The New Mantra Of The Real Estate Business In California
The LA Times reports from California. “Major lenders are repossessing homes in Southern California much faster than they can sell them, a development that could set off a downward spiral of price cuts and more foreclosures. Lenders’ inventories in the counties of Los Angeles, Riverside and San Bernardino grew by 5,829 during the second quarter, according to data compiled for The Times by First American,”
“Jason Bosch, president of Home Center Realty, an Inland Empire firm that works with lenders…has put 42 lender-owned homes on the market since the beginning of the year. Only two have sold.”
“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”
“Ten days later, the lender lowered the price to $417,000, where it still sits.”
“It’s got to get worse before it gets better, said Michael Davin, executive VP of Catalist Homes in Hermosa Beach, echoing the new mantra of the real estate business. ‘We need a shakeout to stabilize the market,’ he said. ‘Lenders are going to have to start cutting prices big time.’”
The Bakersfield Californian. “In February, the notice arrived.Christina Ramirez’s home of 16 years had been foreclosed upon. She had three days to pack up and get out. Statistics suggest that similar scenarios are playing out for hundreds of homeowners across Kern County. Foreclosure filings increased nearly six-fold this June, compared with the same month last year, according to RealtyTrac.”
“‘It’s everywhere,’ said Katy Hudson, CEO of the Consumer Credit Counseling Service of Kern & Tulare Counties. Hudson’s office is busy this year, as homeowners with adjustable rate mortgages find themselves unable to meet monthly payments once their interest rates rise.”
”They were made loans that they could barely afford in the first place,’ Hudson said.”
“Two years ago, Bakersfield homes were the fastest-appreciating in America. Eager home shoppers were lining up in lawn chairs outside model homes, just itching for their chance to buy.”
“Now sluggish home sales, falling prices and thousands of homeowners entering foreclosure are reminders that busts follow booms.”
“‘In the past, we never saw any great appreciation,’ said said Kym Moore, a construction lending veteran. ‘So we never saw great peaks and great valleys.’”
“‘The economy is still moving forward,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘But the excesses in the housing market over the past couple of years were creating an environment where people were betting that prices would keep going up 15, 20 percent a year.’”
“‘There’s nothing that will compare to this,’ said Brian Dawson, who started selling real estate in Bakersfield in 1978. ‘The foreclosures are massive — way, way more than anything in the 1990s.”
“Appleton-Young is bullish on the long-term outlook for Bakersfield as well. But recovery will take time, she said. ‘We won’t be booming by 2008,’ Appleton-Young said.”
The San Francisco Chronicle. “The mortgage meltdown hit consumers square in the face last week. ‘You used to be able to do a stated-income loan (with no documentation) up to 100 percent (of the purchase price) if you had good credit scores. It just can’t be done any more,’ says Jason Bellevue, a mortgage broker in Berkeley.”
“Ernest Williams, a part-time Realtor in El Sobrante, has a client in escrow on a home in Vallejo. In late May, the client was prequalified for a loan up to $450,000 with nothing down and no income verification. The client has ‘impeccable credit’ and a FICO score over 750, Williams says.”
“On June 29, the client offered $417,000 for the house and his offer was accepted. When the mortgage broker submitted his application to a lender the last week in July, he was turned down. The application was submitted to two more lenders last week and was rejected.”
“‘He was declined because they wouldn’t do stated-income loans above 90 percent anymore,’ Williams says. ‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
“The client is willing to put 5 percent down. ‘If he can’t get the seller to carry a second (mortgage) or come down on the price, he will have to walk away,’ he says”.
The Modesto Bee. “As foreclosures mount and ‘for sale’ signs proliferate among Northern San Joaquin Valley homes, Realtors continue a refrain: ‘Now is the time to buy.’”
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
“Agent Yolanda Esparza Winters said she’s seen some neighborhoods with multiple bank-owned homes. She suspects that on those streets, the former owners may have had subprime loans with conditions that eventually caused defaults.”
“‘If a buyer who seeks a home has the financing all arranged, that makes the process go that much faster,’ she said. ‘Sellers look for that.’”
“Bob Nowak and Jan Carrico run a monthly meeting in Salida for people to discuss real estate investing. ‘It’s very hard to buy something now and expect it to be worth more in 30 days,’ Nowak said, describing a practice known as ‘flipping.’”
“Lana Dyer, an independent Modesto Realtor and appraiser, said she has seen two deals fall through in recent weeks because the buyers didn’t know their own ability to pay. When one couple realized the mortgage payment would be $2,400 a month, she said, weeks of negotiations stopped.”
“Eventually the oversupply of houses will stop, and prices will head upward again, though no one’s predicting when that will happen. ‘It can’t go down forever,’ Dyer said. ‘It wouldn’t scare me, if I could, to make an offer and buy a house now.’”
The Orange County Register. “An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years.”
“Then the credit stopped. And home values crashed.”
“Lenders seized the homes at 920 and 946 after owners failed to keep up with payments. 946 sold at a loss, and 920 is in escrow at a loss. Lenders also filed default notices against the owners of 926 in April and 937 in June. ‘For Sale’ signs hang outside five of the remaining 48 homes.”
“Desperate to escape escalating payments, the owners of 937 and 1033 have slashed prices.”
“With neighbors asking $150,000 less than Medina Albarran borrowed a year ago, the situation has become almost hopeless. ‘La droga,’ Albarran said. That’s Spanish for ‘drug’ – Mexican slang for a crippling debt. The people of West Camile Street, she said, are ‘endrogados’ – hooked on debt.”
“The only ones who seem content are longtime residents like Rafael Zambrano, who moved to 930 W. Camile St. in 1988. The chef and father of four said he has nearly paid off his $177,000 mortgage.”
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
“‘He was declined because they wouldn’t do stated-income loans above 90 percent anymore,’ Williams says. ‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
I wish I had something pithy to write, but I think I’ve been rendered speechless.
“The client is willing to put 5 percent down. ‘If he can’t get the seller to carry a second (mortgage) or come down on the price, he will have to walk away,’ he says”.
Thy client is *not* a buyer.
Sanity is returning. $417k is a conforming mortgage and yet he cannot qualify. Take a breath and realize what that implies.
So lean back, kick the feet up… and spectate for a long time. This is a long game.
Got popcorn?
Neil
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
omfg…Looks like we WILL be spectating for a long time, Neil du Popcorn. There are so many like this Tool: unclear as to how we got here, and unwilling to do what’s needed to get out.
River. In. Egypt.
The seller HAS to make money on the deal? What, is that from Realtor School? Is that his counsel for his FB’s?
The mind simply boggles. ..
Don’t worry, Ken Kohler. Today’s ‘lowball too much’ is tomorrow’s WISHING PRICE.
Now stay real still, Mr. Realtor. If this is done wrong, it will hurt a little.
If it’s done right, it will hurt a lot.
http://tinyurl.com/2gmo8u
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler.
You mean when prices in California nose dived by 40% back in early 1990 and nose dived by 25% in 1982-4.
Maybe the seller overpaid to begin with. Maybe pets.com stock was really worth $100/share.
“….Maybe pets.com stock …”
Don’t speak ill of the dead! I’m still waiting for JDSUniphase and PMCSierra to come back. I know they will…just as soon as General Pickett takes Cemetery Ridge.
dvo
Yea… until people realize, a la the 1990’s, that seller might have to bring money to the table to close the deal.
Funniest thing is that prices haven’t dropped enough to even consider scouting the playing field! I have time to wait. Heck, 8 more months on my lease anyway. Do sellers have 8 months?
We have foreclosures that will trigger foreclosures when they hit the market. There were two waves in the 1990’s. This time I think there will be three.
Got popcorn?
Neil
ps
Loved the cartoon in your link.
I have 3 months left on my lease in OC. I will renew another 12… by next year prices will be 30% off. I have no doubts about that.
I do see prices going the right direction in some ocean view places on the left coast. I saw a 1900 square foot home for sale (ocean view) in California for under $500,000 on the web earlier today. Still too durned high for me.
I’m keeping a lookout. Yes, too early to go beyond the web and go to open houses. Sheesh! Open houses are a waste of time right now. I’d say in two years I may go to an open house and sample the cookies.
Beach front property in CA under 500k, it’s probably in Oceanslime.
seller might have to bring money to the table to close the deal
unlike in the 90’s, nobody has any savings to bring.
They’re f’d.
I don’t go to open houses unless they are serving bar-b-que or tri tips and fries and beans at the least. No fui fue food, dip and veggies ,fruit ,coffee, you know the drill. It’s getting closer every week. At the end of the last cycle (90-96) ,we were getting top block or small steaks. You can tell where you are in the cycle by the quality and type of food and drink served at open houses. Oh yes, scratchers and lotto tickets are deriguer.
Hey! It occurs to me that now would be a good time for prospective buyers to start demanding that sellers write them letters explaining why anyone should buy their house! What goes around comes around. We’ll know we’re finally near the bottom when sellers are agreeing to eat squirrels and other vermin as a purchase condition.
Oh that’s rich! I want to make the monkeys dance!
Neil… We just signed another 12 mo. on our lease coming Sept., and maybe another 12 we we feel the prices still too high.
time is on our side! yes it is
FYI-almost the ENTIRE business section in the SF Chronicle on Sunday was about the state of RE. Me thinks they are trying to calm the masses….
Good to see the Builder are still hard at work in the SF putting up more inventory. Looks they have lots of land near the Ball Park.
“The seller HAS to make money on the deal.”
Say’s who?
OT
I had similar situation, instead of buying real estate it was retail business that was being sold through a business broker.
The seller wanted to sell business due to medical reasons and his selling price ( I should say wish price) was too high, this was based on the amount of money the business was generating.
I had not physically seen the business location and the broker was pushing me to make an offer.
Told the broker that price was not making sense and the seller needs to lower the asking price. He got angry when I told this and his response was that the lowering of the price not possible because the seller had invested money by refinancing his house plus the seller had to pay commission to him and the seller has to make some money.
I told him I doubt anyone will ever purchase the business, this made him more angry, and said he has many offers. He wished me good luck with my future business.
Needless to say the business is still on the market and waiting for new owner, but this time there is a new broker with the same wishing price.
My interaction with real estate brokers and business brokers has always been annoying. As they never have an answer to simple question regarding the deal.
I don’t know why should anyone pay them commission.
Hey, Realtor Ken, why don’t you thru your commission to the seller so he can make some money, since you feel so sorry for them? How does that feel, Realtor Ken??? Real Estate agents are the blood suckers of all professions.
Who says you can’t come in and low ball too much? Who says that the seller has to make money? This guy Ken Kohler is delusional. If you don’t want my offer, don’t take it. It’s not personal. Remember if you’re not embarased about your offer, it’s still too high!
Ah, I’ve offered 25% (75% off) on a couple of places in the Detroit area. I’m not embaressed at all. Rejected so far but I’ve also been the only one making ANY KIND of offer. So it goes, next year they’ll deal. But I might offer even less then.
Yeah. If you’ve ever traded stocks you know that feeling, “I shoulda sold when it was worth x. Now it’s worth x - 200 whatever with no hope of going back up.”
“‘But the bottom line is that the seller has to make some money off the deal”
Bottom line is: Sellers can go f^ck themselves.
Me, too. That was the phrase that just jumped right out and gobsmacked me.
‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
What? Huh? Doesn’t this very simply mean that he was going to lie on his loan application? And now he can’t lie? So he can’t get the house he wants now? Isn’t that exactly what this means?
This is a travesty. How will people screw themselves now?? Oh, there are credit cards
The next Domino to fall….
Watch Credit Card Balances along with interest rates increase till borrowers can’t pay them back then BK city.
Can we give Capital One a bailout? They have some AAA “rated” paper they can give to the FED as collateral.
Sorry I can’t give a source, but I just read that some credit card companies have just raised their interest rates
As David Letterman occasionally says, “Sometimes these things just write themselves.”
That’s exactly what he means ,that’s what the realtors/mortgage brokers means ,and that’s what this market for many years meant .
Now that the loan investors that got burned don’t want to loan on junk paper anymore ,what kind of market do you have left ? A few greater fools left willing to catch a falling knife or people who don’t watch the news lately where they admit real estate will come down .
IMHO , the down market was apprarent in early 2006 ,but the real estate industry got clever with the incentives and cash-back deals just to keep the party going and the crooks came out in droves .What ended up happening was another two years of bad loans got put on the books ,that could of been avoided had the NAR and all the other cheerleaders paid heed to the red flags in early 2006, that the demand had crashed .It should of been apparent that trouble was there when the NAR announced that 40% to 50% of the purchases in Florida were investor driven .When lenders saw prices go up 40 to 50% in one year in bubble areas they should of backed off so fast it isn’t funny ,but they didn’t . It was clear that people were doing cash back deals and inflating appraisals . The greatest amount of foreclosures are going to come from the 2004-2007 faulty lending IMHO. You have to question a industry that reports a affordabily rates at low levels, yet has banner sales with people buying in spite of that .Could it be that someone might of figured out that a disconnet existed between how many loans were made verses the affordability levels . What a joke .
The greater fools ride…
http://en.wikipedia.org/wiki/Ship_of_Fools_%28painting%29
That’s funny, I was at a restaurant Friday (Chad’s in Santa Barbara-very nice, big drinks, and their glasses of wine a 1/3 bottle!) that had this Ship of Fools print in its bathroom, also appropo.
http://tinyurl.com/yuk9hp
had the NAR and all the other cheerleaders paid heed to the red flags in early 2006, that the demand had crashed
The NAR low-lifes are so ignorant and greedy they’d rather grab a potential commission now on the table and procede to starve to death in the following years, rather than demonstrate some form of professional restraint and coherance.
Makes no dif now. They’re all pizzin’ in the wind.
The golden goose of half baked, coerced valued appraisals and liar loan easy mortgage dough is dead.
Yes ,your right hd74man ,it’s over . I just can’t believe it ever happened .Oh well ,lets see what the next chapter brings .
He was declined because they wouldn’t do stated-income loans above 90 percent anymore,’ Williams says. ‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
“The client is willing to put 5 percent down. ‘If he can’t get the seller to carry a second (mortgage) or come down on the price, he will have to walk away,’ he says”.
This idiot was saved from his own stupidity, when he was denied, and he keeps fighting to put his head in a noose. It just amazes me how many dumb people there are, who are clueless about what’s going on. Someone pushed him out of the way of a bullet, and he pops back up to take the second shot.
“‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
I have no doubt that drug money has purchased massive amounts of real estate in this country - and still does. I lived in Miami during the “cocaine cowboy” years and have witnessed stuff first-hand that would shock even the most jaded of forum posters here, and don’t think for one second that there are not (and still are) some juicy “incentives” paid out-of-pocket to to everyone in the lending/real estate businesses to streamline the corruption of it all.
I can just imagine how bad it got ,and that is why at this time any loan is questionable . I believe that the RE industry got so jaded that a total “purge” is in order
.
Everybody was getting kick-backs ,no question . It will come out in the wash that during this boom it was one of the biggest crime waves in history .
“and he pops back up to take the second shot.”
And third.
So this Realtor is admitting that his client lied on his loan application by stating that he made more than he actually made. This isn’t a deal where he gets paid in cash and can’t document his earnings, he really and truly, “doesn’t make enough money,” to qualify.
Uh, OK, then Williams knows this is FRAU-DU-LENT!!!!!!!!!!!!!!!! Total admission! He’s busted!
The North County Times:
‘Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market. In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.’
‘In that column, I said…that I couldn’t quite grasp the unbridled joy that the doom-and-gloomers seemed to have about the possibility that many families might lose their homes in a downturn. If flippers get burned, so be it. But there was elation being expressed that households would be disrupted in the correction.’
‘To be sure, I know the ulterior motives behind these attitudes. But since I don’t want to crawl around and look under my car again or have someone taste my food, I’ll leave that alone.’
‘At Wachovia Securities, Mark Vitner says: ‘We are continuing to stand by our forecast that sales of both new and existing homes bottom out this summer. Once sales stop falling, the modest drop in physical inventories should begin to translate into a decline in the month’s supply figures.’
‘I refer everyone to a new report, ‘California’s Deepening Housing Crisis.’ It comes from the Department of Housing and Community Development and, somehow, the media seemed to ignore the news when it was released two weeks ago. ‘Housing production has not kept pace with the state’s housing needs particularly in the coastal metropolitan areas,’ cites the report. As populations swell and home availability ultimately shrinks, a crisis looms.’
‘When I read in this paper last week that plans for a three-story housing development in Bonsall are in the works, I realized that we are, indeed, approaching a crisis. There is little land left for development, and that will indeed create a crisis in housing availability.’
‘So, lets all remain calm. Hate me if you want. I accept opinions, give me the same courtesy. Owning a home is still the American dream and, since 97.4 percent of homeowners pay their mortgages on time, the dream seems to be working out pretty well.’
‘George Chamberlin is a regular contributor to the North County Times.’
“…they have been able to artificially construct something…”
What a joke - this asset bubble is collapsing under its own weight. He should be directing his hidden anger toward what got us here, not toward the people who are glad to see the ponzi scheme finally come to an end.
“..drive down housing prices at a time when unemployment is low…”
Layoffs since Jan1, 2007 in San Diego
Coca-Cola Enterprises, Inc.
Atlanta, GA
San Diego, CA
Coca-Cola Enterprises has laid off over one hundred workers at Coke’s Southern California bottling and distribution plants. Generations of Southern Californians have been making, bottling, and delivering soft drinks, including Powerade, in Coca-Cola Enterprises’ facilities in San Diego and throughout Southern California. Rather than allowing these long-time dedicated workers to follow their work to the new distribution facility at Oceanside, Coke is throwing them out on the street. Coke will not recognize their legal right to transfer. Coke is hiring new, non-union employees to replace the experienced union employees.
Approximate Affected Workforce: 101-500
Source: PR Newswire US - January 14, 2007
Elan Corporation plc
Dublin, Ireland
San Diego, CA
Irish biotech, Elan, is closing one of its US offices in an effort to cut costs, according to reports. Elan will close its San Diego offices and consolidate jobs in its San Francisco facility, according to weekend reports. Elan has had a base in San Diego for the past seven years. Last year, however, it cut more than 100 jobs there. The company has said it is unclear as to how many jobs will be affected this time around, but said legal, administration and research positions would be affected.
Approximate Affected Workforce: N/A
Source: Business World - August 7, 2007
Kintera Inc.
San Diego, CA
In its first major move since a management shake-up, Kintera said yesterday it will lay off 16 percent of its work force. The San Diego fundraising-software company has about 370 employees, with 210 based in San Diego. Of the approximately 60 job cuts, 18 are in San Diego, mostly in clerical and administrative positions. The CEO said the layoffs are necessary for the company to make a profit. He added that many of the cuts are in areas outside the company’s main business of providing Web and software services to nonprofit organizations that allow employees, volunteers and donors to coordinate fundraising.
Approximate Affected Workforce: 51-100
Source: The San Diego Union-Tribune - March 30, 2007
Overland Storage, Inc.
San Diego, CA
Overland Storage, Inc. reported a reduction and reorganization of its workforce as well as other actions to reduce costs. The company noted that, in addition to other spending cuts which are still being formulated, it has reduced its employee workforce by 14 percent worldwide, or 54 employees. Reductions were made across all functions of the company, and included some consolidation and flattening of the organizational structure.
Approximate Affected Workforce: 51-100
Source: MarketWatch - April 20,2007
Jabil Circuit Inc.
St. Petersburg, FL
Poway, CA
Jabil Circuit Inc. is closing its contract manufacturing facility in Poway, Calif., and will begin laying off the plant’s 143 employees. A spokeswoman for the St. Petersburg-based electronics manufacturer said Tuesday the company filed a notice of plant closure with the mayor of Poway on April 26. Poway is a city of about 50,000 just north of San Diego. The closing of the 112,000-square-foot facility comes after Jabil announced last year it will move more of its product design work overseas as part of a corporate restructuring. Jabil’s strategy has been to keep much of its design work and new product development at U.S. plants while moving high-volume production of more mature product lines overseas. Jabil, which employs more than 60,000 people worldwide, including about 2,000 in St. Petersburg, said last month that it lost money during the quarter ended last August. It’s the first operating loss in its history and the first net loss since 1994.
Approximate Affected Workforce: 101-500
Source: St. Petersburg Times - June 13, 2007
Anadys Pharmaceuticals Inc.
San Diego, CA
Biopharmaceutical company Anadys Pharmaceuticals Inc. said Wednesday its second-quarter loss narrowed slightly and that it is reducing its work force by one-third. The company also said it is halting further development of ANA380, a treatment for the hepatitis B virus, so that it can focus its two other drugs in development, ANA598 for hepatitis C and ANA773 for cancer.
Approximate Affected Workforce: N/A
Source: The Associated Press - August 1, 2007
Averion International Corporation
Southborough, MA
Averion International Corp., a clinical research organization specializing in oncology, medical devices, dermatology and nephrology, today announced a cost reduction initiative intended to increase its operating efficiencies and improve its competitive position. The initiative includes a workforce reduction of approximately 13% of total U.S. CRO headcount based on job function redundancies and includes the realignment of some job responsibilities to better capitalize on employee talents and skills. Averion International Corp. is a full service clinical research organization that provides clinical research, and regulatory compliance and validation services to the pharmaceutical, biotechnology and medical device/diagnostic industries. The Company has a therapeutic focus in oncology, dermatology, nephrology and medical devices. Averion is headquartered in Southborough, Mass. and has additional office locations in Rye Brook, N.Y., San Diego and San Jose, Calif., and Neu Isenburg (Frankfurt), Germany.
Approximate Affected Workforce: N/A
Source: Business Wire - February 20, 2007
CytRx Corporation
Los Angeles, CA
Worcester, MA
CytRx Corp. has started the relocation of its laboratory facility in Worcester, Mass., to San Diego with the termination of virtually all of its staff at the Worcester facility. Los Angeles’ CtyRx is a biopharmaceutical company engaged in the development and commercialization of human therapeutics primarily in the area of small molecules.
Approximate Affected Workforce: N/A
Source: Los Angeles Business.com - May 22, 2007
Hollis-Eden Pharmaceuticals Inc.
San Diego, CA
Drug developer Hollis-Eden Pharmaceuticals Inc. said Friday its chief financial officer is leaving and the company will cut 25 percent of its work force, 18 jobs, in a move to reduce cash usage for the rest of year. Hollis-Eden is reorganizing to focus on developing its class of adrenal steroid hormones as treatment for metabolic disorders, autoimmunity and cancer. Hollis-Eden will discontinue investing in products for biodefense and focus on two drugs under development: HE3286, which treats type 2 diabetes and rheumatoid arthritis, and HE3235, a treatment for prostate and breast cancer. The company’s lead drug candidate had been Neumune, which was being developed with help from the Defense Department to protect people against the effects of radiation exposure.
Approximate Affected Workforce: 1-50
Source: The Associated Press - April 27, 2007
Hollis-Eden Pharmaceuticals, Inc.
San Diego, CA
Hollis-Eden Pharmaceuticals, Inc. announced a restructuring designed to tightly focus the Company’s future strategic direction on development of its proprietary class of adrenal steroid hormones in the therapeutic areas of metabolic disorders, autoimmune and other inflammatory conditions, and hormone sensitive cancers. Consistent with this focus, the Company’s primary development efforts will be on clinical drug candidates HE3286 and HE3235, as well as follow-on compounds that may offer benefits in these therapeutic areas. With the Company’s recent decision to discontinue investment in products for biodefense, Hollis-Eden is also reducing its headcount by 25% to effectively reduce its overall cash usage to an estimated $10-$12 million for the second half of 2007.
Approximate Affected Workforce: N/A
Source: Pharma Investments, Ventures & Law Weekly - July 22, 2007
Ligand Pharmaceuticals Inc.
San Diego, CA
Ligand Pharmaceuticals Inc. said late Wednesday it is laying off 76 percent of its work force as it transitions to a smaller company focused on developing drugs currently in clinical trials. As part of the restructuring a number of executives, including Ligand’s chief financial officer, are stepping down. In all, 267 positions are being cut. The majority of the layoffs and restructuring will take place during the first quarter. Ligand is rapidly transforming into a highly focused research and development and royalty driven pharmaceutical company.
Approximate Affected Workforce: 101-500
Source: AFX International Focus - January 31, 2007
MicroIslet Inc.
San Diego, CA
MicroIslet is planning to refocus its business strategy and seek to initiate xenograft clinical trials in locations outside of the US. This change in strategy is intended to shorten the time lines involved and reduce the costs associated with developing and marketing the company’s proprietary and patented islet cell transplantation technologies for use by people with Type I diabetes. In adopting this new strategy, MicroIslet will shift its attention away from previously-planned allotransplantation trials in the US. By focusing exclusively on xenotransplantation trials, the company will be able to reduce its operating expenses and present workforce from 22 to 15 employees.
Approximate Affected Workforce: 1-50
Source: Autoimmune Drug Focus - May 11, 2007
I apologize for posting this as I do these records for my own uses, so I excluded layoffs at financial and government facilities.
Hoz,
In your opinion, what’s causing these plants in the San Diego area to be closed when the companies have other plants they could close? I could guess, but I suspect you have an opinion.
Lip
Its too costly to run a business with high paid employees in California. Main reason for the cost is their overpriced homes.
I was thinking along those lines, but thinking corporate taxes, property taxes, WC insurance, along with the salaries needed to live in SoCal.
Living in AZ, we’re seeing some of the foreclosed houses geting close to $100 sq ft and lots of Californians have moved out here to take advantage. Taxes are lower, we don’t have Mello Roos, etc.
It’s getting bad here, but I’m hoping we recover faster than some of the other places. Heck, our state government even has a balanced budget with a Democratic governor no less!
Lip
Hos,
I for one really appreciate these as they are quite telling on a number of fronts. Thanks again for the posts.
Sorry all - no more layoff posts - there were folks complaining.
You forgot Nokia, Flextronics and others!
So let’s get this straight: If you hope prices go down, you’re hoping people lose their homes.
If you hope prices keep going up: You’re supporting the American dream?
First off, I’m not sure what about the dream of “home ownership” is unique to America, but we’re not talking about home ownership here, we’re talking about continuously rising home values. This has nothing to do with home ownership. The “doom and gloomers” aren’t against home ownership at all, they’re against the assignment of absurd valuations to an asset class.
If you hope valuations go down, you’re hoping for a return of logical valuations.
Ben,
This “bubble” won’t be recognized as such for much longer - everyone will soon be referring to it as the housing “bust”. You may want to register thehousingbustblog.com before someone else does. At the very least, you could point it to this IP address.
“I also said that I couldn’t quite grasp the unbridled joy that the doom-and-gloomers seemed to have about the possibility that many families might lose their homes in a downturn.”
What a freaking Fish Bowl world you live in George…
Let me freaking clearify it for you…but dont take my word for it take the comments of 150 industry leaders…
http://www.mercurynews.com/search/ci_6015735?IADID=Search-www.mercurynews.com-www.mercurynews.com
“Housing costs were cited by 99 percent of executives as the top cost-of-living challenge for valley families. They also were cited by 84 percent as the top business challenge for companies trying to recruit workers. The median price for a house in Santa Clara County was $803,000 in April, according to DataQuick Information Systems”
The main reason we dont mfg PCs and all the tech equipment in Silicon Valley is because the hight cost of employees. All of the workers were laid off in the late 80s to mid 90s. We coudnt compete with the Japanese and Koreans who were dumping their products below costs. The same elements of competition 10-20 years ago has not changed. We can get creamed today very quickly. Today the prices of high tech goods are down 90% since say 1985. You can buy a very powerful laptop for under $350 compared to $3500 a few years back. High home prices do not add to our global competitive advantage. If anything they are a destablizing factor in business today.
Either prices drop and thus become more globaly competitive or
we ALL lose our industries and jobs to cheaper tech workers overseas. Its no wonder that jobs are exported overseas which are far cheaper for employers.
Excellent post, ThomasPS.
~Misstrial
George only talks to the real estate shills, and discredits everyone else…..so how many flips are you holding and stuck with now George?
“In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.’
Geezlouise, I had no idea the power behind the human mind. So, fellow HBBers, if you’ll all start thinking it, we can make this housing bust happen even faster.
Think about when Wall Street opens tomorrow morning…
‘Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market.’
(Palmetto takes a bow and smiles somewhat shyly and modestly) Thank you, thank you…
Wow, is this guy pissed or what? Kinda like the guy who misses the nail, hits his finger with the hammer and then goes outside and kicks his dog for making him hit his finger with the hammer.
yeah, then the dog, feeling rightly abused, goes after the neighbor kid on his bike and soon the guy’s being sued and asks, “Why me?”
“Think about when Wall Street opens tomorrow morning…”
I’m thinking about it, losty. Wish I could be here, I’ve got to go up to Tampa in the AM for most of the day, but my thoughts will be here with the blog. Will catch up later in the day.
we’ll carry on on your behalf, see you here when you get back…
“Wish I could be here, I’ve got to go up to Tampa in the AM for most of the day, but my thoughts will be here with the blog. Will catch up later in the day.”
Give us an update on the density of For Sale signs on residential streets in Tampa. Driving up and down residential streets in St. Pete Beach last week, I would estimate that 10 percent of the SFRs (stand alone homes) had For Sale signs posted out front.
Only 10%, wow, that’s low. Maybe I’m just jaded from all the For Sale signs in South Hillsborough. I don’t get into too much of the residential area when I go to Tampa, but I’ll see what I can do. I do know there’s a lot of fixer uppers for sale in Tampa, check out http://www.discountedproperties.com. I don’t pay to get the addresses, but it is interesting to see all the failed flips, mainly at the lower end of the spectrum. I’d give them about $30,000, if that, for some of the properties.
‘Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market.’
*sounds of applause* Thank you, thank you….In accepting the above-referenced congratulations, I would like to thank the Academy, Ben Jones, and all the wonderful HBB bloggers (like palmetto) who have meaningfully contributed to my previously mentioned views. Thank you again!
~Misstrial
As much as I’d love to see Wallstreet tank, if the human mind is that powerful, I’ll be using it for for more important things, like Selma Hayek.
If you can use yer mind fer Selma, rock on brother!
I still have to use .. “other” parts of my body … !!
George is an *&%*%.
So he’s been asked to join for episode 2 of my “Iron Auger” series.
(click on my name, I respect Ben’s rules)
Ok, lame, but I think it gets the point across.
FUD won’t silence us. We know we’re right. Heck… every time I read this I want to get louder! But I have to be careful at work… many coworkers own 1 to 5 flips! (Yikes!)
Got popcorn?
Neil
George has now inspired a new search - The quest for the King of all Joshua trees. Gone are the days when any ‘ol toxic, prickly pole would do. Oh no, now I must find the grand-daddy of them all! You did it, George. I’ll wander the Mojave for weeks if that’s what it take to find it - the ass-missle of all ass missles. I’m comin’ for you Georgie-boy!
Anyone know where I can rent a pile-driver?
HaHa! There are some mighty nice ones out by El Mirage dry lake. BLM rangers may be able to point in the right direction. Some of that land out there is privately owned. May be able to cut a del with a property owner.
~Misstrial
“George has now inspired a new search - The quest for the King of all Joshua trees.”
I don’t think George will get the full intended impact because he has a case of ‘anal glaucoma’.
In my opinion, Mr. Chamberlin will be out of a job by the end of this year. I don’t know how the NC Times can continue to support his idiocy in the face of unrelenting evidence to the contrary of everything he has been espousing on the airwaves and in print.
Somehow I hope this gets to George Chamberlin,
I have a household gross income of ouer 400K per year. I wanted to trade up in Nov of 2004 in a developement in “The Woods” near Eastlake in eastern Chula Vista, San Diego.
Between the first phase release in Nov of 04 to 4th phase release in Feb 06 (These are approximates) the prices jumped from around 750k to about 1,250. I was competing with foaming at the mouth financial illiterates with no money down using other peoples money who could never qualify for the loan on a fully indexed basis.
Screw anybody, and I mean anybody who waited in a line and used toxic financing with little to nothing down to purchase a home between 2004 and 2006!!!!!!!!
I hope some of the people I talked to go broke. No common sense.
My wife and I walked away in disgust.
I hope to buy from one of these idiots at below 650K and I don’t care if my current home goes back to what I paid for it in 1996 because it makes no fiancial difference to me. It is a home to live in not an investment for my retirement or an ATM. I have a 30 year fixed at 5.25%. What I’m I going to do sell it? Where the hell would I go? I love San Diego.
Plus my property tax basis on the new home will be much lower.
My wife and I walked away in disgust.
Understand what you mean. We went to an open house today. Asking $1.25M in a neighborhood where no home sold for above $0.96M except one house in 2006 for $1.25. Gee… Inspiration? We walked in disgust.
As you note, it makes no financial difference to many what homes go to. When its affordable to you… buy when you feel like it.
Me? Wait. Pressure from the in laws… but I can deal.
Got popcorn?
Neil
Sounds like Palo Alto which went up 300% in 10 years. Never in history has prices in Bay Area gone that much. Neither population or income growth are the reason for these increases.
RE: Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market. In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.’
The man is seriously delusional.
He must have forgot to take his meds before penning that piece.
Bosses better make sure he checks in with nurses office monday AM.
‘Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market. In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.’
Isn’t this what happened in Florida in the mid-1920’s in regard to falling prices with a “booming” economy - not that the current economy is “booming” except possibly on the basis of questionable government statistics? Does “never been done before” actually mean “as long as I’ve been a total tool”?
Three story housing in _Bonsall_? It was a wide spot in the road when I lived near there.
You know, about Bonsall having a 3 story housing development… Sacramento had plans for a gigantic condo tower (towers?). I think that may have fallen through, but in any event, it did not prove that we’re running out of land. If anything, it points to the plentiful supply of morons.
‘Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market. In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.’
…
‘So, lets all remain calm. Hate me if you want. I accept opinions, give me the same courtesy. Owning a home is still the American dream and, since 97.4 percent of homeowners pay their mortgages on time, the dream seems to be working out pretty well.’
‘George Chamberlin is a regular contributor to the North County Times.’
I guess he is congratulating us. But the congratulations are sorely misplaced. Nobody, and I mean nobody, who regularly posts on this board had much if anything to do with the abolishment of lending standards that drove home prices to a level where they were pretty much bound to crash. If helping to convince the rest of the world that loaning $700,000 to help a Central Valley strawberry picker earning $20,000 a year buy a home he cannot afford is a root causal factor in the housing market correction, then I am happy to accept credit for pointing out the collective insanity.
George Chamberlin, you are a certified moron.
I totally agree Prof. Bear!
Besides, losing a home doesn’t mean these “families” will curl up and die. They will have to rent. Big f’ing deal. It’s not the end of the world for these people. They make it sound like a death, it’s just moving, not terminal cancer.
Just read in the left wing Fresno Bee that illegals are moving back home! If the Bushies go forward with the plan to inforce ’some’ of the immigration policys. ie fine employers for hiring illegals. There are other parts of the plan but if they can’t get jobs they’ll leave. We won’t need all the housing that standing vacant and the rest that’s planned to be built. If der governator gets his fingers out of his a– on his massive socialist health plan it will all help—
Hang on, the same Fresno Bee that has a biweekly Religion & Morality section? Left wing? I thought their liberalness was just a popular misconception.
Don’t know what that has to do with anything. I knew an Episcopal priest once who made Trotsky look like Rush bloody Limbaugh.
Abracadabra. We control the price of housing. Be nice to us or we’ll flip the crash switch and goodbye houses. Be nice to us and we’ll make sure the mortgage industry gets bailed out. Yes. We here are in charge and our opinions control whether you get booted out of your house failing to pay your mortgage.
“‘He was declined because they wouldn’t do stated-income loans above 90 percent anymore,’ Williams says. ‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”
I’m literally dumbstruck by this comment.
I was going to say flabbergasted. How casually they admit that the deal can’t go through because the lenders won’t allow them to commit fraud anymore.
“Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years.”
Its easy to point to a loan… but let face it… realtors were pumping homes with Fake Multiple offers like crazy. Every Re office or open house you entered, the was the first thing they said since 2000 to even today. “You will need to bid above asking because there are other offers”. No confirmation no verification all FAKE! The easy no doc loans arent the only problem here….
Before you get rid of liar and all toxic loans get rid of the FAKE BIDS created by realtors. Force them to verify or face fruad and Jail time.
In the semi-restore your faith in humanity and the mostly to pat ourselves on the back category:
We sold our house this last June. We came close to multi-offers but the 2nd fell through before it got delivered to us. Our first offer was $10K below asking (the house was only worth ~$150K, so it’s a relatively big percentage.). We countered with $2k off list.
During this process, the other realtor asked if they were in a situation with multiple bids. Our realtor said and I quote ” No”, which is how I wanted her to answer.
Selling a house is dicey enough and it’s not real until someone with a lawyer’s signature has signed a big check in our name. We figured that we wanted these folks to be sure of their price and the house to make the transaction go smoothly.
Our final agreement was $5K off list which was fine and dandy as my own calculations said the house was at least $40K overvalued at the list price. Worse, it required significant amounts of work to modernize it that probably would cost somewhere around $20K.
I have faced numerous times the same event of being told by realtors to make a bid higher than asking due to multiple offers.
With the realtors not having the check and balance of the lenders saying no and hit the mark appraisers coming in with any value ,there was no limit to how high the prices could go ,until the supply went up beyond absurd and the buyers became few .
The real estate industry ran out of buyers for the “Great Real Estate Scheme .” The media was supporting the absurd myths by the RE industry like ;
(1) ” Real Estate always goes up “. (Not true ,look at history )
(2) ” Real Estate is a good tax write off ” (only if you need a tax write off,and you effectively pay lower than rent after tax consideration is taken . )
(3) ” No need to worry about what loan you go on because you can always refinance down the road after you make tons of money .” ( A myth because financing is not always available and it is important what effective interest rate you are paying is and what it might go to if it is a adjustable ) The Statement is also wrong because it’s a promise to the borrower that real estate always goes up and it will pay for higher effective costs for a loan . Does not take into consideration the high cost of a refinance in the total cost of money .It’s also stupid to bet that you will get a better loan in the future .
(4) You can’t afford not to buy ,because you will be priced out of the market forever. ” (Faulty advice because if you lose a home to foreclosure it will set you back for years credit wise and perhaps make it so you can never get a home . Better to save money until you can truely afford a home or wait until your income is enough to afford a home .Trust in the fact that if people can’t afford homes ,eventually they come down in price .
(5) “Interest rates have never been this low,(implying that any inflated price on a house is OK as long as you pay a low interest rate )”. The price of a home should never exceed the real market value of a area just because rates are lower than normal .
(6) “They are running out of land ,so buy now or never be able to own .” (While it is true that some locations have less land to build on ,making the demand go up ,there reaches a point where the price get to high, which causes a exit because of affordability, which lowers the demand again . Also plenty of land in America and people should not of acted with urgency to buy because expansion is a normal slower process . )
(7) ‘You can use your equity to finance the life you deserve “. Debt buying has to be paid back . People should stop and think about the fact that if real estate is going up ,other expenses are going up ,so your not coming out ahead .Just add up the interest you pay on debt buying and you will find out how much you are really paying for the toy you bought .
(8) “Rich baby boomers will buy your flip .” ( Baby boomers are looking for bargins and a cheaper life style for retirement for most part .A good amount of baby boomers did not save for retirement so they want to flip a overpriced POS to someone )
I could go on and on , but the “myths of the real estate mania” were just outright stupid , and certainly not good investment advice .The boom was a bunch of stupid brainwashing and mass-marketing of real estate investment lies for the benefit of builders and commissioned RE salespeople/mortgage brokers ,who used easy money to finance the gamble they wanted their client ,(the borrowers ), to go all in on .
Now we have the emergency of the Feds injecting 38 billion to keep the financial markets liquid . Is there something wrong with this picture ?
“‘He was declined because they wouldn’t do stated-income loans above 90 percent anymore…If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’”
So he would qualify if he “stated” his income, but doesn’t qualify if he has to *prove* his income (because he “doesn’t make enough money”)? Ummm, why isn’t the reporter all over this? As in, “why was he trying to commit fraud by overstating his income, and isn’t it a *good* thing that he wasn’t given the loan, which, using his real income, he couldn’t afford?”
Clearly, if he can just “state” his income, then he’s making more money than if he can verify his income. What part of his reasoning don’t you understand? Are you an unsophisticated fool or something? LOL
“Are you an unsophisticated fool or something”
Yes.
I obviously don’t understand the complex mechinations of equity extraction, creative documentation, etc. It’s almost like I consider the house buying process as getting an item (a house) in exchange for money, some of which I borrow (meaning I HAVE TO EVENTUALLY PAY IT BACK WITH INTEREST) from a bank…and in exchange, I use the newly purchased house as collateral. I know that that is an antiquated idea in the era of equity liberation (”it’s free money! Let’s all get ATVs, Hummer H2s, and boob jobs!”), but hey, I’m old fashioned. I obviously don’t get “the new paradigm”…much like I didn’t get the “new paradigm” of the tech stock run-up in the late 90’s.
Oh I get it. The extra time it takes to “verify” his income is the time in which he would’ve earned that extra $30K. If he could just “state” his income, he would have time to go out and earn the difference. Right? ha ha
I guess it was his “wishing income ” .Can you imagine how many bad loans the realtor/mortgage agent dealing with that guy put into the system in recent years .The realtors have been pushing bad borrowers for so long ,they don’t even see why it’s bad . I wonder how easy it will be to say ,”Real Estate always goes up “,when the MSM was saying on Friday that no question there will be broad declines in real estate prices now.
You need to get the equity out of your house while it is still there. Today your equity is eroding away at an accelerating pace; if you don’t get it out now you eventually won’t have any left. Get that equity out ASAP!
Everything will work out okay if you just keep in mind that you are borrowing from yourself.
(So I’ve been told.)
“The only ones who seem content are longtime residents like Rafael Zambrano, who moved to 930 W. Camile St. in 1988. The chef and father of four said he has nearly paid off his $177,000 mortgage.”
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
What?!?!? A homeowner who DIDN’T view his home as a free-money ATM??? Shame on him
Chuckles…ATM.
But seriously, I wish to G*d many more had this mindset. I shed tears for where our country is headed.
Many do …you just don’t see articles about them .
We own our home ..no mortgage ..no HELOC …no CCdebt ..no car payments .
It’s nice .
We did it it old fashioned way . Lived within or below our means for years and years and on a blue collar income to boot .. Still do .
Now we can coast and enjoy the fruits of our labors and frugality .
Me too. Bought a house in Sugar Land, TX new for $165K, put down $65K for a downpayment, going with a fixed 15-years loan at 7.65%. Have not refinance, but instead paying extra $1,500 monthly in principal for the last 2.5 years. And Hoooola, by 12/2007’s of this year, my house is paid off (That is a total of 8 years and 4 months to pay off the house). I am debt free. And I am still driving my old (used to be newly bought) 1999’s Toyota Corolla with a 163K miles on it.
Hey….Rafael!!!!…..you’re F-n up our economy, dude!
That’s funny.
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
Uh, no, Mr. Kohler, the seller DOESN’T have to make money off the deal, and any buyer would be a fool if they don’t price in the huge downside risk vice the non-existent upside potential. Those “lowball” offers are as good as it’s going to get, something you and your even more clueless seller had better get used to.
Somebody please hand me a 20-lb trout so I can school this drooling NAR imbecile.
I think what he may be referring to is that “the seller has to make some money off the deal…so that he can afford my commission”
If the seller just breaks even - where’s the 6% coming from for the RE agents? Oh thats right, he has 25-30K in his desk drawer…..
LOL.
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
Clearly, if you believe the NAR and their former chief econo-slut David Lereah, Mr. Zambrano is by definition an “unsophisticated fool.”
(raises glass) Here’s to unsophisticated fools!
My wife is getting more unsophisticated and more foolish day by day. Woohoo! She *does* again want to live in a house that we own, but recently she said “maybe we should just stop even looking at houses for 6 months or so”. We had been casually browsing and occasionally putting in ridiculously low (so we are told) low ball offers for the past year and a half, so it’s a major change for her to say “lets not even look for half a year”.
Us, too.
Us, three.
Us four.
Five
six
Eight.
What?
Inflation, CVG.
With the recent injection of people who don’t want to even consider looking for the next 6 mos, the power of your claim to do so is diminished. Eight is the new seven. You can get a much better rate-of-return if you stretch your “start looking again” maturity date out to about 2 years.
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
I grew up in Escondido in the 60’s-80’s, this is how the Mexicans used to be when I was a kid, worked hard, started business, saved, bought house, paid it off.
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
Ah, yes, the seller just HAS to make some money…right? Right??? RIGHT?!?!?! Wow, look out below!
The same sellers who are holding onto some very old shares of Nokia, Sun Microsystems, Intel, etc etc etc
In the new world, where sellers are way upside down, in order to sell, they do have to make some money. Expecting a buyer to give them that money though is a tough sell today. Perhaps a day job?
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
I bet his FB neighbors just adore him for those pithy sentiments. Viva Mr. Zambrano! I hope the neighborhood young people see this guy’s example and learn something from it. I bet he’s hoisting a cold one along with the smug, gleeful, solvent renters on his block.
“Tempted by her home’s increased value as prices escalated during the boom, Ramirez and her husband refinanced. It helped them pay off debts, but their monthly payments swelled…In February, the notice arrived.Christina Ramirez’s home of 16 years had been foreclosed upon. She had three days to pack up and get out.”
*sigh*. Another “victim” story….”tempted” by the evil fruit of easy borrowing, blah blah blah, paying off some unspecified debts, blah blah blah. How about telling us about all of the nice things they bought with that money, or how much equity they “liberated” before the housing ATM stopped?
In other words, if someone buys a house 16 years ago, and keeps taking out loans to pay for their ever increasing pile of toys, they are not losing ANYTHING (other than FICO score) when the house is foreclosed on. The “equity money” that they would have gotten by selling had already been spent long ago…by them! In many cases, they got and spent even MORE than the house is currently worth. If you are going to do a “cry me a river” profile, at least find someone that didn’t spend the money on unspecified toys. Pick someone that lost a job and never took money out, or someone that has huge medical bills and no insurance. Not fools that were “tempted” by easy loan standards.
arroyogrande wrote…How about telling us about all of the nice things they bought with that money, or how much equity they “liberated” before the housing ATM stopped?
Which they will pack up and take with them, along with any infrastructure of value. Honey, help me rip out the air conditioner, will ya?
*sigh*. Another “victim” story….”tempted” by the evil fruit of easy borrowing, blah blah blah, paying off some unspecified debts, blah blah blah. How about telling us about all of the nice things they bought with that money, or how much equity they “liberated” before the housing ATM stopped?
No kidding, how about if we state it directly without the euphemistic language: she in effect STOLE money from the lender, and we’re supposed to feel sorry for her?
arroyogrande. I agree with you . I had a case one time where the borrowers had major medical expenses that ended up bad because a child died ,and they had to declare BK ,(I guess their insurance policy only covered 80% of the medical bills ,that went over a million ) . 5 years after the death of their child ,this couple tried to move on in life and wanted to buy a house .These people were not flakes , and they could afford the payments they were going for by that time.
Sometimes people just get a hard blow thrown at them in life . My company made a prime rate loan to this couple and held it on their own books .
I just want to add that most the time people run into loan trouble because they buy junk they can’t afford ,rather than it being a job lay-off or a true medical emergency or car accident that laid them up, or something like that .
The article states that Ramirez has 3 children, the youngest of whom is an 11-year old boy with leukemia.
And a real douchebag of an ex-husband too.
Good point. I wrote my response without reading the article in full.
“the youngest of whom is an 11-year old boy with leukemia”
From the article:
“owing around $200,000″
So she spent the $200,000 on her son?
“To keep up with housing costs and Anthony’s medical bills, Ramirez, who has worked as a Food Maxx checker for 16 years, took a second job waitressing nights at the Scotsman Restaurant off Weedpatch Highway.”
It looks like taking a second job is letting her make the payments on the treatments. I guess we have no way of knowing where the money went…it may have gone to Anthony’s medical bills (which are now covered by her second job), it may have gone to toys, or it may have been both. The reason I suspect “toys” is that in most cases, the reporter would emphasis that the money went to medical expenses, (rightly) assuming that such an expenditure would raise sympathy for the distressed family. The fact that the targets of the MEW expenditures were vague, and that medical costs were not mentioned as targets of the MEWs leaves me a bit dubious that it was the leukemia treatments that “forced” them to do MEWs. I guess we will never know.
Yes,
with $2,000 monthly payments.
“Everything was going up,” Ramirez said. “We thought it was a good idea.”
Tony Ramirez left his wife last year and balked at selling the house. Eventually, Christina got a lawyer and put the house on the market, but the only interested buyer wanted her to pay the closing costs. She didn’t have the money and lost the house.
“I was by myself,” Ramirez said. “I didn’t know what to do.”
Now she’s coping with the fallout. She’s gotten her family into another home, on a lease to buy plan. But she’d still like to get her children back in their old school district. Her 11-year-old, Anthony, went to Edison Middle School, where the teachers and administrators knew him and understood his leukemia struggles, she said.
Ramirez recently tried to co-sign on a car to help her eldest daughter, Nicole, a 20-year-old college student. She was turned down. And it may happen again: foreclosures remain on a credit record for seven years. She now tries to pay everything in cash.
To keep up with housing costs and Anthony’s medical bills, Ramirez, who has worked as a Food Maxx checker for 16 years, took a second job waitressing nights at the Scotsman Restaurant off Weedpatch Highway.
Hope she didn’t buy a Crisp and Cole Rent to Buy house.
A sick child or family member is the only reason to go into whatever debt it takes. Who wouldn’t lose it all for a child?
Who wouldn’t do everything in their power to buy health insurance for their family, even if it meant renting instead of owning?
Sorry, after 16 years in a house, you’ve a) either paid off the 15 year mortgage, or b) over halfway through paying off the 30 year.
Apols for the last comment - I didn’t read the full article either. Poor woman - sounds like a real case of financial distress.
Yep, sounds like her husband dumped her at a bad time also .This lady has been working two jobs and also has a child with a medical problem . I don’t know why they pulled the money out on the refinance ,but maybe the medical problems were draining alot of the household income ,who knows .
‘La droga,’ Albarran said. That’s Spanish for ‘drug’ – Mexican slang for a crippling debt. The people of West Camile Street, she said, are ‘endrogados’ – hooked on debt.”
And *that’s* why we need a bailout…these people weren’t responsible for their actions. They were addicted to debt…it was a medical condition, a disease.
COASTAL TSUNAMI WARNING!
“Major lenders are repossessing homes in Southern California much faster than they can sell them, a development that could set off a downward spiral of price cuts and more foreclosures. Lenders’ inventories in the counties of Los Angeles, Riverside and San Bernardino grew by 5,829 during the second quarter, according to data compiled for The Times by First American,”
PB -
Nice to see you back. It’s been quite a while since I’ve seen you post. Years even?
Lots of REOs in LA…but still waaay overpriced. So they sit. And sit. You’d think they’d want to unload em. Most of them have shabby rehabs too. I saw on the other day–a beaut old craftsman with cheap bank rehab on the interior. A shame, really.
We’ve been looking at rentals in LA, and a lot of them are obviously held by people who thought they could do a slap-dash rehab and sell before they had to make a payment. I have seen some god-awful interiors that would make my Appalachian ancestors blush.
Wait I just talked to someone that told me there is no way home values in the OC would go down, it’s not just swamp land like where I live, he said.
Was his name Gary Watts, perchance?
As the penguins in the animated movie “Madagascar said”:
“Just smile and wave, boys, just smile and wave!”
The villain in the animated movie OVER THE FENCE was, naturally, a realtor and HOA harpy. I’m guessing whoever wrote the screenplay had some bitter personal experiences with the type, because his depiction was dead on.
Also because I don’t own a house my opinion on things is obviously worthless
I was should ask if actually “owns” a house or just a huge mortgage
“An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years.”
“Then the credit stopped. And home values crashed.”
It sounds as though all those govt-sponsored affordable housing programs are finally starting to have their intended effect.
“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”
To me, if true, this essentially proves that a crash is coming in the banking (or lending or hedge fund, whoever they are) industry. The ONLY reason for a LENDER not taking $419k on a house listed at $427k is so that they can keep the $427k number on their books a bit longer, giving management time to cash out on options. Considering carrying costs and everything else, a lender would have to otherwise be INSANE not to take that offer.
It looks like more fun days ahead.
GotRocks: giving management time to cash out on options that’s about the only thing that makes sense
Good point.
“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”
That must be the worlds stupidest move on the part of a lender refusing a $419,000 offer on a home in Perris, (Riverside county, CA). Do they actually know how hard Perris will be hit when the IE prices collapse? BY 2008-2009 4/3 6000+ sq ft REO properties IN NICE PARTS of SW Riverside county will flood the market at below $150,000, and possibly even under $100,000. Even now in the ugly outback pockmarked boonie areas oF SW Riverside(part of the IE)one can steal a large REO property for under $200,000 which is still overpriced and a worthless ‘investment’.
SW riverside homes are as overpriced and will tank as far and fast as Bakersfried. Both actually mirror each other(nasty 100% sweltering heat 8 month of the year, long coomutes to LA basin, lack of hi-paying local jobs, 1-2 note limited economies, large expanses of available flat land to convert to housing, both under the thumbs of greedy builders and developers, ect, At least Bakerffried has agribusiness as a sort of mainstay, which SE riverside lacks.
Both The Central valley and SW riverside RE ARE ON LIFESUPPORT.
In 1991 I had our house listed for $190K. No offers for a while. Then one offer came - for $170K. I took it (I’d figured that if I got out with $180K it would be very nice… but, what the heck).
A year later several homes around my old place were still on the market, having come down 2K at a time.
Part of the problem is that people refuse to look at the market they’re in. We all tend to look in the rear view mirror - stocks always go up, real estate always go up, is was sunny yesterday, so it’ll be sunny today, I’ll live forever.
Prices will only seriously decline when some critical mass of sellers realize that their only options are to sit in the property or to lower their price.
Agreed.
Agreed. When we sold last year, the market was turning quickly (San Diego). I dropped the price in 40K increments. The thing that I came to realize is that 40K was not a Lexus - it never existed.
I think people treat the first price they put a property on the market at as ‘real’, and any subsequent lowering of the price as actually taking money out of their pocket.
Until that changes the reductions will always be incremental.
It is amazing that people ever believed that high housing prices where ever a good thing for the housing consumer. Affordable housing means lower priced housing. Creative (and risky) loans and unrealistic housing consumers doomed the housing market (see article: http://www.a2dvoices.com/realitycheck/housing/).
The real question is “Why does the Federal Reserve continue to push liquidity into the housing market?” Using low short term rates interest rates (when long term rates are higher) was reckless and has consumed future housing market capacity.
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
Typical realtor bullshit. If a seller is desperate enough, they’ll accept an offer where they lose money. It happens every day.
“The owners of those 14 homes and three others piled up 79 mortgages from 48 lenders.”
Mortgage Orgy?
Overheard at mortgage orgy:
“Put your keys on the granite countertop.”
Luv,
Jen
“It’s got to get worse before it gets better, said Michael Davin, . . . echoing the new mantra of the real estate business.
mantra n. 1. Hinduism A sacred verbal formula repeated in prayer, meditation, or incantation, such as an invocation of a god, a magic spell, or a syllable or portion of scripture containing mystical potentialities.
——–
I took a mysticism class in college, except that they called it “Economics 101″ back then.
Luv,
Jen
Anyway, based on your accurate definition of “mantra,” I would say Davin’s statement is NOT the new mantra of RE. I would say the mantra of RE is the OLD mantra: “Now is a great time to buy.”
“Economics 101″
They called it “History of Astrology” and “Ancient Alchemy” at my school.
It’s funny , my Econ 101 professor tried to talk me into becoming a economist and the same professor thought a little bit of debt was good at that time, based on the inflation theory .Same professor never gave a talk on manias or asset bubbles or loose money aberrations .
Forget Perris
“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”
The lender’s ride…
http://en.wikipedia.org/wiki/Ship_of_Fools_%28painting%29
“The only ones who seem content are longtime residents like Rafael Zambrano, who moved to 930 W. Camile St. in 1988. The chef and father of four said he has nearly paid off his $177,000 mortgage.
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
We have a winner! Finally, someone with a brain quoted in the press!
OT but this is important:
Comment by Hoz
Alas GS changes his handle back to PB. Groucho, we hardly knew you.
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Comment by arroyogrande
IMHO, he should keep “GetStucco”…a classic housing bubble moniker. What if “LVLandlord” had changed her name to “Princess Tuti Fruti”? It just wouldn’t have been the same.
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Comment by P’cola Popper
I agree with you Arrogrande. “GetStucco” has evolved as a major brand with a huge amount of accumulated goodwill. Pity to abandon it.
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Comment by lost in utah
professor, you there? you reading this? no ivory tower for GS…
Biggest development this week, IMO. Nevermind the housing bubble or the fixed income meltdown. Where have you gone, GS?
Don’t know about Groucho, but Professor Bear has come back to cast aspersions on political efforts to prop up the collapsing bubble.
“Professor Bear has come back to cast aspersions on political efforts”
You just want to keep talking about the Plunge Protection Team and Fannie/Freddy bail-outs without Ben yelling at you…:)
GS …., I know you are not going to change your mind and go back to GetStucco ….,but GetStucco was a great name and the story behind the name you have talked about was great . So many people look forward to GetStucco posts on this blog . But ,a rose by any other name is still a rose .
never heard the story - tell it again!
Tell it again PB ,tell it again .
In the Marx Brothers’ film “The Cocoanuts” (set during the Florida development boom of the 1920s), there is a line were Groucho, talking about real estate, says “You can even get stucco! Oh, can you get stuck-oh!”
I’ll pay you $5 to bring back the screen name “GetStucco”.
Maybe we could use this as a fundraiser. Make pledges to the blog and if we hit a certain level, perhaps GS would be willing to re-instate?
I’m just asking…
If he doesn’t take it back, I’m gonna steal it.
“Register. “An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years.”
I will not go into the ugly financial loan details outlined in the excellent thorough article by th OC register, and how 1st time hispanic buyers got screwed over by unsrupulous predatory lenders. I leave that to the REfinancial experts on ths blogs. I will simply say that i have driven thru that particilar hood in Santa Ana many times. That particular section of Camile st is off Flower ave which goes thru a very dense blighted hispanized part of SA, as does bristol ave.
What you observe is a once proud OC middle class suburb transformed into a densely populated lower class suburban slum populated by recent latino immigrants. See lots of old beat up work trucks and stakebeds, ice crean peddlers on carts, streets deteriorated with cracked pavements, once clean sf r-1 zones degenerated into r-2/r-3 shabby apt zones, sighs of graffiti, ect.
This is the heart of the SA residentail district transformed into an immigrant lower-working class suburban slum. Take this and multiply it by several thousand and this is the picture of what much of LA county/NW OC has become. Welcome to greater LA/OC Metro region, the new immigrant melting stew.
screwed over? how about the “I couldn’t read the docs (cause they’re in ENGLISH) so I just signed them”. Friggin idiot people like that deserve the A**whipping they’re gonna get. 1-800 CATCH A CLUE.
If I want whine, I’ll open a bottle of 2 buck Chuck.
Yep, and houses in this neighborhood in a few short years have gone from sub-$200k to $600k. What cannot be emphasized enough is that 5-6 years ago you could have bought in Santa Monica for that price. Sheer, utter insanity. And that North County Times reporter thinks prices will only drop another 5%.
“how 1st time hispanic buyers got screwed over by unsrupulous predatory lenders.”
I’m calling BS on this one. I know some of these greedy, lying, mortgage fraudsters hispanic immigrant buyers - they deserve everything they’re getting and then some.
http://www.iddmagazine.com/idd//NYTSStories/nytsstories.cfm?id=14210&issueDate=current
and
http://money.cnn.com/2007/08/10/commentary/captainsblog_810.fortune/index.htm?postversion=2007081010
Off topic: They were filming an episode of “Without a Trace” at the end of my block this morning. I have never seen the show so I don’t know who any of the people were that were standing around. The funny part is that they were right across the street from the New York Federal Reserve building. “Without a trace” seemed a fitting phrase, in my opinion.
I guess it becoming a reality, the FIRST offer is the BEST offer… so shut up and take it.
=======================================
“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”
“Ten days later, the lender lowered the price to $417,000, where it still sits.”
“‘It can’t go down forever,’ Dyer said.”
Well.
We’ve come a long way, from “Real Estate only goes up” to “It can’t go down forever.” Maybe it can’t go down forever. Only long enough for you to become insolvent.
Maybe it can’t go down forever, but it can sure seem that way. Just ask Japan.
It won’t go down forever.
How is 2017 for you?
Works for me. I’m a buyer. As most buyers know, we have the cash. Credit? Ok, I accept that is going away. But that doesn’t mean I don’t get a home. It just reduces my competition. Judging from the members of this blog, I think we could come to an agreement.
Got popcorn?
Neil
Can you say SELLER FINANCING at below market rates? I sure can.
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
Zambrano,
Way to go! It seems your parents taught you right. A lot of other people thought that the equity in their home was free money, so they refinanced, took out more money than they ever thought they would have, and spent it like there was no tomorrow. It was Crazy Credit; or should we say “Droga Loca”
First let me say Mr Chamberlin that I have never written you or any local columnist before. I got a link to your August 12th article from Ben’s blog, also known as the housing bubble blog. I hope you are sincere that you truly love a good debate, because from everything I have ever read from you, or heard about you, that is simply not true. You have been anything but honest in your writings about San Diego’s economy in general, or RE in particular. Lets look at a few examples.
*”Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market.” *This is a total straw man argument. Most people are not celebrating the current state of the market. They are anxious and fear laden. Mostly because they are starting to come out of their RE induced stupor and realize that yes, real estate does come down. There are a few people, still precious few, who know what has to happen to return to sanity and we are not celebrating yet. However we will be shortly.
*”I also said that I couldn’t quite grasp the unbridled joy that the doom-and-gloomers seemed to have about the possibility that many families might lose their homes in a downturn.” *Again, unbnridled joy? Those of us with educations, good paying jobs and a bright futur have had our place in the social hierachy pre-empted by the get rick quick credit fueled orgy of the last few years; yet you can’t grasp why we might feel joy at its coming to an end. You have no right to lay claim to anything other than an ill-advised opinion if this level of analysis is beyond you.
*I love a good debate, and there are many sides to the real estate argument. *The is precisely the opposite of the tone and tenor of anything I have ever heard from you. I have heard you yell at people ON AIR for having facts and or figures to contradict your opinions, but never have I heard of you having an open and honest debate about the state of RE.
*”One of the biggest bears is David Rosenberg of Merrill Lynch, who said there is an additional 5 percent downside to housing prices” *This is double lie. Not only is Mr Rosenberg not very bearish if he claims a possible 5% downside to RE, he’s not even a bear considering we have fallen farther than that locally already. The second part of the lie is you plucked a national statistic to defend your opinion about San Diego, one of the most over inflated markets by any reckoning.
*”But never mind what a couple of Wall Streeters think about the housing market. I refer everyone to a new report, “California’s Deepening Housing Crisis.” *Never mind what I just wrote, pay attention to what I’m writing now! Well actually we agree on this, Ca is in the midst of a housing crisis, though it is one of affordability. This boom and its false sense of wealth creation gave birth to Carmel Valley, SEH, and Otay Lakes. Not exactly the kind of housing we needed, hence the shortage.
*”There is little land left for development, and that will indeed create a crisis in housing availability.” *This is easily the most tired and debukable myth of them all. San Diego has never had much land compared to say Phoenix or Dallas. Each and every time there is a boom the same arguments get trotted out. Each and every bust they go away. At least you didn’t say 1000 people are moving here a day.
I don’t hate you, I just think you are an incompetant shill who does more damage than good. Why don’t you report real numbers on real estate. Like median price to median family income? How about the percentage of mortgages taken out in the last 3 years that are not FRM? The coming reset wave would be a great subject for you to discuss. Of course none of these has the short term positive prices only go up spin you are so well known for. If you’ve made it this far Mr Chamberlin, good for you. Its not easy to have an entire piece of writing debunked but I’d be glad and willing to have an open debate about the future of RE in any publicly available online forum of your choice.
Josh
I doubt this shill will read it, let alone consider your many valid point. Why should he? He works for the real estate industry and they expect him to lie his ass off to defend them.
Oh, he’ll read it alright. This was written by one of the other Piggington posters and I would be willing to bet that Georgie boy is a lurkor at that site. Chamberlain hates Toscano…..
“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”
Guys like this are the ones who the MSM should be interviewing on TV instead of the real estate shills.
“Lana Dyer, an independent Modesto Realtor and appraiser
She must do all the appraisals for all her fellow Realtors.
I think in the by-laws it says if you don’t hit the value needed to do the deal you have to turn in your membership pin.
You scratch my back, and I’ll scratch yours-LMAO
Major price drops in real estate are coming. If you are even remotely considering purchasing right now, consider that 1 price cut could wipe out the down payment you took years (and discipline) to save.
It could all be wiped out in an instance.
Better to wait until several big price drops have already occurred.
“Ten days later, the lender lowered the price to $417,000, where it still sits.”
“On June 29, the client offered $417,000 for the house”
Funny to see that number pop up twice. A strange number it is. Is there perhaps a reason no one is rounding up to $420,000?
Anything over $417K is considered a jumbo loan…
http://www.ocregister.com/money/rates-loans-percent-1803859-fixed-week
Wll that covers about 100% of California.
$417,000 = the Fanny Mae limit
When is Ben going to put up a wall of shame? We need to be calling out these shills so everyone can see exactly what they said.
These whores in the media cannot continue to get away with this. We need to shame them so they STFU.
People are being ruined by their lies and distortions.
“Put the KEYS DOWN…and STAND AWAY from the HOUSE !”
LOL!
bwhahahaha
“Appleton-Young is bullish on the long-term outlook for Bakersfield as well. But recovery will take time, she said. ‘We won’t be booming by 2008,’ Appleton-Young said.”
Leslie meant to say the following:
The next time Bakersfield will be booming will be 2018 or later.
–
My crystal ball says that it is likel;y to be in the next life for most. Remember, Bakersfield used to be Johny Carson’s butt of jokes?
Jas
When OIL hits $100 per barrel Bakersfield will be screaming.
‘We need a shakeout to stabilize the market,’ he said. ‘Lenders are going to have to start cutting prices big time.’”
Well, well, isn’t this what we have all been predicting on this site for a while now? The really Good deals are going to come from distressed lenders. Stalk the lenders, we’ve said before, and when they can’t hold the load of REOs any longer, they will deal like they’ve never dealt before.
I realized this on my own 5+ years ago, when thinking about the endgame of the boom-bust cycle. . . the only way to get to the bottom of the cycle is either a short sale or REO; one way or another the lender is taking it in the pants. The only thing keeping homedebtors paying the monthly nut in a flat/down market is if that payment to the bank compares favorably to the monthly rent on a minimally acceptable substitute place.
Here were I live, $1500 rents a decent enough condo-equivalent, said condos still costing $2000+ mo (IO portion less tax bennies).
bank guys are way smart, have heard every story, have tons of staying power.. It’s not their own money at stake (it’s yours, mine and other investors/depositors) and the banker’s ability to deal will be limited by corporate rules from upon high, so expect a lot of “my hands are tied” b.s. during negotialtions.
So, when all this shakes out and the numbers are in, my guess is REOs will average sale price far higher than sales by private citizens… that’s not to say there won’t be a REO deal or two here and there.. just that i’m not getting my hopes up too high..
QUESTION QUESTION
Question for the sharper minds on this site: How are the lender owned properties disposed of when the lender goes belly up? Are they sent to auction? If so, it would seem to me that these auctions would have some real potential for great deals since the lender will no longer be around to put up a ridiculously high minimum bid.
Not claiming to be particularly sharp, but it seems that there is some uncertainty as who represents the lender where the loans have been sliced and diced into kibble and bits. “Belly up” implies a BK, but the wide spread of the MBS-CDOs makes me think that (other than a few hedge funds and investment banks) the bagholders will not be going BK.
However, they will still try to collect. The question is: who represents them and how do these dispersed bagholders decide on policy? TxChick57 has been predicting salad days for BK lawyers, and I think she is more than right. In addition to the lawyers, there will have to be armies of policymakers and especially some sort of agents. Expect the agenting work to be outsourced to India - that will be humorous.
Rajiv (on the phone): Pardoning me but you must be leaving your keys on the granite counter and removing yourself from the house now.
FB: Who are you, and what do you mean?
Rajiv: You are foreclosed by now, you are to be moving out now please.
FB: Can I speak to your supervisor?
Rajiv: I’m sorry, the supervisor is being busy now, but you must be moving immediately. Pleasing to leave your keys on the counter and moving quietly or I must call the Martian to evict you.
etc….
“Rajiv: I’m sorry, the supervisor is being busy now, but you must be moving immediately. Pleasing to leave your keys on the counter and moving quietly or I must call the Martian to evict you.”
Lucky no water in mouth. LMAO.
Any chance prices will come down in West L.A? Non-conforming jumbo loans are 13% as of Friday but sellers refuse to lower their price.
Hopefully 13% jumbos will stop the market in West LA so that the price reductions can begin. But remember, this just happened last week, and the rate will have to stay there for a while. And the West LA market was still moving as of last month’s numbers. So it’s going to take some time before anyone even knows what hit them, then a denial phase, before the bargaining can even begin.
Patience…
Lovely…
Seller is in front of home with For Sale Sign with price “Asking 800K’
Buyer walks by looks at the sign laughs and walks away.
This will be a common event if not already begining.
Yes, but it will take time…not days, more like several years. It will be slow, painful, and grinding…however, when the banks and credit holders finally mark down their foreclosed houses (REOs) to market prices, things may change faster.
“however, when the banks and credit holders finally mark down their foreclosed houses (REOs) to market prices”
When the properties are sold off at bankruptcy/insolvancy dsiolution….
When Lenders raise rates like that they are really saying that they don’t have a buyer of Jumbo’s ,so we are seeing what lenders would really charge if they had to hold the loan on their own books ,or at 13% it would be likely to find a buyer in the secondary market for that high of a rate . Hope they are asking for a huge down payment and full doc on the Jumbo also these days .
In recent years the fraud deals shifted to the higher priced areas . These crooks started going for the big bucks on these cash back deals .
Music to get foreclosed on to…
http://www.youtube.com/watch?v=m6BQKFs3-VM
–
La droga Y endrogados
“‘La droga,’ Albarran said. That’s Spanish for ‘drug’ – Mexican slang for a crippling debt. The people of West Camile Street, she said, are ‘endrogados’ – hooked on debt.”
Hispanics, Mexican smugglers among them, help us with our need for narcotic drugs and we, in return, help Hispanics, who have managed their way to settle here, with that more crippling of drugs – debt.
Who manufacture “la droga?” Bankers and financiers of New York City.
Who look the other way? The “judges,” at the Federal Resreve.
Who distribute the drugs to the streets? Mortgage companies of all stripes and all sizes, inclusibng the behemoth Countrywide.
Who are the customers? Endrogados.
Supply chain completed.
Jas
This afternoon I went to take a look at a new Horton development in Oxnard, ca. I’ve posted before about this place which is called “Orbela”. Horton lists it as just a walk to the beach, yada-yada. It’s actually a couple of mies from the Channel Islands Marina and another couple of miles from latino gang territory. It’s the usual cookie cutter, shi*tbox kind of community. Prices from the $400,000 to the $700,000. Folks, I woyldn’t put your money into Horton’s stock. A few miles away there is another development, big and only half finished (not sure who’s building it) called “Riverwalk”. There’s good chance if you bought one of these homes, you might be a candidaye for throwing yourself in the river in the next few years as the meltdown cascades. Not far down the 101 there is another Horton development. Again, half finished. Prices in the mid-$400,000. I looked at the open house at “Orbela”. Not bad but you could hear your neighbor fart the properties are so close. HOA of course. You buy and you still have a landlord. However, the $400,000 deal I looked at was nice - if it was $175,000. Otherwise, Horton can stick their overpriced sh*tboxes where the sun doesn’t shine as far as I’m concerned.
New development in Oxnard is going to get hammered. It’s already started, and it’s going to get a lot worse. Even the Marina properties are starting to fall already.
Having been in the jungle that is the real estate execution of L. A’s West Side for 35 years, I have seen just about ever real estate market. From what I know from the day to day business if marketing real property as well as what I read the overall real estate market is on the way down. There are many factors that can impact the market most are bad, but we should not be too surprised after all it is the norm for California real estate to have major swings in value. To sum up in a few words, purchase if you need a house to live in. But be aware that it is most likely that the REO’s will be the benchmark for real estate values for the near and far feature. After all the landers do not want to be an owner, this mends that it will be the REO’s (Real Estate Owned) will lower the price of listed houses and that will set the market value in the area that an REO is located. So if you want to get an idea of your homes value, look to an REO in your neighborhood.
I wonder if it’s going to be a “Black Monday “at the NY Stock Exchange tomorrow? I know that some of the talking heads on Stock Market business shows were trying their best to spin Thursday’s downslide and Friday’s injection of money by the Feds as nothing more than just a little matter of re-pricing of risk . No, to be fair ,a number of the business programs did discuss the pending problems regarding the CDO’s and MBS’s ,but not to the degree that I would like them to discuss the problem.
my guess is the Fed’s actions are an admission that problems exist, which means it’s out in the open, which means the sunshine will disinfect it, which means the problem is being addressed, which means the market is healthier than it was last week, which means buy Monday morning..
Warren Buffet will anticipate this anticipation, wait till Monday’s high close and sell before the bell.
Rinse and repeat.
/guessing
Earlier, I went to Bear Market Central.com to check on the foreign markets. The only one I saw was the Australian, which was up big time.
Yahoo U.S. Market news has the headline:
BOJ offers 600 bln yen of funds to cool call rates
The week is starting on the wrong foot again. Curiously, there’s another headline in the list that says “Japan Overnight Rates Hold Near Target”. OK, so if the overnight rates are holding then why the liquidity injections?
BOJ offers 600 bln yen of funds to cool call rates
The week is starting on the wrong foot again. Curiously, there’s another headline in the list that says “Japan Overnight Rates Hold Near Target”. OK, so if the overnight rates are holding then why the liquidity injections?
No, that’s exactly WHY the overnight rates are holding.
1201 Via Descanso, Palos Verdes Estates, 90274
Status: ACT MLS#: P944849 $1,697,000*
List Dt: 04/09/2007 PType: SFR-A Orig Price: $2,285,000
Via Coronel…right on Via Olivera…left on Via Estudillo…right on Via Descanso
Description: HUGE PRICE REDUCTION…downstairs just “staged” and looks great! First time on the market in 21 years! Located on a cul-de-sac, this contemporary home showcases an updated kitchen, formal dining, large family room, study, 4 BRs and 4 baths. The home has dramatic high vaulted ceilings, wide-open floor plan and ocean and coastal light views. Within walking distance of all schools, with Palos Verdes Intermediate being the closest. Three fireplaces, nice patio and very private yard complete the picture. Compare and sell!
Addendum: Lots of accents of traditional woods and colors…super entertaining home…very private yards.
I am so happy I didn’t buy this one last week before they dropped price a “few thousand” this weekend.
These times are so exciting! wow, I’m blessed to have started reading about bubbles about a year and a half ago!..
Woohoo..I’m in cash right now and can’t wait till the housing bubble bursts as with the markets too!
I’m betting 08 will be great..It’s like the dutch tulip situation back in the day.
There’s gotta be a sucker in every transaction.
I’m going to treat home sellers like I treat a car salesmen. I’m going to so lowball them..hahahaha they’re going to love every minute of it too.
Well, the Nikkei is rebounding. So probably no black Monday. That’s a good thing I guess as some of the articles about banks here had me completely spooked.
Not that I don’t think it’s going to happen but the markets continue to mystify me.
Any of the current big moves are pure manipulation. Japan, US, Europe. Makes no difference. The Financial Gangsters of these countries (the US is the most corrupt) bump it up, suck in those who figured they would buy the dips, then wait for a short period before they take their money. They simply repeat the process. These big moves are not by average traders. It’s the big boys stealing the suckers money. Daily charts show that the markets have switched to the downside. How long for I don’t know but Da Boyz are now stealing as much as they can out of the 401k plans. Hey, you don’t they make those $60 million bonus payouts every year for being straight and honest! Soon we’ll hear Joe America saying, “Wow. My 401k was looking really good a month or so ago. Now it’s heading into the toilet.”
You probably are right. My best friend was saying her 401k had fallen by 25k since 1/07. I was advising her to get out. I told her that she could buy the shares back when the market was lower but she said her father-in-law told her to let it ride the “corrections.”
25k to me is not chump change and I don’t understand it even thinking about the dollar cost averaging theory.
I guess this really is the ‘global economy’.
U.S. Homeowner Woes Felt Around World
Sunday August 12, 4:46 pm ET
By Matt Moore, AP Business Writer
In an Interconnected World, American Homeowner Woes Can Be Felt From Beijing to Rio De Janeiro
http://biz.yahoo.com/ap/070812/global_contagion.html?.v=4
FRANKFURT, Germany (AP) — The latest crisis in financial markets has once again served as a reminder of how vital and interconnected the health of the U.S. economy is to that of the rest of the world.
From New York to Frankfurt to Tokyo, markets were jolted in the past week by fears that Americans are failing to keep up with their mortgage payments and the ripple effects that could have on the global banking and financial system.
Dyer said ……..”Eventually the oversupply of houses will stop ,and prices will head upward again…….”
The price of houses will not head upward again unless people can qualify for loans at the higher prices ,and you know that’s not going to happen for years .
I would imagine that the people in the real estate biz are blowing their minds right now at the change in lending terms that will not support the attempts to sell the inflated property by the sellers that bought before the change in lending .
Its going to be a dead market IMHO for a long time . Borrowers got so use to easy money that they thought cheap money would always be available .
I remember during the tight money market of the late 70’s/early 80’s ,when interest rates were 15% to 20% ,that nobody knew if rates would ever come down again .Alot of buyers would assume prior loans ,or alot of owner financing was involved in purchase transactions ,or wrap-around mortgages were attempted sometimes without the approval of the lender .
Sellers would check their contract loan notes to see if they had a assumption clause ,and that seller would pass on that old money to a new buyer and take back a second or require cash to the old loan as a down payment .
That being said , I don’t know why anyone would want to assume one of these toxic notes , even if it did have a assumption clause in the loan contract ,but the realtors will be peddling that angle if the new money market remains tight . Assuming a loan is a way of getting new money by using old money .
Peter M….Do you know anything about the Orangecrest/Mission Grove area of Riverside? Certainly it is much nice than the other Riverside county areas you’ve mentioned, but I wonder how much further it will fall. Housing has gone down approx. 15% so far.
My friend just bought a custom home (over a million). I drove and saw it tonight and just felt sick. It’s 4300 sq ft and gorgeous. Ok, I know I can never get that kind of home, but something larger than 1800 sq ft would be nice! Sigh.
Wish prices would just hurry and drop out. Crossing fingers.
Well, let’s have some discussion about the USA market opening tomorrow morning. Probable events, personal preparations we are making, how many Pompons of Doom we have handy, all of that.
As for me, I went down to the island market this afternoon and bought some new fresh popcorn in honor of Popcorn Neil, a pound of butter for the popcorn, some black licorice sticks, and some authentic Native American pemmican thingies that look like something Hannibal Lecter carefully produced in his garden shed using a lathe.
On the way back I stopped at a yard sale and I found an astonishing little paperback book with a gigantic Jesus in a toga standing by a skyscraper. It looks like He’s banging on the 26th floor window. The title is: ‘Steps to Christ’. I’m still kind of puzzling that out. It cost me a quarter. There’s some flags by His feet. It’s by ‘Ellen G. White.’
Well.
Anyway, I’m not leaving my t.v. or my computer all morning tomorrow, unless the massive ‘liquidity injections’ work, and then I’ll stamp away in disgust.
I will be ‘working from home’, which means, like it always does, I’ll still be in my jammies and drunk by noon. That’s okay, though, because this could be a very special Monday. I am really super hoping so. It’s only about damn time.
I’m even going to wear my extra favorite flannel jammies, which are pink with grinning monkey heads on them, since I think this sort of cheerful monkey expression will make the potential bloodfest even funner for me.
Oh, and Palmy– since you say you will be in Tampa until later in the day, I will raise a licorice stick in salute to you when the market opens. Two licorice sticks if it gets exciting right away.
That’s my plan. Anyone have a better one?
Anyone find a better book at a yard sale? I bet no one did, in the whole wide world, at least not for a quarter.
You’re pretty funny Olympiagal…
Ditto. I like your approach Olympiagal .
At this time, you will not be in luck. The “carry trade” has jumped almost 2 points from Friday which means massive infusion of moneys into the market. The Nikkei was up 1.5% and did sell off a bit to up 0.5% in the morning session, I am waiting for the afternoon session now. Just remember its always 5PM somewhere.
Ellen Gould White ..
wiki has a page on here but it might be a plot spoiler..
I’m sort of in Tampa. Anyways, ditto for me. All without the pink jammies with smiling monkeys on them.
I’ve read that the huge drops in the market were from lots of hedge funds having to meet margin calls. They had to sell off their best, most solid stocks to get money. Monday will see people snapping up these stocks for short term plays.
I am also reading Monday is the day a few big German banks could fail if the central bank actions don’t work. I bet you will see the market go up in the morning and then whipsaw and close lower.
“‘The economy is still moving forward,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘But the excesses in the housing market over the past couple of years were creating an environment where people were betting that prices would keep going up 15, 20 percent a year.’”
What a statement. L.A.Young was one of those people!! What a Bitch……
Leslie Appleton-Young was the economist that said, “People can’t afford to not buy real estate “,or words to that effect ,sometime in late 2005.
“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”
Who says you have to make money off a deal. If you made a bad business decission then you LOOSE. It happens all the time. Get real!!!
The client is willing to put 5 percent down. ‘If he can’t get the seller to carry a second (mortgage) or come down on the price, he will have to walk away,’ he says”.
“Count your many blessings, name them one by one. Count your many blessings, see what God has done. ”
from Hymn book for Church of Jesus Christ of Latter Day Saints
I think these words fit for what this dude should be singing.
The odd thing about the markets in Asia currently is that they went up 200 points, down 100 and now they are flatlined.
Given the environment, I’ve never seen them just flatline. Who knows.
I’m off to bed. See you all at 4!!
That is cuz the market closes for lunch. LOL
Selling off after lunch though.
Hoz,
Thanks for your reply the other day………I value your opinion.
A question for all:
In the stock market, it is a good strategy to buy sectors that show relative strength, as this is a relaible indicator this sector will continue to outperform going forward. Does this apply to the RE market as well?
Is a market that resisted a previous downturn prone to move up stronger with the next upturn? Or can we not make this assumption?
Thanks, Joe
thousands (millions?) of the smartest people have spent countless hours collecting and digesting market information in an attempt to create a winning formula.. or even to find a slight but sure winning edge in some tiny market niche.. all failed..
OTOH, a monkey tossing darts at a new rag’s financial section does pretty well..
IMHO ,real estate markets can change at anytime .What was strong can become weak ,and than the opposite .Look at what happened in Florida in 2005 . Florida had a strong market in 2005 where the overall prices went up about 40% in one year . Now the Florida market is crashing and burning .
Demand for housing can change at anytime ,especially if a factory closed down, or people are priced out and they exit to greener pastures .Same thing can happen with a stock .One thing you can always count on is there is nothing you can really count on ,
LOL,,,, Joey in Calif ,,,We had the same thoughts
dat we did
well, to be truthful, i kinda thought about steering Joe towards one of my holdings, but i’d never abuse a fellow HBBer.
as far as following trends goes, Graham’s Intelligent Investor more or less cured my gambling problem.
What’s next? What’s next is the End of Southern California. Like the demise of Detroit when i’s industries died, California’s industry of late as been housing and that’s going to die, and with it, the California Dream.
When the music’s over, turn out the lights.
OT anecdotes from the past..
Sears and Reobuck sold a pre-cut kit house.. about $500 each. Small towns were built of them where needed.
not bad looking, imho.
http://www.oldhouseweb.com/stories/Detailed/10102.shtml
Then things changed.. industrialization caused population shifts.
“In 1935, Standard Oil decided to sell off the five- and six-room houses for $350 and $500 cash.
With comparable “modern” houses selling for around $4,000, the Carlinville Sears Homes were an incredible value, even in the depths of the Great Depression.”
“..pre-cut kit house.. about $5,000 each.”
A blast from the past .Thanks for the post .I have seen current builders try to copy that style of home in some form in recent years .
i really like the design and was wondering what that style was called.. perhaps a “4-square”?
Today you can buy a “Yurt” house for about $5000. If you want a simple house, its not so much.
More fun times tomorrow for Countrywide…and the markets.
http://forum.brokeroutpost.com/loans/forum/2/152560.htm
http://www.mercurynews.com/ci_6575159?source=most_emailed
So much scam going on that it is unbelieveable.
I’m sure Susanne must have researched that.
Read it in this order: “Every one of the 10 houses were purchased “no money down”; the couple then refinanced some of them to pull out even more money.”
The idiot lenders made it like taking candy from a baby…they were almost throwing free money at this couple. Who loans out extra money on collateral that is already 100% encumbered? Idiots. Idiots the lot of them.
This realtwhore is still in denial
http://www.nymoves2orlando.com/
She was featured on “Property Ladder”. After a failed flip in Casselberry, FL, she decided to rent it out, according to the show. Her website says she later did a refi with $40k cash back. (I.e. she sold it to the bank.)
Anyone remember the address of this place? My nickel is on this house going into foreclosure before the year is up, and being an REO next year.
The “I am a victim” theme is running rampant among foreclosees. Check this speculator out:
http://creonline.com/wwwboard/messages/51423.html
“I fault the mortgage companies for allowing these loans, when they should have been trying to protect their investment. They are way more sophisticated than I am when it comes to the area market.”
I fault the lender, LMAO!
Not even an ounce of: “I fault the borrower for getting in over her head with debt.”