’t because they get miles.
I use my Costco AMEX for almost everything I buy and get a nice refund each year for doing nothing different except charging instead of paying cash. Eating out is 3-5%, I cant remember but it sure is a lot compared to worthless miles or 1% back. The sad part is that I never have cash on me.
Umm… debit card? Use mine all the time.
Flew to Hawaii last month. Am flying to New Zealand next year. Total cost for both tickets? $60. And when I get back I can hit Hawaii again (but it will cost another $30.) Thanks British Airways for those “worthless” miles. (Sorry you didn’t make nearly enough interest to cover them! :D)
Talk about J6Ps, last night I met a quintessential pair of ‘em. Came into town in a big diesel truck, with two Harleys on a trailer. He works for a luxury home builder in pre-manufacturing, says business is booming and they are shipping for two houses a day. Two years ago he jingle mailed, and now they are trying to sell another house. Tried to get me to believe the GP took place during the 50’s, not the 30’s. And they don’t do 6Ps, they do 18ps.
They are truly a nice young couple with pleasant personalities; but they lack any education, any common sense, and are barely functional in modern society. Their destiny is an entire lifespan of multiple full/part time jobs for debt servitude.
Got 10% down?
Methinks that along with bankruptcy attorney, auctioneer might be an attractive profession during the next several years, if even as a moonlighting business.
italics off
Procedure?
Affordability and Orange County just do not mix. In order to dodge this bubble we would have to have an influx of great credit, fat bank account people who make over 300k in numbers that would rival the illegals. If that happened and they all started to gobble up houses, yes then I can see this county having no issues at all, in the absence of the great good credit and loaded hordes stampeding to OC…I think affordability and housing prices are going to have a problem…and prices are going to lose out. Sorry people wake up the never never land dream is friggen over, time for a good ole wholesome dose of reality - the aftermath of this is going to be pretty bad though going to take a long time to get right again.
I ran into this article - this is not new since 2006 we have seen price reductions in OC. The propaganda machines are in full swing now, and I believe the truth is coming out because it is just too damn obvious now. Only those who filled the backyard pool with Kool Aide are still buying this line of crap.
http://www.ocregister.com/ocregister/money/homepage/article_1381194.php
“Usually builders keep their prices up. They try to keep their buyers happy,” said Christie Vu, 27, who paid almost $870,000 for the home she and her husband, Philip Luu, share with their two young sons.”
What the heck does this family do for a living?
What the heck does this family do for a living?
drink Kool-aide?
Are you kidding me? $800k to live in Garden Grove. Hilarious.
That is a big cut. The builder was making a lot of money when the house sold at full price.
$870K?? For THAT?? And she’s 27????
Okay, the gloves are coming off. NO sympathy here. It’s time to start jailing people for being stupid. And since when did refinancing “before the payments go up” become standard fare for buying a house? Shouldn’t the fact that you are expected to have to do that be a clue???
Every story seems to have this as the common theme these days…..supposed victims trapped not by their lack of financial sense. No, they are trapped by the inability to refinance their mortgage 2 years after purchase. Insane!
“It’s time to start jailing people for being stupid.” Are you kidding me???? Six percent of the population (most of which are here) would be supporting the other 94%. Taxes at 158% to cover all the new prisons that need to be built. This is not a viable solution.
Forced sterilization - well that’s another story!
(Don’t get your panties in a waddle. I am not serious about forced sterilization. However, paying for VOLUNTARY….. :D)
“They put us in a bad financial situation by lowering the price,” said Dunn, 33. “Some of (the buyers) did 100 percent financing, so they’re completely over their head right now.”
And yet, no sign of personal responsibility anywhere. It’s all the builder’s fault. The builder is in survival mode. You, Mr. Dunn, should have thought along those lines when risking your own financial future. Way to go.
(Thanks alot, Patricio, my blood’s really boiling on this one!)
AND the builders yell and scream, “Housing Crisis!” Oh, poor builder, let me give you some TAXPAYER money. Not!
Yep, Mr. Dunn unzipped his fly and rolled his nuts out on the a financial craps table for this house in my opinion…and…he lost, lost big time. The only problem is to remove his nuts he must default…such is life…
scratch (a)
Did he “double down”?
“Now, he says, his home is worth less than he owes, making it next to impossible to refinance before his $3,000-a-month payment doubles.”
$3,000 a month doubling to $6,000 a month..ouch! He might as well stop paying now.
I’m still numb at that doubling… $3k/month is reasonable for a mortgage… $6k… very rarefied audience to pay that nugget.
I agree… he might as well just stop paying now. Game over.
Got popcorn?
Neil
WTF, you mean not everyone one in OC makes 300k a year. I’m astounded, how unexpected?
“unexpected”
“You keep using that word. I don’t think it means what you think it means…”
LOL
Paul
“Gomes said he recently saw a coffee table that normally would retail for $125 go for $25 in an auction. ‘Whoever’s out here, if they put up their hand, we’re going to sell it to them,’ he said.”
I smell shill !!
After getting banged around while being moved (by, um, ‘people’ who couldn’t give a care) multiple times, and then left out in the sun to bake/fade/dust coat for a few weeks (no more room in the warehouse), they’ll be lucky to get $25 for that table.
I’m just surprised that there WAS anyone left in California that HAD $25 ….in CASH
“In California , there are only two metro areas- Chico and Redding- where affordability even topped 25 percent,’ said Wes Keusder, a Southern California homebuilder”
Ahhhhh, an opportunity! It’s clear that Chico and Redding’s markets have more room to run!! A new spot identified for the equity locusts to flock to and destroy.
I don’t know about Redding but there is little work in Chico. The people I know there all work for SCU. That seems to be about it for large employers.
SCU = CSU…..
“So why would CAR oppose the bill? ‘It’s an affordability problem,’ said Alex Creel, CAR’s senior vice president for government affairs.”
Heh heh….I think that quote stands on its own. No comment needed.
Never mind the 7% RE Agent fee or the Mort Ins and other transaction costs. They are not material to the CAR, even though they have to be paid EVERY TIME TOO.
Yeah, it’s gonna take more than a few rolls of Bounty to clean up all the irony dripping off of that one, eh?
“He said that’s depressed sale prices at The Auction Park, which often are below normal retail prices for such merchandise.”
Well I should f***ing hope so.
I second that thought! WTF was this moron thinking?
I agree. When I read it, I thought “Who are the morons buying at auction for above retail prices?”
Whoever they are, they need to come to Paul’s House Of Auctions - Where the HELLAGOOD Deals never stop.
If you can’t pay retail at auctions, You Are A LoooooSer.
Paul
‘yet prices in east Ventura County and the Conejo/Las Virgenes valleys haven’t dropped in tandem because the region remains a desirable place to live.”’
Funny, the headline in LAST WEEK’s Acorn was about the decision on which schools to close because so many families are moving away. Also, prices in my part of the Conejo Valley (Westlake Village) are quite clearly falling. A house down the street priced at $900K and which would have gone for >$1M in 2005 just sold for something less than $800K. Of course if you happen to work at Countrywide, East Ventura County certainly is close to work. D’oh!
Deep d’oh indeed.
ABR,
You might enjoy this…
I was out on a party boat on Westlake a few weeks back and we pulled up to take a look at a house for sale. A realtor inside caught a glimpse of us through the kitchen window, ran out to the shoreline, then tried to coax us to dock the boat and come inside. Of course, we had to do a flyby at that point. Gassed it right at her then a quick juke to the right at the last second. If I only would have snapped a picture of the look on her face. Absolute desperation. Westlake Village, as well as the entire Conejo Valley, are toast. Amgen and Countrywide are both hurting right now. Take out either one and it’s all over.
BTW, ran across this blast from the past that sounds hauntingly familiar…
http://www.encyclopedia.com/doc/1G1-9343729.html
that sounds hauntingly familiar…
On the edge of…seventeen… (Stevie Nicks)
are you gay?
“Oversupply is a main reason why local housing sales have fallen, yet prices in east Ventura County and the Conejo/Las Virgenes valleys haven’t dropped in tandem because the region remains a desirable place to live.”
So the reason prices are dropping in some areas is because they are becoming less desirable places to live? And the doubling of housing prices over the past 5 years is because everywhere is now twice as desireable a place to live?
“So the reason prices are dropping in some areas is because they are becoming less desirable places to live? And the doubling of housing prices over the past 5 years is because everywhere is now twice as desireable a place to live?”
I think this statement pretty much sums it up. So how desireable will it be to live there as prices drop now?
HELOC - Dont call it a loan
From 6/26/2007 to 7/3/2007, there were 4 homes sold in ZIP code 90274 for an average price of $1,566,750.
1) $1,000,000 on Lucera Cir
2) $1,652,000 on Middleridge N Ln
3) $1,415,000 on Ranchview Rd
4) $2,200,000 on Via Leon
zip 90274 is Palos Verdes Peninsula, CA. 90274 is just south of LAX by about 20 miles as a Crow flys.
from reading the last couple days it looks like the so-called smart money is starting not to lend to these mortgage outfits and etc.
“Gomes said he recently saw a coffee table that normally would retail for $125 go for $25 in an auction.”
Whoa, stop the presses! You can get a $125 coffee table for $25! Last one at the auction is a rotten egg! (not)
This is insane why anyone would live in a bad location and commute 2 hours each way to work! Why not just rent minutes from work? I bet the rent is the same as the mortgage in the IE. Equity? Don’t tell me that. House prices are dropping and will stay depressed for a while so rent for a few years.
I smell many thousands more foreclosures in the next few years, this will help drive prices down further because those foreclosed will lose their shirt and won’t be able to get a loan for many years or be too broke to even afford a suicide loan.
To the idiot paying $3000 a month on a suicide loan, I bet that is already 40-50% of his gross income. He of course will stop paying once the mortgage goes to $6000 a month for very obvious reasons. Why didn’t he just rent the same house for $3000 a month while waiting for house prices to crash?
OC may be a desirable location but this still does not justify paying a million for a house when the same house could have been just $400k back in 1998. I smell a 50-70% off from peak prices, whats your predictions, guys?
Will there be some good, affordable places in CA once this is all over? What about the sierria or north state? Will I be able to get a nice house there with mountain views for cheap?
It doesn’t take a brain surgeon to figure out why southern California real estate is at a stand still. The house prices are too high and no one can afford them. People don’t make enough money to pay the mortgages. Sellers remain greedy in a buyer’s market thus no house sales. California is overpriced for what kind of lifestyle they offer. More and more native Californians are moving out, there is no California dream anymore. Way too crowded and the lifestyle is dropping fast. House prices need to drop at least 40-50% or the housing market is going to be depressed for years. If you don’t want to drop the price of your house — then happy living — no one will buy it.
“As it stands, the bill would cap the tax at 2 percent, and limit the life of the tax to 99 years. The bill also would require the money for the tax to be used to serve a public benefit.”
“So why would CAR oppose the bill? ‘It’s an affordability problem,’ said Alex Creel, CAR’s senior vice president for government affairs.”
“‘We think that 2 percent is totally unpalatable as well,’ Creel said. ‘If a home sells 20 times, 2 percent of the sales price has to be paid as a private transfer tax each time.’”
Hark the pot calling the kettle black…..bet they’d fight tooth and nail for the 6% on each sale!