You Have To Know The Market’s Going Down
The Union Tribune reports from California. “The first half of this year ended with a continued downward slide in San Diego County’s real estate market as sales declined steeply in June compared to a year earlier, while prices remained more stable, posting only a moderate decrease, according to DataQuick. Last month’s sales volume, which was down nearly 23 percent, totaled 3,510, which was the slowest June since 1997 and the 36th consecutive month of year-over-year declines.”
“The median price of a home, including condos, was down 1.9 percent from the previous June. Put in perspective, the median price of a home last month was 4.3 percent off the $517,000 peak price, recorded in November of 2005, reported DataQuick.”
“Tired of being pressured to raise appraised home values to help real estate loans win approval, longtime La Mesa-based appraiser Sara Schwarzentraub is steering her business away from work with mortgage brokers.”
“‘There is always pressure, but when the market is soft like it is now, the pressure becomes almost unbearable,’ she explained. ‘People are trying to refinance and there may not be equity there. That doesn’t stop people from trying to put the screws to you: ‘We need this value or we can’t afford to do the (appraisal) work.’”
“Ted Faravelli Jr., executive director of the California Association of Real Estate Appraisers, said it’s common for appraisers to feel like their arms are being twisted. ‘I think there is a pressure, particularly when there are fewer dollars chasing fewer deals,’ he said.”
“Like Schwarzentraub, Doranne Godwin, a San Diego appraiser since 1984, is moving away from ‘lender-type appraising.’ Most of the pressure, she said, comes from mortgage brokers.”
“‘I am choosing my lender clients more carefully. I am keeping the clients who do not do put pressure on me,’ she said.”
The Record.net. “The latest quarterly new-home sales figures confirm the Valley housing market is continuing to slow under the shadow of tighter lending standards and buyer concerns that prices will continue to drop.”
“Still, even with sales dropping to the lowest point in recent years - second-quarter sales of 474 in San Joaquin County fell by nearly half from the previous quarter, there are more building projects than ever in the county, according to the latest report on the new-home market by the Gregory Group.”
“There were 90 building projects last quarter, up from 70 in the first quarter of 2005, the peak of the long-running boom market.”
“There also are more unsold homes than ever in the county, the report said. In the second quarter, there were more than 1,000 new homes waiting for buyers, the highest number in the past several years. That compares with only eight homes unsold in the first quarter of 2005.”
“Joe Anfuso, president of Stockton-based Florsheim Home, charged that some national homebuilders are flooding the market with unsold houses, increasing competition so much for the limited demand that builders are forced to slash prices every few months.”
“‘It’s strictly related to standing inventory from many of the big builders who continue to build in the down market,’ Anfuso said.”
“Paquin said that in the market boom of 2004 and 2005, many builders bought land for future development. When the market slowed, they had to decide whether to sit on the land and pay interest or try to build and sell to keep cash flowing, even if they might not make any money, he said.”
“‘At the end of the day, builders build homes,’ he said. ‘That’s what they do.’”
“‘In home building, it’s a pretty big ship to steer,’ said Chris Apostolopoulos, president of the KB Home Central Valley division. ‘It takes a while to slow down.’”
“Builders say there are buyers and potential buyers out there, though they seem to be exceedingly patient and either look for the best possible deal or just watch market prices.”
The Press Telegram. “Don’t try to tell Dick Gaylord it’s a down housing market, or that there’s a housing slump, and don’t dare mention the word ‘bubble.’”
“The congenial Long Beach man, who will assume the role as the nation’s head Realtor next year, will argue vehemently that the market ‘isn’t down but just returning to normal.’”
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said. ‘If people will hold on, there’s no bad time to buy in real estate.’”
The Bakersfield Californian. “‘You have to know the market’s going down,’ said broker Scott Tobias.”
“Houses still sell if they are priced right, said Tobias, a 30-year veteran of the real estate business. He tells his agents to be wary of taking overpriced home listings.”
“Agent Jon Busby, of Bakersfield Premier Realty, was equally adamant about the importance of accurate pricing. Busby said most sellers are realistic, but others are ‘trying to latch on to an equity amount that’s no longer there.’”
“McKinzie Nielsen Real Estate lost some of its agents as the market softened. Many in town who snapped up real estate licenses during the boom were unprepared, said partner Karen McKinzie.”
“‘They didn’t have a true conceptual idea of how difficult this business is, and some of them went away,’ she said.”
“The new work includes a lot of expectations management, McKinzie said. Sellers have to understand that a house might take a bit longer to sell and that it won’t garner as much as it might have just two months earlier.”
“Experience handling foreclosures for banks has helped broker Darrell Sparks make up for diminished standard sales. He estimates that foreclosures make up about 50 percent or 60 percent of his business now.”
What kind of training do you need to have to become an appraiser?
Wanted: real estate appraiser.
Must be able to:
Read a tape measure (round to nearest foot);
calculate square footage;
calculate multiples of $300;
sign name on form(s)
Apply in person, EOE, Si Habla Espanol
It’s fairly well regulated and you need to pass an exam.
whatever……
“It’s fairly well regulated”
When? Not in the last 4 years.
http://www.calmis.ca.gov/file/occguide/REALAPPR.HTM
ENTRANCE REQUIREMENTS AND TRAINING
Real Estate Appraisers who appraise for federally related transactions are required to obtain a license from the State Office of Real Estate Appraisers (OREA). All applicants must qualify with approved education and pass an examination. In addition, appraiser experience is required to hold a Residential License, Certified Residential License or Certified General License. Many community colleges and evening adult schools offer courses in realestate appraisal. Some colleges offer courses relating to appraisal that lead to a bachelor of science in real estate. Courses in economics, real estate, business administration, and mathematics provide a good background for this occupation. Many companies provide classroom training
for their beginning appraisers. A long training period is ecessary to become skilled in appraising the more complex types of real estate. Professional associations and colleges offer seminars and classes conducted by leaders in the field.
In most cases, applicants must have a bachelor’s degree to be considered for hire by government or by private companies. Many firms require an additional six to eight months’ experience. A few lending institutions, however, will hire high school graduates who have had experience in real estate, construction, architecture, or building inspection. Applicants should possess an inquisitive nature and sound judgment. They must also be able to write and speak clearly, and make mathematical calculations.
Trainee Licensees must meet all the current requirements at the time an upgrade application is submitted in order to qualify for the Residential License. Licensees upgrading to the Certified Levels must also pass an examination in addition to meeting all the current requirements at the time an upgrade application is submitted to OREA.
There’s an ‘appraiser’ in Pismo who for a $500 bill will hit the number for you. He will even give you a 24hr turn arround for an additional $150. He gets all the tough business. As the market continues to go down he will continue to make plenty of money. Oh, he gets his pay up front.
You should post the details over at our site.
http://centralcoasthousingbubble.blogspot.com/
“Trainee License: A minimum of 90 hours of appraisal related education covering the specific topics required by the Appraiser Qualifications Board (AQB), with at least 15 hours on the Uniform Standards of Professional Appraisal Practice (USPAP). Must pass the AQB approved residential examination.”
Yep, a whopping 11.25 days training. And you must “pass an exam” that is no doubt as difficult and taxing as the Notary Exam, the Driver’s Exam…
“Residental License: A minimum of 90 hours of appraisal related education covering the specific topics required by AQB, with at least 15 hours on USPAP. A minimum of 2,000 hours of acceptable appraisal experience. Must pass the AQB approved residential examination.”
http://www.orea.ca.gov/html/lic_reqmts.shtml
Just to put a bit of context on that figure, back when I was in college a standard 4-unit course met for 3 1-hour lectures per week, for a 10-week quarter. That’s 30 hours total. 90 hours of training is thus equivalent in time to a 3-course sequence in college.
The 180 hours required for Trainee + Residential would thus be equivalent in time to 6 courses, which is basically equivalent to a minor.
That doesn’t say anything about the rigor of the training material, or the tests, but trivializing it as a “whopping 11.25 days” isn’t really fair.
I first read about this back in 2002. God only knows the impact of the fraud in apprasials has caused over the past some 5 years on home prices. Yet no one does anything about it. Its as if the everyone knew about Enron and WorldCom were cooking its books, and the Feds turned a blind eye. No Investigation and no criminal charges being filed. This is such blatent corruption it damn beyond pathatic.
Sorry. Everybody knew that Enron and Worlcom were cooking the books, and nobody cared as long as the stock went up. The moment it started going down was the moment all the “investors” got bent out of shape, and demanded heads. Both Enron and Worldcom had been doing this for a long time, and in fact the government turned a blind eye on them for a long, long time.
Tired of being pressured to raise appraised home values to help real estate loans win approval, longtime La Mesa-based appraiser Sara Schwarzentraub is steering her business away from work with mortgage brokers.”
Geez Sara, you took all the easy shit when you could hide behind an appreciating market, and now when the pimps come callin’ for their numbers in tough times you want to bail?
Tsk, tsk…so much for loyalty.
I dumped the appraisal profession way back in ‘01, cause the stink was gettin’ way too heavy for me.
Even my good client’s where gettin’ down in the gutter with the number hitters because the brokers wouldn’t bring them any biz unless if they didn’t use so and so…
Hope your enjoyed your swim in the cesspool the last 4 years.
I know, I know…you’re laughing all the way to the bank.
Bob Casagrand San Diego report for June
June 2007: San Diego Housing Market: single family attached and detached homes; The slide continues. Sales for June were 2,370 homes this is down from June 2006 by 29% and June 2005 by 46%. Inventory for June was 21,991 up from the 2006 inventory of 19,803 and 2005’s 10,910. This increase in inventory and declining sales has inventory supply at almost 10 months and continues the downward pressure on prices. Prices are dropping across all size homes except for the 2200 sq ft to 2500 sq ft size range. The amount of the price decline depends on the size range with the smaller homes showing the largest decline. Currently approximately 12% of our Active listing are listed as short sales which is another indicator of our price slide. Pending sales in June of 2,289 indicates that sales decline is still with us. Sales for the second quarter were 7,445, reminiscent of a winter quarter not the peak selling season. We are on a path to sell 25,000 or fewer homes this year compared to in the 40,000’s in the years leading up to 2006 when we dropped to 31,000. As long as we continue with the large imbalance between sales and inventory we will see downward price pressures.
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said. ‘If people will hold on, there’s no bad time to buy in real estate.’”
Is this guy on drugs or what? He needs medication obviuosly.
I would like to sick some people that are underwater 200k on this bozo. It is always a great time to buy according to most realtorwhores.
There have been several really bad times to buy. This time is different. It is even worse that previous bad times!
Just Pathatic!
And to think they outlawed Snake Oil Salesmen!
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said.”
McKinzie said… understand that a house… won’t garner as much as it might have just two months earlier.”
McKinzie, meet Gaylord.
Gaylord, meet Mckinzie.
Similar situation in Sacramento. From the Sacramento Landing blog at
http://sacramentolanding.blogspot.com/2007/07/exceedingly-patient.html
Sittin’ Out This One said…
Is the Sacramento housing market about ready to meltdown?
Consider the following:
New homes sales 1st Qtr = 1700 (6800 annually)
Inventory = 18,000 (all time high)
Re sale homes = 1500/mon
Implode-O-Meter at 99 lenders
and now, get this
Foreclosures in Sac Area in June = 3400!
Lenders foreclosed on more homes last month than the builders and realtors could sell on a combined total.
And I see no reversal for any of the trends in the foreseeable future.
Perfect Storm may prove to be an optimist!
Jingle,
That’s just scary… 3400 vs. 3200 (1500+1700)…
And it takes what, 30 to 90 days, for foreclosures to hit the market as REO’s? And others are predicting a change in mortgage rule starting September 1st. (Probably less than we would expect…)
Rising inventory…
Tightening credit.
It is a perfect storm (apologies to the blogger of that user name.)
Got popcorn?
Neil
Neil, I am glad to see someone else is understanding the significance of this data. There may be a title waive of foreclosures coming in the next 24 months. Add to that these factors: The builders are still building, re-sales are still coming on line, the mbs world is melting down, credit is still tightening, retail sales volume is dropping, commercial real estate is getting overbuilt, high wage construction & manufacturing jobs are ending, low paying service jobs are the only ones left, etc., etc., etc.
I am not saying this is all eminent, but the risk is out there, growing each week and it is looking more and more like a probability, instead of just a possibility
I remembe just 6 years ago, people went to sacramento because you could “buy a home for 100,000″, now its like 400,000 (but falling)., there certainly arent barriers to building more. I think we will see a return to 100,000 homes in sacramento. Well perhaps 100,000€ since we will have some stealth inflation.
“The congenial Long Beach man, who will assume the role as the nation’s head Realtor next year, will argue vehemently that the market ‘isn’t down but just returning to normal.’”
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said. ‘If people will hold on, there’s no bad time to buy in real estate.’”
******
Well, relatively speaking, I would say right now is a bad time to buy.
But maybe that’s just me.
No, he’s right - it IS always the right time to buy.
You just have to pay the right price. In times like this, that may be a lot less than the seller is asking.
Yup, you’re right. I’d consider this a very good time to buy if someone would sell me the house I want at 100% off its 100% overinflated price.
Looks like we have another inductee to the list of “Realtors of Genius” here’s to you Dick Gaylord, and may I say quite the name!
“Dick Gaylord, who will assume the role as the nation’s head Realtor next year”
Perfect name for the job……bends over backward to get you to buy now……don’t drop your soap around this guy!
‘If people will hold on, there’s no bad time to buy in real estate.’
“hold on” = don’t buy just yet…
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said”
The top of the last house mania might qualify…it took, what, 10-15 years for house prices to climb back up to what they had bought them for.
It’s never a bad time to pay a Realtor™ a commission!
Sounds like he’s off to a fantastic start in destroying whatever remaining credibility the NAR had.
Question: How do you know when the head of the NAR is lieing?
Answer: His lips are moving.
In a normal market, of course it’s never a bad time to buy if:
1. You won’t be moving for, say, 10 years or more
2. You don’t know what an “opportunity cost is”
3. You have a fixed 30 year mortgage that is
less than 30%
4. Don’t get laid off or transferred
But if you buy now and have to move in two years, you’ll find out there’s a bad time to buy.
I would say that in many areas, it will be bad if you have to move in four or five years.
In some areas, it could be longer.
The mellower markets will be a small loss in four or five years.
Florida… California, Las Vegas… People would still lose years of income if they had to sell in five years.
Its only starting. When I first started posting on this blog, I thought it would be mostly over by 2008… Now I know it will still be starting in 2008.
Got popcorn?
Neil
In some areas, we will not see these prices (inflation adjusted) again in our lifetimes.
We want you to know that we will honor the approved rate on all 2/28 loans you currently have in our pipeline, but fund them all as 3/27 ARMs. This means your borrowers will all get an extra year of the low fixed rate for free. For those loans in the pipeline that have prepayment penalty periods, we will leave them all at 24 months or less. This means your borrowers will not only get an extra year at a low fixed rate, they will also get at least one full, penalty-free year before their first adjustment date. This is an excellent deal for your borrowers.
So. You sign up for 2 and you get 3. Thing is how does lender amortize balance after 3 years and for next 27 years?
“So. You sign up for 2 and you get 3. Thing is how does lender amortize balance after 3 years and for next 27 years?”
They don’t. The secret is collecting fees for as long as possible, paying out year end bonuses to the Board of Directors, and using what’s left over to declare bankruptcy Q1 2008. Someone else will get to clean up the mess.
what a scam - how beneficient of them!
How can they fund them? In less than a week I had to update my blog on the same topic. The collapse of the A rated ABX indexes.
http://recomments.blogspot.com/
Subprime will somehow stick around for a while longer… but its dying off.
Got popcorn?
Neil
This guy Dick Gaylord who’s set to become the nations “head Realtor” - is that a powerful Executive position like the Surgeon General or Attorney General, ie the “Realtor General”?
I propose we refer to him as General Gaylord.
Just plain Gay in my book.
Is this gaylord focker?
erm….I think it’s more akin to head nurse.
Come on now, let’s be fair. You really can’t compare the two. A nurse’s job is to save lives, not ruin lives.
nurse rachett
Medication time, gentlemen…
OK, now I get it.
“Last month’s sales volume, which was down nearly 23 percent, totaled 3,510″
When I look up June sales on
http://www.sandicor.com/statistics/stats2007/06statistics.html
I get:
JUNE 2007
Includes all property classes:
Resident - Detached, Attached, Moblile Home, Lots/Acreage - LOT, Income - 2-4
new listings: 7,124
closed sales: 2,468
Value of closed sales: $1,630,043,012
I thought this was an exact science? How can they be more than 1000 sales off?
I suspect the devil’s in the details. As in the difference between sales posted and sales closed. A 76.89% closed rate is probably decent, considering cancellations on new home purchases are running 30%+.
In talking to my agent, there have been no sales closed in my local area since early May. I wonder if the actual decline in sales is broader and deeper.
Save the following quote because this guy doesn’t have a clue as to what’s happening now, much less what’s going the happen in the next few years:
“Despite the prolonged slump in the market, there is still room for optimism, believes DataQuick analyst John Karevoll, who suspects that San Diego will continue to dodge steep price declines.”
““The big issue here is that with the slowdown, you would have expected prices to come down much more than they have, and it’s very likely now that most of the decline off the peak for San Diego has already occurred,” said Karevoll. “It will probably wobble around where it is now.”
The assessor lowered the value of my property (through January 1st, I think), around 10 percent below the peak 2005 value. This is still much too high based on the current market. To sell, it would probably need to be at least 20 to 25 percent below the peak 2005 prices. A coworker had the assessed value of his property lowered 33 percent.
There have already been significant declines in value for many properties. With inventories climbing, sales declining, foreclosures at record levels, and tightening of credit, it would appear more declines and probably steeper declines are in the not too distant future. Only a fool would call a bottom now.
Here’s a link to some previous comments he made in September 2006:
http://tinyurl.com/2wk78l
Not exactly ahead of the curve with his analyses.
“Experience handling foreclosures for banks has helped broker Darrell Sparks make up for diminished standard sales. He estimates that foreclosures make up about 50 percent or 60 percent of his business now.”
This is the new revenue stream for the realtors.
Florsheim Homes ? I’ve heard & seen Florsheim shoes … hmmm
Yes, This is the builder that did built for the lil’ ole lady.
Hey, didn’t that overly fertile ho-bag live in a shoe?
LOL
buster brown lived in the shoe! ..with his dog!
Another point not many people comment on is that fact that EVEN IF YOU COULD get a house for a “good” price this afternoon- it does not mean you should buy it. Why? Because you don’t know how some of these neighborhoods are going to play out. In 5 years they could be foreclosed slums. That will be my biggest concern and an item that I will research before buying.
If that is your biggest concern, you should repriortize your list of concerns. Kind of like this:
Things to check before buying–
1. Paint doesn’t cover up a house made of cheese.
2. The neighbor doesn’t have a chimpanzee with bubonic plague.
3. George Bush will be my neighbor after he leaves office….
1074. If the neighborhood has a chance of becoming a slum and burning down on a hot, malt liquor induced night.
Except the original posters concern wasn’t a fairy tale, and in fact was true for many, many neighborhoods in the last downturn. New developments can easily become slums, extend their portion of the downturn even longer, decades longer in some cases from the last bust. Check your facts.
I’d say some of the new neighborhoods in Riverside County and San Berdu are already slums, long before the foreclosure cycle has played itself out. Speed freaks, check kiters, and delinquent mortgage fraudsters are already slumming it up good in some areas, I’d say.
Ain’t subprime loans grand?
“Speed freaks, check kiters, and delinquent mortgage fraudsters …”
How dare you insult middle-cass America…
Why, if it wasn’t my turn to stand shotgun at the street facing “view” window, I’d give you a right verbal thrashing…..
I don’t need to check my facts. I’ve got common sense. Guess I shouldn’t assume people like you do.
He who buys a car without an engine shouldn’t be surprised when it doesn’t work.
Heeeeeere, trolly trolly…
Ive never seen a house made out of cheese. Now THAT i would like to see!
“Dick Gaylord” — Let the puns begin!
I’ve never been able to comprehend the thinking of parents who name a kid “Dick.” How about Richie or Rich? No, we’re calling him Dick, and that’s final.
the kid could really have a problem if he’s a junior. you’ll have big d… and little d…
hahahahaha
I don’t think the parents call them Dick. I think it just kind evolves naturally. Have you ever known a “Dick” who wasn’t one? I haven’t. Nice guys named Richard are called Rick or Rich.
There’s a Cheney joke in there somewhere. With birdshot.
Dick Nixon
Dick Cheney
Hummmm…
I had a friend named Richard who was quite the quintessential nerd type, though by senior year in college he’d gotten socialized so well that he was a party asset. (He could dance very well— including ballroom dance— and had learned to carry a conversation without somehow turning it to math or computer science.) Math/Comp Sci major. Played the marimba. Average height, thin, and wore glasses. Had his own tux, though (see marimba playing, above.)
Anyway, he was clearly a Richard or a Rich. There was one person who insisted on calling him Rick, though, and it simply— did— not— work.
I had a friend who worked as a receptionist at a small law office. The owner name was Richard and he went by Dick. This girl worked there for quite a few years and from the stories she tells the name fit his personality. (A former receptionist had stolen quite a bit of money from the firm so he would constantly make accusations against the current employees - even the ones who had worked there over a decade.)
Anyway, one day Dick came into the office and told everyone that he wanted to be called Richard from now on. He and his wife explained that they had just learned that there is an alternate meaning to the term Dick.
Seriously. This was in the late ’90s when this happened.
A co-worker was named Dick Ball. No joke.
Could be worse: Harry Boughner
From Calculated Risk, the containment continues to be contagious.
“Its official, every single tranche in the ABX hit a new low today (first time ever)”
http://www.markit.com/informatio…ations/ abx.html
This “toxic sludge” of loans mixed in with the “good loans” reminds me of the old proposal for dealing with radioactive waste. Basically the idea was to mix it in with large amounts of material we all use, say asphalt on the roads, concrete, steel in cars and other equipment, building materials, even jewelry (yikes!!).
So far, some people have been making great hay slipping the “sludge” into larger mixes of bonds of higher quality. Then hopefully nobody notices the awful loans hiding in there. It’s a great con, if you think about it.
“Then hopefully nobody notices…..”
Well nice goin’ Home_a_Loan….. if you keep calling the Chinese ‘Nobody’, we’ll never sell this crap….
“‘I don’t know that there’s ever been a bad time to buy,’ Gaylord said. ‘If people will hold on, there’s no bad time to buy in real estate.’”
——————————————————————————
So did HE buy any real estate in 2005 or 2006?
I’ve got a $20 bill says he didn’t.
KB homes is still building in sonoma county.there is what appears to be a couple of hundred home development going in on the south end of petaluma,just west of highway 101.the grading is nearly done and it looks like they will be building through the winter to come.beautiful view of the freeway.as far as instant slums check out El Dorado hills…although the shitboxes they built there are unlikely to last 30 years it will be a hellish place to live until they disintegrate.
Much as I hate to do it, I have to disagree. In Sacramento, the slum-divisions are the new housing build in the Meadowview area and scattered smaller places down into (and including) Elk Grove. This part of South Sacramento has always had problems and you can’t blame folks for moving into nicer digs but still staying close to their old friends and family, which is what is happening. Many of them became subprime borrowers who briefly clutched the American Dream, and more are renting these same homes Section 8 now.
El Dorado Hills has always been a fairly affluent community, as has Folsom. There is geographic distance as a factor here, as well as culture. People really do tend to want to live within their own cultural enclaves, and it works both ways.
Those homes may be worthless and dangerous from being built on ridges in a windy pass, riddled with mold and possibly with asbestos from the rocks. But they will never become slums. Maybe a ghost town? Or maybe some entrepreneur contractor will be able to salvage them, rehabilitate them, and turn them into apartments — like the old Victorians downtown.
In the previous post someone’s landlord committed suicide for going bankrupt for owning too many houses. The tenor Jerry Hadley also just committed suicide and also declared bankruptcy. I wonder if real estate was involved?
Maybe there is a trend developing…..
Depressing, indeed. One has to wonder whether real estate speculation led to bankruptcy…
—————————————————————————–
Noted Tenor Taken Off Life Support
The Associated Press
Monday, July 16, 2007; 4:06 PM
POUGHKEEPSIE, N.Y. — Celebrated tenor Jerry Hadley was taken off life support Monday, nearly a week after an apparent suicide attempt left him with a severe brain injury.
…
Officials said last week that Hadley was filing for bankruptcy and had been treated by a doctor for depression.
http://www.washingtonpost.com/wp-dyn/content/article/2007/07/16/AR2007071601073.html?nav=rss_artsandliving/entertainmentnews
Oh Chit………..
Is this lot contained as well???????
Scroll down to the charts.
http://bigpicture.typepad.com/comments/2007/07/wtf-is-going-on.html
Somebody appears to have accidently linked in an altitude chart for the water going over Niagra Falls…
Hmmm, hadn’t we been talking about this for a while:
http://thehousingbubbleblog.com/?p=3016
“Comment by arroyogrande 2007-06-27 10:45:53
Sorry for being OT again, but doesn’t any one else find it interesting that the supposedly “A” grade Credit Default Swaps (insurance on “packaged/bundled” mortgages(?)) tracked by the ABX index are down so much?”
http://thehousingbubbleblog.com/?p=3105#comments
“Comment by arroyogrande
2007-07-15 11:10:32
Not to keep beating on the same drum, but the double-A (”AA”) tranche of the ABX index (specifically the 07-1 series) is now following the same pattern of the “A”, the “BBB”, and the “BBB-” tranches”
I know Neil has been watching and reporting the successive ABX “A” and “AA” and “AAA” failures as well. It’s good to see the analyst blogs take the ball and run…how long before the “big media” gets interested?
Reporters, it’s time to start researching your next big business article: “The fall of Alt-A home financing”.
Also…(forgive me if this was posted before)
CFA SOCIETY OF CHICAGO SPEECH � June 28, 2007
Absence of Fear, by Robert L. Rodriguez, CFA
http://www.fpafunds.com/news_070703_absense_of_fear.asp
“We have witnessed an explosion in the size and types of securitizations, with mortgage securitizations leading the way. We were on the March 22 call with Fitch regarding the sub-prime securitization market’s difficulties. In their talk, they were highly confident regarding their models and their ratings. My associate asked several questions. “What are the key drivers of your rating model?” They responded, FICO scores and home price appreciation (HPA) of low single digit (LSD) or mid single digit (MSD), as HPA has been for the past 50 years. My associate then asked, “What if HPA was flat for an extended period of time?” They responded that their model would start to break down. He then asked, “What if HPA were to decline 1% to 2% for an extended period of time?” They responded that their models would break down completely. He then asked, “With 2% depreciation, how far up the rating’s scale would it harm?” They responded that it might go as high as the AA or AAA tranches.”
“Don’t try to tell Dick Gaylord it’s a down housing market, or that there’s a housing slump, and don’t dare mention the word ‘bubble.’”
“The congenial Long Beach man, who will assume the role as the nation’s head Realtor next year, will argue vehemently that the market ‘isn’t down but just returning to normal.’”
Shill alert!
“The median price of a home, including condos, was down 1.9 percent from the previous June. Put in perspective, the median price of a home last month was 4.3 percent off the $517,000 peak price, recorded in November of 2005, reported DataQuick.”
Down by lots more than 4.3 percent by the S&P/Case-Shiller methodology (which is more accurate for measuring the price change for any given house, as it averages the price trajectories of homes that sold more than once over time…).
You have to read the comments following that SD Union Tribune piece. There is a comment war there that would make any of Ben’s regulars blush, and some of us have a few battle scars from days of yore.
Here is one which grabbed me:
“By Khalil Greene on 07/16/2007
Dude, I make $2,250,000 /year and I still can’t afford to buy a house in SD. I graduated Ridgemont High. Come see me play tonight at Petco. I may hit for the cycle.”
That’s got to be a joke, but pretty funny at that…
“The big issue here is that with the slowdown, you would have expected prices to come down much more than they have, and it’s very likely now that most of the decline off the peak for San Diego has already occurred,” said Karevoll. “It will probably wobble around where it is now.”
Well I hate to say, but big drops in sales volume normally precede price drops, especially when accompanied by a large buildup in inventory. I guess DataQuack doesn’t track inventory, though?
Oh prices will fall, give it a few more months to see another wave of price drops.
The Subprime Meltdown: A Primer
http://www.nera.com/image/SEC_SubprimeSeries_Part1_June2007_FINAL.pdf
Well don’t expect the excess inventory of new homes in Sacramento to go down any time soon. From Tuesday’s Sac Bee:
http://www.sacbee.com/101/story/276289.html
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Placer County supervisors Monday approved a development the size of a small city just north of the Sacramento County line.
The Placer Vineyards project — in the works for the past 13 years — is the largest development ever approved for the unincorporated portion of Placer County, and one of the largest ever approved in the region.
It will bring 14,132 houses to a rectangular swath of 5,230 acres of farmland west of Roseville. About 32,800 new residents are expected in the development, which will be built over 20 to 30 years…
The project is bounded by Baseline Road on the north, the Sacramento County border on the south, the Sutter County line on the west and by Walerga Road and Dry Creek on the east.
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That’s going to make for a pretty hellish commute to get into downtown Sacramento, even if they eventually add light-rail.
So the question is whether this new Eden will look more like Rocklin (as the planners intend) or Rio Linda/Elverta? I’m betting on the latter.
I just got coffee in my sinus cavities, but it was worth it. ‘Dick Gaylord’?
I rejoice!
This guy absolutely should be a porn star, working in one of the more ‘specialized’ sub genre’s, like the kinds you have to special order from Bulgaria. You know, the smearily produced sort, with trained squirrels, and lutes, and maybe even an antique Smith-Corona typewriter for props.
His mom should have picked a better name, but in any case she can be glad he somehow rose above it to become the Grand Spokesman for Realtors, instead of being forced into making a career of performing utterly debased, indecent, and dehumanizing acts for money, shamelessly prostituted to an audience, made to writhe around and pretend to enjoy it.
Oh… wait.