There’s More To Come In California
Bloomberg reports on California. “California mortgage defaults rose to the highest level in a decade in the second quarter as falling home sales and higher interest rates battered the housing market. Homeowners received 53,943 default notices, more than double the 20,909 filed a year ago, DataQuick said today. Last quarter’s default level was the highest since the fourth quarter of 1996, when 54,045 notices were recorded in California.”
“Most of the loans that went into default in the second quarter were originated between July 2005 and August 2006. Loan originations peaked in August 2005. ‘We’re going through a lot of that activity,’ DataQuick analyst John Karevoll said in an interview. ‘There’s more to come.’”
“The number of defaults resulting in foreclosures is the highest since DataQuick began keeping records. The previous high was in early 1994, when about 30 percent of defaults resulted in foreclosures, Karevoll said.”
“Only 55 percent of homeowners are able to avoid foreclosure because a greater number now have multiple loans on their properties.”
“In the past, when a homeowner had just one mortgage, the lender would often allow the borrower to sell the home for less than the amount owed on it and take the loss, known as a short sale, Karevoll said.”
“‘They can’t do it that way anymore because the primary lender can’t tell the secondary lender, ‘We’ll take all of the sales price here and you get nothing,’ Karevoll said.”
The Union Tribune. “DataQuick reported on Tuesday that during the first half of 2007 San Diego County had 2,896 foreclosures compared to 445 during the first half of 2006, a 551 percent increase. Notices of default, the first step in the foreclosure process, totaled 8,314 for the first six months of 2007, compared to 3,311 in the same period last year, a 151 percent increase.”
“DataQuick attributed the spike to ‘flat or falling prices, anemic sales and a market struggling with the excesses of the 2004-2005 home buying frenzy.’”
“‘There is no sign that they are on the verge of turning around,’ said University of San Diego economist Alan Gin. ‘It could take a while for this thing to shake out.’”
The LA Times. “Foreclosures in the state during the second quarter totaled 17,408, up 799% from the same period last year. The current rate handily eclipsed the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump.”
“‘We’re clearly in for a worse third quarter and an even worse fourth quarter,’ said John Karevoll, chief analyst at DataQuick.”
“Ron Barnard, owner of Home Center Realty, which has several offices in the Inland Empire, predicted that the shake-out would continue for two more years. He said there was a year’s supply of houses on the market now in San Bernardino and Riverside counties, up from a three-week supply at the height of the boom.”
“Perhaps, he speculated, it was so easy to get into houses during the boom, many lenders didn’t even require down payments, that it’s easy to give them up too. ‘You walk in with nothing in your pocket, it’s easier to walk away from it,’ Barnard said.”
The Press Democrat. “Mortgage defaults, the first step in the foreclosure process, are the highest in Sonoma County since at least 1992, according to DataQuick. Lenders sent default notices to 462 homeowners in Sonoma County during the second quarter, up 129 percent from the same period a year ago.”
“Meanwhile, 163 Sonoma County homeowners lost their homes in foreclosure proceedings during the second quarter. A year ago, lenders seized 18 homes in foreclosure proceedings during the same period.”
The Santa Cruz Sentinel. “Nearly 7,000 homes were sold at foreclosure auctions in May, about 15 percent of all real estate in California, according to Foreclosure Radar.”
“The number of homeowners having trouble making mortgage payments stands at 397 so far this year, about double last year’s numbers, according to the Santa Cruz Record. About half are in foreclosure, and 117 have lost homes in foreclosure sales.”
“The problems are worse in neighboring Monterey County, where 1,156 have received default notices, quadruple last year’s numbers. As in Santa Cruz, about half of the Monterey properties are in foreclosure.”
“In the tri-county area, which includes San Benito, a whopping 531 homeowners have lost their homes in a foreclosure sale, 10 times the number compared to a year ago.”
“Watsonville is buzzing with foreclosure activity, with 81 properties taken back by lenders, according to RealtyTrac.”
“‘It’s only going to get worse,’ predicted Vern Johnson, who presides over sales of foreclosed properties outside the Santa Cruz County Government Center. ‘They are more strict with new loans, and there are fewer no-money down loans, although I just saw a sign saying ‘loans with no money down.’”
The Sacramento Bee. “New foreclosure data released Tuesday shows the financial fallout from the sizzling five-year housing boom is still growing in the Sacramento region.”
“Lenders foreclosed on another 2,251 households during April, May and June in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick. That’s up 33 percent from the first three months of 2007.”
“Conditions are also ripe for still more foreclosures and bank reposessions ahead. DataQuick reported that another 5,201 households fell behind on their mortgage payments during the second quarter in El Dorado, Placer, Sacramento, Sutter, Yuba and Yolo counties. That’s 15 percent above the first quarter numbers.”
“Sacramento County, with 1,662 foreclosures and 3,840 notices of default, had the region’s greatest share of foreclosure related activity. ‘It’s like that book, ‘The Perfect Storm,’ said Sacramento real estate agent Carey Covey, a specialist in marketing homes repossessed by banks. ‘All the factors have come together to create this situation.’”
“Covey has so much business he can’t handle anymore.”
From CBS 13. “Hundreds of empty buildings are crowding Sacramento and some of them are attracting crime. The number of vacant building has more than doubled in Sacramento in the last three years. Many of them are deteriorated and some have become a magnet for criminal activity.”
“The sharp rise in vacant homes is tied to the growing number of foreclosures. Homeowners who can’t afford their homes simply walk away.”
“The city is proposing some pretty hefts fine for people who neglect their homes. A huge percent of vacant homes are owned by banks and this rise in fines could start racking up some pretty big leans against vacant properties, which may motivate the banks not to just let property sit.”
The Orange County Register. “O.C. real-estate and lending job counts are off 4,900 in the year ended in May, the biggest year-over-year drop since January ‘95. And the state’s count does not track the self-employed or the off-the-books workers.”
“It’s worth noting that one year ago, O.C. real estate/lending was adding workers at a 10,700-jobs-per-year pace.”
The North County Times. “Residential construction in the area continues to languish and is no longer offset by stronger commercial building activity, according to an industry report.”
“Local governments in Riverside County issued building permits for 1,201 housing units in June, a decline of 65 percent from June 2006, according to the Construction Industry Research Board.”
“The permitted houses, apartments and condominiums totaled $271 million in value, a decline of about 61 percent from $686 million in June 2006.”
“The retrenchment is a response to the number of unsold homes in new tracts and, ultimately, to weaker demand from buyers, industry analysts have said. Builders have also sought to get rid of empty houses by offering steep discounts and whopping incentives.”
The Tracy Press. “A record number of ‘for sale’ signs line the streets in Mountain House and Tracy.”
“Eighty homes in Mountain House and 971 homes in Tracy are elbowing to stand out in the crowded market. And sellers and real estate agents who compete with housing developers and banks for buyers have cut prices and turned to unique methods to sell.”
“Dipping prices and plenty of homes to choose from have done little to attract buyers during the past year. About five homes sell in Tracy each month.”
“‘With this market and record number of homes, sellers are getting a little desperate and trying different strategies,’ said Annabelle Ramirez, a real estate agent in Tracy. ‘The strategy is about pricing now.’”
“The few homes that sell each month have either low price tags set by housing developers or homeowners who can afford to drop their price. Or they’re houses that have been foreclosed.”
“The market has pushed many local real estate agents out of the business and into other jobs, according to Neil Metal with Metal and Brooks Preferred Real Estate Group.’
“‘As a whole, most of your agents are dying out here,’ he said.”
“Metal advises potential buyers to wise up and take advantage of the market. ‘You can find the same home in the same neighborhood for a significantly different price,’ he said. ‘Look around.’”
“Christine Lynch with Preferred Real Estate Group, blames the spike in the number of homes for sale not on the stagnant market, but on too many eager buyers. A lot of people who bought homes three or five years ago signed on to loans that offered low interest rates for just two years, Lynch said. Once the interest rates rose, as according to the terms of the loans, owners saw their monthly payments soar.”
“As of Monday, Fannie Mae Foundation requires potential home buyers to qualify for a principal payment plan and an interest payment plan even though the buyer might only sign on to an interest payment plan.”
“‘People are waiting for the bottom to drop out before they buy,’ said Lynch. ‘The prices will rise soon. It’s a fantastic time to buy right now.’”
“‘People are waiting for the bottom to drop out before they buy,’ said Lynch. ‘The prices will rise soon. It’s a fantastic time to buy right now.’”
If only we could hire people to do drive by slappings….
House prices are going up soon in Tracy? The desperation is getting pretty intense.
it’s just funny and sad. or sadunny. hey i just made a new word. that’s cool. sadunny.
Actually this is getting pretty damn spooky, this has barely started and this pissed off pit bull they put under the rug is coming out. I still remember that IBM commercial with the 20-somethings launching their web site, and cheering the initial sales then slowly start to realize they can never handle the sales as it spins widely into high numbers. That is how I feel now, yeah I wanted a correction, however this is going to be ugly I mean like testing the mettle of the Union ugly. If this doesn’t make you a tad scared you got a screw loose, buying gold….buy a gun! I may be over reacting, but those of us living in metropolitan areas over crowded with incompetent, quivering, do nothing people have much to consider….crabs in a bucket….and it may just implode I hope I am wrong but this is freaking scary!
The early 1990s recession and SoCal real estate belly-up gave us the excellent “Falling Down,” with Michael Douglas as a laid-off aerospace engineer.
Can we get a sequel, with a mortgage broker in the starring role?
I still love that move.
“move” = “movie”
Thomas, that’s a good point. If all we get out of this is a movie, I’m for it. But this is a worse bubble than the one in the early 90s and the US savings rate is negative for what - 15 months straight?
BTW: I was an aerospace engineer at the time the movie came out, I had very short hair and wore button down short sleeved shirts and eyeglasses. I grew my hair longer after that and gave up the buttoned-down short sleeve shirts. Sheesh!
I grew my hair longer after that and gave up the buttoned-down short sleeve shirts.
Why? I seem to remember Michael Douglas turned into a bad-ass in that movie. Didn’t he whack a wannabe gang member with a baseball bat?
I don’t think you could convey middle-aged fury any better after that movie than with a short-sleeved shirt, a pocket protector and some glasses.
Sort of like “Revenge of the Nerds” with balls.
You are spot on Patricio…..Anyone who has experienced a hard recession in their adult life would understand….With all the leverage in the system, any recession now would dwarf the 1982 downturn IMO….I pray it does not happen….….
1982 still scares the living $hit out of me. The younger guys I know just don’t get it. It was one f—ed up time. I’m guessing that this time will not be worse.
That should read, “I’m hoping that this time….”
“would dwarf the 1982 downturn IMO”
Graduated college a few years later…college grads (friends included) had to take jobs as sales associates at May Co. I made $12,000 my first year out of college. Ate a lot of pasta, beans, and rice.
I think we’re about the same age.
I remember how bleak things were in OC from 82 to 85. It really was the land of the haves vs. the have nots. This was also when Reagan cut college funding for veteran’s children. Talk about a double whammy - no wonder I’m such a pessimist.
this was aound my time too - have a feeling there are a lot of ppl here in mid-40s. I had to take a sh!t job out of college too. Picked up in 87-88.
Me, too. I deeply internalized so many negatives during that time. My kids look back on it as their “poor” childhood, and it was. Things were so unaffordable, and good jobs were so scarce. It was the end of the prosperity of the Midwest town I grew up in, and unemployment there was at 10%. More than anything, it was the pervading feeling of hopelessness that I remember. I also lost my little 401(k) nest egg on Black Monday, and in combination with childhood stories from the parents on their own Depression-era bad times, I’ve been a little froggy about economics ever since.
Look at the bright side - no more little brats driving around in their BMWs with their Gucci shades on thinkin’ they’re the sh*t livin’ on credit!
Where should I put my Fidelity 401k funds? I currently have them in FDIVX, MSEIX, DODFX, & FMCSX.
What a joke, prices going to drop for 2 more years. She is trying to get some commission money to make her Benz payments.
I put her email address below…
How ’bout a physical address…..I’ve got a Joshua tree with her name on it.
LMAO!!!
How many joshua trees can a single ass hold? I’m guessing that she is about to find out the answer to that age-old question.
slap a ‘wide load’ bumpersticker on that one
ROTFLMAO
Oh man… wine in the nose… good one on the Joshua tree.
Got popcorn?
Neil
“The market has pushed many local real estate agents out of the business and into other jobs.”
Maybe Christine’s next job will be selling sh*t to a cow!
Oh man, I have coffee all over my computer screen now. Thanks Doug!!
Ben is a sensitive man. Realizing the drubbing some mortgage companies took at the stock market, he is trying to be funny. That quote is not real, only a programmable robot would say such things, not a real human being with some brain.
Well she will need to invest in a different kind of polish, because those turds just don’t look as shiny as they once did!
“….drive by slappings”
LMAO!!!
Why did I just get a Three Stooges visual? That would feel so damn good to line two or three of these idiot realtors up and go Moe on ‘em. “Wise guy, eh….”…..smack-smack-smack!
LOL on *that* visual
There’s even more in Santa Clarita, Oh the humanity.
SANTA CLARITA - The city will crack down on sign twirlers who advertise everything from Hondas to ice cream from the walkways because they’re in the city right-of-way.
The popular nationwide phenomenon often features agile performers who defy passers-by to ignore them. Complaints apparently triggered the move.
“We’re working on setting up enforcement, getting in touch with business owners,” said Curtis Williams, the city’s senior community preservation officer. “We’ll let them know they can’t be in the city’s right-of-way - it’s no different than putting a sign on the sidewalk.”
Talk about kicking the HB’s in the head with steel-toed boot!
“This is 911 what is your emergency?”
“I was sliced in the face by a spinning sign twirler on McBean and Valencia Blvds”
“All units respond, SWAT needed, deadly sign twirler, proceed with caution”
No, I think they’re trying actually to kill the messenger!
Exactly, here’s the news quote:
“Suspect lunged at the officers with the… “99 cent Hot Dog ” sign…it hit the police dog…so they had to respond”
Wife noted last weekend on the absurdity of San Diego sign twirlers trying to interest drive by lookee-loos in the many brand new $1m homes in the area. She commented that there is something downright tawdry about a sign-twirling teenager trying his durndest to call attention to large, conspicuous McMansions with For Sale signs out front.
Speaking of family members making astute comments on the San DIego real estate situation, I was driving my 12-year-old daughter to summer theater camp this morning, when she commented that it looks to her like too many new homes have been recently built in our area. This was yet another shoe shine boy moment by my reckoning…
Isn’t sign-twirling like performance art?
I remember a few years ago passing through Tracy and seeing one of those hired sign-holders (a female) standing on the corner of Corral Hollow and 11th St. Instead of “doing the dance”, she was spinning the sign she had in circles furiously, and not once in the couple of minutes while I was stopped at the light did she let up.
What I wondered was, how is someone going to get information as to the what and where if she can’t be bothered to stop spinning the sign long enough SO THAT PEOPLE CAN READ IT?
Uh oh…
The contagion is spreading…
http://news.yahoo.com/s/ap/20070724/ap_on_bi_ge/earns_countrywide_3
“Foreclosures in the state during the second quarter totaled 17,408, up 799% from the same period last year. The current rate handily eclipsed the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump.”
“Riverside County at a new high. In addition, there’s a year’s supply of houses on the market in Riverside and San Bernardino counties, up from a three-week supply at the height of the boom.”
Mind boggling…so how is this any different than the last housing slump, you know, the one where prices went down for years? Yes, it’s not the economy and layoffs that are starting this one, but the reasons for housing price declines (increasing inventory, increasing foreclosure, and decreasing demand) are all there…except that this time it’s actually WORSE in magnitude: “The current rate handily eclipsed the previous foreclosure peak set in 1996″
And, add to that the real potential for a recession that would then dwarf the downturn in 1992….
I remember a friend from San Francisco coming home to Ohio and telling us her condo was worth $100-150k less than what she paid for it. They wanted to buy a house since they’d had a baby, but she said it would be years before the condo would be worth what she paid. So they just stayed there. Her son was 1 then and now he’s 18. I wonder if they got out when the values rose back up.
I also had friends come back to Ohio from LA — after just walking away from condos they could no longer afford or manage to sell in the mid-90s.
Glad you said that … plenty of fools in San Fran will never say that. They still think SF prices never went down. But it true in the City prices did decline in a major way.
But John Husing said that the IE has a diversified economy so prices couldn’t drop there. Damn economics supply-demand curves.
Yes, it is diversified, if by diversified he meant construction, warehouses and local distribution…which all rely on a strong economy and disposable income. LMAO
Well, and meth.
Weren’t foreclosures up 800% in the 1st quarter too? How is it different this time?
The notational value of real estate this time is 300% more than last time. Can you say wealth destruction yet?
I recon it is much different this time. Much worse. Just look around at the failing infrastructure and indebtedness of people, corporations and governments in our country.
You are scaring the daylights out of me. But I knew it; this crazy credit will end up in a nasty depression.
crazy credit, i mean CRAZY credit = depression
Ok, so I am pessimistic on this one, but it is in my nature to look at situations like this and know they cannot end well.
How is it destroyed? Just because you foreclose on your home doesn’t mean Robert Toll has to give back what you paid for it. Sure interest profits are lost…. But some people (the rich) are now richer. Their money doesn’t go away unless the poor people ransack their castles.
799%? there is no problem - move on
Christine@OurRealEstateLady.com
Christine Lynch with Preferred Real Estate Group
What? You want me to email her! “It’s a fantastic time to buy right now.” This statement says it all. “I want to be Lynched”. Buy now and owe forever.
Got an email the other day from a Real Turd and said to act now before the end of the summer sale. I just went off.
“real turd”
that is funny.
i’ve been reading this blog over 2 years, i don’t recall seeing real turd before. absolutely perfect. kinda like “Man Coulter”
“Foreclosures in the state during the second quarter totaled 17,408, up 799% from the same period last year. The current rate handily eclipsed the previous foreclosure peak set in 1996, when the state was in the final throes of six-year slump.”
Anybody want to try and explain to me why this is going to be painless? This is the first inning!
Cause it is a soft-landing and subprime is contained.
“Cause it is a soft-landing and subprime is contained.”
I think I’ll still hold on to my barf-bag while the bozo plane makes its so-called “soft landing”!
Anyone notice how the soft landing comments have magically disappeared from the mouths of the often quoted RE shills.
Somehow the words “soft landing” were never spoken and from the looks of it will never be spoken again.
Kind of like “shock-and-awe”
What about that “plateau” we were riding on a year ago?
So long “souffle.”
If this were an airplane, the nose would be down 30 degrees, the rivets would be popping on the wings and the passengers would be screaming. The cabin crew would be telling us that statistically flying is the safest way to travel, and we were going in for a soft landing. Far below … The Rocky Mountains…
It’s amazing Paulson was on Kud-low yesterday talking it’s important to have a strong $ and sub-prime is contained.
May they can call him on the phone and have him give a runny commentary.
How the implosion is contained.
Maybe they can still say it’s contained. . . to Earth.
Because we are going to be landing on pillows.
“Because we are going to be landing on pillows.”
Quick, get me some Bed Bath & Beyond stock!!!
If you’re the pilot of a Jumbo Jet you don’t get on the intercom and say “Nobody panic, we’re all going to die in 3 mintues, thanks for your time”
As I see it, the pain is mainly in outskirts of LA, due to recent residential construction in areas like San Bernardino, Riverside, Antelope Valley. I haven’t seen any sign of distress in preferred areas like Cerritos, La Palma, South Pasadena, Arcadia, etc. Anyone see it differently?
It’s all a facade. I bet if we can gaze into the balance sheets of the households in these so-called preferred areas, the two Bear Stearns subprime hedge funds are worth more, which is not much since those two funds are worthless.
You’re right. I see the core of LA experiencing dramatic slowing, but without new construction to undercut existing homes, prices are going to be a lot stickier the closer you get to the coast. Without a recession, I think people expecting >25% declines in LA and OC are reaching. As a renter, I hope I’m wrong though!
I am already seeing REO’s with 30% off peak prices in south OC. You just gotta start looking Jimmy.
What cities Bubble?
I have no doubt that you’ll find those kind of deals, I’m speaking more of an overall haircut. I think the possibility of a BIG drop seems more likely everyday, though. The snowball seems to be picking up speed.
Jimmy, I keep here the East Coast of the version of that bull$hit. “Westchester, Manhattan, high-end areas of Long Island, etc. won’t fall.” It is complete bulls–t. The high-end won’t get out of this. No area will escape. I don’t care what anybody says. We are on the brink of one of the largest credit contractions in history. Slowly or quickly, the outcome will be the same.
“We are on the brink of one of the largest credit contractions in history.”
Since credit drives the economy, this mother of all credit contractions will result in a never before seen, out of this world economic contraction.
True
Norcal: Rancho Santa Margarita and Mission Viejo
Ah, you’re keeping your eye on RSM, too?
There’s a nice REO 2 BR condo on Via Meseta (I think — somewhere thereabouts) listed on realtor.com for $299K. Last sale was in 2005 for $374K.
Still an insane price for a glorified apartment, but a move in the right direction.
Yes. So nice to see prices dropping drastically now… I saw a 4 bd home 2500 SF in Dove Canyon in the low 700’s - probably would take in the 6’s. Looking to see them in the 500’s by year end…Heck, at the pace things are going, it is possible.
Don’t forget to do a title search at your local clerk’s office BEFORE you bid! You may find some interesting information…an leins on the property.
Even if you have to rent forever, do so as long as it’s cheaper. Or you could simply relocate to an area of $100k houses. Why stay in an overpriced location?
“Without a recession”
Wait a minute…what would a recession add to the mix that we don’t already have?
Recession leads people buying (able to buy, qualify, wanting to buy).
Recession leads to owners (and banks) forced to sell (foreclosures).
Recession leads to increasing inventory and months of supply.
We have all of these right now, and it’s only going to get worse (CS ARM reset chart).
What would a recession ADD to what we already have? What is so magical about a recession that brings down house prices? And doesn’t the current situation already have the needed magical ingredients?
In other words, why what is different about a recession that allows it to bring down housing prices, that doesn’t already exist (without a recession) now?
With a recession, all work will stop. No doctors doctoring, no nurses (ahem) nursing, no teachers teaching, no scientists researching, no waiters waiting, no baseball players playing, no Hollywood producers producing, no farmers farming, no astronauts going into space, no armed servicemen defending, no auto mechanics fixing cars, no students attending college, no software written, no chips being made.
NOT! The implication in all this negativity is the world will stop spinning! I laugh! Productivity will continue. The sun will come up tomorrow. The noticeable thing is that house prices will certainly fall quite a lot!
Bill, Are you a moron or do you just like to act that way? I ask this because I hope you are being facetious, since you obviously do not have any empathy for those individuals less fortunate than you.
I am always amazed at the statement “A fool and her money are soon parted”, because I am confused by how a fool could make moneys. You have shown me how! Blind stupidity
Obviously a recession does not mean loss of services.
Hoz, I did not call anyone names. You did. Here. I will follow your lead…You my friend, are the moron.
Now where in my post did I lack any empathy for individuals less fortunate than me. Show me. You are the stupid idiot my friend.
No loss of services. No loss of BUSINESS. Now, what does that imply? Stocks going to zero? Go home to mommy.
Those who do not have empathy for are the greedy ones who bid up the prices and are now stuck in their stupidity. I mentioned this before. You Hog, say I should be empathetic with them since they are less fortunate than me. Well well well! They drove a lot of unfortunate people out of the market for houses. Now moron, who should I empathize with? I’m sooooo confused!
i think bill is awesome
Hey Hoz,
why bother with bill, the guy is dug into his foxhole and is happy with his choices. So be it.
I’m an enormous fan of yours and hope you will continue your informtive posts. Why argue with foks who don’t understand your posts?
I think you guys are funny. You should run for President! (visions of Hillary and Barack slander)
“In other words, why what is different about a recession that allows it to bring down housing prices, that doesn’t already exist (without a recession) now?”
In a word, capitulation.
Good point. I was going to point out that unemployment is low now, but wouldn’t be during a recession. Job losses can lead to late payments, losing the house … I think the bottom line is that we’ll see an overcorrection in housing before this is all over. (And not a piddling 30% off 2005 peak pricing.)
What do you mean there’s no new construction. Check out the 10K condos is Playa del Rey. There are brand new 40-60 unit condo complexes all over the west side. Look in Brentwood, Venice, Santa Monica, Marina Del Rey . . . the list goes on. Maybe they weren’t building whole new sfr housing tracks, but they were definitely building. Prices are really varied. One 3 bedroom in my area is $900K while another is $1.3M . . . I can’t tell the difference.
Good luck getting that 1.3 . . . ha ha ha.
Did you notice that vast open field of weed strewn dirt between the freeway and the first units in Playa Vista? That is supposed to be full of more units. Units they are not going to build. Not until the market comes back.
Playa Vista is a drop in the bucket compared to the demand in West LA, and all those westside condos, much as I hate them as they’re seriously ruining quality of life here, will sell, especially with small price reductions.
Housing prices are all relative….meaning, that the people who commute 30 minutes see drastic declines in the prices of the 45 minute commute homes and move. Then the people with 15 minute commutes (i.e. West LA, etc) see the 30 minute commute homes drop and have incentives to move….and the thing continues. While there will always be a premium for “coastal living” and a short commute, the idea that a drop in the overall price level will not effect all areas is not true.
“You’re right. I see the core of LA experiencing dramatic slowing, but without new construction to undercut existing homes, prices are going to be a lot stickier the closer you get to the coast”
wrong. dead wrong. please tell me you and pc man are new here. if so, welcome. i’m getting tired of repeating myself…bought my first property….a prime west los angeles duplex, at the end of the last bust (1996) for 41% off the sale price from 5 years earlier from a bank. it happens here in los angeles. no area in los angeles is immune.
Did prime LA areas fall toward the end last time too? Or did they lead the fall?
Everything fell by a like percentage in Redondo(about 25-30%), at the same rate… except for the Palos Verdes peninsula (a fast 40-50%).
PC Man:
Actually, I’ve been tracking West Hollywood Condos on the mls for the past couple of years. Yesterday, inventory was at 190, the highest I’ve ever seen it, and I counted 4 REOs and one short sale. As for prices, I think we’re about 6 months away from some pretty nasty drops on the west side of town.
yeah, but i looked @ 90069 recently and i was still shocked. when i left weho, you could get a smallish sfh for 400-500. this was only 10 years ago. Prices have a long way to go - nasty, as you say
OMG, I do hope you are right as we are one of those couples waiting, waiting, eternally waiting for prices to correct. I don’t understand life when DINKs who make $150K simply can’t afford a basic home in anywhere resembling a decent part of town.
I’m in South Pasadena. We have had our first foreclosure a couple of blocks away. A flipper who flopped! Wheeeee! Finally! Also seeing an uptick in listings and in reduced price listings. As I’ve said many times, it’s gonna take longer here, but it will be bad when it comes. This town has quadrupled in price in the last six years. There’s no way it won’t end really, really badly.
Trishyla
In north west Altadena (those in the area know what development I’m talking about), I see about 1 NOD every 6 months or so on $1.5M homes.
If you want to see SFH going up in the LA basin, go to Azusa and check out Rosedale. In March they had crews working on the model units and 15 pads all at once. This month they have a new phases going and only the models are being built, nothing else but models. No more specs. If you buy they will build it.
Call me a snob, but did you just call Cerritos and La Palma “preferred areas”?
I guess they’re preferable to Compton or Cudahy, but still…
I was wondering about that myslef. Did these towns have a complete turn around since 1990?
Not sure about La Palma, but maybe Cerritos. It’s like the West San Gabriel Valley - Alhambra, San Gabriel, Rosemead, these areas have all turned around from what they were in 1990. And everyone knows why.
What I mean by “preferred” is areas with good school districts like Cerritos, which has high API scores. I see that lot of families with children prefer to move into areas like Cerritos.
The perceived so called school districts have nothing to do with your children and everything to do with propping up your perceived home values. Perceived is the optimum word. How pretentious people are.
Testify!
I live in Davis, Ca and I can’t tell you how sick I am of this “it’s the schools” crap.
The actual quality of the instruction in the schools isn’t the issue. The dirty little secret about talk of “good schools” is that it’s a proxy for the school’s ethnic composition. High test scores = high proportion of Anglo whites and Asians; lower test scores = higher proportion of Latinos and African-Americans. Not always true, but true often enough for people who prefer to live around certain kinds of people more than others to use “good schools” as an acceptable proxy for preferences they’d rather not speak of openly.
I agree.
Lately Davis taking a lot of heat in the press
Liberal town? Davis is white, wealthy and conservative
http://www.sacbee.com/325/story/283946.html
example: The city if Davis 2007 teacher of the Year is somewhat famous for tearing a poster of Malcom X off a classroom wall.
This is after the county began looking at development on county land. So the former mayor began recall proceedings for the city reps because they LOOKED at the plan, just looked at it. It made the city look like whining spoiled children, which is about right.
Yolo’s plans stir up Davis
http://www.sacbee.com/yolo/story/268702.html
ok rant off/
Up to now I’ve been content to just bask in the warm glow of Gwynster’s Davis-ranting. But I’ve just gotta say that Davis has always struck me as being very full of itself, and the only reason I could ever see for it was that very few brown people live there. I have heard enraptured ravings about “the schools” in Davis for years, but the kids of the people that lived there didn’t seem any better prepared for life than mine. Currently, there is about a 300K difference in the price of the exact same style and floorplan of mid-century modern homes that I track from Sacramento to Davis.
You are correct, Thomas.
I’ve worked in very high-performing and very low-performing schools. Want to know the difference? The low-performing schools have **better** teachers. They tend to be more dedicated and really have to fight to get the kids just up to the median level.
The teachers in the “good” schools can sit back and bask in the rewards of having involved, highly-educated and **intelligent** parents (don’t let anyone kid you about intelligence not being inheritable).
The API scores are determined more by the parents in the neighborhood rather than the teachers in the schools.
CA Renter — You’re on target.
An interesting example: Newport Harbor High School and Corona del Mar High School in Newport Beach were once strictly comparable, test-score wise. (CdM had a slight edge because Harbor students were, and are, notorious drunks.)
The quality of the teachers, programs, textbooks, and physical facilities was indistinguishable (except that Harbor at least has some classy 1920s architecture and CdM is a 1950s-vintage institutional architectural yawn). However, CdM now has substantially higher test scores.
The only thing that’s changed is that the local school district changed its enrollment policy, making it much easier for students to attend any high school in the district, regardless of where they live. That resulted in a large number of Latinos from West Costa Mesa going to Newport Harbor, increasing the Latino population there from about five (Eddie Martinez, Amy Veloz, Teddy Gonzales, and Mike Vargas) to “a lot.” Although test scores at Harbor dropped, as I said, there was absolutely no change in the school’s institutional quality.
I think teachers ought to be paid substantially more to teach at underperforming schools. No other “merit pay” scheme is likely to be workable. In my experience, smart kids with smart parents educate themselves as much as or more than schools educate them. The difference in their outcomes with a good vs. an average teacher isn’t much. Students without those advantages, on the other hand, learn at school or not at all. Even *with* excellent teachers, I lean towards “not at all,” but the resources ought to be deployed where they’re likely to have the greatest marginal effect. That means matching the best teachers with the toughest educational challenges, and the best way to attract the cream of any crop is to have the highest pay.
Agree, Thomas!
I haven’t seen any sign of distress in preferred areas like Cerritos, La Palma, South Pasadena, Arcadia, etc
Are you looking for sandwich signs to tell you things are bad? And just who prefers Cerritos, La Palma and South Pasadena?
Los Angeles is only in the second or third inning of this downturn. By this time next year there will be blood in the streets, even in the “preferred” areas.
Wait a minute. You are calling Cerritos and La Palma “Preferred”…you must be an illegal…just joking
Exactly! Cerritos is preferred by 10 out of 10 Illegals!!!
Thank you!
Here in LA, all this housing downturn talk does seem pretty surreal. The 3 and 2 ranch house (Ocean Park and Bundy) across the street from my friend was just listed for 1.2M. That’s not to say they’ll get that price, of course. But try going on Craigslist - type in “bank owned” or “short sale” and you get pages of listings in San Bernardino, about 2 pages for OC, and less than one page for LA, and many are bogus listings from out of the area.
Dammit, CL is still down in Sacramento. I wanted to surf the listings and gloat.
No need to post from CL, Gwynster, I have no doubt that you guys are way ahead of us
I just like reading the HoFo for giggles. We’re in yr 2 of the downturn here. At the auction, I saw a house I would actually own go for below the 02′ sales price.
LA will get there, you just have to wait until OC gets really hammered then you’re next >; )
You are correct and it is what I and many others predicted on this blog 2 yrs ago. The first areas to get hit and slammed are the outlying areas. The next areas will be the cities. Since the number of monthly sales have dropped by 50% from the peak, it is reasonably safe to assess the damage is just starting to occur. In 2 months I would expect the damage to start showing up in city centrals, LA, NY, SF and Chi. If I am wrong I will apologize, but based on 30+ years of trading bubble markets, an apology is not likely to occur.
i am wondering the same thing…is santa monica/brentwood area not going to be hit by this??? Not really seeing anything going way down in our neck of the woods…and wondering if it ever will??? It seems to be so desirable that people just keep buying/tearing down and rebuilding enormouse homes…what gives. Any feedback would be greatly appreciated. I am holding out on buying for the next year or so in this area. thanks
It’s the calm before the storm. Orange County is starting to get pummeled - Irvine thought they were invulnerable but we just had a clipping on this blog like 2-3 days ago that showed that parts of Irvine are already down 15% from a year ago. And of course all the marginal parts of SoCal such as the Inland Empire are getting battered. LA proper including West LA shouldn’t be TOO far behind now, most likely we’ll see some good action within the next year.
no way westside prices going to decline, no way.
Well, there you have it, it’s either the calm before the storm, or the calm before…nothing.
It would seem that we, like everyone else in the civilized world, are waiting for the other shoe to drop. All the signs are pointing downward but nobody knows the angle of the slope. If we only see 5% drops on the West side, I don’t know what I’m going to do because that doesn’t amount to a hill of beans. I need to see 30-40% before I can even see clear to buying.
I love when people say a 551% increase has had little effect on the economy.. If anything increases 551% it has a major effect.. I.e 551% weight gain, income gain, income increase, tell me something that adding 551% to it has little effect.. even minnie me .. well I won’t go there!
tick tick tick tick tick tick.. I always hear that ticking sound on the rollercoaster!
Well a 551% weight gain since you were a few ounces of lizard in your mother’s womb isn’t so bad. We are coming off really low numbers.
“We are coming off really low numbers.”
You must have missed the part about easily beating the old record, highest number ever recorded.
Maybe there was a crooked ref that was betting the over. Nahhh, that would never happen in housing, just in basketball.
And almost the population adjusted record fewer than 500 additional monthly foreclosures will break that record.
Trouble in Hedgistan: “It’s Gonna Get a Lot Worse”
Two columns of black smoke can still be seen rising over the New York skyline.
Terrorism?
Not quite. The plumes of smoke are all that’s left of two major hedge funds which blew up just weeks ago leaving nothing behind but a few smoldering embers and a mound of black soot.
The compiled assets of the Bear Sterns High-Grade Structured Credit Strategies Fund — nearly $20 billion — have vanished into the miasma of cyberspace soon be joined by $1.4 trillion of other, equally worthless, Collateralized Debt Obligations (CDO).
http://www.dissidentvoice.org:80/2007/07/trouble-in-hedgistan-“it’s-gonna-get-a-lot-worse”/
At least the clients took the big hit, I think Bear Stearns only lost $ 100M to $ 200M on this. As they said in the Bear Stearns boardroom, “Good thing we didn’t invest much ourselves. On to the next financial venture.”
Doesn’t CDO stand for “collapsed debt obligation?”
Beautiful!! I’d steal that joke but all the FBs I know who taunt us about being renters have no idea what a CDO is.
“The number of defaults resulting in foreclosures is the highest since DataQuick began keeping records. The previous high was in early 1994, when about 30 percent of defaults resulted in foreclosures, Karevoll said.”
“Only 55 percent of homeowners are able to avoid foreclosure because a greater number now have multiple loans on their properties.”
So let me get this straight: not only do we now have the largest % of loans heading towards default since the trough of the last RE crash, but the % of those NODs that will actually end up being foreclosed on is much larger today (45% vs. 30%). And given that the rise in NODs and NTSs is probably nowhere near peaking, and that there’s a minimum lag time of ~9 months between initial NOD filing and when that REO property actually hits the MLS, we can safely assume “prices will rise soon”.
Yup, makes perfect sense to me.
Loading up on popcorn here.
“And given that the rise in NODs and NTSs is probably nowhere near peaking, and that there’s a minimum lag time of ~9 months between initial NOD filing”
Not to beat a dead horse, but for the reasons above, this downturn looks like it’s *really* going to hurt…*much* more than it is now. And for at *least* two years after that.
That credit suisse chart give me the heebie jeebies now…
dammit, show the chart. everytime. for any casual observer. this is like Jesus telling Thomas to stick his fingers in the holes of his hands, so that he’d believe (allegedly.)
http://www.smugmug.com/photos/136440158-O.png
Speaking of Forclosures and REOs in Sacramento, I was at the auction last Sunday. I shared what I saw here and on Sacramento Landing. I wonder what other people saw happening?
Skipped the Sacramento house auction. Got to be late in the afternoon …. blue skies … kids in the pool .. just a lazy, drowsy type day that I wound up swimming then napping.
Must be gettin old & maudlin.
Figured the auction would be a waste of time, with better ones to come later.
Yer comments confirmed it, Gywnster. Sorry I missed you.
They’ll be back in Nov. I’m suggesting we all meet in the bar afterwards to tell stories and run up a large bar tab.
971 homes for sale in Tracy?? How big is Tracy?
80,000 ??
“About five homes sell in Tracy each month”
Only a 16 year supply of homes at that rate.
I was in Tracy one time. We drove out from Burbank. If I recall right, it seemed like it took forever. All I can remember about Tracy was all the farming going on. Did they start growing gold trees out there?
They grow dust and subdivisions now.
Trace from Burbank would be a big ‘up’, not ‘out’.
I noticed that when peter eliades went on CNBC talking about the hidenburg omen and etc the market was at down 130. it ended the day at about 100 points down from that.
Tracy has about 75-80,000 pop. Most of it refugees from the East Bay area.
It was only 20,000 in 1992 or so. It has really exploded.
The other shoe drops at Countrywide
Gotta love the quote by Bill Gross…………..
“The junk-bond market now “resembles a constipated owl,” wrote bond wizard Bill Gross in his monthly outlook. “Absolutely nothing is moving.”
http://www.marketwatch.com/news/story/other-shoe-drops-countrywide/story.aspx?guid=%7B0F6503B7%2D66B1%2D4143%2D8687%2D9BF906129314%7D
“Absolutely nothing is moving”.
Kinda sums it up for the the RE market’s spring and summer selling season here in OC too.
From Bloomberg:
“We are experiencing home price depreciation almost like never before, with the exception of the Great Depression,” Mozilo said during the call.
Ouch - having to go back to the Great Depression for a comparison.
http://tinyurl.com/2byxdv
Well what did you expect after the biggest housing bubble in the history of Earth.
I listened to the conference call. The positive point they were hitting on was that they hoped to continue to be profitable. I wish them good luck with that, but I don’t expect them to last more than 2 more quarters.
Hope your right, have Jan puts
Me too. *licks chops*
“We are experiencing home price depreciation almost like never before, with the exception of the Great Depression,’’ Mozilo said during the call.
Note to Bernanke, Paulson: no more White House dinner for this Mozilo canon.
“Mozilo said late payments are being driven by “more traditional issues” such as job loss, divorce and health problems, not because adjustable-rate mortgages are resetting at higher rates.”
Riiiiiggghhhhhtttt, because all of a sudden, people are losing jobs, getting divorces, and getting sick. All of a sudden I tell you!
“Mozilo said late payments are being driven by “more traditional issues’’ such as job loss, divorce and health problems, not because adjustable-rate mortgages are resetting at higher rates.”
Will Countrywide still be in business when all of the defaults driven by “more traditional issues’’ begin?
The Leather Man knows it’s the lack of lending standards, and so do the analysts on the conference call. But the analysts work for ibanks making gold securitizing and selling his junk loans. Since they colluded with Leather Man to put this scam over, they can’t call him on it. Analysts? Call ‘em what they are–IBank shills.
Sister and Brother in law were in Camarillo CA. last weekend. They saw an open house and went in to look. The house was beautiful, about 4,000 square feet, sitting on top of a hill with a view of the citrus valley and the ocean. The back yard was done with a waterfall and no expenses were spared. My sister said the house was someone’s dream house all new and ready for move in.
Price $1.9 million. Sister spoke to the realtor; the realtor said the price may come down. The former owner was a big wig at a major mortgage company.
Also, saw a sigh on a car: REALTOR will work for food. This was in Simi Valley, CA.
Is that last part really true?
Most of the loans that went into default in the second quarter were originated between July 2005 and August 2006. Loan originations peaked in August 2005.
Based on the dates Can someone explain why we aren’t near the peak of the implosion?
Alt-A and prime resets don’t peak until four years out, according to the now-famous Credit Suisse chart…
So what Country fired said was they are seeing prime morph into sub-prime. Thats why the 2009 comment.
If they say we will bottom 2009 its 2010 for sure.
We’ll end up bottoming out sooner than the end of resets because families with no income can’t even pay the mortgage before the reset.
Were beginning into the period of “stealing future foreclosures”.
“stealing future foreclosures”.
Nicely put. First “stealing future demand,” and now this.
It’s still too early.
A couple I know cash out refied with a 2 year IO in November of 2005. Like most sheeple, they don’t even know they’re in trouble yet. They’re still happily spending against their HELOC with absolutely no idea of what is happening in the financial markets, or how it will directly effect them. Come September when they get around to refinancing, will they be able too? If not, will they be able to handle the fully amortized loan and the HELOC?
This is a slow moving train wreck because it is happening one loan and one house at a time. The scary part is that we are just getting started with the resets, and the answer to the above questions are more and more often “NO”.
The big chunk of sub-prime was the 2/28 loan. Alt-A follow on later. And don’t forget those HELOC’s. Reset chart from Credit Swiss is all over the blogosphere. Someone does a you-are-here with it.
“‘We’re clearly in for a worse third quarter and an even worse fourth quarter,’ said John Karevoll, chief analyst at DataQuick.”
Straight out of the mouth of a normally-bullish commentator!
I was surprised by that too. Normally we hear that things are OK or that they don’t make predictions. Now, he’s guaranteeing it will get worse. Quite a turn around.
Both Karevoll and Bernanke have turned around since the beginning of July…
Both have essentially thrown in the towel as far as trying to influence the market through their sound bites. Should we take that as an ominous sign?
I don’t expect them to stay consistent on message. Rather, going forward I expect CYA acknowledgment of a dire situation interspersed with unsupported pulses of optimism designed to keep some sheeple sufficiently flummoxed to convince them to keep buying stuff right through the bust. Once consensus is reached that the bust is here, we could quickly morph into the Japanese “cash under the mattress” mentality from 1990-2005…
Yep, now they’ve turned around. Tomorrow they will bend over …
This is what happens when the power of positive thinking no longer works.
“‘People are waiting for the bottom to drop out before they buy,’ said Lynch. ‘The prices will rise soon. It’s a fantastic time to buy right now.’”
How soon? 10 years? The kool aid flows thick here
Flashback 12-14-2005: “It’s Economics 101,” said Leslie Appleton-Young, chief economist for the California Association of Realtors. “It’s demand and supply.”
Hey Leslie, it turns out you were right after all.
When there is a flood of supply, lots of folks go underwater. It’s Hydraulics 101.
http://www.nytimes.com/2007/07/23/world/23cnd-flood.html?em&ex=1185422400&en=bd31e1e2263f4ce5&ei=5087%0A
“When there is a flood of supply, lots of folks go underwater. ”
It sometimes seems that it is more like a flood of molasses…
http://www.snopes.com/horrors/freakish/molasses.asp
“‘People are waiting for the bottom to drop out before they buy,’ said Lynch. ‘The prices will rise soon. It’s a fantastic time to buy right now.’”
Even though home prices are two to three times as high relative to rents or incomes than they were back in 1998, it is a fantastic time to buy, since real estate always does go up, ya know?
lots of kool aid. Itll get shut off soon
See her response to me below - she claims she was misquoted! LMAO!!
Cue up “Ballad of a Thin Man”.
Let me see, you can’t let the homeowner do a short sale because the first lender can’t tell the second lender “You get nothing”. Funny thing is in the end that’s what’s going to happen anyway. Once it goes to the trustee sale the second is toast. I’ve seen several REOs in my hood with a 20% markdown as soon as they are listed.
I can show you an REO right now in my neighborhood that has a 100k markdown.
MLS# 076057722
On 1/12/06 it sold for $513,000
On 6/12/07 it went back to the bank for $370,752
It is now listed for $414,900
As you know…or maybe you don’t but the Newspaper NEVER gets it right.
It is however a fantastic time to buy. While interest rates are still low.
If a home goes down 20,000 but the interest rate is 1/4 higher you are
paying the same each month. Buyers have choice, so they can find the right
house that has most everything they want. (nothing is perfect) In a
seller’s market buyers buy whatever they can get…not actually what they
want.
This market is the same thing that happened in 1991,92,&93. Rise soon????
NO, that is not what I said. What I did say is we will rebound as high as
we were before in 2 to 3 yrs.
Not sure who you are…what your profession is….where you live or what
your experiences are. Maybe we need a professional quote from you to have
a full picture.
Have a great day!
Christine Lynch, Broker Associate, CRS, E-Pro
Preferred Real Estate Group
2180 W. Grant Line Rd.
Tracy, CA 95377
(209) 321-2276 Cell
(209) 644-7400 E-Fax
http://www.OurRealEstateLady.com
_____________________________________________________________
> said Lynch. ‘The prices will rise soon. It’s a fantastic time to buy right
> now.’”
> ___________________________________________________
>
>
> Prices will rise soon? Keep dreaming!
_____________________________________________________________
My email to her and her response
“What I did say is we will rebound as high as we were before in 2 to 3 yrs.”
Uh, Lynch, keep dreaming. The last down turn took 6 years in California, but somehow she thinks this down turn will not only be over in 2 or 3 years, but we will have our down turn and then fully recover and go above the previous peak - all in 2 or 3 more years. She is just delusional.
Not delusional, but ignorant to what is really going on around her in market. A lot of the general public still has not connected the dots back to the credit glut that is now under contraction. I guarantee that if you asked this realtor what the implication of the implosion of the Bear Stearns hedge funds was she would have no idea what you are talking about.
Face it, realtors are not generally the sharpest knives in the drawer to begin with. It was usually a job you took if you didn’t want or couldn’t do a real job. Okay, flame away…..;-)
NO, that is not what I said. What I did say is we will rebound as high as we were before in 2 to 3 yrs.
Hey Christine, Ya think? Then you should go out and snap some RE for yourself right now!
Jeesh, what do you expect for a bunch of high school dropout Trump wannbees. Keep drinking that Kool-Aid Christine.
Pass me the popcorn.
I read comments like that dated 1930 to 1934.
I believe it would be better if the mopes said
“we’ll muddle our way through this somehow.”
“The last down turn took 6 years in California”
I thought that it was closer to 9-10 years for the peak prices of the previous boom to be reached in the next boom. Until then, peak buyers were under water.
1988-90 peak and broke even by 1998… however
the bottom took back 4-6 years of gains…
In CA, on average, if one bought at the peak in 1989 they didn’t break even until 2002. Great investment!
I’m cornfused…is that “Old Christine” or “New Christine”?
Hopefully her analysis of the “market” is better than her use of the English language.
Can I bash this idiot Christine on her payment math? Puuuhhhllleeeaaazzzeee.
Simple
100K @ 5.75% 30 yr
= $583.57
80K @ 6.00% 30 yr
+ $479.64
Send that to her and tell her that she needs to go back to the 8th grade. Price makes the biggest difference, beotch!
Sorry, that’s = $479.64, not +
Casey says that predatory lenders done him wrong:
been in contact with a group that helps borrowers fight predatory lenders. They review your mortgage documents and look for any Truth-in-Lending-Act (TILA) violations and any other “red flags”. Then there is an option to sue the lender and sometimes even get your mortgage forgiven. This company also has a network of qualified real estate attorneys to help take these cases into the courts on a low cost or contingency basis.
I didn’t have much desire to go this route before because I figure, what the use? I was about to lose everything in foreclosure and I just wanted a way to sell those houses and be done with it. But I was always interested in the idea behind it. I was going to talk about this company on my blog before in order to help homeowners who may have been taken advantage of, but never got a chance to do it, since it wasn’t something I needed at the time.
However, NOW things have changed a bit. There is a very good reason for me to have my mortgage documents looked at by an expert. We’ll see what he says… Hopefully I’ll get an answer back by the end of the week.
Wouldn’t “unclean hands” (he’s admitted to lying on his loan docs) prevent him from winning even if the lender did screw up something on the loan docs?
Not in a nation where a burglar can sue a business owner because he broke his leg while robbing the store.
And that is a sorry fact about this nation. Makes my blood boil.
Not the whole nation, at least not sue and win. But it is one of my biggest gripes about your home state of CA, where suing and winning in such a case is in fact very possible.
OC I would agree with you except that I am 100% sure that there will be no mass prosecution of the millions of middle class folks who lied on their loan apps with things like “Owner-occupied” or inflated incomes, etc. Otherwise, there would not be enough prisons to hold them, nor would there be enough government money to care for their “ward of the state” children. It would have quite damaging effects on our country, although I would like to see it happen anyhow…
In the case of Casey, there may be some people who go to jail in extreme cases such as his, so the government can show the sheeple that they are doing something about it.
Home arrests could be the next wave of stay at mom and dads >; )
Is he crazy? I remember from his interview on AM 640 KFI that he was able to buy the 6 houses because he bought them all simultaneously, so each lender would think it was his first and only purchase. This was based on the advice of some real estate scam class he took. Now he’s crying he was taken advantage of by the lender? The guy has no shame.
I like how the Haterz ™ are threatening to report him for violating the “Truth in Borrowing” laws…liar loans, checking the box for “owner occupied”, getting several loans at once without reporting it to the lenders…
“However, NOW things have changed a bit. There is a very good reason for me to have my mortgage documents looked at by an expert.”
Oooh, did somebody just figure out you can’t Chapter 7 a 1099 (or 6) away?
Where is bubbles the clown? I’m sure he would have a humdinger for us if he would post.
I have not seen a post from Bubbles the Clown for over a year. No one could spin like Bubbles.
Rainman18 still pops in once in a while. I really miss his “Bubblefucious” bits, too.
What is the foreclosures as a % of existing homes? There are a lot more California homes in 2007 than there were in 1996.
I need to ask this again, because it is really bugging me…
Recessions (like during the last housing market ‘crash’) don’t just magically bring down house prices. House prices go down during a recseesion becasue recessions spawn conditions that are favorable to house prices going down.
So my question is: “What are those conditions, and how are they different than what we have now”.
The conditions from last housing crash:
1. Recession caused less demand (less people able/willing to affors a house).
2. Recession caused more people/banks to “have to” sell becasue of foreclosures, relocations, etc.
3. #2 + #3 increased the inventory to historic levels.
4. #2 + #3 increased the “months of supply” to historic levels.
5. Psychology changed, increasing #1.
We currently have all five conditions at historic levels. What’s left? What is different, other than we don’t (currently) have a recession?
You only know you have a recession in hindsight. I think we have already entered into it and it just hasn’t been acknowledged yet.
we’re in one now, just like the 2000-2001 recession. The question now is will it become a 90-92 or aan 80-82 type. Now is minor, 90 was bad and those of us older folks can tell you about 80-82 ( the real “worst economy since the depression”)
Don’t forget, the RE bubble was the way we got out of the 2000-01 recession. What’s going to bring us out of this one? $100 a barrel oil? I don’t think so.
Stagflation
I think so, too. At least in Florida, I’m seeing the signs, one of which is a very skinny Help Wanted classifieds section in the Sunday paper. Less traffic. Fewer people buying “stuff”.
JWM: you only see them through the rear-view mirror - caution objects in the mirror are closer than they appear!
“You only know you have a recession in hindsight.”
Oh right, and you only know you have a bubble in hindsight, too… the Fed told me so.
People like to think in patterns. Comparing what’s happened in the past and overlaying on the present. One of the most often made comments in the past couple years was ” There’s never been a recession in housing without a general economic recession first”. Well we now have a housing recession without the economy being in recession first. Imagine if we now go into an economic recession. With job losses mounting and people worried about losing their jobs, the housing recession could snowball into a bloodbath.
“There’s never been a recession in housing without a general economic recession first”
Actually, if you check the U.S. data going back to 1955, there has never been a 25%+ dropoff in residential construction without a concurrent recession in the U.S. macroeconomy. This happened seven times out of seven — I checked! And we are currently in the eight 25%+ residential construction recession since 1955…
“There’s never been a recession in housing without a general economic recession first”
Yes there has. Check out 1929, which was lead by a housing recession starting in ‘27. And we all know how that turned out.
Yes, very few people can truly “think outside the box”.
Casey Serin is just a smart-aleck publicity hound piece of sh*t! It’s just that simple.
He makes up lies, then promises to get straight, then reneges, then its more broken promises, more lies … like a stupid soap opera. I’ve just skimmed his site a few times but his story has all the earmarks of a cheap mexican novello. He’s like a bad version of William Hung, but at least William has some charm & doesnt start out lying. He just sings and makes a little do re mi off his campiness.
Bottom Line; Casey is an azzhole. I’d be embarrassed to be his russian wife & I tell ya what: living here in ground zero of Sacramento, ‘ol Casey better hope his wife doesnt have any russian mafia relatives pissed at him, or owed money, cause those people dont fool around, tovarich !!!
You know it’s bad when people call up a conservative talk show host to vent housing.
I heard a few minutes of venting on “Savage nation”.
Shouldn’t they be shouting praises to the beauty of deregulation and the “free market?”
Maybe they were venting about FNMA and governmental bailouts of FBs?
The genius of capitalism, no?
Michael Savage is a conservative the way Lyndon LaRouche is a liberal. Edmund Burke would have kicked his ass.
i really like Michael Savage. I’m a lefty, I listen to a lot of Air America, I CANT STAND Rush or Hannity or any of the other paid shills for the RNC and Clearchannel. But I’ll listen to Michael Savage.
“Metal advises potential buyers to wise up and take advantage of the market. ‘You can find the same home in the same neighborhood for a significantly different price,’ he said. ‘Look around.’”
Same home. Same neighborhood. Significantly different price. Hmmm, ok, I’ll do that……just as soon as I sell the one I’m in…..
Yes, Florida appears to be EXTREMELY slow. I was there two weeks ago. Things seemed “ominous”
“Only 55 percent of homeowners are able to avoid foreclosure because a greater number now have multiple loans on their properties.”
“In the past, when a homeowner had just one mortgage, the lender would often allow the borrower to sell the home for less than the amount owed on it and take the loss, known as a short sale, Karevoll said.”
“‘They can’t do it that way anymore because the primary lender can’t tell the secondary lender, ‘We’ll take all of the sales price here and you get nothing,’ Karevoll said.”
The beauty of this thinking is that more properties will be forced into foreclosure than into a short sale which means they will sit vacant with weeds growing in the front yard. Nothing like vacant house to stiffle future sales!
Inside scoop - mass layoffs coming to Countrywide.
Where do Countrywide employees live? Calabasas? Agoura Hills? Westlake Village? Think they’ll be able to make their mortgage payments?
Pretty big presence in SD too…in Mission Valley.
the center ot the home.com implosion
I work for Countrywide as systems analyst. Only the higher ups live there where you mentioned. I doubt you are interested in where the rank and file employees live, but Countrywide is notorious in the industry for underpaying their employees. I know many of us live in some pretty bad areas such as Inglewood, Lancaster (my town), and Pacoima.
After reading these quotes from the real estate complex I shake my head in astonishment at how many worthless a-holes live in this country.
Staggering how big the cesspool has gotten.
Comments from the Santa Clarita Valley
I suspect that DOM in the valley has risen dramatically. So far we’ve got a house listed for sale with the loweat price per square foot in our area and not one low ball offer. Additionally, since we listed the property for sale 6 weeks ago, 2 houses have entered escrow of a similar size and location. That’s out of 20 houses. So much for one of the best cities to live designation as some type of selling point.
I suspect the existing home sales will be dismal and it is getting worse. The roller coaster ride has just begun.
bikegirl,
I am renting in Valencia and ALL the houses for sale have looney wishing list prices. I have been waiting for over two years.
what really sucks is realtors are still talking about multiple bids …
just walk into any Norcal open house and you get the standard…
we expect multiple bids .. make your offer acceptable (higher)
sales may be down but they really need to be down single digit..
I do expect to see that… lets watch forclosures dive
As far as the Westside of LA, prices are coming down, but only a little bit. But, what is interesting is how few sales there are compared to inventory. Very,very soon, it will be at a standstill, and nothing will sell. What happens then? Either the banks cut prices drastically, and/or people still don’t buy because things will be that bad. EVERYTHING will be a falling knife…but, maybe I’m a pessimist.
What do you mean “banks cut prices”? How many bank owned properties do you think there are in W. LA? Let’s not get carried away here.
Yeah, LA is different. 20% down 30-year fixed mortgage holders will be able to hold out for decades.
LAIG, why do you defend WLA so profusely? The banks only need to own a few in the area. NO bank is going to say, “okay, this area should do fine, even though it’s not selling, so we’ll hold prices steady there, while taking losses on taxes and other miscelllaneous costs every month”. Their properties are spread ALL OVER THE PLACE, and they will get to a point where their pricing model breaks, or triggers an automatic price reduction of X% EVERYWHERE, including WLA. Then, IF they sell even one, the comps drop, and, uh, oh, you know the rest.
As far as the Westside of LA, prices are coming down, but only a little bit. But, what is interesting is how few sales there are compared to inventory. Very,very soon, it will be at a standstill, and nothing will sell. What happens then? Either the banks cut prices drastically, and/or people still don’t buy because things will be that bad. EVERYTHING will be a falling knife…but, maybe I’m a pessimist.
FORECLOSURES LEAD TO WEST NILE VIRUS OUTBREAK!
On the way in to work this morning, my local news radio reported that California recorded its’ second West Nile Virus death this year and the number of infections has doubled since last year. Health officials believe the culprit is untended pools in the rear yards of foreclosed homes, where mosquitoes are breeding like crazy.
I remember not so long ago when there were barely 1000 places in Tracy. Now a thousand for sale? Wow. Ouch. BART does go to Livermore now, yes?