August 16, 2007

Life In The Housing Market Is Anything But Normal

The report from the Washington Post. “A growing number of condominium developers are backing out of projects as the worsening real estate market causes lenders to tighten their standards. In the past 12 months, nearly 20,000 condo units have been removed from the glutted local development pipeline, said Gregory H. Leisch, CEO of Delta Assoc. in Alexandria.”

“By Delta’s count, in the second quarter of this year, developers abandoned plans for 22 local condo projects.”

“During the real estate boom that ended two years ago, developers could get loans even if they presold only one-quarter of their units, said Peter Antonoplos, a real estate lawyer. But then sales slowed drastically, and many would-be buyers cancelled their contracts.”

“Now lenders are asking that 50 percent or more of the units be sold before construction, he said. Others want the developers to contribute more of their own money. ‘Institutional lenders don’t have the appetite for condo properties that are going to sit around and present a credit risk,’ Antonoplos said.”

“At Vaughan Place in Northwest Washington, the developers sold 186 units to individual buyers, then sold the remaining 388 to a New York rental company in April.”

“That has rattled some of the owners. ‘I have very mixed feelings about it. In terms of my day-to-day living here, it’s extremely pleasant,’ said Patricia Kenworthy, who bought her condo at Vaughan Place in April 2006. ‘In terms of thinking if I had to sell for some reason, it’s very scary.’”

“Joy Siegel, a Bethesda lawyer who handles home-sale closings, uses a spreadsheet to track which mortgage lenders are filing for bankruptcy protection these days.”

“‘It’s getting incredibly nerve-wracking for us,’ said Siegel, president of Settlement Pros. ‘There are banks I haven’t even heard of, pages and pages of them, who have stopped making loans.’”

“Letters from lenders approving loans ‘used to be a reason to exhale, a reason to believe that a deal is done,’ said Leisa Hart, an agent with Long & Foster Real Estate. ‘We no longer have reason to exhale until we’ve gotten to the settlement table and until that loan has been fully funded.’”

“Eric Iversen learned that the hard way. Half an hour before he and his wife, Catherine, were scheduled to settle on a house in Bethesda, their loan officer at American Home Mortgage informed them that the company would no longer fund any loans, including theirs.”

“‘I was driving, talking on the phone on the Beltway, trying to keep the car going in one direction,’ Iversen said. ‘My wife was next to me with this stricken look on her face, especially when she heard me say: ‘Should we turn around and go home?’”

The Baltimore Sun from Maryland. “Maryland’s housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation. Homeowners in the state sold 21.1 percent fewer homes during the second quarter than they did a year earlier, the National Association of Realtors said yesterday.”

“‘All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle,’ said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. ‘Well, it popped.’”

“Maryland home prices doubled from 2000 to 2005, an unusually big gain even for the U.S. boom years. Incomes didn’t rise nearly as fast. With half the homes now selling for more than $325,000, some would-be buyers just can’t make the numbers work.”

“‘Affordability has been eroded,’ said Celia Chen, director of housing economics for Moody’s Economy.com. ‘If prices are not falling off, that’s going to constrain sales. Conditions can easily become much worse than we expect because of all the issues arising right now in the mortgage markets and financial markets.’”

“Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need ‘jumbo’ loans of more than $417,000. It’s hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.”

“‘That’s a scary thought,’ said Pat Hiban, an associate broker in Ellicott City.”

The Times Community from Virginia. “You go to the settlement, sign the papers, and are informed that your check from the sale will be given to you in a couple of days. It all sounds so normal. But life these days in the housing market is anything but normal, as people in the area are discovering.”

“‘People are closing loans, but then the mortgage company may not be able to sell it. They have three days to back out, and some of them are,’ according to Valerie Frank, president of Preservation Mortgage in Old Town Warrenton. ‘You could close today, and the money might not be there, even though the borrowers have the loan rate locked. That’s the state of the market today.’”

“‘You used to be able to get a mortgage without the company even checking what your income was,’ she said. ‘I talked with a lender today, and she said that she had seven loan applications that her company was working on. Normally they would have 50 to 75. A senior underwriter can process three to four a day, so you can see that the business is really slowing up.’”

“There were just seven foreclosures here in the last half of 2006. In the first half of 2007, 48 other properties were sold on the courthouse steps. ‘I understand that there were 900 foreclosures in Prince William County last month,’ Frank said.”

The Daily Times from Delaware. “As ‘for sale’ signs continue to line Wicomico County home lawns and condo windows faster than they can be removed, residential builders have changed the county’s construction machine mantra to a wait-and-see approach.”

“At the end of July, the number of active inventory listings jumped to nearly 800, or double the amount on the market in January 2006, the Lower Shore-based Coastal Association of Realtors reports. In the last 12 months, there has been more than a 35 percent increase in listings, and sales are down 6 percent.”

“This housing downturn translates into less revenue for the county. ‘For certain, the county is going to collect less money,’ said Tom Ruark, president of Salisbury-based Thomas H. Ruark Builders. ‘There is substantially less construction than anybody anticipated.’”

The New Jersey Herald. “Standing five stories high at the center of the county seat, the Aberlour building is now opening its doors to a new breed of home buyers in Sussex County: the single professionals.”

“Now that all of its age restrictions have been removed, the 45-unit condominium complex has dropped its starting prices and revamped its marketing campaign to attract a younger professional crowd looking for a more affordable place to live.”

“The starting price has been decreased from $299,900 to the low $200,000 range for about six of the units. ‘We want that building to be successful. We don’t want an empty building,’ Newton Community Development Director Debra Millikin said. ‘It shows there’s not as much of a need as everybody thought for age-restricted housing.’”

“With lower prices on some units, Aberlour might be able to attract single professionals who can no longer afford to live in Bergen, Morris and other nearby counties, said Deb Cleary, the new head of marketing for Aberlour. ‘Everywhere in New Jersey, builders have to adjust prices if they want to maintain velocity in the sales. If I’m going to come out there (to Sussex County), it’s got to be a deal.’”

The Jersey Journal from New Jersey. “The allure of home ownership in Hudson County has charmed thousands of residents to try their hand at the risky practice of subprime borrowing.”

“The controversial practice helped boost home ownership to all-time highs in the United States, but it’s now aiding the so-called crash of the real estate market nationwide as these same borrowers find themselves in over their heads and defaulting on their loans.”

“‘We are seeing a tremendous increase of people in foreclosure,’ said Jeannie Seeliger, a bankruptcy attorney with roughly 20 years of experience in Jersey City. ‘There are a number of people who simply can’t afford it and they have given up.’”

“Seeliger told me about one of her clients, a woman who purchased her first home when she moved from New York to Jersey City. The woman walked into a realtor’s office and was enticed to buy after the salesman talked up the benefits of buying a two-family home instead of renting.”

“The pitch was attractive. The loan required no money down, and she could rent out the second unit to help pay off the $2,500-a-month mortgage, while accruing equity in a hot market along the way.”

“Then the proverbial floor fell out from under her feet, Seeliger told me. ‘The place was much harder to rent than she had hoped and the house needed repairs,’ Seeliger said. ‘Then the rate increased by 3 percent and it became unsustainable.’”

“The woman is currently filing Chapter 7 bankruptcy.”

From Newsday in New York. “Foreclosure rates in Suffolk soared in the first half of 2007, a new study has shown. There were 2,993 properties in Suffolk with at least one foreclosure notice, up 65 percent from the same period a year ago, according to RealtyTrac.”

“One reason Suffolk may be experiencing a jump in foreclosures is because there are more first-time homebuyers purchasing homes there.”

“Queens, meanwhile, has 3,901 homes in foreclosure, up 49 percent from the second half of 2006 and up 183 percent from the same period a year ago.”

“The Community Development Corp. of Long Island has been swamped with area homeowners in trouble this year, said Eileen Anderson. Between the middle of May and the end of July, the organization fielded 166 calls, a tenfold increase from the same period a year ago.”

“‘We are getting inundated with phone calls,’ Anderson said. ‘I don’t see this diminishing. This is just the tip of the iceberg.’”

“Homeowners who still have their hearts set on boom-time prices may be in trouble, Long Island real estate agents say. Monthly sales numbers show the median price for July contracts was as low as 70 percent of the median price for all properties for sale, according to July data from the MLS of Long Island.”

“MLS divides Long Island and Queens into 16 zones, so consider zone 3, which covers about 60 communities, including Muttontown, Centre Island, New Cassel and parts of Hicksville. Out of 309 contracts signed in July, $630,000 was the median price, or 81 percent of the $779,000 median list price of all homes for sale in that zone.”

“MLS began comparing inventory prices to contract prices last fall, after buyers began refusing to participate in bidding wars and upping offers to more than 100 percent of list prices.”

“Emmett Laffey, CEO of the Greenvale-based Laffey Associates real estate firm, said he sees a lot of limitations in those comparisons but said the numbers have some value in revealing a trend. ‘That means the marketplace has a ton of overpriced houses,’ Laffey said.”

“There’s no question that the number of homes for sale is up, a market bellwether. There were 36,185 homes for sale in July, up from 33,724 a year ago.”

“‘Two years ago, buyers were willing to overpay,’ said Don Scanlon, president of the MLS of Long Island and broker in Wantagh. ‘Today, they’re not.’”




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128 Comments »

Comment by joesixpack
2007-08-16 06:10:45

“‘Two years ago, buyers were willing to overpay,’ said Don Scanlon,”

I think this might charachterize the very definition of a blow off in the market.

Comment by Tom
2007-08-16 06:17:59

Remember the feeding the squirrel story? What was the lady’s name? She bought a house in SF for $815,000 I think when the asking price was $699,000. She was a college administrator also. Apparently that college education didn’t do much for her brain.

Comment by GH
2007-08-16 06:50:22

Definition of Intellectual - A person educated beyond their intelligence.

 
 
 
Comment by jmunnie
2007-08-16 06:14:55

Approved Home Loans No Longer Done Deals

“Joy Siegel, a Bethesda lawyer who handles home-sale closings, uses a spreadsheet to track which mortgage lenders are filing for bankruptcy protection these days.

“It’s getting incredibly nerve-wracking for us,” said Siegel, president of Settlement Pros. “There are banks I haven’t even heard of, pages and pages of them, who have stopped making loans.”

Comment by Tom
2007-08-16 06:19:28

Did you hear about the RE attorneys in Atlanta that have a bunch of checks from HomeBanc that are bouncing? It’s in the millions and they are pissed but who are they gonna sue? HomeBanc filed for BK protection.

Comment by bob
2007-08-16 07:27:17

Sad and funny. Shouldnt lawyers know better … are we going to see requets for money orders at transactions. Perhaps they could be like waiters in Europe with the portable credit card swipers :-)

 
Comment by GH
2007-08-16 08:42:19

Actually, the lawyers can throw an incredible amount of legal flac at them and make the bankruptcy proceedings vastly more expensive. they may work out a deal.

Comment by Tom
2007-08-16 08:52:03

But the creditors have lawyers too.

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Comment by GH
2007-08-16 09:13:22

I have seen it done before and done well. Creditors seeing their money held up in court for years and squandered good money after bad will come to the logical conclusion that the lawfirm needs to be paid. the lawfirms legal costs are much lower than the creditors who are paying full retail.

 
 
 
 
 
Comment by Tom
2007-08-16 06:14:56

No one can do what Countrywide can LOL.

http://biz.yahoo.com/ap/070816/countrywide_mortgages.html?.v=5

Countrywide Borrows $11.5B From 40 Banks to Fund New Loans As Industry Faces Credit Crunch

NEW YORK (AP) — The nation’s largest mortgage lender borrowed $11.5 billion from a group of 40 banks to fund new loans, in a move that shows just how deep the lending crisis has become.

Comment by jmunnie
2007-08-16 06:15:29

Key graph:

“To increase liquidity for people with less-than-stellar credit, Freddie Mac, one of the largest investors in U.S. home mortgages, said yesterday that it plans to make a 90-day commitment to purchase what are called Alt-A mortgages, which are made to borrowers who provide less documentation about income and employment than the more-creditworthy prime borrowers.”

Comment by Tom
2007-08-16 06:21:30

Can you smell Gov’t bailout for all the hedgies and Wall Street banks? This is just another way to get rid of that Alt-A paper.

Comment by TimeTraveler
2007-08-16 06:32:57

I’m in cash, but the charts make me sick to my stomach anyhow. It’s gamed. The public actions will pale beside the machinations going on behind the scenes.

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Comment by Tom
2007-08-16 06:24:55

On Wednesday, a Merrill Lynch & Co. analyst downgraded Countrywide to “Sell,” just days after calling it a “Buy,” attributing the change to the rapid deterioration of the credit market. Friedman, Billings, Ramsey Group Inc. said Thursday a continued liquidity crunch for more than three months could send Countrywide into bankruptcy.

 
Comment by rms
2007-08-16 07:09:06

They can also raise cash from selling insurance. I always have one of these life/mortgage policy applications included with my statement. Same goes for BofA who also are apparently in the health insurance business too, soliciting along with my monthly statement. No solid product, just promises on paper.

 
Comment by Ghostwriter
2007-08-16 07:11:06

You know Countrywide may be big, but they’ve been doing these bad loans for at least 8 years that I know of. I had a neighbor that between the two of them they made $75k and they were in debt up to their eyeballs. They refied 6 times that I know of and most of the loans were thru Countrywide. When they listed their house to sell it was probably 25-30k over market and the wife told me that they owed almost the whole amount of the list price. Countrywide had given them a 110% loan. They went bankrupt and the house went into foreclosure. It sat 18 months before Countrywide even put it on the market. By then there was mold on the walls. Countrywide deserves what they get. As far as I’m concerned they were the first to start this crazy credit cycle. I think morgage companies created a lot of this bubble. If stupid people couldn’t have gotten these loans in the first place there wouldn’t have been as much run up in the market. There were lots of prime buyers out there going to mortgage companies too. Why, I don’t know. If they were smart enough to have good credit I’d think they would be smart enough to get their loans through a bank.

Comment by GH
2007-08-16 08:45:13

Countrywide was gambling on continued price increases like everyone else who played the game. They did not care if the people they loaned money to could pay it back or not. Now everyone is crying the blues and singing the victim song. Like most who frequent this blog, I did not play, and have no sympathy with those who did.

Comment by Aqius
2007-08-16 10:01:38

Damn Skippy right-on with those comments . . . I refused to play in the rigged real estate game also. 1 month “temporary” layover in a ghetto apt turned in a MOTHERF*CKING 4 YEAR BANISHMENT while searching for a fair, reasonable deal here in Sacramento.
Hell, I didnt want a mansion, just a decent home for our 3 new children out of the war zone, but thanks to all the greedy speculators AND greedy homesellers, had to endure drug dealers, gunshots, massive illegal occupation of neighboring apts, and more.
I used to joke to my spouse that apt below us was a modern underground railroad as there was a new group of men waiting outside the door every week, in camp gear, looking around in fear, and were ushered inside as soon as the hispanic residents arrived home.

Report em? To who? And for what reason? Nothing would have been done anyway as the construction co’s snapped em up (there’s that term) for labor asap, and the kicker is the regular private citizen whining about illegals but runs down to south sac to get a few on the corner for his day project at cheap rates. Hypocrites !!
I dont know of anyone who is not sympathetic to immigrants personal plight but America just cannot absorb the entire outflow of Mexico, Central & South America.

So yeah, I was a bitter renter, but I made the best of it, shrugged my shoulders, got along with everyone and chugged along staying OUT of ruinous debt while keeping an eye out for the escape hatch.

Hell YES I enjoy, relish, anticipate, and savor each & every article of the greedy real estate industries demise. Their unbridled greed & arrogant attitude on the way up is now haunting them on the way down.

Not all are scumbags but plenty enough to sour the barrel I tell ya what !!

rant off - where’s my blood pressure medicine? heh heh

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Comment by vile
2007-08-16 10:11:04

Well put!

 
 
 
 
Comment by LA-Architect
2007-08-16 08:14:09

Those 40 banks can kiss their money goodbye!

 
Comment by talon
2007-08-16 08:51:50

Just to get my day off to an uproarious start I was watching CNBC this morning. At one point they started to go to commercial, and were informed that there WAS no commercial. The spot? A Countrywide ad. Apparently their advertising budget isn’t what it used to be.

Comment by GH
2007-08-16 09:16:21

That is great. No doubt the ad was for a $300K loan with monthly payments of $697 a month - wink wink..

 
Comment by sweeny texas
2007-08-16 09:17:33

…now THAT’s funny! :)

 
 
Comment by asuwest2
2007-08-16 09:01:21

The real news in this story was a bit different–effective today, they’re going almost all conforming loans…….newsflash to California…”YOU’RE TOAST!!”.

Quick scan on ziprealty says that for CA-OC, looks like there are

 
 
Comment by aladinsane
2007-08-16 06:15:30

E.I. and wife made a half court 3 pointer @ the buzzer…

(unless they find another “officer of the loan” that will bury them in a house)

“Eric Iversen learned that the hard way. Half an hour before he and his wife, Catherine, were scheduled to settle on a house in Bethesda, their loan officer at American Home Mortgage informed them that the company would no longer fund any loans, including theirs.”

 
Comment by exeter
2007-08-16 06:18:04

“‘All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle,’ said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. ‘Well, it popped.’”

But NAR says there is/was no bubble and the “air is coming out of the….. balloon?

People Are Smart

Comment by Tom
2007-08-16 06:20:22

I heard another lady say it was a souffle.

Comment by exeter
2007-08-16 06:25:13

The whole thing is a seething $hitpot of mugmoid that needs to be disposed of. Including (fun)Yun, Liareah, CocaineKudlow, Commerce Dept, Treasury etc. It’s not quite time yet. We’ll know when us commoners talk of hanging these asshats from lamp posts.

People Are Smart

 
 
Comment by AndyInJersey
2007-08-16 09:27:34

“People are Smart” I love that quote. Is that Di-Tech? What a bunch of crap. No people aren’t smart, they bought ARMs a few years ago that they’re desperate to get out of. They’re confusing ’smart’ with “desperate and panicky stampede the exits.” I guess they figure it’ll make they’re hopeful clients feel better about themselves knowing there are millions of people that are just as stupid as them. Kind of like that phrase “30 million Frenchmen can’t be wrong.” Actually, yes they can. And very wrong at that.

Comment by exeter
2007-08-16 10:15:39

It is Ditech. The 30 million frenchmen were wrong about Sarkozy but thats about all.

 
 
 
Comment by ChrisO
2007-08-16 06:19:47

From the Washington Post condo article:

Hammond, the government consultant, was eventually able to buy, this time at 1800 Wilson Boulevard in Rosslyn. In June, she had a “Third Time’s the Charm” housewarming party. “Happy ending,” she said.

This lady had not one, but TWO condo deals fall out from under her, as the developers canceled conversion plans. But she still thought it was a good idea to buy a condo and found a sucker to take her money. Hope she plans to stay in her new condo for a long time. The article didn’t go into her financing method, but one hopes for her sake that she’s not facing ARMageddon…

Comment by Tom
2007-08-16 06:26:29

I want to go to TXCHIC’s housewarming party ;-)

 
Comment by Ghostwriter
2007-08-16 07:25:27

I don’t think it’s smart to buy a condo anywhere, in any kind of market. You can get screwed so many ways if you own one. HOA can be raised to astronomical amounts if things need fixed or if there’s a lot of foreclosures in your condo development. Your condo fees can go from $50 a month to thousands in a heartbeat and don’t think condo docs will protect you from those kinds of fee raises.

Comment by ChrisO
2007-08-16 07:51:50

I keep having to explain all this to my wife, who lived in NYC for awhile and likes the idea of owning an apartment. I have no problem renting an apt., but buying one, not so much.

To me, a condo only makes sense for a retiree who wants to live in a central or vacation-oriented location, doesn’t want to deal with the upkeep, and pays cash.

 
Comment by gttim
2007-08-16 09:05:54

You have to read the covenants before you bid. I bought a condo in January of 2007- after tracking the prices in the complex for 3 years and getting a great deal. I thoroughly read and re-read the covenants before I even bid. I knew what the COA fees were: I knew the maximum percentage increase that can be applied per year; I knew the maximum assessment I could be hit with per year, I knew whether or not I was allowed to install hardwood floors; I checked the financials for reserves; I knew how many cars I was allowed to park; I knew how many dogs I was allowed to have; I knew how many people my neighbors were allowed to have living in a unit.

The condo docs are going to hold because they have no reason to go around them. If I lived in Florida on the beach and insurance was going through the roof, maybe. This complex had some serious retaining wall issues years ago that cost some money, and the docs held. I love living in a condo.

Comment by gttim
2007-08-16 09:07:52

Typo- I bought in January of 2006. There were several conversions in the area that suppressed the prices of older condos.

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Comment by Annata
2007-08-16 09:21:43

You can buy insurance against this. It’s like $20 a month.

Anyway, sudden HOA assessments are the condo equivalent of an unexpected repair on a house. It’s not really a valid reason for not owning one. If you are hell-bent on avoiding all kinds of surprise maintenance/repairs, then renting is really your only option.

 
 
 
Comment by TimeTraveler
2007-08-16 06:21:42

Did you see the Hong Market overnight? Youch! It’s gonna be bargains galore. RIP “Contained”, August 2, 2007-August 15, 2007.

 
Comment by aladinsane
2007-08-16 06:33:30

No Howard Roarke…

“This housing downturn translates into less revenue for the county. ‘For certain, the county is going to collect less money,’ said Tom Ruark, president of Salisbury-based Thomas H. Ruark Builders. ‘There is substantially less construction than anybody anticipated.’”

Or is Ruark supposed to be in Atlas Shrugged?

Comment by talon
2007-08-16 09:02:02

If he follows Howard Roark’s example, he’ll just blow up his buildings. Not a bad solution, really.

 
 
Comment by bink
2007-08-16 06:38:17

I live in a section of Arlington, VA where a few very large rental buildings were torn down 2 years ago to make luxury condos. None of the new buildings have been built yet, the signs advertising the condos have decayed and fallen over, and there are no prices posted anymore. The land would make for a nice park, if it wasn’t surrounded by a chain link fence and full of rotting construction equipment.

Comment by ChrisO
2007-08-16 09:07:02

Would that be in Rosslyn?

I drive by there every now and there and there seems to be one ‘luxury’ development that is taking a looong time. Rosslyn is pretty sucky and boring for “young professionals” compared to Clarendon, Crystal City or Ballston

Comment by bink
2007-08-16 09:26:50

Yep, Rosslyn. They’ve managed to build a whole lot of “luxury” condos over the last few years on the Wilson/Clarendon corridor, but in my neighborhood closer to Ft. Myer they only completed the tear-down portion. If you want to see something really hilarious drive down Rt. 50 near Courthouse and take a look at the old junky apartments that they’re now trying to sell for >$300k. These are 1-2 bedroom apartments that used to rent for below $1000/month. All they did was paint the exterior brick from red to greenish and add some pretty bath fixtures. I saw one on craigslist for rent, they wanted $3000/month.

Comment by ChrisO
2007-08-16 09:35:14

I know about those Rte. 50 apartments! I almost rented one about 10 years ago for $650. The unit I looked at faced right onto the highway, and the noise was constant. $300k? Uh, no thanks.

I lived in a rental in River Place for a year in the ’90s after I finished law school. Dismal apartment, but the rent was very cheap. They’ve spruced everything in Rosslyn up a little bit since then, but the main portion of it is still a sea of soulless concrete. I just don’t see a big upscale condo market there, since there are plenty of new units available in Clarendon.

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Comment by bink
2007-08-16 09:40:52

So you’re probably familiar with the giant condo building that’s under contruction, “Turnberry Towers”. AR6346174

Who wouldn’t want to pay $7 million to live at the top of a skyscraper on the flight path to National Airport? The $3000/month you’ll probably pay in condo fees will more than isolate you from the dreariness of downtown Rosslyn. Take your private elevator down to the garage and see where Deep Throat met Woodward. Walk to dinner every night at the many restaurants, just make sure you get there before 4pm when they close.

 
Comment by Jay_Huhman
2007-08-16 09:53:54

River Place used to be known as Arlington Towers (nicknamed Roach Towers) and I rented there for three years in the early 1980’s leaving when 1111 Arlington Blvd was converted.

Never a nice place, but an easy stagger late at night from the bars in Geogetown.

 
Comment by bink
2007-08-16 09:58:22

Thankfully, I was warned about River Place when I moved into the area. I have some family members who have been realtors for over 30 years in the DC area (hush up, you). They said to stay away from River Place. It was the only building I was aware of inside the Beltway that still sold units for

 
Comment by bink
2007-08-16 10:00:07

Ugh, forgot not to post less-than symbols. Should say: that sold for less-than $75k.

Sometime last year one of the penthouses burned down and was boarded up. It actually looked better.

 
Comment by ChrisO
2007-08-16 10:52:17

I lived in the basement of 1111 Arlington Blvd. “Roach Towers” is exactly right. Still, I was paying $500/month for walking distance to the Metro in 1997, so I couldn’t complain too much. But I moved after a year.

I have seen the Turnberry Towers thing though I can’t remember the details. Is that the new building in downtown Rosslyn or the one across Rt. 50 from River Place that faces the Iwo Jima memorial? Factoid: Larry King used to live in the dumpy predecessor building to that one across Rt. 50. I think it was his ‘bachelor pad’ back in the day.

 
Comment by bink
2007-08-16 11:04:32

I believe the building you’re referring to is Prospect House. It’s not a dump by any means. I don’t live there, but all condos are 2 level units and most have great views of the monuments. The condo fees are insane though.

 
 
 
 
 
Comment by A Texan in Bavaria
2007-08-16 06:39:14

Echoing several other 401k holders, I’m not sure what I can do with the money in my Fidelity account, as the “stable value” fund has, guess what, a fair amount of MBS in it. Yeccch!

(but would like to stop the bleeding from the mutual funds).

Helllp…

(ah, well, got my own privately-controlled Roth stuff out into cash)

Comment by aladinsane
2007-08-16 06:44:48

Panic 1st, in a prolonged game of panic…

Imagine when the hoi polloi sorta halfway figures out what’s going on?

Comment by Paul in Jax
2007-08-16 08:52:45

Some people not only didn’t get the panic memo two weeks ago - they’re actually just now getting their wake-up call and are still wandering groggily around the kitchen.

 
 
Comment by Tom
2007-08-16 06:58:11

Hmmm Can we put our money in cash in our 401k?

Comment by A Texan in Bavaria
2007-08-16 07:05:33

Sadly, no; only one of the 15 or so funds available in it. Normally, I’d go for the Freedom 2010, figuring it was all very safe stuff, but “very safe” seems to include exactly the stuff that’s the source of the problem - bad mortgages.

Comment by Tom
2007-08-16 07:36:16

Maybe pull the 401k money out and pay the 20% in taxes and 10% penalty? Might be the way to go while losing the least amount of money? ;-)

The market has support somewhere.

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Comment by Brian
2007-08-16 07:07:01

I can’t. The closest I could find was a some sort of guaranteed return fund, which guarantees you a very low rate of return. I moved my very modest nest egg there on Monday, and out of foreign stocks.

The old saw to “never time the market” is propaganda for “never sell”. This is the first change I’ve made to my 401K in two years. I’ll get back into stocks if a full panic breaks out.

 
Comment by lineup32
2007-08-16 07:57:58

Go to a FDIC 3 month CD- stay away from the money market funds.

Comment by AndyInJersey
2007-08-16 09:35:59

I’m trying to figure out what to do here. I’m managing my money for my wife (because she has no interest i worrying about it). She’s in an IRA with Prudential. I moved it to a money market from a S&P Index fund a few months back thinking that was relatively safe, but I don’t trust it. What can I do here to move it into cash or Treasuries or something and still keep it in the IRA? I’m not finding any good options really. I talked with an annoying hard-sell JO broker last night that flapped his jaw non-stop last night trying to impress me with how much he knew (he really didn’t know jack) plus he spent an inordinate amount of time trying to impress me with how much he makes per year (offered to show W-2s etc…), how much training he gets, and how much property he owns. He also thought Greenspan was a genius. So in short, not someone I want to work with.

Thanks

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Comment by technovelist
2007-08-16 21:04:53

I had exactly the same problem. What is wrong with the HR departments who won’t let us have anything safe?

However, you should be able to borrow 50% of the 401k’s value (up to $50,000) and invest it in something safer. That’s what I’ve done.

 
 
Comment by cynicalgirl
2007-08-16 06:43:10

I heard that those Abelour condos have sold 3 of the 45 units. What happens if they don’t sell any more and the place goes bankrupt? What happens to those 3 condo-owners when the place goes under? How does it get maintained if there aren’t enough people to pay the maintenance fees?

Comment by WT Economist
2007-08-16 06:59:05

Bad news. They may end up going broke due to absorbing the entire property tax burden for the complex if the builder defaults. That’s what happened in NYC in the early 1990s to co-ops, which had common mortgages in addition to taxes and operating costs, making it even worse. The more owners went under, the bigger the burden on those who remained, until everyone went under.

Comment by flatffplan
2007-08-16 07:17:30

condo and co-op have that same problem ?
ouwwwwwwwww

 
Comment by Paul in Jax
2007-08-16 07:21:18

Palmetto think globalization is the worst idea ever, but I think it’s condos.

Comment by sweeny texas
2007-08-16 09:20:24

Paul, I’ve got to go with Palmetto on this one. But condos are a close second…

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Comment by Annata
2007-08-16 09:30:43

This is the reason why there’s usually money to be made buying pre-construction. You can usually buy cheaper because you are assuming these types of risks. In fact, the assumption of this risk is really the only value that investors add to any market. But once again, the bubble made everyone believe they could get the reward without the risk.

 
 
Comment by ChrisO
2007-08-16 07:01:52

That news article about the Aberlour was a hoot:

While affordability has always driven Sussex County home sales, the local real estate market has mostly catered to families and older buyers, not the young professionals, said Ken Miebach, manager of the Vernon office for Century 21 Gross & Jansen Realtors. One potential drawback for younger buyers might be the long commute out of the county and the lack of public transportation, Miebach said. With the exception of a park-and-ride lot behind ShopRite on Route 206, Newton residents must use their cars to get around.

“I think more families are willing to make the sacrifice,” Miebach said. “I don’t know how many single professionals are living in Sussex County or moving to Sussex County.”

Cleary said she didn’t see transportation as a problem. “People have cars,” she said. “Everybody drives to wherever they’re working.”

That’s right. All of those young NYC professionals are just itching to live way the hell out in the middle of NJ and drive into Manhattan every day. Great business model!

Comment by cynicalgirl
2007-08-16 07:15:12

Um, it’s a 90 minute ride to NYC, bus takes 2 hours. The train is 20 miles away, it will take to you Hoboken and then you have to take the PATH from there. Yeah, there are people who will do this, but not many and not for that long before they tire of it.

But they’ll find buyers. Riiiiight.

 
 
Comment by Ghostwriter
2007-08-16 07:27:59

Those 3 owners will be responsible for the maintenance and upkeep.

 
 
Comment by Tom
2007-08-16 06:57:20

One of the guys I work with who is really good with stocks says he thinks the DOW ha s support around 12,700 and won’t fall that much further.

Comment by Craven Moorehead
2007-08-16 07:10:09

Everyone has their own opinion. They had a dude on CNBC this morning who mentioned Dow 10,000 if the Yen keeps appreciating, and he seemed to suggest that he thought that was possible. Some dude with a Russian name, I think.

It’s all floors and support until someone loses an eye.

Comment by AndyInJersey
2007-08-16 09:39:51

“It’s all floors and support until someone loses an eye.” LOL

Didn’t your mother tell you not to run with a permabull in your hand?

I say DOW 8,000 by November. Dow 3,500 by January 2009.

 
 
Comment by VT_Dan
2007-08-16 07:25:02

We shall see, 26910 and falling right now…

 
Comment by VT_Dan
2007-08-16 07:25:27

We shall see, 12691 and falling right now…

 
Comment by Tom
2007-08-16 08:10:30

Seems to have been a temporary floor. It bounced off of it.

 
Comment by vegassoldin2005
2007-08-16 09:37:55

One of the guys I work with who is really good with stocks says he thinks the DOW ha s support around 12,700 and won’t fall that much further.

Dow 12,700 is about where the 200 day moving average is. If it breaks through strongly it will probably keep going down.

 
 
Comment by flatffplan
2007-08-16 07:14:48

” why worry you know you’ve lost 10%
bought her condo at Vaughan Place in April 2006. ‘In terms of thinking if I had to sell for some reason, it’s very scary.’”

 
Comment by Paul in Jax
2007-08-16 07:15:01

Man-on-the-street datum: Guy in our cycling group mentioned today that they’re selling condos where he bought for $30K less than he paid and the place is still empty. Someone I know well that heard him acted astonished. I casually mentioined to her that I had moved all my money market account into a Treasury account. More astonishment. Most people are so unaware.

Current mantra pet peeve: “asset-backed commercial paper.” CP is no more “asset-backed” than CDs are. It’s a way for corps and finance companies to finace themselves cheaply, that’s all. Started as a way to by-pass banks and go directly to institutions for working capital needs. Now it’s just part of their capital structure. There’s no explicit asset-backing for it. Bankers’ acceptances are the old-fashioned asset-backed securities - every BA used to have the bill of lading of the goods attached to the paper, e.g., three containers of furniture FOB Hong Kong destination Norfolk, value $XXXXXXX. How quaint.

Comment by libertas
2007-08-16 09:45:54

You must be really old to even know what a BA is. :)

 
Comment by Bill in Carolina
2007-08-16 09:57:35

Yes, they’re astonished and still unaware. Their only media “input” is listening to the MP3 tracks on their iPods, and/or satellite radio. Newspapers? Cable news? Nah. Will they even pay close attention when they get their next quarterly 401k statement in early October? Probably not; they don’t really know how to interpret the numbers.

BTW, I just got the Vanguard mailing where the performance of all their funds is shown YTD through June 30th. Sure looks good! :-)

 
 
Comment by Brian
2007-08-16 07:23:28

Classic FB story on the front page of the WSJ today:
http://online.wsj.com/article/SB118722072707499017.html?mod=hpp_us_personal_journal

FULLERTON, Calif. — Nearly two years ago, Mario and Leticia Montes found a home they loved, a gray stucco bungalow with a hot tub in the backyard in a middle-class neighborhood of Orange County.

The price was a major stretch at $567,000. But the couple, who had sold a home a few years earlier to move to a better area, was tired of renting. Mr. and Mrs. Montes convened a meeting with their two teenage daughters around the kitchen table to hash out the implications. “We agreed we wanted to be homeowners again,” says Mr. Montes, “even if it meant the end of vacations and not eating out as often.”

Like many people who jumped into the rising housing market in recent years, they had little money for a down payment and chose a loan that would hold their monthly payments down for the first two years, then “reset” to a much higher level. Mr. and Mrs. Montes say their mortgage broker assured them they would be able to refinance in a couple of years to keep their payments affordable.

With a December “reset” on their loan looming, however, the refinancing option now looks impossible. A friend who works as a loan officer called with some bad news this week: Similar homes in their area have been selling for $535,000 to $565,000 recently. That means the Monteses’ loan balance may exceed the value of their home.

Comment by Craven Moorehead
2007-08-16 07:27:59

They moved into their home and hung a sign on the front door reading, “Life is a daily celebration of love.” Within months, things started going wrong. The Monteses received a letter informing them their property taxes had been reassessed based on the $567,000 sale price instead of its previous $389,000 value. That raised their taxes to $6,000 from $2,900 a year and would have increased their monthly payments (including the mortgages and taxes) to $3,931. “Whoa!” Mr. Montes recalls saying. “I can’t afford this. I went into emergency mode.”

LOL. Idiots.

Comment by Cinch
2007-08-16 07:42:30

If life is a daily celebration, shouldn’t they be eating out more, and lounging at martini bars every night?

 
Comment by ylekiot1
2007-08-16 07:53:04

A 3100 to 3900 a month jump and they go into emergency mode? Taxes went up 258 a month. Due to that, the escrow account probably needed more added to it to catch up. That is probably the reason for the 800 a month increase. I don’t see anything mentioned here about the loan except for the 3 year prepayment penalty. The loan and the broker had nothing to do with the situation except for the three year payment penalty, which is obviously on the loan docs. The value of the house went down preventing the refinance. I don’t see how the broker was involved in their demise or bad lending practices outside of the bad math by the buyer. Now they are calling the lender asking for a modification of the terms after the teaser rate is over. They are having issues during the teaser term! I see no responsibility on the lender here. Just the stupidity of the buyer. GRRR. RANT OFF.

Comment by arroyogrande
2007-08-16 08:08:41

They are “complaining” because it was a 2/28…with a 7/23 they could have stayed in the home longer and hoped for positive HPA. They were hoping to use the 2/28 as a “credit repair tool”, to go to prime in two years after they had “repaired their credit”.

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Comment by Paul in Jax
2007-08-16 07:36:40

Who would put a hot tub in their backyard in a middle-class neighborhood in OC? That’s like a wife-swapping appliance, isn’t it? They probably jog in their underwear, drive a monster pick-up and named their children Carson and Brittney. I bet the heating vents are full of pet hair and there’s yellow cigarette smoke stains on the ceilings. But, hey, only 567 large.

 
Comment by arroyogrande
2007-08-16 07:57:54

“major stretch at $567,000…tired of renting.”

I get tired of “major stretches” (going paycheck to paycheck without emergency reserves and without fun stuff like vacations) before I get tired of renting.

At least with renting I can sleep at night. With major stretches? Not so much.

Comment by arroyogrande
2007-08-16 08:03:42

“The price was a major stretch at $567,000…Together, they earned nearly $90,000 last year.”

 
 
Comment by jmunnie
2007-08-16 08:04:50

I’m confused by this, too. “Mr. Montes recalls feeling edgy about whether he would be able to afford the higher costs — about $900 more per month — due to take effect after two years.”

Okay, so they’ll need $900 more a month (I’m assuming their taxes will not be higher in 2 years, due to the inevitable upcoming short sales/foreclosures in their nabe.)

Yet: “There is very little wiggle room. Mr. and Mrs. Montes also have two car loans, with payments totaling about $700 a month, and are borrowing more money to help put their elder daughter through college. They recently had to tell their younger daughter they couldn’t afford $70 a month for her to take piano lessons.”

Huh? That’s quite a bit of wiggle room to me. Get rid of one car, save up to buy a used one outright, then get rid of the other. There’s $700! Tell your kid that she’ll have to go to a community college or state school and take out the loans herself. (Some of us, ahem, worked our way through school.) There’s another few thousand!

I really don’t understand people.

Comment by arroyogrande
2007-08-16 08:14:20

“Huh? That’s quite a bit of wiggle room to me.”

It’s not called wiggle room if you have to give up your toys to do it…if you have to give up your toys, that’s called “hardship”.

“The couple now eat out once or twice a month, instead of once or twice a week before they bought the house. They have yet to visit a nearby jazz club they had hoped to frequent. The trips they used to take to Lake Tahoe now are out of the question…”Bottom line, it’s our little home,” Mrs. Montes told a visitor one evening in April as tears welled in her eyes.”

Comment by erik
2007-08-16 11:28:45

I am so sick of these people and their complaints. Man up! Is life so bad when you still have a house but you cant take out loans or have piano lessons?

What seems to be happening is people are mad because they cant drink any more punch and now are throwing temper tantrums, while those of us who didnt have any punch have to sit around and listen to them whine.

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Comment by Tom
2007-08-16 08:43:59

“Mr. and Mrs. Montes say their mortgage broker assured them they would be able to refinance in a couple of years to keep their payments affordable.”

I cannot tell you how many mortgage brokers promised people they could refinance in 2 years or sell.

 
 
Comment by sevenofnine
2007-08-16 07:41:13

“Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need ‘jumbo’ loans of more than $417,000. It’s hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.”

“‘That’s a scary thought,’ said Pat Hiban, an associate broker in Ellicott City.”

Not scary at all for me Pat. I can’t wait for prices to drop so that we can buy a home. I can’t believe all of the new construction going on in Ellicott City, Clarksville, Highland, Glenelg, Glenwood, West Friendship, Woodbine, etc. Everything is a huge McMansion for $1+M. Who do they think will buy all of these places? Oh, yeah, that’s right, BRAC.

My husband and I just moved back to MD from CA in late June. We are renting a place that was listed for sale in the high $700K’s ($790K iirc) and still hadn’t sold even though it had been sitting for a while and had price reductions.

The neighbors immediately asked us if we were going to buy the house and told us what a “steal” it was at the current price (a house down the street is asking $880K after a huge reduction from $900K! LOL!) We said that we were going to rent and wait to see what was happening with the market.

They responded that their Realtor friend told them that this was a great time to buy because of all the inventory and that this was a temporary dip. They said that because of the 10K jobs supposed to be coming due to BRAC, there would be a 100K housing shortage in the area. My husband and I were dumbfounded. We just both looked at them and didn’t know what to say.

We knew they had a vested interest in prices staying high and obviously had no clue about what was going on with housing or the economy, but we didn’t want to start trouble as it was our first day in the house. So we kept our mouths shut. We didn’t say - Why would we buy it when we can rent it at half the cost? etc.

In a later conversation with my husband, one of them said that these houses were expensive when they were built (mostly in the $300K’s in ‘96 a few years before the bubble started to inflate). We wonder if they think about what they say. If the houses were expensive then, what changed to make them a “steal” today at more than 2.5X the price, especially since they have not been upgraded at all — everything is original (dirty carpet, original appliances, no fresh paint, not even any granite or stainless steal (Yeah, these places are a steal at more than three quarters of a million to a million dollars!!! LOL!)?

Salaries certainly haven’t gone up that much. It was the loose lending and speculation that let prices get so high. Despite most of our neighbors being highly educated and well-paid, they probably couldn’t buy their own house today without the equity from the last few years. Also, I fail to see how 10K jobs will create the need for 100K extra houses especially at the prices that new homes are asking. In fact, NJ wants to keep those jobs and is fighting the relocation, so they might not be coming at all.

Anybody have opinions on what will happen to all these McMansion neighborhoods in the middle of nowhere as this thing progresses?

Comment by arroyogrande
2007-08-16 09:18:10

“My husband and I were dumbfounded. We just both looked at them and didn’t know what to say.”

Just smile and wave, boys, just smile and wave. - Penguin, “Madagascar”

Comment by sevenofnine
2007-08-16 09:59:09

LOL! I love those penguins!

 
 
 
Comment by Ghostwriter
2007-08-16 07:46:04

The lending industry touted the 2/28 loans as “affordability” mortgages, because they helped people buy houses that wouldn’t have been affordable with the higher immediate payments on 30-year fixed-rate mortgages.

The key is “wouldn’t have been affordable with the higher immediate payments on 30-year fixed-rate mortgages.” If you can’t afford it, you can’t afford it. Wake up people. Rent like the rest of us had to do, until we could afford it.

It’s still so hard for me to get my head around these prices for homes. Since I live in Ohio, $567k would buy you a 5500-6000sf McMansion. Their house would sell between $80-110k in our area. My husband makes about the same as they do with two salaries and I wouldn’t consider buying a $300k house. Max should have been about $270K. Am I being too conservative?

Comment by DC_Too
2007-08-16 07:55:23

No, you’re not.

Speaking of the mid-west, I am seeing houses in Detroit for sale at what appears to be around 1/3 of replacement cost. Even some pre-WWII mansions in the 300K range. Incredible.

I know next to nothing about Detroit, but I do remember when NYC was beaten into the ground during the ’70’s - it recovered, despite the fact that “everyone knew” it was impossible. Same drill with DC in the ’90’s.

I’d be looking at Detroit if I was out your way.

Comment by Tom
2007-08-16 08:51:28

Especially if GM, Ford, and Chrysler can make cars that people want to buy and drive.

Comment by edgewaterjohn
2007-08-16 09:41:32

Sorry, if and buts - candy and nuts. It should be obvious by now where the domestic auto industry is headed. Even if the Big 3 survive what will root their H.Q. to that region when all their manufacturing will be done outside the rustbelt sooner or later? They may as well run the show from the sunny Caymans.

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Comment by Andrew
2007-08-16 08:51:34

Well, NYC has the financial and other industries and DC has the government to support it… Detroit has????

Comment by DC_Too
2007-08-16 09:32:54

Remember, there was a horrible bear market in stocks during the 70’s - it lasted for fifteen YEARS. Everyone “knew” that the financial sector was toast and that the City had lost it’s manufacturing base.

The point here, boys, is that Detroit is worth a look. A careful look, but a look nonetheless.

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Comment by princegoro
2007-08-16 12:37:05

For $270K you could barely get a 2bd condo in an older building at a relatively decent area in the greater DC area. I’m so discouraged living in this area that I’m thinking about moving out (some friends of mine have already done that).

 
 
Comment by Arwen U.
2007-08-16 07:53:08

From the Fauquier Times article:

The decline in the average price in housing is hurting them the most. The latest statistics show that the average price of a house sold in Fauquier County declined 25 percent from July 2006 to July 2007. That figure likely is skewed, as no two houses are exactly alike and average sales don’t compare like to like. Probably the more reliable figure is the 7 percent decline in the median price of a house, a decline that is mirrored Prince William County.

I live in Fauquier and live and breathe the housing market. Also, I’m living in a neighborhood that was built from 2003-2004, and resold a little in 2005. (Including ours).

It’s 20-25%, not 7%. At peak (’05 and even ‘06), houses were selling for 700K. Two years later they’re fetching 520K.

Comment by DC_Too
2007-08-16 08:02:48

Tell me about it. Realtors are reporting something like a .3 % median increase in DC. Nearly half the properties for sale in my zip are marked “price reduced,” and, oh, as of today there will be no mortgage money for anyone with less than 200 times his FICO score in cash.

 
Comment by bink
2007-08-16 09:36:43

I live in Fauquier and live and breathe the housing market. Also, I’m living in a neighborhood that was built from 2003-2004, and resold a little in 2005. (Including ours).

So you’re suffocating right now?

 
 
Comment by Mike
2007-08-16 08:05:35

No sooner said than done. About a week ago I posted about something we had yet to see. Private equity firms who jumped into the sub-prime market going under. I posted because a friend in his 70’s, a recent victim of serious cancer, incredibly low total income (below poverty level) was able to get a sub-prime loan on a property for over $400,000. His total income is less than $1,000 a month. He told me the private equity company which funded him was First Magnus. Surprise! They just went belly up. How many more “private equity” firms are out there I wonder?

Comment by Arizona Slim
2007-08-16 09:04:41

Slim checking in from Tucson.

Funny you should mention First Magnus. They’re the Big Story in today’s paper:

http://www.azstarnet.com/dailystar/196683

To me, this company always seemed a bit full of itself. And it turns out that a lot of people share my sentiment:

http://regulus2.azstarnet.com/comments/index.php?id=196683

 
Comment by Ghostwriter
2007-08-16 12:24:59

I saw on the news last night that most buyers of subprime no doc loans never even made their first payment, because they couldn’t afford to.

 
 
Comment by Anne
2007-08-16 08:10:54

Hey, I just received a mortgage quote today,payment rate starts at 1% 30yrs with APR 6.522%. I thought these mortages were gone! Are we hearing one thing and seeing another? They advertise welcome perfect credit,less than perfect credit & in between.

Comment by arroyogrande
2007-08-16 09:22:02

Did you talk to them…might be bait and switch.

 
 
Comment by Anne
2007-08-16 08:10:54

Hey, I just received a mortgage quote today,payment rate starts at 1% 30yrs with APR 6.522%. I thought these mortages were gone! Are we hearing one thing and seeing another? They advertise welcome perfect credit,less than perfect credit & in between.

 
Comment by Tom
2007-08-16 08:42:18
 
Comment by Tom
2007-08-16 08:50:15

I guess the private equity bubble couldn’t take over fast enough. LOL It’s popping too.

The only one doing Private Equity will be Warren Buffet and a few others when they buy solid companies for pennies on the dollar. Don’t expect him to buy any of these mortgage companies.

Comment by Boston Bruce
2007-08-16 10:14:09

Two tts in Buffett, whether it’s Jimmy or Warren.

 
 
Comment by Sean_from_NVA
2007-08-16 08:51:09

I been working with a local mortgage company and I shot her an email and this is what I got back.

Me: With everything going on in the news lately about the credit crunch has that hurt your guys business?

HER: It has but Heltzel has survived 42 years of market changes so we just have to struggle through it. They have put a lot more restrictions on us and have changed a lot of guidelines so we as loan officers feel like we are relearning the business.

So this whole mess is contain. WRONG!!!!!

 
Comment by Curt
2007-08-16 08:58:19

Another bubble is forming:

COLCHESTER, Conn., Aug. 14, 2007 (PRIME NEWSWIRE) — On August 14, 2007, Scott+Scott, LLP, filed a class action against Countrywide Financial Corp……

HARTFORD, Conn., Aug. 15, 2007 (PRIME NEWSWIRE) — The law firm of Schatz Nobel Izard P.C., which has significant experience representing investors in prosecuting claims of securities fraud announces that a lawsuit seeking class action status has been filed in the United States District Court for the Central District of California on behalf of all persons who purchased the common stock of Countrywide Financial….

BALTIMORE, MD — (MARKET WIRE) — 08/15/07 — Brower Piven, A Professional Corporation announces that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of the common stock of Countrywide Financial Corp….

Yup, a class action against CFC bubble!

Comment by ChrisO
2007-08-16 09:11:16

Sounds like a bankruptcy filing waiting to happen…

Comment by Curt
2007-08-16 09:40:10

2006 number of employees: 54,655.

 
 
Comment by Crapburner
2007-08-16 09:52:41

Subprime is contained…..now we are contained by subprime…..

mwahahahahah……fruit cups for all….I am being vindicated finally for my bearishness for the last five years.

Comment by Bill in Carolina
2007-08-16 10:09:15

So how much investment gain did you miss out on in that period? Five years ago the S&P 500 was around 950, dropping to its low of around 800 in late September. It’s now still about 1350, or about 45% higher than five years ago. That’s a gain of about 8% a year compounded.

Comment by Crapburner
2007-08-16 10:36:11

Never in stocks with some dabbling in metals and collectibles with which I have done well by buying and selling in cash and being conservative…I could tell this was a bubble five years ago….just cheap farmland and range land is what I prefer. The housing bubble killed that and hoping the death of RE/housing will render good productive land for honest farming and ranching reasonable again.

Had enough of 5 acre McMansion by noveau riche with their lifestyle in tow cluttering up the landscape and raising the taxes of productive people who live with the land around them.

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Comment by JayInMD
2007-08-16 12:55:43

I wonder if BooYah Cramer is an unindicted co conspirator based on all his pump so Tan zillo can dump.

 
 
Comment by jmunnie
2007-08-16 09:01:50

Positive thinking!:

Going Against the Flow

“With all the doom and gloom over the stock market, the real estate market, the economy, etc., I thought it was time for me to comment on what I’m doing during these “troubled” economic times…. It’s hardly ever as bad as people think it is. The media feeds the frenzy that the sky is falling because that’s what the media does (see U.S. stocks set to tumble over credit worry and New home construction slowest in decade as examples). But the hyped-up fear of the unknown is usually worse than reality…. If it does turn out to be as bad as everyone thinks it is, that’s already reflected in the stock market. At some point, it will reach the bottom and go no further. I personally believe that we’re not far from that point…. If it’s worse than everyone thinks it is, I believe the US economy is strong and resilient enough to bounce back. It may take a few years (like with the Internet bubble), but past history will show that the economy usually comes roaring back…. When everyone says things are really, really bad, that’s the time to buy stocks….

“These four reasons are why I’m currently going against the flow and buying extra shares in index funds (i.e., buying stocks on sale.) It may take years for my current investments to pay off, but it may not. No one knows. But whenever they do go up, I think they’ll go up strongly….”

“In short, it’s times like these when cash and no debt are kings. If you have no debt and a decent amount of cash, you can get a piece of property for a steal of a deal. This is one reason I’m currently in the market for a new home. I can get a place worth twice what my current home used to be worth for 20% to 40% (or more) off it’s “worth” a couple years ago. And why can I do this? Because the housing market’s in the tank and I have no debt and enough for a good down payment even if I don’t sell my current home….”

Comment by Sam
2007-08-16 09:33:31

buy when it touches bottom, dont catch the falling knife.

Comment by edgewaterjohn
2007-08-16 09:56:57

It’s way too early. Keep your powder dry, your hands steady, and the beer cold. An opportunity for savers to finally have some power may be unfolding - don’t fall for the tricks of the hacks trying to get your spot on the lifeboats. Real capitalists have always looked to future - only failed MSM hacks try to prolong the failures of the past.

 
 
Comment by david cee
2007-08-16 11:11:36

“It’s hardly ever as bad as people think it is” And where were you
1 year ago, 6 months, ago, 3 months ago with your enlightenment.
How about “It’s never as good as the masses think it is”…I guess 1929 never really happen, and there was a Chicken in Every Pot”

Would you be interested in a condo at the strip in Las Vegas at 50% off what I paid for it? I know it’s at the absolute bottom of the market, and you should jump all over this opportunity.

 
 
Comment by shadow7
2007-08-16 09:59:38

Who needs CNBC or talking heads for that matter, just drive any new housing area in this country and house after house is either for sale, for rent, or empty, getting ready for bank owned sale or auction?

 
Comment by Ghostwriter
2007-08-16 12:32:38

I was driving home today (in Ohio) from one small town to another. At the end of the first town I saw 4 houses in a row with realtor signs in the yards, weeds a couple feet high, and empty windows. That was just one end of one small street. Each one had a different realtor sign, so I’m guessing they were all owned by different people.

 
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