It’s Going To Be Survival Of The Fittest
The Gazette Mail reports from West Virginia. “West Virginia appears to be sheltered from the eye of the storm buffeting the nation’s mortgage markets, but that doesn’t mean it won’t get rained on. About 30,400 homes were sold in the state in the April-to-June period, down 13.6 percent from a year earlier, according to the Realtors.”
“‘The underwriting criteria is tightening across the board,’ says Larry O’Dell, a Charleston mortgage broker. ‘They’re asking for more documentation, looking at debt ratings — it’s more difficult to get [loan requests] out of underwriting than it was two weeks ago.’”
The Rock Town Weekly from Virginia. “As the mortgage industry struggles with its subprime lending meltdown, the market is making adjustments. While those changes will leave some potential homebuyers out of the market, others will be presented new opportunities, mortgage professionals say.”
“‘We’re going to see a massive revamp of the industry,’ said said Don Earman, president of CTX Mortgage Co. ‘It’s getting more expensive to buy a home if you’re putting less than 20 percent down.’”
“The mortgage industry’s problems are an echo of the Internet bubble of 1999, according to William Wood, professor of economics at James Madison University. ‘People thought Internet stocks could only got up and they were wrong,’ Wood said. ‘And people who thought housing prices could only go up were wrong.’”
“Larry Martin, co-owner of Re/Max Performance Realty, has seen loans denied that would have been approved two years ago. ‘The last two sales I made, the sellers came off the price 9 to 11 percent to make the sale,’ Martin said. ‘We have purchased more ‘price reduced’ signs this year than anytime in our 15-year history.’”
The Baltimore Sun from Maryland. “About three years ago, back when the housing boom was still booming, David Fleming and his wife pooled their skills - hers in real estate and his in developing - and launched a building business.”
“Then the housing market slowed. Then the subprime mortgage market for those with shaky credit collapsed. Then interest rates on ‘jumbo’ mortgages - those above $417,000 - rose. And now, well, times have gotten a little tough for Fleming.”
“He’s no longer working on spec, ‘due to the tightening of the credit,’ he said. After deciding not to build on a half-acre lot he bought in Essex, he’s been trying for a year to unload the land, knocking his price down by about $30,000 to $209,000.”
“Developers…like Fleming are stuck with homes and land they can’t sell. ‘Builders are cutting costs in any way they can,’ said John Kortecamp, executive director of the Home Builders Association of Maryland. ‘It’s been difficult.’”
“Mueller Homes Inc., a builder of custom homes in the Baltimore metro area, has come close to losing two sales because of loan troubles in the past week, said VP Tony Letke.”
“One buyer had a pre-commitment from a lender for 95 percent of the purchase price on a $1.3 million custom-built house in Sykesville. But the lender recently backed off from that, saying it could finance just 80 percent, leaving the buyer with a $260,000 down payment.”
“‘I don’t know whether [the buyer] has 15 percent [more] to put down,’ Letke said.”
“‘This is going to dampen the motivation of buyers. In years past, people buying million-[dollar-]plus houses were not putting a whole lot of money down and could leave money in investments,’ Letke said.”
“‘We deal with a lot of buyers who are self-employed, and it’s hard for them to show proof of income,’ said Wendy Oliver, VP at a Severna Park builder. ‘The majority of the investor banks are putting a halt to those loans, and it’s frightening. Our buyers are going to be funneled out, and it’s going to be survival of the fittest with the buyers who can prove their earnings.’”
“Susquehanna Bank foreclosed yesterday on a small developer, putting a home and several lots on the auction block, said Christopher D. Holt, regional president at the bank.”
“‘The smaller builder, that’s who is getting caught. That’s who [has] overextended themselves,’ Holt said. ‘They bet on the market, that it was going to continue strong, and it’s working against them.’”
From ABC 11 TV in North Carolina. “So far the Triangle has survived the nation’s deflating housing bubble, but the mortgage meltdown is affecting home loans everywhere. ‘Jumbo loans’ are suddenly much harder to land, and it’s rapidly shrinking the number of potential buyers.”
“Eric and Emily Brinker put $200,000 into a Boylan Heights home just above downtown Raleigh. The Brinkers hoped to flip the home for almost $500,000, but now they are also looking for someone who is willing to rent it.”
“‘I don’t want to sacrifice really dropping the price too much just to get out from under something that’s in a good spot,’ Eric said.”
“‘If it’s hard to get a loan, that’s definitely a problem,’ realtor Melanie Osborne said. ‘A lot of people don’t have cash to buy a home. I know I don’t. Not a house this big.’”
From News 14 in North Carolina. “North Carolina’s new rules for mortgage lending companies means getting a home loan is getting more difficult.”
“Sherri Hodge’s Huntersville home has been on the market since March, but so far, no one has made an offer. ‘I’ve checked with some agents, and I said, ‘Am I doing something wrong?’ and they said, ‘Truthfully, it is maybe just about the price,’ said Hodge. ‘So we reduced down, we just reduced it down again. I had some other incentives going on, and I don’t exactly know why it hasn’t sold.’”
“Abigal Jennings, president of Lake Norman Realty, said the rules involving foreclosures and mortgages will be beneficial in the long run.”
“‘The rules that are coming into play are stronger,’ said Jennings, ‘but they are probably for those individuals the best thing.’”
“As conditions in the market improve, Hodge said she hopes buyers will trickle their way into purchasing her home. ‘We’re just going to see what happens,’ said Hodge. ‘And just bring offers and see what happens. You never know what I’ll take for it.’”
‘Two years ago, my wife and I sat at a long conference table in a mortgage-title office in Bethesda. Sitting next to us: our real estate agent, who drew up our bid on a townhouse in Germantown two days after showing it to us. We didn’t get an inspection, and I don’t recall going back for a second look. We had to act fast or someone else would get it.’
‘And then, as the saying sort of goes, the stuff hit the fan. The sizzling home market almost immediately began to cool off, which my wife and I sort of ignored. Interest rates started to creep up, and we sort of blew that off, too. We have time. This too shall pass. No worries. Life is good! We bought a flat-panel television, took a nice vacation, bought a dog, hired him a daily dog-walker, and then we got pregnant.’
‘I walked in the door one night last week, and Brian Williams was talking to my wife. I heard the word ’subprime’ from the TV. She looked at me and said, ‘Should we be worried?’ I said, ‘We have plenty of time.” But the truth is, I am getting nervous. And a few days later, when I told my wife I was indeed worried and writing about it for this newspaper, she said, ‘You’re going to give me a panic attack.’ She paused and then added, ‘Did we really mess up?’
If only they would have just visted your site Ben!
Ben,
By creating this site you’ve created a community that spread the truth. I expect our discussion might have saved 25,000 people from buying far beyond what they could afford.
It also kept the peak from going that little bit higher that would have been very destructive. So on the downside you’ve saved jobs.
Kudos to Ben for creating this site.
Neil
Neil,
HBB gave me an insight into housing markets.
But I forwarded HBB to my cousins and friends before they purchased the house this year. No use. They choose to ignore this blog.
Who are we, a bunch of pessimists?
Ben, I can truly say that one of my friends who works hard, earns little, and wanted a house has been saved from financial ruin PURELY thanks to your blog. I was unable to convince him until he saw the mass of information available here. That was almost a year ago, and had he bought then (and he lost his job some months later and had to relocate), he’d be facing financial ruin. Thanks!
Some vicious comments on that story. No sympathy from me either.
As noted, writer is a reporter for Wash Post, wife is a doctor.
He did his research after the fact, wife is in a financial fog.
These are presumably educated people, they may even think of themselves as somewhat sophisticated. In truth, they are dumber than a box of rocks.
Writer complains that “the world is a tricky place” and nobody warned him. You can see why the Wash Post hired him. He’s too dopey to be hired at Mickey D’s.
Yeah, after reading this story, I just saw the Realtors latest ad campaign talking about the “Code of Ethics” each has to adhere to. Hilarious - these two geniuses sitting next to and relying on their realtor who didn’t have a single problem signing them up on something w/ no inspection, etc. etc. It’s truly telling when two highly educated individuals have absolutely no common sense and rely on a realtor in such an important transaction. Apparently, the society as a whole seems to think that a realtor that gets paid a percentage of the selling price somehow has their best interests in mind - give me an f’ing break.
Really. The buyer’s realtor should be paid more if you pay less. Like 20% of the discount I get from the asking price. Then they have motivation to get a lower price.
They had the option to consult a financial planner. They had the option to say, ” maybe we shouldn’t be getting this townhouse for $459,000 if all we can afford is an interest-only mortgage. They had the option to ask for a reduction in price. They had the option to wait. They now have a number of options with which to cope with their financial decision. I’ve had to deal with poor financial decisions that I’ve made in the past. Now they have to. It’s part of being a grown-up, I guess.
Evidently, these two FOOLS are making too much money and some one just HAD to take it away from them…IT’S the American way !
That struck me too. Two professional incomes and they can’t swing a $450K house? Perhaps they can’t swing it with all of the toys.
It’s funny what their interest rate could go to. When we bought our house, our interest rate was 10.125%. Not a problem. The advantage of buying when interest rates are high is that home prices are lower and you can refinance when rates are dropping. This couple seems to have a lot going for them in terms of contacts and services. I don’t have a financial counsellor (just a few blogs and forums) to advise me.
well said…dumber than a box of rocks and such unsavory feelings of entitlement. He complains that it’s a little sad finding himself needing to hope the hirees at MickeyD’s lose their jobs in the recession he must now hope for, so that his interest rate is reduced and he doesn’t have to pony up half his wife’s yearly salary at the closing table if they decide they need a 4 bedroom home for themselves and junior…sorry I had to hope for all you peons to lose your homes so that I can feel like I didn’t “mess up” and fail to make good on my god-granted right to profit. *that’s* the trickiness of the world that he bemoans, not even that oops, they didn’t tell me I should maybe pay attention to what’s going on in the world around me as I sign a mortgage. Did he mess up?! Lord, if this is what the montgomery school system creates and sends back for more, I’m really glad I have no contact with it. That was one of the grossest pieces I’ve seen linked here, ew…
“Besides all that, our mortgage broker and real estate agent kept confirming what we wanted to believe: nothing to worry about.”
What a shock? LOL
Agree, no symathy!
The fact is millions of equally ignorant home buyers serendipitously made tons of money riding this wave. No sympathy here either but it did take guts to write this. In fact this article is so good it made me wonder if it was a bubblehead plant.
you mean so gut-wrenchingly icky?! his whole position wasn’t so much ignorant as it was presumptuous…
I found it profoundly disturbing, like there was so much of this attitude that the fates had to come in finally and strike down the ‘owners’ of so much hubris.
They were sitting at a poker table where everybody was playing with the house’s money. Now, they find themselves at a poker table where everybody has been forced to pull out their own stash. They are surprised to find that the bets being laid are much smaller than they previously were. Genius!
Wow. How did people just not see this coming? How did even the supposed smart ones buy into the hype? Makes me feel like a freakin’ genius in comparison. Little, ol’ me.
Love this statement: “As you know now, things are quite different,” Iobst told me. “It’s a strong buyer’s market now, probably the strongest buyer’s market that I have ever seen.”
Raise your hand if you’re tired of hearing about how it’s such a great buyer’s market. To me buyer’s market = lots of inventory (check) AND… affordable prices (nope!). Lots of inventory alone does not a buyer’s market make.
I hope all these people have to get second jobs at McDonald’s and WalMart for the next 10 years to pay off their debt.
If you think about all of the people currently working at McDonalds, they are the ones that will be unemployeed.
On the upside, perhaps service will improve as “smarter” people are hired to replace those that have been working there the past 10 years.
Hand raising, I am also so freaken sick and tired listening to this BS already.
When it is a true buyers market, we will be purchasing 2.5 to 3 times the median income for a median priced home in Florida.
Until then it’s just a waste of time and energy to bother to even look.
skb, I think you just described a “normal” market. A true buyers market would be when the ratio is significantly less than that and still nobody is buying because “Real estate is the worst investment you can make. It’ll never go up again.” When you hear that, and the fundamentals are unequivacally in your favor, then it is a buyers market.
This is a classic example of greed overriding common sense. They were litterally begging to get screwed and can only blame themselves. You can almost see them begging the realtor to hurry things along and get those docs to them to sign.
Dog walker? I use to work with a guy who was employed in his spare time as a dog walker by Liberace. Got $400 a week to walk Lib’s four poodles. This was back in the ’70’s, I think. Nice work if you can get it.
“we got pregnant”. That explains everything.
what’s the “we” part about?
in vitro paternalization
we got pregnant = politcally correct
LOL
Hey, emasculation is not funny!
The real estate bubble and economic meltdown in LA is now hitting Main Street. Picture the 3rd street prominade in Santa Monica on a hot Saturday afternoon.
A very good Italian resturant had no seats or customers on its front outdoor patio at 1:30 PM lunch time. Usually mobbed. My curisoty
guided me to the front door, which was open. There was aboslutely no one inside, no cooks, no waiters, no customers. The TV was on, most of the tables were set, but it was right out of the twilight zone. NO ONE THERE! And I flashed back to a business I was involved in 30 years ago, where the paychecks started bouncing, and after a couple of weeks of excuses, every employee just walked out.
Tell Bernake, the bleeding of main street is in your face.
After 40 years in business, I know the feeling of the “R” word. From housing bubble to recession. Now I am scared
Could I ask which restaurant you are referring to?
That happened to us a few weeks ago. We went to an upscale restaurant on a Sat. night because we had gift certificates. At dinner time it’s always a good 45-60 min wait. We were seated immediately and there was no one else in the main dining room with us. When we left an hour later it was probably 1/4 full. It was eerie too. My husband and I both commented on how strange it felt.
Somebody from a non profit organization I donate to, called last week in regards to getting donations, and I know the person and we got to talking and 700 letters were sent out, asking for donations, and 11 days later, not one red Cent had shown up…
Money is indeed tight~
Just goes to show that there were a lot of fancy HELOC’ed restaurant meals served during the heyday.
Now they’ll be eating beans for supper. Bon appetite!
I was at Costco Saturday before lunch, drove in and got a nice parking spot, store was not very crowded and only one buffoon in front of us at the checkout line.
So Bay, I had the opposite experience at the Torrance Crossroads Cosco yesterday (Saturday). Alas, certain events can drive Cosco attendance (kids soccer, a popular TV show, etc.)
Got popcorn?
Neil
Our favorite pizza joint was more crowded last Friday evening than any time we’ve visited it in the last two years. Go figure.
Maybe the sushi and steakhouse crowd just wanted to get some ‘za? Consumer behavior is a haphazard indicator of the coming recession - I mean those dumb enough to have become FBs can’t really be expected to make rational choices in any spending decision, can they?
My local public library is open on Sundays. I went there today. Bustling.
Neil,
Costco has two stores in Tucson which are always crowded, but what I have been observing waiting to get to the cashier and observing neighboring lines is that do you not see the big ticket items anymore. More importantly, there are now an observerable number of folks with only small amount of fresh food for the next couple of days which can be carried without a cart.
desertfox
Haha this was always the way I would shop there. No carts and only buy what I can hold. All my past girlfriends would laugh when I would be walking around with all that stuff in my arms. The only times for carts are when I want to stock up on gatorades and other drinks, because i just hate finding parking at that place.
I saw a piece on Bloomberg television yesterday. It featured billionaire investor Wilbur Ross. He recently provided $50 million for debtor in possession financing for failed American Home Mortgage. He’s positioning to buy assets of theirs. But he’s thinks it’s too early to be buying. He sited the large number of ARM mortgages that still have to reset, in the next couple years, as a reason why it’s too early.
The piece was interesting, because it brings to light the fact that there is a lot of smart money patiently waiting on the sideline for this mess to play to play out. As these failed institutions are forced to liquidate, investors will be buying assets, such MBS bonds at huge discounts. These investors will have a much lower cost basis on these bonds, and therefore be able to start trading these bonds thus establishing market prices for them. Many of these institutions that are now refusing to mark down the value of their bond portfolios, claiming that true market prices don’t exist, will have a hard time making that claim in the future.
I see this playing out similar to the S&L crises of the 90’s. Deep pocketed investors will be picking up assets of failed institutions at big discounts, but their patiently waiting on the sidelines.
Berkshire and other smart funds are sitting on huge cash reserves waiting for the fallout. the ones who leveraged long will be wiped out and their assets will be sold for pennies on the dollar. The smart get richer while the stupid go broke and have to start up a new hedge fund to rip off rich people.
When the Wall Streeters bankrupt 1 million people, it’s the people’s problem. When the Wall Streeters bankrupt 50 million people, it will become the Wall Streeters people’s problem.
Um, Steeters people = Street people’s
Berkshire price increased well during this perfect storm.
Last Monday I went to a little fast food place that a friend of mine owns and runs, he owns a few subways, but this one he runs himself. It is located in west LA. It has always done very well, last Monday though my friend was telling me that the business has fallen off a cliff.
Oh I thought the “r” word was “renter” lol…
The recurring theme in many of these articles, across the country is that a TON of transactions are falling out due to financing. In addition very few people are qualifying for loans. Stats should be very interesting once we get to October or so
Yes, I wonder about those re-sets. In recent days, I’ve seen reports that the re-sets might be postponed, considering the market for re-fi has dried up. Anyone think that will happen?
Even if it does, I wonder how many people will still walk.
Hey, all this means is that mortgage applications are up. That’s good news? Right?
“‘We deal with a lot of buyers who are self-employed, and it’s hard for them to show proof of income,’ said Wendy Oliver, VP at a Severna Park builder.
I have been self employed for 30 years and it is no problem for me to show “proof” of income. This is bald faced lie, how do these no proof of income folks function in the system? I’m more that happy to watch this charade come to an over due close!
Let’s see, copies of your tax returns, bank and brokerage account statements. How hard is that?
“Let’s see, copies of your tax returns, bank and brokerage account statements. How hard is that?”
Absolutely. I’m self employed. And lenders make adjustments to your income to compensate for Schedule C write-offs, which W2 employees don’t have.
Sounds like another case of overstated income to me.
What she was saying was “hard to show proof of their made-up, pull-a-number-out-of-their-a## income”
Yeah, that was my reaction too. About the only excuse for not being able to prove income is that you’ve started a biz or been self-employed for less than 2 years, so no tax returns to show yet. (But then why on earth would anyone lend you money against the income from your new biz?)
I’d be curious if there is a honest-to-god, valid reason why proof-of-income is an onerous burden.
They’re either lying to the IRS or on the loan application, probably both.
I agree, if they actually filed taxes on the money they made instead of hiding thier acutal income and not reporting they should be able to prove how much they make. Some one call the IRS on the d@#$hbags.
New bill to that should go through congress, when someone purchases a property, the IRS should review the loan docs and compair with tax returns.
The reason it’s hard to show income is because of all the false write-offs, & under the table cash payments that bring their income so low they hardly pay any taxes. When in truth they’re making 150k a year their tax forms only show 25k. Their income tax forms are the only proof of income they have. Hence no doc.
Well ,the way these self-employed people use to get loans in the past lending cycles was by putting more money down. These borrowers want to save on taxes yet they want the best loans claiming they really clear a whole lot more . They can go to hell unless they put up the money to show they won’t walk ,in my not so humble opinion.
They must be drug dealers or some sort of criminals.
Perhaps she meant buyers are having difficulty proving “verifiable” income which means steady paychecks for at least 3 months. People who are self-employed can rarely do this. They may make a nice penny over a year, but “verifiable” really means consistent pay while working for someone else. Someone the other day talked about the housing bubble masking the true weakness in the general economy and this verifiable income issue is another example. So much of America has been outsourced that many Americans are making their own way as independent contractors/small businesss men/women. What hasn’t changed over the last three decades is proof of verifiable income for the conforming loans. Although we’ve been moving away from traditional employment for the last two decades, the conforming loan standards have not changed in that regard. And the housing bubble didn’t need to change because there were a plethora of new loan programs that didn’t require verifiable income. I remember my cousin complaining loudly about the added burden he had to endure to get a loan to purchase his family’s house in Rancho Santa Margurita ten years ago. He’s a self-employed attorney and a very successful one at that. His choice was either put more money down or have the wife get a job to help out with the “verifiable” income stat on their application. This is a guy who not long afterwards started winning seven figure lawsuits.
Like a lot of other things finally getting recognized with the housing bust/mortgage meltdown, the lack of access to conforming loans by people who are self-employed is going to be another problem in the near term. So perhaps that is what the lady meant…that borrowers just don’t have the kind of steady stream paychecks that conforming loans require.
I guess if you cannot show a steady income, then you’re a higher risk, and should then be treated as such.
After all, a lawyer without any clients makes the same as a housekeeper without any clients. Maybe the lawyer will cash in on some bogus pain and suffering claim - maybe not. Why should a bank risk my deposit money in that way, when the probability of someone with steady work being able to make payments, over the long haul, is much higher?
“They may make a nice penny over a year, but “verifiable” really means consistent pay while working for someone else.”
This is an excellent post, frcp. As a self-employed individual, it hits very close to home for me, which is why I am on the hunt for a little concrete block home I can pay cash for. I have excellent credit and money in the bank, but the income is not steady. Rental management companies frown on this and often will not even accept you if you don’t have a “job”. I remember looking at one mom and pop complex where the owners lived on site. When the application came out and I mentioned that I was self-employed, the lady’s eyeballs started jittering back and forth in fear. Although I look somewhat presentable most days, I knew she was looking at my car, lack of a “job” and putting 2 and 2 together and getting 5. Furthermore, since she and her husband live on site, I think she wanted tenants that would be gone during the day, anyhow. I also heard of one leasing company locally that started declining to renew the leases of tenants who did not have “jobs”, even if they had good credit and paid their rent on time. New management policy. They, too, apparently want their tenants gone during the day. If it’s the same place I’ve heard about, I drive past there pretty regularly and for the last couple of months they’ve had a “Now Leasing” sign posted out front, whereas they were always full before. Conversely, when I was looking for a place to rent, I would not rent a place where the management required copies of tax returns to be kept on file. Five years ago I wouldn’t have cared, but when the management has English as a second language, I don’t even want to show them so much as a driver’s license. They might be perfectly decent folks, but with all the identity theft that’s going on amongst the illegals around here, I’m not taking my chances.
Bankers aren’t the only ones getting pucker butt. So are landlords, unless they are desperate flippers. I can’t say as I blame them. People want to be sure they get their do-re-mi.
Question: I never had to put this to the test but what if you incorporate and hire yourself on a normal payroll like any other company. Is that considered a “job”?
For closely held corps, they traditionally checked your % of ownership and if it exceeded a set amount it was same as being self employed, in the bank’s eyes.
One real bright side here: Now that the double bookkeeping that self-employed people are able to get away with (i.e., giving the IRS one set of numbers, giving their mortgage brokers another set) is getting more difficult to pull off, maybe some of these people will actually start paying income taxes, at least for a few years, so that they can qualify for a mortgage.
And I’m sure just about all of us would LOVE to see the IRS compare stated income mortgage applications, in which the borrower swears, under federal law, that the data is correct, with 1040 forms, in which the borrower swears, under federal law, that the data is correct.
There may be enough money to gain that we could close most of the deficit.
Yes and they can use that money for any bail outs.
Let me get this straight. It’s hard for buyers to show proof of income because…they are committing tax fraud? If they are making the money but don’t have true tax returns, they should be in jail.
Am I the only one noticing this?
I seriously think the IRS should be going after every single stated income loan and collect their taxes that the IRS is now owed. Unless all of those people on stated incomes have been paying their fair share of taxes. =)
Aside from Flippers, MTG and RE Brokers I really do not like to see people get burned, but I must admit this all seems to be panning out even better than I had hoped 2 and half years ago when I sold all my RE. My thought then was that the main catalyst for price drops would be rate increases. Looks like with the credit crisis, those like myself with good credit, income history and cash for a downpayment are going to have their pick of homes after a nice 30-40 trim in price.
Sorry, too early in the morning. My point was that we are going to get the best of both worlds, a fair price with low interest rates.
Here’s a question for all of you Yankees. Why do you all view the Carolinas as paradise? Most have never been there and don’t have any idea what the culture is like. Our friends in Charlotte tell us that it has been above or near 100 degrees for several weeks now. It will be 95 or above for at least the next week. They have not had rain. They will get fined $500 if they wash their car or water their lawns. Air conditioning bills have gone astronomical.
I have a co-worker that wants to move to South Carolina. He has never been there but he thinks it will make his life perfect because he has heard how great the Carolinas are.
Here is my advice. To any Yankees that are thinking about the Carolinas, do a little research. Drive through Charlotte during rush hour. Check out the sprawl going on in many cities. Make sure you visit in July or August. Oh yeah, also learn about their bugs and snakes that they have. They can be an unwelcome surprise.
I hear ya, NYCityBoy. Being a Yankee originally myself, those are wise words. Generally speaking, the Carolinas are viewed very favorably by many here in my neck of the Florida woods. That’s because so many go to the Carolina mountains during the summer and find it delightful. I’ve never been there myself, but have mostly heard good things. However, I agree that a place has to be experienced to really know what it is like. When the ex and I sold our place in 2005, we made a temporary move to another area of Florida. I thought it would be great, based on what I heard and even saw on a visit. It was a disaster. I came screaming back here. Thank God I was only renting, but even that was a nightmare.
Texas is horrible too! Stay far, far away!!! We have tornadoes, rattlesnakes, hurricanes, insufferable heat, droughts, floods, tarantulas and Katrina evacuees!!! PLEASE STAY OUT YANKEES!
God I hope that works………..
And illegals.
reminds me of a bumper sticker I once saw - Jackson Hole sucks, tell your friends…
LOL, that’s why I’m hanging on here in FLA. People are finding out how badly it sucks for real and packing up. After the purge, I’m hoping the state can get back to what it was in certain areas (not Miami or Orlando, though), a nice, low cost laid back haven for a Northeastern escapee.
OT - I spent a summer in Tampa once, doing some grad school stuff at the Univ. of S. Florida. It was HOT!! And I’d never seen a palmetto bug, it scared the bejeebers outta me (way worse than any rattler, but I think you have them, too). There was an alligator cruising the golf course. Also, I’ve spent lots of time in the San Juan Mtns in S. Colorado, which have a high iron content and attract lots of lightning, but Tampa’s lightning storms made anything I’d seen seem tame (and I’ve had my hair stand on end from electricity in the mtns). In short, was I impressed? You bet. Tampa’s something else, and I nearly had a heat stroke playing tennis my first few days there. But man, does the ball whack good at that altitude! Florida is a beautiful state.
You go nycityboy! I’d like to keep this area a secret for as long as possible.
LOL Mugs!
Sure it may get hot in the south but it also does not get as cold. I prefer the heat over the cold. Just came back from Puerto Rico for Buisness. Another thing about the warmer areas, girls in clothes that don’t leave much to the imagination!!
Don’t worry - any place dumb enuff to elect George as guvnor holds no interest for this Yankee. Now what to do about the whole countree bein dum enuff to elect him prezdent 2x….that worries me.
Don’t worry - any place dumb enuff to elect George as guvnor holds no interest for this Yankee. Now what to do about the whole countree bein dum enuff to elect him prezdent 2x….that worries me.
Colorado Springs used to be a paradise for California equity locusts. Then our local nuclear reactor experienced a Chernoybl-like meltdown, coating El Paso County with highly radioactive debris. That spawned swarms of homicidal, Californicator-hating mutants - such a shame. So to our California friends, you might want to steer clear of us - though I hear the Carolinas are a lovely and enticing destination.
We will take ya-all here in California. Traffic is light between 11:45pm and 3:45am. You can waste water all you want. Free education for your kids (and tutoring if illegal). Plenty of illegals to help unload your moving van. Celebrity governor and two US Senators that are total liberals.
-It is all good here…the entire world looks to us for the future trends.
I currently live in WNC and could not agree with you more. Please do not send anymore here. In fact try to get your friend in Charlotte to move back to NYC if you can. The culture here is horrible; I had three snakes in my house this morning and had to use a stick to kill the monster bugs in my bathroom. The heat is unbearable! I had to sleep with only once blanket last night! The neighbor had the nerve yesterday to knock on my door to give me about 10 of the biggest juiciest tomatoes from his garden. How he has time to garden I just don’t know since he is a neurologist, I think that is what they call them fancy brain doctors.
Bill in Carolina,
Did you want to add any thing to the horrible conditions we are subjected to here?
A friend out there told me they’re having to spray down the dairy cattle every 15 minutes to keep them cool enough they’ll produce milk, guess you all are having a bad drought?
This is like San Bernardino, California where we have to spray down the sign spinners every 15 minutes to keep them spinning. They keep slacking off in the 110 degree heat.
Old Spinning: working out at the gym on a stationary bicycle
New Spinning: hanging out on a stationary corner, getting paid for doing nothing, other than being a flashy human billboard
BP, it’s awful here. We called a local golf course (not our club course) Saturday a week ago wanting a tee time for the following day (Sunday) between 10 and 12, and had to settle for 12:18. Gasoline is up to $2.54 a gallon. There were SEVEN cars in front of me at one traffic light in town last week.
Oh, the horror!
“Here’s a question for all of you Yankees. Why do you all view the Carolinas as paradise?”
All of the people I’ve seen that moved to the Carolinas or are “trying to”, are doing it for the same reasons. The run up in home prices would allow them to cash out of their house in New york, go down to the Carolinas and buy a place with little or no mortgage, resulting in very low living expenses and much less financial pressures. That’s their “Paradise. Of course it requires a greater fool to take on a huge financial burden to finance the new life for those people moving out of the north east. We’re also seeing a lot of young people, on Long Island, leaving straight out of college. They see the American dream on Long Island as the impossible dream. It’s being called the “Brain drain” in the local press. If this keeps up we may only be left with older people, who missed the last trains out in 2005 and 2006.
Northrop Grumman in Bethpage can’t hire anybody right out of college so they’ve “recalled” retirees from the Apollo 11 days to help take on the extra work. My friend told me that 7:30am in the parking lot looks like the “dawn of the dead” movies :>
We can’t hire anyone from out of state. People look at the cost of housing and property taxes and see their standard of living going down, if they move here. Most of the pool of potential hires are older people that have lived here for decades, thus have smaller mortgages and can afford what is offered as pay.
Are you kidding? My dad worked at Grumman in the Apollo 11 days, and he’s turning 70 in a few months. What kind of offers are they making to get these guys to wake up early, fight horrific LI traffic and deal with all the job stress that drove them nuts nearly 40 years ago?
“Here’s a question for all of you Yankees. Why do you all view the Carolinas as paradise?”
answer: Jobs, affordable homes and air conditioning!
Unfortunately for the locals, their culture is disappearing. Can’t blame them for resenting the infux of northern newcomers.
My husband is from western NC. The things he loved about NC are mostly gone.
Yes, the heat/humidity is oppressive. The bugs are big and numerous. Christ and country still rule in most parts of the state. Knock yourself out…………
This thread hits pretty close to home. My sister is seriously considering a relocation to North Carolina and we may or may not follow her.
My Yankee sister’s and husband’s reasons for the relocation:
- Jobs: VT is one of the least attractive to industry, NC is one of the best
- Affordable houses: cheap compared to VT
- Little snow: if you don’t ski in VT or do something to get out in it, November-March are long months punctuated by white knuckle drives. My BIL golfs and less snow means more play.
-Hurricanes: or really significant lack there of.
-Politics: relative to the rest of the south, some more moderate pockets exist. My sister and I are more conservative than your average “educated” VT residents but certainly aren’t right-wing either.
That said, I’m not sure those reasons are good enough for us to move our family. NC is at 9 million as of the last census and appears to be the east coast’s answer to CA. The fastest way to ruin anywhere is to cram too much humanity into it. By renting we’ve somewhat isolated ourselves from the worse of the property tax carnage currently taking place in VT.
My sister is leaving her nephew here and doing a scouting trip at the end of this week. Depending on her take on the state, we will do our own. Honestly, I don’t mind the snow and I’d rather not move. What really worries me long term is how high taxes are here and that the state can’t seem to stop coming up with new entitlement programs.
We’ll see…
Typo - My sister is leaving *my* nephew behind (her son) with us during her scouting trip.
Hear hear on the A/C. We are in S.C. - our neighborhood blew a transformer when it was 104 last week (heat index w/humidity 110). Yikes! I grew up in Northern Ohio and had thought this is the perfect place down here, bust having your house at 92-93 degrees while trying to sleep made me realize how dependent on A/C this whole region is. If the infrastructure is not kept in top shape, you can almost not live in this stagnant climate. Also, the gridlock on the roads is reaching a point where I am hearing fellow Greenville county people saying they are thinking of moving somewhere less “booming” - the developers do whatever they want, politicians are owned by them, and sprawl is probably among the worst in the U.S.
Gridlock? In Greenville?!! LMAO. You don’t know gridlock until you’ve commuted in the D.C. area.
Greenville isn’t setup to handle heavy traffic.
Carolina w–we lost a transformer in Greer not too long ago. I don’t know what caused the problem. The people I know at the utility company arent talking.
When winter weather hits, no one is ready for it. Everything shuts down.
Are you sure you aren’t describing Los Angeles? Oh wait, you don’t have wildfires burning down half the state. And you don’t have earthquakes. And you don’t have a huge housing bubble. Yep. I think that’s paradise compared to Southern California.
Idaho and Montana are literally burning up -
http://www.nifc.gov/fire_info/nfn.htm
Good. Those areas need regular regenerative fires. Good for game and wildlife after they clear.
Sorry.
I just worry that some dang fools will try to put all those fires out and upset the ecosystem that depends on that.
As long as you keep the trees back from you house and protect it from the brush then its long term degenerative for the area. People just don’t seem to know.
agree, fire is generally good for an ecosystem - I think it’s especially good for the McMansion ecosystem and surroundings - (sortof kidding, mostly not)
“Here’s a question for all of you Yankees. Why do you all view the Carolinas as paradise?”
Friend of mine in Maryland was looking to move to NC this summer. Reason? He wants to cash out on his house he bouvght 5 years ago and go somewhere cheaper. Result? Hee hee, given the state of the Maryland housing market, they just re-registered their kids for school in Maryland!
Seems that his wishing price is so high that after only a couple of months on the market and only seven (at last count) people wanting to view the inside, and no offers or even hint of offers, he is finally realizing he’s not going anywhere. Oh well, late to the game, eh?
So it looks like you Carolina residents are saved from adopting one more family from north of the Potomac.
“‘This is going to dampen the motivation of buyers. In years past, people buying million-[dollar-]plus houses were not putting a whole lot of money down and could leave money in investments,’ Letke said.”
Here’s where the investments are going to take a hit. If they want that house and have to put money down, they’re going to cash in investments and in turn that will eventually affect the stock market. Plus some people used the equity in their houses to invest in the market. If the ARM rates go up, they’re going to have to pull investments back out for the house. I think it’s all intertwined and if one goes then the other is going to take a hit. Just my opinion, but I saw it happen during the dot.com stock run-up and crash.
I think people won’t be buying those million dollar crackshacks when they have to put $200K down. It’s easy to buy when you get a zero down cashback teaser rate loan.
Good opinion and I agree with it Ghostwriter .How many people will need to take money out of their stock investments in order to survive the downturn . Anybody that thinks the stock maket is going to get a bull run is crazy .
A lot of people will use 401(k) loans as downpayments…. And, a 401(k) loan is STILL money coming out of the stock and bond market.
“Here’s where the investments are going to take a hit. If they want that house and have to put money down, they’re going to cash in investments and in turn that will eventually affect the stock market. Plus some people used the equity in their houses to invest in the market. If the ARM rates go up, they’re going to have to pull investments back out for the house. I think it’s all intertwined and if one goes then the other is going to take a hit. Just my opinion, but I saw it happen during the dot.com stock run-up and crash.”
You can add to that the retiring baby boomer’s. Who will be steadily drawing down their assets, over the next 30yrs, to fund their retirement. As Medicare and social security get stretched beyond help, we’ll see a greater burden placed on retirees to pick up more of their own expenses. The coming problems in the retirement system are the dirty secrets that the politicians in Washington refuse to deal with now. They keep kicking the can down the road, knowing they won’t be around when the problems come to a head. I wouldn’t be surprised to see a return to multi generational households, in the future. Before social security, multi generational households were common. Of course that would lead to less housing demand. Some of these longer term demographic and financial trends could cause real estate to under preform, relative to inflation, for decades.
It has hit the MSM!!!!!
Here in PHX we have a local politics show called Sunday Square Off. Today’s show is 100% dedicated to the housing crash!!!!
Well, it was a very weak show.
Jay Butlerm, Realty Studies at ASU: He was just there to sooth raw nerves. It won’t be that bad, unless we have a recession.
Some lady that runs FousingDoom.com: Govt. can’t have it both ways. They say they want affordable housing, but they are under great preasure to step in to stop prices from dropping. You can’t have both high priced housing, and affrodable housing.
She did a bit of the supply and demand two step, but completely missed the fundament support levels, arguement.
Dude that runs AZ Association of Mortgage Brokers: He was just there to pimp for regulation requiring all mortgage brokers to be licensed (cut down competition?) and to pimp for FHA to be opened up to taking all the loans his guys want to write.
“It won’t be that bad, unless we have a recession.”
A recession is “in the bag” at this point. Exactly why so many think they can simply wish away that eventuality is testament to how precarious the situation has become.
Recession Memo is not set to hit the street till after summertime fun. You cant direct the sheeple to not go hog wild all summer if a recession has started.
I agree, these things do have a seasonality aspect about them. Can the system be juiced enough to save the critical holiday retail season though? It will be interesting.
I recently went house hunting in an area that has had less bubble-ation, hoping to cash out my California bubble house and get me a cheap spread.
The realtor was pretty clueless about what was going on. “Prices just suddenly started going up about 5 years ago. We don’t know why! Giggle giggle”.
The mortgage broker said he could still get 103% financing for non jumbo loans. Either he’s way out of touch with the current scene, or just stroking me to get my business or we are in serious trouble that these practices have STILL not been stopped.
I guess as long as the Chinese buy these toxic loans, the party will continue.
“ ‘The smaller builder, that’s who is getting caught. That’s who [has] overextended themselves,’ Holt said. ‘They bet on the market, that it was going to continue strong, and it’s working against them.’ ”
There are more under construction and completed spec homes (about 25) in our community now than at any time in the last 20 years. Local builders all got caught up in the mania in 2005 and 2006. Even a friend got caught up, buying three lots and building a still-unsold spec home on one of them.
I guess it won’t be long before they start going back to the lender. With somewhere over a thousand homes here, we won’t see the community bulldozed, but existing home prices are gonna take a hit when the lenders put those homes on the market. Glad we bought a rock-bottom foreclosure here two years ago.
We bought our last house at the bottom of the last cycle. It was only 150k. A peanut vendor could have qualified for it. Those were the good old days and there was no real “crash” behind those low prices.
Just wait until the foreclosures start to mount. It’s going to be like an avalanche when the mainstream media starts blabbing about it. We haven’t reached the steep price drops. Not even close. And those that sit back and say, “I’m glad I don’t have to sell” will be in for a surprise when they lose 60% of their home value for 10 years or more.
I can only imagine what the foreign investors now think of American financial products. That’s probably our most important export and now it’s been trashed by greedy bankers who conveniently ignored the fact that the AAA securities really weren’t secure which they knew all along. “Everyone else is doing it. We have to also to remain competitive”. Hey, isn’t one of those guys now really high up in the government or something like that?
The only thing that’s going to save housing is foreigners coming in and buying our cheap property with their strong currencies. Hope your property is somewhere rich foreigners want to live. I hope no one tells them Hollywood isn’t what it used to be.
I guess the so-called Activist Fed may have to shoulder some burden by FAILING TO ACT, now…..lets mange the crisis by a brand new playbook.
Turning to Page23, Paragraph III, Part 2, Section A, Subchapter b.
When in doubt, sound the alarm, point fingers, and hide under desk. Dont forget to shutdown the computer after liquidating assets.
“I can only imagine what the foreign investors now think of American financial products. That’s probably our most important export and now it’s been trashed by greedy bankers who conveniently ignored the fact that the AAA securities really weren’t secure which they knew all along.”
I agree that this is the aspect of this whole crisis that scares me the most…why would they trust our products anymore? and what happens if they decide they won’t buy anything with mortgages packaged in it at all anymore?
That is very good advice for anyone thinking about moving anywhere. Research the area thoroughly prior to packing your bags.
My personal specs are absolutely geared for wet, cool, damp climates, since all my ancestors came from just about the North pole and I’m maybe 2 melanin cells away from being an albino. And I love rain, love love love. Pretty fond of wetlands, too. Washington state is the place for me.
Last year I met a woman, of course from California, who had visited relatives here in July, which is dry—although not this year, had some freakish weather this year– and had immediately moved up here because she just adored all the big pretty green trees. Whereupon the very brief dry season ended and the skies opened up again in a massive deluge of pouring rain. Where did she think all these big pretty green trees come from? Dragged out every morning by Mexican yard workers and arranged prettily for the viewing pleasure of pretentious, elaborately made-up Californians with fake tans and plastic breasts?
She was mad. She felt she had been tricked. And she was ‘going back to the decent weather’.
I struggled to control my tears.
I love Seattle weather but I am in FL. It’s wet, but hot and humid ICK! However, we have great winters.
I struggled to control my tears.
Tears of glee, perhaps. Hee hee hee! Yes, you have to wonder what goes through people’s minds when they move somewhere based on their impression of a couple of weeks worth of weather. Heck, the first time I went to Scotland, it was sunny and dry for the entire week, just beautiful, unlike the rest of rainy, cold Europe. That didn’t mean I was was ready to move to Scotland and ignore years of climate data indicating otherwise.
Ah well, that friend did no more research on her move to the Pac NW than most people do on their mortgages when buying…
Sorry, I meant to post that further up as a reply to NYCityboy and his question about why everyone moves to the Carolinas sight unseen.
“He’s no longer working on spec, ‘due to the tightening of the credit,’ he said. After deciding not to build on a half-acre lot he bought in Essex, he’s been trying for a year to unload the land, knocking his price down by about $30,000 to $209,000.”
This is a misprint right? 209k for a friggin lot? These people are right out of their minds.
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