The Market Is Drying Up In California
Inside Bay Area reports from California. “Just about every day they gather on the courthouse steps, waiting for an auctioneer to read off a list of foreclosed homes at the Alameda County Courthouse in Oakland. ‘We are here every day,’ Francis Ho said Tuesday before entering an unsuccessful bid for a Livermore condo at the hour-long auction.”
“Still, Ho’s was the only competitive bid of the day. While many more foreclosed homes are ending up on the auction block compared with a year ago, that isn’t translating into a lot of bidding interest on the properties.”
“Only a few people showed up for Tuesday’s auction. Of the 12 properties that went up for auction, only one, the Livermore condo, attracted any bidding interest. There were no bids on the remaining 11 properties, which meant they automatically became the property of the mortgage lender.”
“‘Usually, there is not enough equity to make it worthwhile,’ Ho said. ‘A lot of times, there is not much action. A glut of (auctioned properties) are so highly leveraged there is no room for the investor to pick them up.’”
“In June, 150 foreclosed homes went on the auction block in Alameda County, compared with 74 a year ago, according to RealtyTrac. In Contra Costa it’s even worse. Some 408 foreclosed homes were put on the auction block in June, compared with 70 a year ago.”
“In Solano County, 216 homes went up for auction last month, up from 44 a year ago, and in San Joaquin County, 293 homes went up for auction last month, compared with 62 a year ago.”
“Auction activity is also rising on the Peninsula. San Mateo County saw 40 foreclosed homes put up for auction last month, compared with 10 a year ago.”
“Most of the homes being offered in recent months in the Alameda County foreclosure auctions were financed with subprime, no-money down loans, according to Robert Kramer, an Oakland-based foreclosure sales consultant. The result is there is little, if any, equity in the properties to attract new buyers, he said.”
“On the other side of the foreclosure equation is Dorothy Hicks, (who) is hoping to avoid losing her home to foreclosure through a short-sale proceeding, which involves selling the property for less than the mortgage amount with the approval of the lender.”
“If Hicks cannot accomplish that in the next few weeks…her home will be sold at a foreclosure auction scheduled for Aug. 27. Hicks said she was pushed into a predatory refinancing loan last September that promised lower monthly payments.”
“‘You really think you are getting a good loan, but you are not,’ she said. ‘Later, you are in this high-interest loan.’”
The Daily News. “Just a few years ago, Fontana was touted as one of the nation’s fastest-growing cities, with sprawling new neighborhoods and booming retail projects. Now, Fontana ranks high on a different list, second only to San Bernardino in the number of home foreclosures in San Bernardino County.”
“RealtyTrac reported Tuesday that 336 Fontana properties were up for auction and that 838 were bank-owned. San Bernardino had 379 properties up for auction and a whopping 997 in foreclosure, according to RealtyTrac. Cities such as Victorville, Hesperia, Rancho Cucamonga, Ontario and Pomona weren’t far behind.”
“City records show the number of building permits for single-famly homes reached about 1,800 by the end of fiscal 2004-05, then dropped to 1,237 in 2005-06 and to 746 by the end of 2006-07.”
“If the housing market were better for buyers and new home builders, there would be ‘no issues or problem’ with returning back to a time where developers pulled 1,500 to 2,000 building permits per year, said Fontana City Manager Ken Hunt.”
“‘It’s not because we’re an undesirable place to move to. It’s a function of people taking out aggressive loans,’ Hunt said.”
“One real estate professional who works and lives in the city said that while he sees several properties in north Fontana up for foreclosure, there are just as many spread out over the entire city.”
“‘They’re all over the board,’ said Steve Thomas, co-owner of Rancho Cucamonga-based CIG Property Management and Investment. ‘I see them all over the city.’”
“What Thomas sees is a mixture of both new and existing homes, he said. ‘They attracted a lot of the sub-prime (loan) people,’ Thomas said. ‘Those properties are having issues. These people can no longer afford those properties.’”
The Press Enterprise. “There were 22,166 filings of defaults, trustee auctions and bank repossessions in Riverside County in the first six months of 2007, up 222 percent from the same period a year ago. Foreclosure activity increased 345 percent to 19,185 filings in San Bernardino County for the same time periods.”
“Jon Marcell, owner of Better Mortgage Bankers in Upland and immediate past president of the California Association of Mortgage Bankers said he expects foreclosures will keep increasing for at least 12 more months, adding to the already large inventory of unsold homes.”
“‘What has happened is loans are sold to Wall Street on the secondary market and they are paying attention to foreclosures and pulling in their horns … and then the market is drying up,’ Marcell said.”
From KABC TV. “In this sluggish real estate market, some property owners are looking for new ways to sell their homes fast. Eyewitness News Consumer Specialist Ric Romero reports some are turning to property auctions. But the auction could be just another sales gimmick.”
“One woman thought she had won with a bid of $420,000 plus 10 percent in auction fees, but when the bid was presented to Juliet it was too low. ‘I just feel that someone should honor the system if she intended to do this, and she should go through it. Otherwise there’s no point,’ says Evelin Chang, the would-be buyer.”
“When I talked to the president of the Orange County Real Estate Association, he wasn’t surprised. ‘I know of no instances where it’s been successful, and we don’t have a track record, a good read on this type of system just yet,’ says Orange County Real Estate Assoc. President Michael Caruso.”
“But in all fairness, shortly after the auction was over, Juliet lowered her price and Evelin raised hers, and a sale was made.”
The Orange County Register. “First American CoreLogic’s monthly review of O.C. home sales in June shows that not every seller got a price in excess of their purchase price. Last month, 9.9% of all sellers lost money (and that’s before any ownership or transaction costs are tabulated.)”
“In November, sellers who lost money made up 4.3% of all tracked deals.”
The Union Tribune. “A rising tide in real estate earlier this decade lifted the fortunes of many retailers, boat sellers included. But as real estate prices recede, so too do the number of boat buyers.”
“‘In those years people saw how much equity they had in their homes, and were refinancing and buying luxury items like boats,’ said Bob Brown, spokesman for the Southern California Marine Association. ‘But by 2006, that market had pretty much dried up.’”
“Dennis Dreischmeyer, co-owner of Boat Depot on Pacific Highway, said he has had to downsize his business by cutting his staff and moving into a smaller facility. ‘For a while people were using home-equity lines of credit to buy boats; now you are not seeing that,’ Dreischmeyer said.”
“No one, however, seems worried about a serious downturn like the one that hit the industry during the early-1990s recession. Then, after several boom years, sales dropped by half almost overnight, and several local dealers went out of business.”
From KFSN TV. “The West Nile Virus has killed two more people in California. The announcement from the State Health Department came the same day the City of Fresno vowed to prevent the spread of the disease.”
“City leaders say vacant homes with pools that are no longer being maintained can become a breeding ground for mosquitoes. Abatement officials say there are more abandoned pools because of the increase in foreclosures.”
“Dave Farley, Fresno Mosquito and Vector Control District, says, ‘We’re finding new pools everyday in these houses where people have had to leave and no one is taking care of the pool. It’s a sad statement on today’s economy.’”
Kramer just told everyone who bought a home in 04-05 to “walk away” once again. There is a clip out there from the last time he said it; but this time he was very, very clear, those who bought in the past few years are definately better served by walking away then staying in their homes.
Walk away, keep the car and the credit cards and become a renter. Seems like that advice, although correct, is maybe something that should not be shouted by the MSM.
Kramer is such a cad!
If I had walked everytime my last house dipped in price the 23 years I owned it, I would of been in bad shape.
Cramer is talking like you should just dump houses like you do a stock . While it might be true that these people have a bad investment if they bought at a market high ,there is a penalty for just walking . The rumor has it that Cramer just sold a property at a loss . If this rumor is true ,Cramer sold the property ,he didn’t just walk .
People should talk to financial advisers ,accountants ,or a attorney regarding the best course of action to take . Certainly this stock market showman Cramer could of recommended selling ,but to say to people to walk on loan contract obligations is questionable for a talking head on a business show.
“but to say to people to walk on loan contract obligations is questionable for a talking head on a business show”
Agreed.
cnbc should reprimand him.
Au contraire, mon freres. Intentional breach of contract is a design feature of our legal system - the reason there are no punitive damages for breach of contract is that you are supposed to breach when it becomes more economically efficient for you to breach and make the other party whole than it is for you to complete the agreement.
Where it breaks down is under the single form of action rule, where you don’t actually have to make the other party whole. It seems to me that this fundamentally breaks the risk allocation scheme and economic model of contract.
Or, as one of my ex-friends said, “A contract is just a document on which to base a lawsuit.”
I was thinking the same thing, the rules say that there are specific ramifications of walking, for example, you surrender the collateral of the loan. You get a bad mark on your credit report for exactly x years, etc. If a ho-moaner thinks its in his interest to take the walking option, then its all good. You think the pig men think twice about excerising all their different options in their various business dealings?
The only thing they’d really have to lose is their credit score, and for many people it wasn’t even great to begin with. So it won’t be at all surprsing to see mass abandonment of homes soon.
Not true Pete .You could have more problems than just loss of a credit score . Depending on what state you live in ,you could get a deficiency judgement against you that could haunt you for years ,you could get a big 1099 tax bill, they could go after wages ,a collection agency could chase you . It all depends on what the lender decides to do and what recourse the lender has .
HW is right. Only in CA with purchase-money mortgage can you walk. As well, sometimes the poor credit hurts you when job hunting.
Sometimes poor credit also hurts renting.
The trick is to sign a lease before you go into foreclosure.
The trick is to live free for 6 plus moths or longer. If possible drag the process out and hope the bank is overwhelmed with REO. Negotiate and hope for a bailout or mormatorium on forclosures.
If you get really lucky you can live rent free for a year and build up a substantial cash war chest hidden in you mom’s basement (or other secure off unrecorded location).
Then walk out and pay for stuff under the table.
Then stick the money in after the collection agencies et al have given up for ghost.
It might even be better to quit your job so their are no wages to attach. The government will probably look at this as getting blood from a stone if you don’t have a job so get forgiveness of that as well.
Poof you have a bunch of cash to put into high interest rate account (mom’s name or child) after rates skyrocket and then sepnd a few years building back up with a nice nest egg.
In 5-6 years you are ready to restart.
You are describing exactly what my cousin did 20 years ago. He heard the rumor his wife was divorcing him, he just dropped out of sight, moved a 1000 miles away, got a part-time job (paid under the table), she never got one cent from him but she and her new husband did get stuck with all the bills.
As he had free time plus some extra cash he decided to go back to the university finish his degree taking a couple of courses at a time. Did quite well, got an assistantship for grad school, afterwards then was offered an instructor position at a small college. Now he has tenure.
He lived with me a couple of years at the first while starting over. Strange how it all turned out.
James and Hazard, if I ever mess up financially, I’ll have to look you up for advice…
The other way is to divorce while quietly staying together, quit claim the property and give the saved cash as a cash out settlement. Once you have to leave, the former spouse is all set to set up house again. Apparently a lot of people in Sacramento are doing this. If you have the down, FHA will work with you if you have 2 year old BK. Crazy isn’t it?
Makes me feel like an idiot for trying to buy a house the tradiional way.
It ain’t a mere coincidence that the states (e.g CA) with the most consumer friendly borrowing rules also saw some of the highest speculation.
Keep paying on a house that’s falling in price with no end in sight is crazy. See what happened in Japan. Of course America is differant as we have a better manufacturing base that is increasing year after year and a limited amount of land to build on for new home construction. This guarantees houses will correct soon and this bubble was just one little mistake. Keep paying on those upside down loans as only a good misguided debt slaver should do for his “master”, who only wanted his slave to “have the best” he could afford, and was there to help him reach his American dreams.
sorry dude. while i agree that it is not good to be upside down, the buyer entered into a contract. now that things are not going up, the buyer should suck it up…
I mildly disagree.
Reasons are some bought because of Realtor spiel, broker spiel, etc. These people were not looking to flip, they were just looking for a house.
Their hopes and dreams are shattered. The bills are mounting and their respective companies have cut working hours from 40/wk to 30/wk.
The buyer has been offered a job in Podunk. The new job will pay his rent and modest life style without causing stress.
Run do not walk to the exit.
There are to many things that can go wrong if you stay.
Plow under the Inland Empire. Yeah, that video was on here for like 3 days. The followup was out more than 24 hourse ago. If you bought in ‘06, once the price drops below your downpayment, just walk away.
However, he kept saying 20%, like that is the standard downpayment. HE is SOOOO out of touch. I wonder what % of people were really putting down 20% in SoCal’s Inland Empire? 1 in 10 buyers maybe?
if even that many.
You can say “Boo Yah Sucka!” to the bank on the way out.
I am impressed with Cramer, he gave the working stiff some sound advice.
And in the process he will hurt his hedge fund mafia buddies.
Yeah, somehow I don’t think so. I suspect Cramer and his backers have long since been out. Unfortunately, it’s much too late for J6Pack to get out of this mess if he is already in debt up to his eyeballs.
Perfect comment. He now sees the light after everyone he is beholden to is out of harms way. J6P paid the bill again for these rich SOB’s. He is a complete self serving a**hole.
PS This is not sour grapes as I have a high net worth, but of course not in the same league as Cramer.
He’s been saying for a week to sell ANYTHING financial. Usually means he sold 2 weeks prior, and told everyone that pays for his newsletter 1 week prior. By the time he brings it to CNBC, he’s been out for weeks.
Actually, I think he’s still holding Goldman for his trust … that’s gotta hurt.
Yeah, that is pretty much the MO for all these financial dog and pony shows on CNBC or wherever. I learned this the hard way in the late nineties. If you hear it on TV, it’s already too late.
“If you hear it on TV, it’s already too late.”
Never a truer word said, my friend.
Anyone who relies on teevee for financial news is beyond help.
“If you hear it on TV, it’s already too late.”
- Like when it was said, ‘ Buy now - you will be priced out forever!’
Housing Top Was Sweet for KB Home Pair
Let the record show that neither KB Home’s current head honcho, Jeff Mezger, nor his predecessor, Bruce Karatz, did anything wrong when they dumped more than $100 million of stock in July 2005. And they certainly weren’t the only industry executives who got out while the getting was good.
The fact that the pair sold huge chunks of company stock almost exactly at the peak, and shortly before the housing market collapsed, was doubtless just a coincidence. And the people who bought their shares and have already lost nearly $63 million, or 60 cents on every dollar invested, are just the victims of bad luck.
lol….
The people’s 401K, mutual funds.
And the brokers earned their huge bonus on paper profits.
What would Trump do?
Trump is a such a con–no surprise there. His latest in NY is a “residential’ hotel in Tribeca. The area is zoned commercial, so he’s calling it just that–a “residential hotel” at 40+ stories, it’s wildly out of whack for that low-rise neighborhood. Places will cost over a million but the owners cannot stay there more than 29 days continuously, and cannot put anything personal in their suites-no photos, no pictures, no nada. The rest of the time the suites must be for rent–owners personal clothing to be placed in lockers. He’s selling these as condos to overseas folks. The Dept. of Buildings is so pissed over the variance he received, they have announced they will be sending inspectors every month and watching the place like hawks to be sure the rules are enforced.
Sounds like another crackpot Trump deal–but he may make plenty on it.
Cramer says “just walk away”.
http://www.youtube.com/watch?v=c7e9H4zTqk4&NR=1
The next day,
http://www.youtube.com/watch?v=FJYcxqjXlkc
But, but, but…..real-estate never goes down!
I wonder where those poeple are and what they are thinking.
If they’re smart, they’re somewhere far away, in a hotel where no one will disclose their locations.
After all, eventually, some FB who has lost his job, his credit (and therefore his chances at another job), and his family will have nothing left to lose, a common kitchen knife just lying around, and an internet connection, with just enough money in his account to hire one of those remote investigative services…
“‘Usually, there is not enough equity to make it worthwhile,’ Ho said. ‘A lot of times, there is not much action. A glut of (auctioned properties) are so highly leveraged there is no room for the investor to pick them up.’”
Lower the reserve price to auction market value and they will all sell on auction day. The problem is that the owners will not accept less than their wishing prices, at which there are no buyers forthcoming.
It is the mortgage processors that don’t want to book the losses. Let all the REOs stack up, then take the BIG BATH. ONE giant mark down. Much better than month after month after month of small (but still pretty big) write offs.
The pressure to sell isn’t great enough yet ( including the lenders with REO’s). By 2008 the pressure to unload properties should be getting pretty intense.
exactly, it’s still too early.
By 2008, the mosquito-infested pools will be full of alligators…
Actually, sharks.
That’s ok… them sharks is good eatin’!
Most foreclosures in our area are the same as the market asking price. These shame auctions are a JOKE. Until the pressure really builds up in this forth coming pressure cooker, I would not waste my time !
Year-end is market to market time. Then the FDIC comes in and checks the books.
Things was so bad with my proppity that a Ho bought it!
So the banks will hold these properties until at least the end of this quarter (end of September) so they can have one more good quarter of earnings and get one more big bonus. Then?…
Then? You fire middle management, take the hit on your books (along with the other banks so you’re not singled out as uniquely stupid) and wait for the fed to lower interest rates again.
would that make the local market a “tiny bubble”?
These kinds of auctions at the court steps that the article was referring to have to follow the rules in the law. They set the bid price at the outstanding debt plus expenses. In this day and age, with instant refi, pretty much everything is underwater when it arrives at the court house steps. When I was going to auctions in ‘05, almost all canceled, when I went in ‘07, almost all went bad to lenders. I did get to watch a pretty intense auction on a sea view house in San Clemente, too rich for my blood.
Fontucky & Aggressive Loans = Utter Disaster
“‘It’s not because we’re an undesirable place to move to. It’s a function of people taking out aggressive loans,’ Hunt said.”
Here, let me fix this for him….
“‘It’s not because we’re an undesirable place to move to. It’s a function of people taking out aggressive loans,’ Hunt said.”
“‘It’s not JUST because we’re an undesirable place to move to. It’s ALSO a function of people taking out aggressive loans,’ Hunt said.”
I grew up in the Inland Emprire. WAY overpriced.
“‘It’s not because we’re an undesirable place to move to. ‘
LOL! It’s a horrible place to live.
“Dave Farley, Fresno Mosquito and Vector Control District, says, ‘We’re finding new pools everyday in these houses where people have had to leave and no one is taking care of the pool. It’s a sad statement on today’s economy.’”
The banks that own the REO w/green pools should be hit over the head with a sufficiently large fine to keep that water blue and clean. Everyone would win, as they could get more in the REO auction with a clean blue pool than a murky, mosquito-infested algae-green one.
Why not just empty it? I don’t understand the talk about how these pools will be such a nuisance.
zactly
In swampy areas (re: S. Louisiana) you have to keep in-ground pools full or else they get pushed out of the ground. Half-full, and the water-line = ground-level.
Really is something you have to see to believe.
What happens to houses with basements? Does the whole house slowly rise?
Basements don’t exist. Deep burials are problematic, too.
Basements don’t exist, as Barry said. Furthermore, structures SINK over time depending on size/weight.
Charity Hospital, the gargantuan cement hospital in New Orleans hus sunk 32+ inches since it was built decades ago, causing stability problems today.
I’ve seen that happen right here in San Diego. My neighbor’s empty pool rose out of the ground like a ship after a couple of days of a big downpour. Funny thing is my Dad told him that would happen and to drill a hole in the bottom if he was going to leave it empty.
Doesnt an unfilled popping out pool mean it was designed incorrectly? Otherwise how could you ever refinish the floor??? Either way whoever owns the property should be taking care of the pool.
In other areas, like AZ, the plaster will crumble if left empty for any amonut of time. Even if you don’t mind a replaster job, there is serious risk of damage to the shell. When it is full of water, you have tons of water on one side and tons of dirt on the other side = equalibrium. Drain the water and the tons of dirt are pressing in with nothing to push back = cracked shell.
When I wuz a pup, very few people had swimming pools. But there were local neighborhood pools, swim clubs and the Y. A lot cheaper, IMHO. For many people, pools are just a waste of water and power.
I have a pool. Kids are in it 20 days a month in the summer. We’re out of town the other 10.
Seriously, they are in the thing ALL the time. I’m in it 15 days a month in summer. Of course in winter we don’t go in, but we drop the filter to 2 hours a day, and in cold weather the chlorine doesn’t dissapate too fast.
They said even emptied they refill with rainwater.
Not only that, the plaster in the pool will be under serious stress if the chemical composition of the water is wrong.
Oakland mayor has set up a fund for affordable housing + park. Makes sense to develop park and let market take care of affordable housing.
Since when is it that taxpayers’ duty to subsidize banks and homebuilders?
Is it so that the owners who walked away in default can have a place to sleep? On the park benches?
“City leaders say vacant homes with pools that are no longer being maintained can become a breeding ground for mosquitoes.”
Dump a quart of motor oil in the pool and the mosquito problem is solved.
Or that.
Or price the house reasonably so it will sell and the pool issue takes care of it’s self. This should be an easy fix; it’s not like we’re splitting the atom or anything.
You would be surprised what simple things in life are great mysteries to the masses.
That is why the Secret is so popular…friggen dumbest thing out there.
Every time I walk past a store shelf and see that piece of overpriced toilet paper, I’m reminded why this country is going to get EXACTLY what it deserves.
Too funny, I had to go look it up. I’d never heard of it. My idea of required reading is Minyanville (big thanks to TX for tip) and Spider Robinson.
One of the tag lines I heard on it was this.
Eating high calorie foods while never exercising will make you fat, ONLY because you think it will make you fat. If you just believe hard enough, than you’ll be skinny, no matter how much you eat or don’t exercise.
I just thought my scale was lying.
Combo — I think you might be serious about that, because the film on top would keep the bugs away. But how do you get the oil back out, including the residue from the pool shell surface, especially if the water level drops so that the oil gets on the rough-surface part?
Ahhhh — forget that. The oil would go through the filter system and really screw things up. You’d have to assume the filter is turned off, the inlets blocked and that no idiot would turn it on again until the oil’s gone.
“Combo - I think you would be serious about that, because the film on top would keep the bugs away.”
I am very serious. The film on top won’t keep the bugs away, the film will prevent the mosquito larvae from breathing through their snorkels. Thus the larvae will drown.
“But how do you get the oil back out?”
I’m not at all concerned about getting the oil out. I’m not suggesting doing this to a well maintained pool, I’m looking to to this to an unkept, abandonded, public health hazard.
It would work, It worked in Panama.
can you say hazardous waste? Would have to be hauled out and processed. not able to go into storm drain or sewer, yea right.
I’m talking a quart of oil, not the Exxon Valdez. A quart of oil is barely a dent.
“can you say hazardous waste? Would have to be hauled out and processed. not able to go into storm drain or sewer, yea right. ”
Reminder: The stuff that comes out of your butt, and eventually into the sewer is toxic waste. And the runoff from the streets contains oil too, that goes right into storm drains. That’s why it’s like, so totally slippery on the streets after a short rain in SoCal, dude!
1 quart of oil isn’t much, but one quart of oil for every foreclosed house in the country could add up to the equivalent of a major oil spill.
you could always buy 2 dozen “feeder” guppies at the pet store and put those in too
Why not a gallon or two of bleach every few weeks?
Dump a quart of motor oil in the pool and the mosquito problem is solved.
Better than that, get a buncy of mosquito fish (my dad called them that, I don’t know if that is their name). It’s some type of fish that feed on the mosquitos. My dad kept his pool full of water. It kept the pool in the ground and there was no mosquito problem, thanks to the fish. My dad had no interest in swimming but decided not to fill in the pool with dirt. After I sold the house, the pool was probably restored to its proper working condition.
That is “get a bunch of mosquito fish…”
What happens if no one bids in an auction and the property goes back to the bank. How do banks get rid of this property? Do they hire real estate agents and try to sell it the normal way.
When the banks get around to it, they put it on the market with a RE agent in the area. Often with AS-IS clauses. My buddy bought one in the mid 90’s for $167k, turned out it had a cracked foundation. Realtor said not to worry, he’d take care of it. The realtor never did anything except tell my buddy not to worry. Buddy sold last year for $600k and is back renting with $450k tax free gains.
Anyeho, the banks seems like they’re in little hurry to sell because the prices are so high. Either that or the RE agent is trying to protect the home turf and keeps telling the bank the price is right but just no interest.
“or the RE agent is trying to protect the home turf and keeps telling the bank the price is right but just no interest.”
I’m not so sure the bank would give a crap what a dumb local realtwhore thinks.
“If the housing market were better for buyers and new home builders, there would be ‘no issues or problem’ with returning back to a time where developers pulled 1,500 to 2,000 building permits per year, said Fontana City Manager Ken Hunt.”
“‘It’s not because we’re an undesirable place to move to. It’s a function of people taking out aggressive loans,’ Hunt said.”
Yeah, sure. People are just standing in line for the opportunity to move to Fontucky. With such cultural treasures as the California Speedway and the not too distant Norco feedlots, what’s not to like?
…”owners looking for new ways to sell their properties…”
How about LOWERING the price until the property sells.
Thank you…that makes total sense!
Crowntown aka Corona, CA
“But as real estate prices recede, so too do the number of boat buyers.”
But don’t worry - it is all contained.
To paraphrase from Jaws: we’re going to need a bigger container.
Or…
I love the smell of Refi in the morning!
“Hicks said she was pushed into a predatory refinancing loan last September that promised lower monthly payments.”
Pushed at gunpoint, no doubt. More great reporting.
If you ever plan to buy a house in the west
Do it my way
Wait until the market resets
Get your kicks on Route 66
The housing bubble winds from Chicago to L.A.
More overpriced houses, than I’d dare even say
Get your kicks on Route 66
Now you pray to St. Joseph as you are trying to sell your home in Saint Looey
More misery in Missouri
And Oklahoma City is in the vicnity
Bubbly Amarillo
And oversold New Mexico
Not far from Ben is highfalutin’ Flagstaff, Arizona
The bubble forgot to include Winona
Avoid Kingman, Barstow and San Bernadino
Wont you get hip to my timely tip
When you make that California trip
Get your kicks on Route 66
Especially dark if to the tune of Depeche Mode’s version. Sort of like “Blasphemous Rumors”.
“Fontana: ‘It’s not because we’re an undesirable place to move to.’ Hunt said”
BZZZZZZ! Wrong!
Ok, I know I rag on Fontana alot, but I lived there for a couple of years and I still have nightmares about it.
“One woman thought she had won with a bid of $420,000 plus 10 percent in auction fees, but when the bid was presented to Juliet it was too low. ‘I just feel that someone should honor the system if she intended to do this, and she should go through it. Otherwise there’s no point,’ says Evelin Chang, the would-be buyer.”
That’s crazy she should have walked… I’m not getting the auction thing however, 420k winning bid + 42 10% auction fee, then the seller bumps you in price! WTF are people thinking, someone should have passed this lady a webster’s so she could have looked up the meaning of aution. Unbelievable, how does that happen, I mean really.
The first auctions out here, we saw the same stupid moves. The last auction I was at, no one was bidding over 2/3 of the listed REO price with lots of movement in the 50% off area. I saw quite a few close out at 01′ prices but they were in the really creepy, scary areas.
I think it will shake out in time. It just buggers you senseless until it does.
Yea, because I really don’t understand that. Typically in auctions per my definition and understanding mind you. Is that when you buy at an auction it is as-is where-is with no recourse if the property is a dog with fleas. So if someone is going to pay that kind of money then you may as well just buy retail. At least you have some recourse if something goes wrong and maybe can chisel the seller for a home warranty and closing costs, especially in this market. I don’t get it. As they say “fools and their money”…
“fools and their…” is the key. It’s like watching a bunch a ebay noobs believing they are masters of the universe for winning an rigged auction where the shipping fees are twice the cost of the item. Either they wise up fast to the system or run out of money.
I used to bid on LDDs. I frequently saw buyers get in bidding wars over a doll and pay 10, 20 or sometimes even 30 dollars more for the same doll I purchased with a Buy It Now.
People equate auctions as if it’s the classifieds. I’ve dealt with people like this all the time on Ebay. Most would just use another account to jack the price up to what they want to sell it at. I’ve even had a guy email me asking for more because he didn’t expect the winning bid to be so low. Unbelievable!
The auctioneer must hate this situation, too. Notice how she later hooked up with the seller and bought the house anyway. Seems like a good way for the seller to hook up with buyers and not have to pay any fees. After the auction just say that the price is too low, then later call the buyer and tell them you’ll sell it to them for the auction price + 10% which is exactly what they were already willing to pay. If I were the auctioneer I would make the seller pay the 10% in the event of a refusal to sell at the auction price.
If anything it exposes if there are any other bids.
The buyer should have stood their ground and said
“Take it or leave it. I got time and lots of inventory”
DONT Send me a nice letter why I should buy your home.
PS i dont feed squirls.
BAHAHAHAHAHAH !
MOST auction companies have a clause that says if an auction leads to an immediate sale afterward, they are still entitled to a fee. They usually speficy that the seller pays it.
at a minimum she should have pushed her phone number on the seller and done the deal in the parking lot… saved the 10% on the deal since the auction was a joke anyway.
From KFSN TV. “The West Nile Virus has killed two more people in California. The announcement from the State Health Department came the same day the City of Fresno vowed to prevent the spread of the disease.”
So, who is going to be the defendent in the lawsuit for these unfortunate deaths if they can trace it back to a specific source? The BK FBer, the city (for not doing something?), county, state, bank, the homeowner’s insurance co? Some attorney is going to be looking for a deep pocket somewhere if possible.
“Just a few years ago, Fontana was touted as one of the nation’s fastest-growing cities, with sprawling new neighborhoods and booming retail projects. Now, Fontana ranks high on a different list, second only to San Bernardino in the number of home foreclosures in San Bernardino County.”
Fontucky,…right….HA! I guess if you are a meth maker it is a hot area, or are looking to hang out with fellow mullet wearing tank top scum bags.
“Dennis Dreischmeyer, co-owner of Boat Depot on Pacific Highway, said he has had to downsize his business by cutting his staff and moving into a smaller facility. ‘For a while people were using home-equity lines of credit to buy boats; now you are not seeing that,’ Dreischmeyer said.”
Does this mean no more ‘flip that yacht?’ Oh, sorry — I almost forgot that All Boat Markets are Local…
———————————————————————————
THE WEALTH REPORT
By ROBERT FRANK
Flip That Yacht
Rich Buyers Sell Unfinished Boats, Reaping Millions in Profits
May 25, 2007; Page W2
Terry Taylor, a Florida car dealer, has purchased five yachts since 2001. But don’t expect to see him anchoring off the coast of Cannes this week. Mr. Taylor is boatless, having sold all of his yachts to other buyers for huge profits.
WEALTH REPORT
[Money]
Check daily posts on Robert Frank’s blog, The Wealth Report.
“I wouldn’t feel too bad for Terry,” jokes Felix Sabates, a partner in Trinity Yachts of Gulfport, Miss., which built Mr. Taylor’s boats. “He’s probably made more money off those boats than we did.”
http://online.wsj.com/public/article/SB118004846052414031-LWTe6TrhDhTxm72ZZYmfaiwOMi4_20070624.html
Question:
Can Mr. Taylor afford his latest yacht? What happens to Mr. Taylor if he has multiple boats under contract (with no intention of taking delivery) and multiple buyers back out? I’m assuming Mr. Taylor now owes Trinity yachts for delivery?
I’m not thinking the Yacht companies have many years left of full employment. Ouch.
Got popcorn?
Neil
Check that one off here on the West Coast too.
There used to be a boat dealer on Beach Blvd and PCH in Huntington Beach.
If you go to google maps and look at the satelite picture you can see the size of the boatyard on the SE corner of the intersection.
From the photo about 200-250 boats, they are all GONE and it is an empty lot today.
Go here:
http://maps.google.com
Paste this into the search box:
pch & beach blvd huntington beach ca
Zoom in and see for yourself. Poof!
I’m familiar with that boat yard myself. I noticed a few weeks ago that all but a couple of boats were gone. But it could be that the proprietor just moved to another location. Especially with all the hotels and condos they’ve been building in the general vicinity, perhaps it’s slated for another development.
Glad to see the Bay Area press putting more stories out that showcase how our region is not “special.” The articles are still pretty lame, but it’s a start. The delusional madness that permeates throughout bay area minds drives me crazy. Yeah, there are some big companies here, but 99% of their employees aren’t making the bucks necessary to sustain current prices. I’m still calling for 40-50% declines. With a few exceptions, bay area cities have household incomes of well under $100K. Without the suicide loans there is no way in hell this region would be where it is today. Now it appears that investors only want to buy real A-grade paper. The number of qualified buyers here will substantially dry up. Look out below and pass the popcorn.
hey cal guy! i’m a cal guy . northern cali. bay area. why is it that here in the east bay berkeley and enirons houses are still selling like hotcakes? they’re put up for sale and the in two weeks its sale pending sign. it’s like the rest o’ the country is hurting and here it’s the same old rising prices. it feels to me that this place is so desirable a place to live that it will never be affordable again. probably like ny and boston. just my take on things. however. the poorer neighborhoods are definately seeing higher crime rates and foreclosure rates. gaps between rich and poor becoming more pronounced for sure.
Wait another month to see if someone actually lives there. I’ve seen a few here in the southbay where I live and it is vacant. I guess the hot potato is still being passed around.
Livermore is slow. Had a brief pickup in sales activity in May/early June, but that is a memory. More inventory dumped on the market every day. We’re seeing the current crop of homes languishing. I don’t know why there was a brief window of sales, maybe schools/summer, but it definitely seems slow now. Pretty standard to see “price reduced” signs.
…still selling like hotcakes
You forgot to say, “getting snapped up”.
right you are look up the Map of Misery from BusinessWeek to show the high percentage of ARM loans and their resets.
If the Area is so Income rich why do you need risky loans?
I get a feeling Cramer’s team is short builders and mort co’s.
He is allowed to be right once in a while.
I wonder if there will be certain developments in the IE and parts of Phoenix and Las Vegas that fall to almost worthlessness. After a while, even 80% off a house doesn’t matter if every other house on the street is a methlab, biker gnag hangout, or has “rooms for rent” to drifters and illegals. What middle class family would want to live among that, and any price?
And nothing deteriorates faster than negelected desert landscaping - 6 to 8 months you’re back to dirt and rocks. I really wonder if some of these 3-4 year old ‘hoods will become “badlands ghettos”? You have to feel really bad for the decent people that bought and meant to build a life there, with 20% down, etc.
I still suspect this is part of the plan. Force the once middle class to live among the poor, the gang-bangers, the druggies, etc. That way, there soon won’t be a middle class. Just the poor masses and the rich in their private estates. Just like so many other nations in the world.
There hardly is any middle class now. If both parents have to work, that’s not middle class.
yeah.. buying smart won’t be so simple as to make a decision on price alone.
however, what’s down the road? Will this formerly nice hood that is now an eyesore become a nice hood again? Get me into the right place cheap enough and i might take the risk that it will bounce back.
Oh, that’ll happen, no doubt about it.
It’s gnot very smart to gnag a biker. He’s likely to give the gnagger a gnuckle sandwich.
speaking of boats, a short humorous tale from FL:
The elderly couple asked what I was looking for when I leaned over the edge of the boat on a short day cruise, back when I lived in Fl.
I replied ” just making sure it’s not named S.S. Minnow ” (since we are on about a 3 hr tour) …. oh, the hilarity that ensued!
Yes, I was quite the young rapscallion, lemme tell ya.
Or S.S. Hedge Fund. They also seem to be sinking these days.
Sorry o/t. It seems that non-bank mortgage lenders will be pushing up daisies soon.
http://biz.yahoo.com/ap/070801/ahm_competitors.html?.v=1
Lend was down over 19% today.
Something weird is going on with LEND. They have a buyout offer @ 15/share and the stock is tanking. Somebody must think it’s not going to happen.
Try this chart, lend vs ahm
http://tinyurl.com/28mkjv
This seems like it could be great news. Back in the day the only place you could get a mortgage was a bank, none of these shady third world lenders existed. Once they’re all gone, maybe we’ll really be back to 20% down, full doc loans again.
This is OT but it seemed like I would get a better SD response on this thread so apologies.
Being a frugal nerd I offered my niece self-defense lessons for her high school graduation. She is going out of state for college and I want her to have the ability to fight off any drunken frat boy or other malcontent. I am looking for a course in San Diego that has a combination of lecture and some time spent pounding on some innocent guy in a well padded suit.
Months ago someone talked about a really good NRA course. I was wondering if anyone had info on that as well as any suggestions for other courses. I don’t mind paying for two different ones if it will get her both info and experience but would like to find good ones and not just rip offs.
Thanks so much!!
Try contacting local PD or campus PD. Local schools often have law enforcement (current or retired) as instructors. Local martial arts schools can also often provide referrals if they don’t offer their own quick & dirty class.
That was Palmetto…ask him on the Florida thread tomorrow.
Seems to me if I recall correctly, the NRA course focused on things like being aware of your surroundings as well as some self-defense. Will probably send my wife at some point. Thanks for reminding me, that will make a good b-day present.
Chrisusc, the Refuse to Be Victim Course can be really inexpensive, it only cost me $15.00. That may vary from community to community. The guy who gave the course was ex-Tampa PD and had his own self defense dojo, plus an affiliation with a gun shop and training range. For him, it is a community service combined with a little bit of marketing for what he does for real $$. There were a few couples there as well as single folks, both you and your wife might like to attend on a weekend morning or afternoon if you can. Just great basic, common sense stuff, along with updated crime techniques that it is good to be aware of.
Palmetto, thanks for the info. After the class I will let you know how it was.
Hello, San Diego, as spike mentioned, I was the one who spoke about the NRA course. It is called “Refuse to Be A Victim”. It is basically a short, introductory course (morning or afternoon) that teaches mainly awarness, prevention and a little self defense. It is taught in communities all over the country by law enforcement or ex-law enforcement, security and self defense specialists who have been trained in the course. It is mainly introductory, to familiarize people with various options and situations. Usually, the people who give the course, either teach more advanced techniques in private instructional courses (Oriental self-defense, gun handling, etc.) or can refer people to other schools, courses, gun ranges, etc. I highly recommend the basic Refuse To Be A Victim course as a start, as it would give your niece a range of options so that she can choose an area of self defense with which she might be comfortable. Try the NRA website to find out what communities in your area offer it, or email them. It is even offered on college campuses.
Great recommendation. Also note that Taser has recently finally started selling the smaller, much cheaper and a little more attractive consumer model.
You might alternatively advise her to consider carrying a bottle of pepper spray - they can be very small and inexpensive, and the difference between escape and escalation. (I’m speaking from personal experience here, living in a not-always-safe area.)
This is the best course I ever took: http://www.wammselfdefense.org/wamm_resources/other_chapters.htm
Highly recommended!
sfrenter - it looks like WAMM has shut down. The San Diego number connects to “Lindsey’s cell phone,” and the Michigan number is the recorded out of order. Still it’s exactly what I am looking for so it gives me a name to use when I call the local PD. Thanks!
Front Sight Firearms Training Institute
http://www.frontsight.com
1.800.987.7719
Best firearms training courses out there. Nice people, very professional.
Thank you all so much!!!1 I think the combination of lecture with “Refuse to be a Victim” and hands-on with WAMM will be perfect for her. What a great group and what a great set of ideas!
(dustartist I’m going to hold on on the firearms training because I don’t think hte campus will allow a 17-year-old to pack a pistol!
However, for me……)
Thanks to all and I will let you know if she ever takes down a criminal!
We’ll I just had a meeting with an RE agent today. Why did I meet with her? My wife made me do it!
I live in NorCal where housing prices are basically in the 4th dimension. She showed me listings that was just laughable. I told her that I would like to buy a house but it would have to be at 3X my income. >200K. She started to show me some condos and townhouses! LOL! Heck, I can barely afford houses in East Palo Alto! (at one point, the murder capital in the US)
Point blank I asked how can people afford these prices. “She said that people around here will take on more risk. In addition, many buyers will factor in what their income will be in 2-5 years and they think it will increase dramtically.” Huh?
What’s your opinion on the state of housing these days? “She said that the BA has a strong economy and that RE prices will continue to go up because of the amount of cash and jobs being generated in the area. In fact, she sold several houses with multiple bids and they were sold higher than the asking.” hmmm…
I told her flat out, that I believe it is not a good time to buy. “She said, that it’s never a good time to buy but I just need to make that jump and purchase one asap” Wha..?
Needless to say, it was fun. Wife is disappointed of course. Time is on our side.
You heard it here folks. The unvarnished truth! “She said, that it’s never a good time to buy.” Yep, a realtor who is admitting you’re better off renting than buying. I think you need to go along with the “expert” on this one FP. How can your wife argue with you when the realtor admitted it’s not a good time to buy?!”
Clarification. >200K(income) X 3(times income)= >$600,000. Buy now and I can get a 2/1 sfh at East PA. I don’t even get 24/7 police surveillence. They’re too scared to drive by the area!
“They’re too scared to drive by the area! ”
Nah, cops are unneeded — many others already doing drive-bys for them!
I had a realtor tell me recently they’d been selling properties for 2 million in an area I’m interested in (in the future that is…) I did some research. It was a lie.
The good old adage we are so found of on this board…
IT’S DIFFERENT HERE!
Not.
Just wait. It’s going to take time but it will happen.
“She said that the BA has a strong economy and that RE prices will continue to go up because of the amount of cash and jobs being generated in the area.:
Oh thats rich .. .we lost 250K jobs in 1991 another 350K jobs in 2001 and still facing layoffs due to cost cutting and further M&A activity. Currently there is no new boom years ahead of us as we had in 1999. Where the fu*k did this person come from…The majority of new jobs are being sent overseas and other states.
HIC, I hope you are ok!
“‘You really think you are getting a good loan, but you are not,’ she said. ‘Later, you are in this high-interest loan.’”
No, it’s a great loan! Remember, you can always refi!
“No, it’s a great loan! Remember, you can always refi!”
That’s rich.
FP - good for you on telling the RE agent to walk. I would be scared $hI&less in East Palo Alto. Not exactly a great place. Most people bought with suicide loans. I saw one family that bought a $850K loan with the husband/wife making $13/hr. They ‘thought’ they had a fixed 1% 30 yr loan with $2K payment. Of course, I reviewed the documents and it was a neg am suicide loan. Saw more of those doing some financial work. There will plenty of homes to choose from for you in good area with a $200K income and willing to wait for the place you want. I assume the folks I am referring to are now foreclosed on as that was summer of 2005.
Everyone is pointing to East San Jose and E Palo Alto as prime targets of price declines… but those areas didnt go that high anyway. The same realtors wont discuss so called prime areas where prices have gone up 3x in the decade are not supported by salaries.
I’m sorry. These people who take these loans are just plain stupid! They should NOT be buying a house at that price.
The mortgage broker who originated the loan should have their license revoke ASAP.
You wont need 200K salary since those are rare cases for dual income actually in SV.. prices will head south where 85K will afford a home 3-4x salary. Just watch you will see .. its happened before in the bay area.
Why only as low as $85*4 = $340k? I think SFH houses will be $100k in SJ. Or maybe the sellers will actually pay the buyers to take the houses off their hands. After all there’s no difference between the Midwest and California. And there’s a tech boom in Lenoir, NC, with Google moving there. I think they’ll move their HQ to NC, so we’ll see a caravan of Priuses carrying all the Googlers to NC, leaving behind zero demand for housing in Silicon Valley.
The question is, when does the exodus start? There’s still multi offers and houses going over asking in Saratoga. I doubt the multi offers are fake, otherwise the seller would have taken my offer over asking. And the sale did record over asking and over my offer.
Guess I’m moving to Lenoir.
If you want to learn what’s going on, talk to a mortgage broker, not a RE broker.
A couple of years ago, my business partner was speaking with his mortgage broker, and found that the most popular loan in the area (very good spots on the Peninsula) was a 3-4% teaser for something like 12 or 24 months.
Problems will come home to roost here too, it may just take more time. I can be patient.
Roll call for the Twin Cities crowd.
Quick data from Livermore, CA
http://www.sfgate.com/homesales/, which is a little delayed, and based on assessor info, I believe. I just plugged in dates for Sundays and counted up the numbers.
4 full weeks sales volume
July 1-28, 2006: 120 sold
July 2-29, 2007: 76 sold
YoY volume change: -44 (-37%)
REALTOR.com finds 576 SFR and Condo/Townhouse/Co-op
52 weeks in a year, 4 weeks in the survey, means 0.58years, or 7 months of inventory. But these count new home and FSBO (non-MLS) sales, so there is probably more like 8 months inventory.
sorry if double post.
Quick data from Livermore, CA
http://www.sfgate.com/homesales/, which is a little delayed, and based on assessor info, I believe. I just plugged in dates for Sundays and counted up the numbers.
4 full weeks sales volume
July 1-28, 2006: 120 sold
July 2-29, 2007: 76 sold
YoY volume change: -44 (-37%)
REALTOR.com finds 576 SFR and Condo/Townhouse/Co-op
52 weeks in a year, 4 weeks in the survey, means 0.58years, or 7 months of inventory. But these count new home and FSBO (non-MLS) sales, so there is probably more like 8 months inventory.
DQNews.com also gets data it feeds to Mercury News and all other media outlets…
can’t wait to put my money in those banks!
Two companies, Countrywide Financial Corp. and IndyMac Bancorp Inc., are among the largest subprime and alt-A mortgage lenders in the nation, but should be safe because they own and operate regional banks on the west coast, KBW’s George said.
Because both operate banks, they can tap deposits and bank funds if they face margin calls because of faltering loans, George said.
http://biz.yahoo.com/ap/070801/ahm_competitors.html?.v=1
THIS JUST IN:
i posted on HBB before I called my mom. Special thanks to misstrial, GS, Ben Jones and everbody else who lent me rant on my LL. i feel a song coming on… He just wrote me this:
Ann-
We have a solution for all of us. We have decided to liquidate the condo and when sold let u out of the lease of course by action of the sale. We will be selling it well below current asking prices and it will be sold.
We will give you proper notification and certainly time, if needed , to find another place. We will also need to have the realtor possbily show the property and will give you notice.
If we can get it sold, we will all be happy and free and clear. Our intent is to not mess around and just drop pricing until it sells immediatly.
Thanks for your understanding and cooperation with the realtor, Ron Hetu. We know how unhappy you are and think instead of watiing until the end of your lease to sell it, 6 more months, we will sell it now and get you out also. Please feel fre to contact me anytime.
Rob
——————————————————————————–
Pinpoint customers who are looking for what you sell.
i havent followed the story, but.. “let u out of the lease” ?
wtf does that mean? Who’s doing who a favor?
A lease is a contract. If he’s gonna reneg on his part of the bargain, he should pay for the privilage.. and be thankful if the other party accepts.
and as far as having agents and clients and their bratty kids stomping through my place, no thanks.
I second that. I don’t think you can get damages for being forced out but make sure you get your deposit back and then go at your lesiure.
You know that you don’t have to leave when the Realtor shows place. You could sit around in your skivies drinking a beer if you like.
That’s a diaperfull. Unless your LL has given you a 120 days written notice of his intent to sell he has to mail or deliver to you in person a 24 hour notice to show the place. And yes that is 120 days.
And even if he has given you that 120 days notice he has to give you a 24 hours notice to enter and the date and time. The realtor has to leave their card. All showings have to be scheduled during normal business hours 9-5, no weekends or holidays.
http://www.dca.ca.gov/
> Quick Hits
> Landlord-Tenant
So what was your story? I missed it.
NAR Affordability index will be bad, last year the NAR changed the calculation of affordability index base on a NEW standards of ARM, since the lending landscape change and we are going back to 30 years fixed as standard I wonder if the NAR will adjust its calculation (which I doubt it, it will be a negative news which is unlikely to be tell by the NAR) cause it will show the affordability index way way lower then even last year.