The Crazy Appreciation Is Now In Reverse
The Daily Breeze reports from California. “The South Bay MLS of properties for sale shows more homes with reduced prices, and more cumulative days on the market. So why are collective median prices in the South Bay and Los Angeles County mostly going up if an increasing number of list prices of individual homes are going down?”
“‘More than half of cities in Los Angeles County actually have year-to-year declines,’ said Robert Kleinhenz, deputy chief economist for California Association of Realtors. ‘The higher-ends make up a larger share of sales distribution by price range, so that affects the calculation of median price.’”
“‘I see (situations) where nobody is buying a house,’ said Warren Snyder, co-owner of Carriage Realty, based in Torrance. ‘You now have houses for four and five months on the market, and you get one or two offers and they are 20 to 30 percent below price.’”
“‘Anyone out there buying a house is making offers that are absurdly low compared to what we had before,’ he said. ‘The sellers just aren’t used to that. It will take a long time for sellers to adjust.’”
“Snyder has sold real estate in the South Bay for 45 years, and believes he is witnessing the fourth housing downturn in his career.”
“‘This one will be the worst we’ve ever had,’ Snyder said. ‘It will involve so much more of the economy than ever before. So many owners have turned homes into ATM machines. If you’d done loans 10 years ago the way they’re done today, you would have been thrown in jail for fraud. So many people are in houses they can’t afford. This will be a tremendous problem over the next 18 months.’”
” ‘I believe the death spiral is on, and it will deflate values in real estate,’ said ‘Kyle Kazan, who owns Beach Front Real Estate Services in Long Beach. The company either owns or manages 2,000 apartment units in Los Angeles and Orange counties, and invests in properties in other states and foreign nations. His company’s combined portfolio is worth more than $250 million.”
“‘The crazy appreciation in real estate in the last few years is now in reverse,’ Kazan said. ‘None of the South Bay is as much of an island as people believe. We’re all pretty well interconnected and tied together. The outlying areas get hit worst and first, and then the flu spreads to more densely populated areas of Los Angeles and Orange counties.’”
The Daily Bulletin. “When Southern California’s residential real estate market began to slow down, it forced developer John Young…laid off about 40 percent of his workers at Rancho Cucamonga-based Young Homes. ‘Unfortunately, in our whole division we’ve had layoffs,’ said Young, the company’s president. ‘They’re all over the board. It’s progressively gotten worse.’”
“In the Inland Empire and the Antelope Valley, foreclosures are soaring and causing financial misery for families who just a few months ago celebrated moving into a home. The South Bay, long a lucrative enclave that usually rides out each wave of a downturn, now shows signs of some pain and no gain.”
“‘They (buyers) are having rough times right now just because the loan programs are changing by the hour,’ said Kelvin Munemitsu, VP of lender Value Properties in Woodland Hills. ‘I could have a loan program set up with a major bank in the morning, and by the afternoon that loan program no longer exists.’”
“A pursuit for Rick Izquieta, CEO of Beach Lending Inc. in Redondo Beach, is foreclosure sales. ‘The biggest problem now is the lending,’ Izquieta said. ‘The question now with buyers is can they get the loan to (buy) the home? I don’t event mention zero down. That’s not even in my vocabulary anymore.’”
“Steve Thomas, owner of Rancho-Cucamonga-based CIG Property Management and Investment, has a wide range of job candidates to choose from: loan processors, loan officers, brokers and several applicants with various bachelor’s and master’s degrees.”
“It’s a good example of the plethora of jobs that sprung forth from the recent housing boom, only to be extinguished by the market’s downward spiral, Thomas said.”
“‘People who didn’t know anything about (real estate) were jumping into it,’ he said. ‘It means the plane was just about to go down.’”
The Daily News. “President George W. Bush’s pledge to rescue some homeowners from foreclosure rallied Wall Street on Friday, but got a cooler reception from Los Angeles County borrowers who might owe too much to benefit from federal assistance.”
“‘Right now we’re seeing 30-40 calls a day. And 85 percent of these families we can’t help, simply because the gap of what they can afford and should have been able to afford is so huge,’ said Ester Cadavid, chief development officer of Los Angeles Neighborhood Housing Services. ‘They bought too much house. Even if we refinance them into a fixed-rate (mortgage), the payment is still too much.’”
“‘It would be useful if the government would end its encouragement of borrowers taking on a huge amount of debt,’ said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University at Pomona.”
“‘Ultimately, if I had to decide, I’d let the market do its work. Do you want the government to bail out everybody who makes a bad decision?’ he said.”
“Folks with low-wage jobs and bleak prospects somehow thinking the housing boom could put them in the proverbial big house on the hill? Or was it more a case of always-optimistic Californians trying to grab their share of the dream?”
“‘Homeowners make a lot of sacrifices to buy their first homes,’ said Pat McKenna, mortgage broker in Montclair and Ontario. ‘There may have been a real small percentage of people who thought they could sell or refinance if they couldn’t manage the payments, but mostly I think that was investors.’”
“McKenna has overseen funding of more than 6,000 home loans in more than 20 years in the business. Most of them with first-time buyers. ‘I really think the biggest problem is that most people truly don’t understand what they’re getting into,’ she said. ‘Your typical first-time buyer is not that savvy.’”
“Colleen Badagliacco, California Association of Realtors president, pointed out that while a limit of $417,000 for federally insured loans would certainly help in places such as the Central Valley and the High Desert, it wouldn’t do very much to help in the state’s major metropolitan areas.”
“‘Does this solve the problem? No. Is it better than nothing? Yes,’ she said.”
“In the end, it is about the borrowers, whether or not they thought they could afford the properties they purchased. ‘In a way, Bush’s proposal is something of a Band-Aid,’ said Todd Tatum of American Housing Group in Victorville. ‘I think it’s a good step, but I don’t know how you can determine whether someone really thought they could afford the house they bought. Anybody you ask, they would tell you they made an honest mistake.’”
The Tribune. “In real estate circles, Pete Gliniak is known as the ‘Short Sale King.’ ‘You can take any house in any neighborhood and determine the price it can sell for in today’s market - not what it used to sell for - but now,’ the La Verne resident explained. ‘Then you deduct the normal and traditional selling costs. If there’s not enough left to pay off the house, you put together a short-sale package.’”
“‘If there is a $400,000 loan on the house and it sells for $350,000, that minus the costs would make it around $300,000,’ he said. ‘If the bank doesn’t accept that, they will have to foreclose and resell it. But by the time that happens, the house might be worth $30,000 less.’”
“And for homeowners who opt to go for a short sale, the financial information that’s presented to the bank is a little different. ‘Instead of putting together a packet that shows how (financially) strong you are, this will show how distressed your situation is,’ Gliniak said.”
“Gliniak, who has worked in the real estate industry for 30 years, stressed that sellers can resort to a short sale only when all of their other options have been exhausted. In most cases, they’ve already depleted their bank accounts, tapped out all family resources and are not eligible for bankruptcy, he said.”
“Gliniak receives 10 to 15 leads a day from real estate agents, brokers and attorneys who have clients they feel are prime candiates for a short sale. But as more and more homeowners fall behind on their mortgage payments because of loans that have reset, Gliniak figures he’ll soon see 25 to 30 requests a day.”
“That doesn’t surprise William Moran, a spokesman for the California Department of Real Estate. ‘Notices of default are up considerably in California from a year ago or two years ago,’ he said. ‘There is definitely a need for short-sale services.’”
Strange. Our government cannot provide health care or basic services to the poor but they can bail out real estate speculators.
off topic, for a holiday weekend Mr Ben, you sure are smoking out the stories today.
I can’t believe the amount of material out there. BTW, I am putting together some posts for tomorrow as well.
Mr. Cup, let me introduce you to Miss RunnithOver.
““‘I see (situations) where nobody is buying a house,’ said Warren Snyder, co-owner of Carriage Realty, based in Torrance. ‘You now have houses for four and five months on the market, and you get one or two offers and they are 20 to 30 percent below price.’”
Am I the only one who read that as “Carnage Realty” the first time around?
Labor Day stories for all!
Thanks, Ben. Also appreciate the linkage. Have learned to not talk too much about all this - people are in a denial/panic phase out here in Coachella Valley - fingers in the ear la laing. People get really pissed when you try to dispute the talking points they make nearly word for word from MSM.
Thanks for the effort, Ben…
Off topic but how many have noticed a change in the way they are viewed by other people? I used to speak about this stuff at work and people would look at me like I was crazy. Now when I speak I see fear in their eyes because they are worried that what I am saying is still so negative and everything I’ve been saying has come true. I don’t waffle at all any more just to spare people’s feelings. I just say, “no you are wrong” and let them have it. When this is all done people will say about us, “I wish I had listened sooner”. What a great feeling to have.
likewise; I’ve had several people at work come to me and say “you were right!” LOL
I know whatchya mean, NYCBoy. It’s hard not to laugh in people’s faces when they treated you like a moron and you turned out to be right. But be careful. As our economy continues to go south, and the layoffs begin, you do not want to be the guy that makes your boss feel uncomfortable. Try to stay friends with everyone.
NYCB, I have a friend in Vegas, where I lived a few years ago. At least a dozen times we got into discussions where I would warn her about the housing market, and she would argue that I was missing the boat. I moved to L.A.; she bought a second house in Vegas. Last time I saw her, she asked me for advice on short sales. I did manage not to smile, though.
Hey Ben, if you need a suggestion for tommorrow, as I put in the last story, Fed Governor Mishkin is lobbying for a bailout to “help prop up home prices”, it is front page in alot of the financial publications of the last 1-2 days including Financial Times and Conde de Nast.
Just because it’s a holiday, that doesn’t stop people from not paying their mortgage.
Ben: appreciate all the info, no excuse to be blind to the problems in housing. Many thanks. Since the shrub spoke last Friday, the NY Times has been going NUTS over the foreclosure problem. Gee, it is well known here. 2+ YEARS ago they should of been enlightening the masses about sky high prices, suicide loans, fraud, mortgage hucksters (think Countrywide), the coming ARM resets, … well exposed here?
Speaking of Countrywide, it’s been kinda quiet the last few days on them. Anyone know of any updates on their situation?
Hailey:
I’ve been thinking the same thing. Last Friday night, I heard on the news that the CFC-BAC deal was basically nixed by the regulators. Since then, I haven’t heard an update. Did BAC retract the offer or go through with the castrated version? Seems the MSM only does a story when a newswire comes through.
GOVENATOR:
“I have been working closely with GB , and the FB homeowners behind in payments and things in Callifornia. Many of yous have told me ‘noway dude!’ to assist the speculators and such. I agree. Therefore, I am implementing stateoffaults Lieonceshameonyou Order #86, which will set up a toll free hot line for yous to report any person you see….who are known speculators and liar loans users…. and things, and who are trying to get free bailout monies….and I will personally Terminate their activities and such….. in my spare time….and with one hand. End of problem…..and they won’t be back………hahahahahahahahahahaha”
PRESS: What else do you plan to do to help Cally FB’s?
GOVENATOR: “ I also will be implementing stateoffaults pricesonlygoupincally Order#13 which automatically add $500,000 to ALL home values in Cally…..then they can all continue to use their homes as ATMs and such…..and Cally economy will boom”
PRESS: Brilliant Governator……just f$&@#%* brilliant!
The government couldn’t provide basic services to me either, so I decided to get a job and provide my own basic services.
joe momma - why would a government be expected to provide health care or basic services to anyone?
government is there to govern. that means make and enforce laws, administer the education system, provide military defense against threats to our country. that’s it.
thats not the way i look at it at all. government should be there to provide for those less fortunate. i also believe government should provide health care for all americans. the health care system we have now is wasteful and broken. as for military defense so much is wasted on wars, and armaments to maintain this so called ‘empire’/ Plus the weapons systems are very very expensive. why do people not cry about a trillion dollar star wars system that doesn’t work and complain about a poor mentally demented homeless person who can’t get a bed to lie in. A big disconnect as far as i’m concerned
do you count those people living on welfare for generations to be less fortunate? nobody is saying to throw handicapped people on the streets. i’m against lifetime welfare for perfectly healthy people. i’m also against wasteful spending in all facets of government. how about you?
you bet i’m not for wasting money. but i’d start with the corporations and work my way down. then i’d look at the military budget and thats where we’re really wasting it!!
actually health-care and military adventurism is about equal in annual costs.
jerry: as a left-libertarian my basic political philosophy is that government should be in the business of ensuring/encouraging every one of its citizens to become and remain a productive member of society.
Free market fundamentalists forget that the market is great at efficiently providing for our wants (40 shelf-feet of toothpaste in the store), but not necessarily our needs (granny’s hip replacement).
Seriously, the energy bill, the prescription drug benefit bill, the new bankruptcy law… it’s just screw the taxpayer, shake em upside down while big business holds open a big sack to collect the cash.
Actually, that trillion dollar Star Wars systems has been proven to work. Besides, I would rather have a trillion dollar Star Wars system sitting in my garage unused than a nuclear holocaust in my backyard for the world to see.
Military spending also has a lot of cross-over civilian uses. Data-links, GPS, radar, night vision (law enforcement), satellite communications, etc., etc. You can’t ship engineering jobs that work on military systems overseas. So it is a good thing.
Expect to see a government sponsored health organization (similar to Fannie Mae and Freddie Mac) in the next 20 years. Not because Democrats or the left or anybody else that is considered to be in that camp is doing it for the poor. Expect to see it from the conservative side, which will be the only way that it will be allowed to happen. Businesses are going to be begging for it so that they don’t have to pay so much for employee health insurance (essentially taking it off of their books), county and state governments are going to beg for it (so their pension plans don’t go under), and Medicare is bankrupt.
Welcome to Republicanism, folks. Oh well, at least we’re lucky enough to have a Republican in office while the housing market corrects itself. This way we can rest assured that the forecosures will not stop. Only a Democrat would bail out a silly homedebtor. This is the only decision by George W. Shrub that I’ve ever agreed with. Help out a few truly deserving people and let the rest eat cake.
You have to right to vote those people out of office and get your people in office. Americans deserve the laws they live under. That’s why I’m a rabid independent. I’ll vote against anyone who votes against the best interests of the working man. Too bad many Americans are more loyal to their political party than they are to their own country.
I wonder how many of these serial refinancing, Hummer-buying, big screen TV watching FB’s neglected to buy health insurance “because they could not afford it”?
Jerry… americans do not deserve the laws they live under because most of the worst laws were passed when a president was elected due to a spoiler canidate.
Income Tax, Federal Reserve signed into law by Wildrow Willson who would have lost if the banks hadn’t sponsored another canidate (in addition to Wilson) to divide the opposition vote.
Same problem with the New Deal and Social Security.
Even now we see daily how our media lies and manipulates the public to promote the agenda of their owners (big coorporations and banks).
No, the American people do not deserve this government and these laws.
“Actually, that trillion dollar Star Wars systems has been proven to work.”
When was it “proven” to work? I don’t remember a nuclear missle attack being stopped.
Carlsbad Renter:
The system was not proven to work. In fact, in secret reports and memos from physicists, the feasibility and even the physical possibility of certain parts of the system were questioned from the beginning. In the end, the Pentagon published certain parts of a report which made it look like Star Wars (SDI) was doable and suppressed the rest.
The government lied to you, and you bought it.
More recently, the government, after several distressing failures in testing of various parts of their missile defense program, rigged up some tests to try to convince some members of congress that all the money flowing into Raytheon, Lockheed Martin, Litton, etc, was worth it. Yet even the rigged test was considered a collossal failure and a joke by rocket scientists and informed members of the public.
I do have a personal connection to all of this … a close member of my family is a physicist (as I am) and used to work for defense subcontractors. He was furious in the 1980’s that the Pentagon was able to swear him and others to secrecy about the utter uselessness of SDI while waving around a sham report to play politics. (He did not tell me about it until more than a decade later, when a lot of these secrets were becoming public knowledge.) It was a corrupt abuse of the principle of defending national security.
(As you may recall, SDI damaged relations with the USSR anyway by undermining MAD–it was not as if this fake weapon was providing some kind of protection. Furthermore, the USSR had scientists too, who surely could have run through the same calculations. There was a lot of uncertainty on both sides about the level of their science and their technology, but certain basic facts about Nature are universal … no matter what The Gipper may have thought about it.)
SDI was a giant, useless waste of money. The B2 bomber, which has a ridiculous vulnerability to atmospheric H2O (wtf!?), was another giant, useless waste of money, as were the $1000 toilets and the most recent adventure with unmonitored credit cards being handed to petty officers.
One can argue that the ICBMs helped bankrupt Russia brought about an end to the USSR. (The conclusion may be true: though I’ve never heard this argued by anyone who was not a partisan, still it has the ring of plausibility.) After all, the ICBM is a weapon which works–devastatingly. China today is feverishly developing them. North Korea wants them (though it lacks, it would seem, the means). But SDI is a crock of crapola and always was.
Less fortunate need to provide for themselves or they will always be “less fortunate”.
ah the blame the victim arguement. Listen we could do so much with our wealth instead we piss it away on suv’s and mcmansions and consumerist society. total wasteful society its really sad. we should be building solar fields in the desert and provideing housing for all those homeless. Life is short. lets take care of our brothers and sisters
so how many houses have you built for the homeless?
i was once poor, but i worked my way out instead of considering myself a victim and waiting for guvmint handouts.
I helped build 5 of em. Habitat for Humanity. Jimmy Carters outfit
actually it wasn’t for the homeless it was for low income folks. there are some interesting things being done for the homeless in some rural areas in this country. If only we could make it a priority. no we’d rather dick around with laser weapons. sad really.
But Melvin, if we provide free houses for the homeless, then no one will want to work anymore. Why work when you can get a free house? And once everyone catches on a quits their jobs, then who will be left to pay for all those free houses?
silly me. i’ve been working all this time when i could have sat at home and waited for a free house and free welfare.
i wonder why all those people without jobs aren’t out building free houses for themselves? so they sit at home and wait for people with jobs to spend their weekends building them a free house. something seems out of whack.
those poor unfortunate people having to ride the gravy train all though life while we fortunate people work and pay taxes. i feel so guilty
http://tinyurl.com/2lkwpa
Here it is. On one side is unaffordable housing. On the other side is the government trying to prop up home values. Aarrrggghhhh. They are so dumb.
hey i’m not trying to make ya feel guilty jerry. and i don’t know if you’ve been to an inner city lately but the places are cauldrons of violence, frustration and poverty. what causes it? hell its a complicated problem, some of it racism some of it generations of welfare families, some of it is shipping jobs to china instead of keeping the jobs here. as for a free house and a gravy train and sittin’ home waitin, you are exaggerating the comforts. the houses i built were not exactly in a hood you’d ever see. at night the bullets are flying o’erhead. are these people less fortunate than me a nice middle class white guy who’s been to college too. yes they are.is there an extreme gap between the rich and the poor…humongous and getting even worse. Lift up the bottom is my philosophy but hell im a minority so don’t worry about it.
Hey Big V
most of the homeless are mentally ill, indigent or addicted or war vets. when we talk about housing a homeless person we mean a room. the kind with a roof and 4 walls, running water nothing fancy but it is luxury to many who spend long periods of time out in the streets. People like you and me.
i grew up in the ghettos of houston and worked my way out. there were bullets, police helicopters and all the comforts of a warzone. i wore shoes with holes on the top and bottom. every pair of pants i had was patched. the thing is, anybody who wants to get out is able to get out. i worked my way through college and grad school. that’s why i don’t buy any of the excuses of the system holding people back. i lived amongst those people and many of them don’t want to get out. they were happier smoking crack, collecting welfare checks, and robbing hard working people like me.
Last time I checked the US Constitution, the American government is not supposed to provide health care to the American public. Perhaps it’s in the North Korean Constitution to provide health care to Koreans though.
yes it is in the consitution!!! promote the general welfare!!!!
provide for the common good!!!!!! not the good of Halliburton but for an average hard working ass busting middle class schmo
we have 20 MILLION people in the country without health care!!!!! Thats one in TEN.
they didn’t mean a lifetime of free housing and food stamps when they said general welfare. i’m against corporate and personal welfare. government aid should only go to those who truly cannot work, not those who do not want to work.
20 million out of 300 million is one in 10?
also, try breaking those numbers down and you’ll see how many illegal immigrants, self-employed and rich people are counted amoung those who do not have health insurance. even medicare says that 4-5 million people qualify for aid but do not bother to apply. they prefer to go to the county hospital for free care whenever they need it.
the government cannot run amtrak, cannot provide food and water after katrina (walmart got trucks there immediately), yet people want to put their health in the hands of those nitwit bureaucrats. government bureaucracies is where people go to work when they can’t make it in the real world.
Hi Melvin:
It’s actually a matter of opinion whether or not government-provided healthcare would be better for the common good. Perhaps sky-high insurance premiums are exactly what we need to steer people away from using insurance and back to paying for their own services. Once that happens, the law of supply and demand will once again apply, and the costs of healthcare can no longer remain unaffordable (kind of like housing).
One must not interpret the Consitution with an eye towards justifying one’s own political agenda.
I have no agenda just too many opinions. and yeah why not interpret the constitution the way i want to. certainly the common good stinks in the country. we have a corporatist government now it favors the rich and the rich corps. if you don’t think i’m right then you’re in neverland. I look at it like this.. we got the fire department and the police department basically socialized public works. I think socialized health can work. Have you been to Kaiser Permanente recently now thats a great health care provider.they should set the model for health care in this country. just my two cents..or was that 4 ?take care.
I have Kaiser with a $100 a day copay on hospitalization, a $2000 general deductible and for this I pay $509 a month for my wife and I. I actually think ALL medical coverage should work like this and discourage frivolous use. It is about time Americans had some skin in the cost of medical costs.
Gotcha beat. $4000 deductible HSA with no nothing paid under that. About $400 a month but we put another $400 a month into a tax free health savings account. I agree Americans should have some skin in the health costs or they overuse it.
If you think Amtrak stinks, try riding Greyhound. Or, better yet, try contract negotiations with one of the bigger railroads. Puh-lease.
Most of Amtrak’s on-time performance problems (the “measured in days” kind) are due to intransigence by the RRs. Of course, why should they care about safety and efficiency when government is always leaping into the breach to prop up the line-haul trucking industry.
“Oh, sure, run three-trailer trucks on the interstates. It’s not like they have any strategic importance, and besides, the states are the ones who have to maintain them. ” (Damage to roadway is proportional to axle weight by a power of 4.5! Thousands of cars do not equal the damage to the roadway caused by one loaded Class A tractor trailer. Conversely, the expected lifespan of railway rails is 20 years, after which the rails can be turned over and used for another 20, or more, depending on the amount of traffic.)
Congress also put a noose around Amtrak by MANDATING the costly NE Corridor project. An incompetant contractor won the contract by playing politics (costing the public millions). And, in the end, Congress refused to pay for the project, saddling Amtrak with, I believe, billions in debt service payments annually.
All passenger rail worldwide is run on subsidies, but some countries (*cough* Germany *cough*) run their systems better than others. Britain did experiment with privatization. A quick Google will let you know how well *that* went.
I have been following Amtrak for many years. They have had able management and remarkably little partisanship, as Amtrak support cuts across party lines. (Except for McCain, who fought Amtrak as Amtrak has no service in his state, and later Bush and Mineta who tried–and failed–to destroy Amtrak with a divide and conquer strategy.) Amtrak has been dedicted to doing more with less and they have done an admirable job, growing ridership and improving revenue along many corridors. Now, are some of the crews lazy and hold up trains unnecessarily? I would say yes. The NYC–Boston crew has a totally different attitude from the DC crew. But most of the airlines suffer from crummy service as well. (The Delta Shuttle crews who were facing possible job cuts just when Acela was first rolled out provided the worst service I’ve ever had the misfortune of enduring on an airplane.) Amtrak should probably try to take a few lessons from Southwest Airlines. But many of the crew members I’ve met on cross country trains were as courteous, friendly, and full of personality as Southwest crew people.
Most people who ride Amtrak regularly love it, which ought to tell you something. The tragedy is that so many major metropolitan centers in the US are not adequately served by rail. NARP (of which I am a longtime member) has just rolled out a vision campaign for Amtrak which includes adding service on existing, in-service ROWs to many of these neglected population centers, restoring rail as a viable alternative.
As an economy, we can keep wasting money on more giant, expensive highways, with more congestion, wasted gas, pollution and ruinous maintenance costs; we can keep wasting money on oversized cars, oversized houses, and oversized portions; or we can spend money strategically and frugally by investing in cheaper and more efficient rail transportation, by limiting exurb growth with impact fees and preserving income-generating farm land, by allowing apt blocks and small SFRs to be built (you wouldn’t believe the roadblocks to this in NE), by funding programs like CHIP and Head Start and the subsidized school lunch and physical fitness programs instead of waiting for the little brats to turn into little hoodlums and paying in lives and destroyed property and police.
Europeans do not have giant cars and giant houses or even giant highways. (They have highways, but with more modest land-taking and modest traffic.) This is because their governments do not subsidize SUVs, and they do not subsize highways on the same scale. They have pulled back from air subsidies, since high-speed rail is cheaper. According to NHZ they have been subsidizing housing and a lot of new building is evident. If so, they are probably going to suffer for the oversupply just as we do. When they subsidized the universities, they provided direct funding and no tuition, which seems to control costs in a way that the Stafford-loan-armed bidding war of the last thirty years has completely failed to do.
We can do better than this. Providing giant loans does not make things more affordable. Ditching Freddie and Fannie, not bailing out lenders (shame on you, Duval Patrick!), and, quite frankly, getting rid of the FHA would be the first steps to making housing more affordable. Overturning that Supreme Court idiocy about allowing imminent domain in order to increase property values would go along with that. I support punishing the fraudsters, too, but it was easy credit that made it all possible.
On education, getting rid of student loans would immediately change the ballpark. The state schools–the land grant institutions–have utterly ignored their charters. They need to be brought to heel. The private schools, who have gone increasingly lavish with all that loan money coming in, might actually be relieved to go back to spending money on academics and not on millions of glossy brochures, ugly new buildings, “luxury” dorms, new trees every year (oh my!), and redecorating the trustee lounge. Let’s not even mention the athletics programs. The state of American colleges and universities is utterly dreadful and couldn’t come at a worse time, as India and China, Central Europe and Northern Europe, finally catch up to the United States.
I paid about 175% in tuition in one academic year (2001-2002, fall and spring semester) as it will cost me to live for ALL of 2007. OMGWTF? Excuse me, but I did not cost them that much to teach. (I wasn’t even living on campus!) I could have bought courses a la carte for less, but I had to go full-time to get that **** diploma.
Melvin,
Read that phrase again: “Promote the general welfare” was a very carefully set of words. Somehow I don’t see “provide” in that phrase.
wonderful. another of Ben’s topics hijacked.
“if you don’t think i’m right then you’re in neverland”
Wow Melvin, maybe we should all wear Arm Bands and march to your drummer. With a statement like that, dialogue is finished without beginning.
At least we can always count on Bill in PHX for yet another tedious “You’re a commie” sneer.
LOL I’ve begun to think that Jerry from Richardson and Bill in Phoenix are the same person.
Bill in PHX is my conscience. He works hard as a contractor, and because of that is paid a fair salary. He self funds his health insurance and retirement after paying high taxes and SS. He is so very disciplined and responsible in his life. I am interested in his opinions. I sure wish I could meet his standards.
A civilized rich country like the US does a poor job providing reasonably affordable health care to its citizens. Healthcare costs in the US are double per capita as compared to Canada where there is universal healthcare coverage. Insurance companies are a huge part of the problem.
Anyway, why do important issues always have to be distorted with a “Communist” or “Socialist” slight? Public health is in everybody’s interest.
“Last time I checked the US Constitution, the American government is not supposed to provide health care to the American public”
Heck last time I checked the Constitution, the American government isn’t supposed to invade other countries on a whim, torture people, create a worldwide clandestine system of jails/’interrogation’ centers nor illegally spy on it’s own citizenry either.
And yet THAT hasn’t stopped anyone now has it?
So where in the Constitution does it say we can’t invade anyone we damn well please, on a “whim” or on whatever basis we choose?
Read the part about declaring war.
“joe momma - why would a government be expected to provide health care or basic services to anyone?
government is there to govern. that means make and enforce laws, administer the education system, provide military defense against threats to our country. that’s it.”
Hey break, I don’t know about you but I really don’t mind us building roads communally, cause I can’t afford to build my own highways. I also like those signs with arrows they put at the bend in the road so I don’t drive into a ditch at night. As for the water system, I could do that myself, because I have training in that area, but a lot of people don’t and I can tell you it’s generally more expensive to build your own water and wastewater system than it is to use a municipal one. So, some of us kind of like these services, and there are cases where we collectively can provide them more economically than we could individually.
DP
If a man is not wise enough to run his own affairs well enough to provide for himself, it is not a hell of a leap of faith to assume another man is any wiser?
I will never trust another man - or woman - to run my own life any better than I can. If I need help, the only person I trust to get me out of that bind is myself. I’ve seen enough of my fellow humans to know anyone offering help - or a handout - is going to want something in return. Vegas has a vig for a reason: everyone - and everything - has a price. Nothing is free.
I think the g’mnt should provide some basis services like electricity, water, etc. After all, it was the g’mnt that kowtowed to the utility companies and set it up so that we almost HAD to subscribe to those services in order to survive in society.
Watch as people start wasting more eletricity and water because it’s “free”
Of course, here in San Diego, we pay ANY PRICE the local utility sees fit to charge. Rates are up 500% in 7 years. Free market economics DO NOT WORK in this case, since there is no competition and electricity is a basic need.
We should go back to the managed monopoly system, where the government set the rates the utility could charge in exchange for the sole right to provide service. It may not please the commies or the free-marketistas, but it worked.
i guess it’s not so strange.. these folks are anti-humanists. hardhearted scrooges
Yes, I’ve seen the other side–Soviet Union, N. Korea, and Venezuela. Very humane.
ah the commie rap. how about canada or france or cuba with health care for all. whatever. i’m not going to get too steamed about it this country has turned into a Scrooges Empire long ago. Sad actually. The richest nation on the planet and in the bottom rung for health care. support the system that leaks money like a sieve because people have to go to an emergency room for a sprained ankle/ also most of our kids are uninisured another sorry page. guess i’m just a commie or some such bs
Generosity is hard wired into people in this country. I used to care but things have changed!
Melvin:
The US is absolutely not on the bottom rung for health care. Although some services are paid for in Canada, France, etc., most services are not available at all. Canadians are known for coming into the US and paying for medical services with their credit cards becuase said services are simply NOT AVAILABLE in Canada.
You mentioned that the only way some people can get free medical care (for a sprained ankle, etc.) is by going to the emergency room. Well, that’s just as good as what they get in Canada. If you want it for free, you have to go to an overcrowded facility and wait for a long time, and then get only basic care. Then it’s up to everyone else to foot your bill. The only difference between health care in Canada and health care in the US is that most people in the US have access to SUPERIOR care, whereas some people only have access to the same level of care as the Canadians.
we are $10 trillion in debt yet people keep saying we are the richest.
anyway, if canada and cuba are so great, why do more canadians and cubans migrate to the usa instead of vice versa? i thought they would be sickened by our lack of free healthcare
RE: The richest nation on the planet and in the bottom rung for health care.
Ah, I think there’s ah, $53 trillion in IOU’s to be paid which says we are no longer the richest country on the planet.
I also think we are now known as the world’s largest debtor nation.
You must be gettin’ your info from old Eisenhower election speeches.
Jerry:
Good point about the debt, although I think it’s 9 trillion. I wonder what our debt is like compared to others’, though. Might theirs be even worse? I really don’t know the answer, but it’s an interesting question anyway.
“People are screwed.”
-Big V
I don’t have strong feelings about this debate one way or another as I am a dual Canadian/American and tend to see both sides. The one point that is bandied about as a fact is the vast number of Canadians who come here for proper health care. Perhaps it’s true, but I’d be interested in seeing numbers. Admittedly it’s not a large enough sample for a scientific study, but I’ve never heard a single complaint from any Canadian relative about health care. (Though it does vary from province to province, so maybe they’re only in ones that have superior health care.) Having just spent $80 on nasal spray for my little girl, on top of a $45 co-pay (despite paying over $600/moth for health insurance), for a simple allergy, at the moment I think I’d trade it in for the system my relatives have in Manitoba.
yeah well how did we get to be the biggest debtor nation? i’ll tell ya. our money is sucked up by the military industrial machine thats how. instead of investing in things like solar energy and wind energy and housing and family farms and local communities that same industrial complex of oil/military/pharma/big agriculture has raped and pillaged us of our wealth. Eisenhower did have it right. beware the military industrial complex. we’re seeing it and they also have hold of the airwaves too so that makes it a clean sweep. they got the masses hypnotized and they got the minds of Americans in their hold. they’re not reading they’re watching NASCAR as their planet heats and melts the ice caps.
good points melvin
‘the government cannot run amtrak, cannot provide food and water after katrina (walmart got trucks there immediately)’
not this government
Hey Melvin,
Wipe the spittle off your screen will ya?
Paul
whatsamatta paul? talk to us
one can always tell when their beliefs have been challenged. they start using personal insults. kinda like rush limbaugh. weak.
Melvin, I agree with everything you have said here today!
Melvin,
Do you actually have any ideas of your own or do you just like to be spoon fed?
Since healthcare is a right under the Constitution, shouldn’t housing also be a right? Housing is much more important than healthcare. We should get rid of all the wasteful homebuilders and lenders and let government take over housing all Americans. They will decide what type of housing we need and where we are allowed to live. The same goes for food. Food is also a right that everyone should have access to. It’s wasteful how all these grocery stores exist to rip us off. We’ll just get rid of them and have government warehouses where we line up and get our weekly rations. That would make it much more fair and efficient.
Melvin is da man! Funny to see how sarcastic and defensive jerry and others get when their sacred opinions are challenged.
If you take your ego out of the equation and just look at things rationally, you will see that this corporatocracy we labor for does not act on behalf of the greater good. A good book to read (if you are able to adopt an open mind) is:
A People’s History of the United States 1492 - Present, by Howard Zinn.
Got this from Wiki:
In 2005 the public debt was 64.7% of GDP According to the CIA’s World Factbook, this meant that the U.S. public debt was the 35th largest in the world by percentage of GDP.[2][3]
Canadians are known for coming into the US and paying for medical services with their credit cards becuase said services are simply NOT AVAILABLE in Canada.
Well perhaps you might introduce them to me, because in my entire life I have NEVER MET another Canadian who has gone to the US for medical treatment.
All this crap that is spouted about the Canadian health care system by the US medical-industrial complex is a pack of lies.
Agreed, yogurt, and what’s more, increasingly Americans are travelling to India for major medical procedures.
Why? Because even with insurance, the under-insured (and uninsured) find it more economical to buy the plane tickets and pay top Indian prices than to pay outrageous American prices.
Indian healthcare is quite good (if you can pay) although they are rather freer with prescription drugs (which does keep the cost down, though I still have a paranoia about pharmacological substances in my food–I mean, look at this ginseng and ephedrin crap).
I have a friend who works at Shands [Teaching Hospital] and has all her dental work done in India. Ouch.
Until now I have had good experiences in the US healthcare system. I am insured through my company and the expenses and copays are ok, I have to pay but I won’t become poor.
I am not fooled by the opinion that European countries have a better health care system. I’m European, I have lived in Spain, UK and The Netherlands, being there, done that…their healthcare sucks and it is waaayyy expensive for the service and the worst thing you can sue or protest or do nothing if something goes wrong, you have no other alternatives either (except to go to the US).
Here is a bailout plan for you!
http://www.larouchepac.com/news/2007/08/22/larouche-proposes-homeowners-and-bank-protection-act-foreclo.html
The government absolutely can, and does, provide health care and basic services to the poor. Check out Medicaid and Healthy Families. It’s those of us who actually work for a living who have to pay through the nose.
“‘Anyone out there buying a house is making offers that are absurdly low compared to what we had before,’ he said. ‘The sellers just aren’t used to that. It will take a long time for sellers to adjust.’”
PB’s unsolicited editorial suggestion:
Anyone out there buying a house is making offers that are
absurdly lowincredibly sane compared towhatthe absurdly high offers we had before…“It will take a long time for sellers to adjust.’”
Somehow “Bubbles & drowning” seem likely to return to: “The O.C.”
1979
A hippo named “Bubbles” escapes from Lion Country Safari and takes up residence in a rain-filled pond. For several days, authorities attempt to coax her out and end up tranquilizing her, only to watch in horror as she descends under the pond waters. Their efforts to pull the tranquilized 4,000-pound hippo out of the water are to no avail and Bubbles sadly drowns.
http://thehousingbubbleblog.com/?p=3357#comment-909442
Sorry wrong link:
http://www.ocalmanac.com/History/hi01i.htm
Another good example of unintended consequences.
More like a good example of the loving hand on gov’t that Melvin FH wants forced on all of us so he can brag about being on the side of “the poor.”
Paul
And Stucco Bear beats me to the choice quote yet again!
Remember, if you’re not embarrassed by your low ball offer, IT’S NOT LOW ENOUGH !!!
Hi. I need some advise. My name is Mr and Mrs FB from San Jose CA. We each make $13 per hour. We had bought a new home in May 2005 for $850K. Our broker told us we had a fixed 1% loan with a $2000/mo payment. We believed them. Then our friend, “need 2 leave ca” came and showed us the truth from the actual loan documents. We had bought a neg am toxic loan. We bought because we were promised RE in CA only goes up. By now our home should be worth over $1M. We just got a letter that our pymt is going to $3500/mo. We can’t afford that, not with the truck, cc, and other bills. So, now what do we do. I just found out our house wouldn’t even sell for what we owe, yet alone above. That is, if we were even lucky enough to sell, as I see for sale signs everywhere. I guess I wasn’t the only gullible person here. So, HBB folks, what do I do?
That’s easy. Walk away and start over.
Wait until they rewrite the law so that you don’t get a 1099 for the forgiven debt and then, in the words of Pink Floyd, run like hell.
Yeah, it’s weird to realize that the B’s who are truly F’d are the ones that put down a substantial down payment. Bye bye $$$
The zero-downers get away with just a few scratches.
Well, they’ll have to come up with “down payments” for item they purchase in the future, including renting.
Disturbing suggestion in “Maxed Out”: renters using cash advances on their credit cards.
AFAIK this hasn’t been discussed on HBB. Ya hadta have cash to rent … right? But Maxed Out (the book) suggests that cash advances for downpayments and security deposits may be happening, perhaps often.
Ouch. Ouch. Ouch.
You have to walk away. Stick it to the morons that loaned that much money sight unseen.
Screw em!
‘Mr and Mrs FB from San Jose CA’
- You are dumbass’s … stop making any mortgage payments - plan on staying in the house as long as possible (6 months) and try to save for rental security deposit and rent. You will also need space on CC for moving truck and gas. Check with Ca social services for education funding / retraining.
He wrote this as a parody.
You sit in the house and stop making your payments hoping that President Bush and Congress bail you out.
Let me add to that
What makes you think that Bush will rescue you if New Orleans hasn’t been fixed for 2 years?
So help for FB will be on its way for another 2 to 3 years.
The reality is that they almost certainly put no money down, so they don’t lose a cent if they walk away. That is why all the talk of bailouts is nonsense. These people don’t NEED bailouts!
Ask the bank to do a short sale. If they refuse, file BK and let them foreclose.
I recommend you buy a hummer with some sweet rims.
Unfortunately, my story I typed is really true. They know nothing about HBB land though. That part of course I made up.
Apparently, if the mortgage doesn’t disclose the full cost of the mortgage up front as required by the Truth In Lending Act, the loan is no longer secured by the property.
Unfortunately, my story I typed is really true. They know nothing about HBB land though. That part of course I made up.
I want to see this story plastered on the front page of the Mercury from a different home buyer everyday… plus spots
on the 5 oclock news. I want this to last as did the 89 earthquake. never ending news story.. .I want to see abondanded
condos in Santana Row… oh the pleasure it would bring me…
I had a friend visiting from NYC, and for a lark we drove down to the Winchester House (tourist trap in San Jose), and we both laughed out loud when we saw the really stupid looking apartment/condo complex across the street.
Only later did I realize that ugly piece of crap development is the highly touted “new urban” Santana Row development. What an absolute joke!
Yeah, but only if the news promises to cast each FB in a really bad light. Like “Another evil flipper/dumbass dropout rightfully loses his overpriced house, making it possible for highly educated, responsible, working people to move in’”. Otherwise, it will just be fodder for HC to save the FBs and all their children. Ugh.
“‘Homeowners make a lot of sacrifices to buy their first homes,’ said Pat McKenna, mortgage broker in Montclair and Ontario.”
Is she kidding? All you had to do, the last few years, was sign your name on the dotted line. Sacrifice was when people actually scrimped and saved for the down payment. As a result they took the whole transaction a lot more seriously.
There are some people who really did lose their own skin, the folks who had a lot of equity or owned their houses outright and used the house as an ATM. They should have stayed the course, continued with the plan that had been working for them. But I don’t feel sorry for the people who didn’t put anything in and only lost paper value on the house and a few points on their credit score.
“used the house as an ATM” does not equal “make a lot of sacrifices”.
It’s one of them thar opposite thingies…
If they borrowed all of the equity out of their home at the peak, then they did not lose anything. They spent all of it and now the banks will be stuck holding the depreciating bag when they foreclose. The only people I might feel sorry for are the grandmas who got a boiler room call from a mortgage jockey who suckers her into an option ARM.
How is it that my 12 year old nephew is much less gullible and wiser than my 4 year old niece, and I am even far less gullible and wiser than he (at age 35). But as soon as somebody becomes a grandma and they get duped, they’re not expected to have learned from life’s experience?
I guess you’ve never talked to an old person before. Many are easily confused. Mental and physical abilities normally deteriorate with old age. I’m not saying that all of them were duped, but I’m sure many were. Others were just greedy.
Here’s an easy way to tell - if the oldsters took a cash out refi, they’re greedy. Period. End of discussion. I don’t care how senile they are.
If they didn’t cash out refi, they were ripped off.
RE: “‘Homeowners make a lot of sacrifices to buy their first homes
My -ex wife and I lived in a 10×50 60’s vintage mobile home for 5 years while we saved up a down payment.
Then we borrowed a whopping $43k to put up a shell and quasi-finished 1st level.
To finish the balance of the house we paid cash as it rolled in.
The extra bedrooms got done as the kids were born.
Took 12 years to finally get it all completed.
These chucks today…Gimme a McMansion, RIGHT NOW!
Screw ‘em all.
NO BAIL-OUT!
“Folks with low-wage jobs and bleak prospects somehow thinking the housing boom could put them in the proverbial big house on the hill? Or was it more a case of always-optimistic Californians trying to grab their share of the dream?”
- Californian’s feel that they have a ‘right’ to easy riches. The younger they are, the more entitled they feel.
We are the land of movie stars, rock stars, rappers, hollywood ….
Like the LA music producer turned squatter Jingle told us about who was dragged out of a vacant McMasion in Sacramento. I’d love to know what area that was in.
Or the gangs can come in the REO vacant houses, hook up power, and start growing marijuana.
Hey now, I think it’s mostly immigrants from other states that move into CA and think they deserve a pat on the back for it. Native Californians are usually a lot more level-headed than the Wisconians who ride in on a VW bug.
- Californian’s feel that they have a ‘right’ to easy riches. The younger they are, the more entitled they feel.
We are the land of movie stars, rock stars, rappers, hollywood ….
Hold on there Buddy! What Californians are you talking about? We natives are not like that. The dumb asses pimps you describe and i see are from the east coast. Get freaking real…
“Snyder has sold real estate in the South Bay for 45 years, and believes he is witnessing the fourth housing downturn in his career.”
“‘This one will be the worst we’ve ever had,’ Snyder said. ‘It will involve so much more of the economy than ever before. So many owners have turned homes into ATM machines. If you’d done loans 10 years ago the way they’re done today, you would have been thrown in jail for fraud. So many people are in houses they can’t afford. This will be a tremendous problem over the next 18 months.’”
But, here is an individual speaking the truth. I thought housing had never gone down since WWII (according to many experts). This man is saying his 4th. Who do we believe? I will place my bet with Mr. Snyder. He seems up and up to me.
I thought housing had never gone down since WWII (according to many experts).
I think that’s the claim that is made at the national level. Anyone who is more than about 20 years old knows that LA just had its most recent major real estate downturn only 15 years ago. All the more amazing that people decided to ignore that recent history and buy into a market that defied all common sense, claiming that it was different this time. It wasn’t.
We are no brighter on the East Coast. New York City condos went down 30% between 1989 and 1994. Yet nobody here believes prices will go down on this island, even now. Stupidity knows no territorial boundaries. People want to hum and whistle and never have to have a critical thought. Then they cry like children when their stupidity proves to be their undoing.
It is different this time. It’s worse!
“People are screwed.”
-Big V
It is different this time.
Previously America could rely on some other industry to bail it’s self out with. With all the outsourcing of technology jobs and running down the wages by bringing in H-1Bs with no loyalty to the country, Silly Con valley is really in for a hum dinger.
It is the same story in far to many urban areas — even Hollywood is outsourcing to Vancouver Canada for work to be done.
This time, there is a tinge of globalism to take into account when considering recovery.
Even Hollywood is outsourcing to Vancouver Canada for work to be done.
Not to mention Louisiana, Albuquerque, Toronto, Britain, Australia and New Zealand.
I just had another thought, will these proposed bailouts also include the people who took out home equity loans to buy BMW’s, vacations and other “necesities”?
The California downturns were
1974
1982
1991
There was also a move out of the cities like San Franisco to the burbs… prices in cities dropped like a rock.
“‘It would be useful if the government would end its encouragement of borrowers taking on a huge amount of debt,’ said Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University at Pomona.”
“‘Ultimately, if I had to decide, I’d let the market do its work. Do you want the government to bail out everybody who makes a bad decision?’ he said.”
We all know how we want to answer this question, but what is amazing is that the person who wrote it actually has ‘Real Estate’ in his title. I’m surprised he still has his job. But, the government will do just that, bail out the bad decisions, prevent people from learning from their mistakes, encourage a ‘blame someone, anyone else’ mentality, and once again buy votes with big government and encourage a wasteful welfare state-of-mind.
“neon kitty lips”
LMAO!
I would also tell my ‘friend’ to walk away and not to look back. Multiply this family by over a Mill and we have a picture of what this foreclosure crap is going to look like.
I am with Carney. Let the market decide. NO BAILOUT of any kind. Let the folks eat cake (or whatever crap is given to them). They wanted to speculate. Well, you lost. Don’t take my tax money to pay for your gambling addiction.
“They bought too much house. Even if we refinance them into a fixed-rate (mortgage), the payment is still too much.”
IMO this says it all. No amount of US Govnmt “help” is going to help them pay a mortgage on a house that they owe X, when the house is worth (X minus - depreciation). There’s no stigma for forclosure or personal BK. We all know they’re just going to walk away and there’s a wave of foreclosures coming in ‘08.
we could give a 50% home value subsidy from the government to all first-time buyers. That would reward us savers, allow the FB’s to exit their positions, and save the banks and upstream investors.
win/win/win/win. As for the additional debt, since when has government debt stopped anything. . .
lame, lame, lame
I want to buy a small starter home with cash in a few years. Why should I have to pay some blood-sucking bank points and closing costs? Because that is what your plan will entail. Prices will double. And who is a first time home-buyer? FHA says you haven’t owned (loaned) in three years. Whoop-de-doo. The BK is still on your credit report, but you can get a McMansion.
Half-off an inflated house is not a deal. I’m a saver and nothing would anger me more. FB’s should exit the hard way, their reward for being greedy. Ditto for house-ATM UAW’s. The vast majority who owned their homes and didn’t MEW will face, at worst, lower taxes when their paper gains from 2005 go away.
Pumping up house prices was a great sop to Wall Street and to redneck building contractors and land
destroyersdevelopers, but now the party’s over and everyone just got a new lesson in stupid. Yep, this is why the gov’t and the Fed worked so hard after WWII to keep housing bubbles down. Generations passed and everybody forgot and it was 1926 all over again. Take the medicine, losers.And BTW, why does everyone forget 1989-1991 so easily? Was everyone too young? I was born in 1979 and was keenly aware of what was going on, so where was everyone else? Sleeping off their hangover from the ’80’s?
“and you get one or two offers and they are 20 to 30 percent below price. Anyone out there buying a house is making offers that are absurdly low compared to what we had before”
ab·surd
–adjective
1. utterly or obviously senseless, illogical, or untrue; contrary to all reason or common sense; laughably foolish or false: an absurd explanation.
Actually, offering 20% to 30 % below asking price is the *opposite* of “contrary to all reason or common sense”. However, if you think that prices will drop 50%, I guess that 30% off *is* kind of absurd.
Bwwwaahhhhaaa, I found that funny in a way I could never explain.
“‘If you’d done loans 10 years ago the way they’re done today, you would have been thrown in jail for fraud. So many people are in houses they can’t afford. This will be a tremendous problem over the next 18 months.’”
EXACTLY. Which is why we should be talking about PROSECUTIONS ..not BAILOUTS.i
Bush said they were going to go after the fraud cases. What are the odds of that happening? I’m guessing they will throw two low level clerks in jail and then pronounce, “mission accomplished”. Maybe O.J. could break off from the hunt for his wife’s killers and investigate the mortgage industry.
I hope at a very minimum that they check for borrower fraud before dispensing one thin dime. Any borrower who committed fraud by exaggerating his income compared with his reported IRS income should be automatically ineligible for any assistance, and arguably a tax bill should be sent for the difference.
“next 18 months” just seems optimistically short.
Was speaking with one of the parents this weekend. Subject was loosing the home. Not too long ago there was a huge stigma attached to forclosure. Now, it appears people have no problem walking away (with ruined credit of course) or begging for some kind of bail out or hand up from the government. Pathetic.
BTW….I hope the FB’rs who ruin thier credit can’t get jobs. We just hired an AR clerk at my branch. For the position a credit report in addition to background check is company policy.
What has more stigma now-a-days…getting foreclosed on, or being a renter?
Hey, good question! Betcha it depends on who you asked.
FB’ers would probably say “At least I was in the game”.
Renters might say “At least I didn’t participate in the scam”.
“What has more stigma now-a-days…getting foreclosed on, or being a renter?”
I vote Renter.
Most of the news lately still talks about people losing their homes to foreclosure as if all of them are going to be forced to live on the street forever afterward.
Not even close on this one. You can get a job where I work if you are a renter. You can’t get a job if you have bad credit. You can also lose your job if you have bad credit. Maybe there are more renters in NYC than other areas but bad credit will disqualify you from a lot of jobs. Conversely, good credit people will be in a better position to negotiate with potential employers.
If/when I update my resume I intend to add a blurb about “Fiscally responsible with excellent credit history”. I may even put it in 36 point text. It is sure to stand out to any potential employer.
If/when I update my resume I intend to add a blurb about “Fiscally responsible with excellent credit history”. I may even put it in 36 point text.
——————————-
That idea is pure gold. You are on fire these days NYCityBoy.
I agree NYCityBoy. My response was mostly sarcastic. The MSM tend to gloss over the fact that renting is also a viable option for a living space.
The last two places I have rented and the last 2 employers I’ve worked for have required both a background check and a credit check. Unless credit scoring is seriously dumbed down in the near future, the FB’s in question will be lining up for a diminishing number of jobs and landlords who don’t ask.
Could become very interesting.
Unless the outfit is a defense contractor then I am under the impression that all of this talk about what is in a policy manual is nothing more than ammo managers use to impress their contemporaries in other outfits about “how it is different here” and “we only hire the best” and “our hiring standards are the best in the industry” etc…
Just like a year ago any one of these lending institutions would have told you “we are protected from loan fraud because our lending practices are the best in the industry” …
Got 10% down?
Does anyone know what happened to Taco Bell Jeff on SDCIA?
Is this him?
http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1854186&highlight=taco
Hilarious!
- I thought the reference to Taco Bell was the TB Manager in Orange County Ca who bought 12 homes two years ago.
Is this the TB Jeff?
http://tinyurl.com/38hrrs
Wait until he tries to sell those SLC houses and finds out nobody can get approved. Time for Jeff to bend over.
Why are people talking about these events as though there is utter shock and surprise????
I just don’t get it.
We are in such a bare minority here. This is an utter shock for 95% or more of the population. Even now it is a shock to them.
They’re always going to be behind the curve. They will be shocked too when some of us on this blog swoop in and buy at 50-60% discounts when the prevailing wisdom is to stay away from real estate.
“They bought too much house. Even if we refinance them into a fixed-rate (mortgage), the payment is still too much.’”
Hello. This is why folks didn’t get 30-year fixed loans to begin with, at a time when these rates were at historic lows. But they are also the most difficult loans to qualify for.
“‘If you’d done loans 10 years ago the way they’re done today, you would have been thrown in jail for fraud. So many people are in houses they can’t afford. This will be a tremendous problem over the next 18 months.’”
EXACTLY. Which is why we should be talking about PROSECUTIONS, not BAILOUTS.
“Gliniak, who has worked in the real estate industry for 30 years, stressed that sellers can resort to a short sale only when all of their other options have been exhausted. In most cases, they’ve already depleted their bank accounts, tapped out all family resources and are not eligible for bankruptcy, he said.”
Hahaha, what does “tapped out all family resources” mean in this context? That even relatives won’t “loan” the deadbeats any more money?
“The crazy appreciation in real estate in the last few years is now in reverse.”
Wow, that’s a mouthfull. Funny how these guys can’t bring themselves to say the word DEPRECIATION.
Prices aren’t downsizing, they’re RIGHTsizing!
Suddenly I feel like going to MacDonald’s.
whoa, nearly snorted out my mid-afternoon Labor Day snack!
‘Bad outlook for homeowners.’
http://tinyurl.com/yntxru
Dean Baker, co-director of the Center for Economic and Policy Research, discusses the possible fallout of the current market chaos.
‘I don’t know how we can avoid recession, as a direct effect of the housing situation: Construction is down 20% from 2005; sales are down about 15%. Those will fall further. People in mortgage banks are being laid off. Realty agents will lose jobs; construction workers will lose jobs. The indirect effect is that people will lose the ability to spend at the same rate. There’s been a lack of savings in the last seven years. When people cut back on consumption, it’s a big hit on the economy. Signs are showing already: July car sales are down; Ford’s cutting back production — they have a large inventory; consumption growth in the second quarter this year was the weakest in years. It’s just the beginning.’
Here’s a link that doesn’t require registration and gives some different statistics:
http://tinyurl.com/2yd6k4
Olympiagal, we’re already in a recession here in Florida, even though nobody wants to admit it, certainly not our politicos.
After the big real estate crash in prices ,because of the abuses in lending during the mania ,I predict lending will change for a long time to come .
First , in order to get investors to start buying loans again ,I believe that all loans will be insured . The insurance expense will add to the cost of money ,but at least it provides a way of paying for defaults .I believe this will be the only way that the United States is going to get enough funds for mortgage lending .The insurance will be provided by private insurance companies for loans that are not government backed ,while government loans will also be insured .
America is going pay for the lending abuses because the system can’t be trusted anymore .It use to be that long term mortgage loans were a good investment in the secondary market , but that goes back to the old lending standard days ,and those lending standards will return .
The insurance companies that insure the loans will have to also approve the loan application and appraisal , which will add processing time to any loan transaction . Once the equity in a property goes below 30% a borrower will be entitled to cancel the insurance after a current appraisal is conducted .Maybe after about 15 years the industry will only require insurance on 10% or under loans ,but for a long time it will be necessary to carry insurance on lower LTV amounts on all loans . The only way to avoid insurance costs is if a borrower puts down 25% to 30% or more down .
The insurance companies will be profit companies and will be regulated by the Insurance Commission of Mortgage Insurance (made up name ).
The lawmakers will enact new laws that control down payment requirements and document requirements for private money lending to make sure that one section of lending does not create a false market that affects all lending because of faulty appraisal and easy lending . Lending will become more uniform in application, in other words. This will prevent one sector, like Wall Street funds ,from screwing up a RE market because Wall Street might have excess funds looking for a place to invest ,creating faulty lending and easy money by poorly designed loans or faulty lending .
They will pass laws that make mortgage lenders and agents more liable on loans that are fraudulent . Appraisers will be drawn from a appraisal list and the mortgage lender or realtor will have no say -so in who does the appraisal . If the mortgage broker or the realtor or borrower has a problem with what price the appraisal come in at , they will be allowed to submit additional data to a appraisal reviewer ,who will be the only party that has authority to change a appraisal .New laws will be enacted to prevent undue influence on a appraiser or a lender by a interested party in a transaction .
Good borrowers will not be affected by the changes that much except that the insurance costs will add to the cost of money .Lower down loans will have a higher insurance cost for the borrower .
Does anybody agree with what I just said .
I don’t see any reason why lending needs to be uniform in application. I do no-doc loans all the time, I just don’t lend high LTV. And, as I repeat every single week, not a single one of my borrowers is in default. Not even a day late or a dollar short. I also do NOT “securitize” my loans, who the hell would buy them? Well, somebody would, but they would be wanting a 14% yield or something like that, where I’ve been getting only 9%-10%.
That sounds nice and all, but this is the government we’re talking about. The REIC lobby would never let that happen.
Low loan to valueloans could be no doc loans because they are low risk . The reason you would need uniform lending is so one company doesn’t mess up another company by faulty appraisals .As long as you have a market system appraisal ,everybody has to be playing by the same system .
Private lenders like Az -lender will be under a different set of rules in that she directly invests funds ,rather than depositing money in a investment account to fund loans .
“…making offers that are absurdly low…”
What exactly does that mean in a free market, especially where real estate is concerned. Anybody out there making offers right now for more than 50% off peak are fools.
I remember a few years back when people would say how crazy the sellers were getting by “asking that much” for their house.
I used to remind people that in a free market, it’s not crazy at all for sellers to ask for sky high prices. The only crazy part is if the buyers actually PAY that much.
I would agree 20% off asking is absurdly high these days. Market factors which were present a couple of years back are no longer in play, so the only absurd bid is one which does not take into account todays market factors, all of which point to continued proce drops for some time to come.
Comment by breakthespecultors
2007-09-02 13:49:52
joe momma - why would a government be expected to provide health care or basic services to anyone?
“…government is there to govern. that means make and enforce laws, administer the education system, provide military defense against threats to our country. that’s it.”
Absolute rubbish. Why doesn’t free enterprise build the highways or provide police/fire protection?
No profit.
Government holds a monopoly on police protection. Also on defense. Don’t believe it? Then try to start your own private protection racket, er Army! Government taxes gas to pay for the roads. Also a monopoly. In very few cases are their private roads. It’s not that private companies can never do those businesses. It’s that they are discouraged from doing them.
On the other hand, there have been instances of private fire departments and there are security guards who are private. A lot of arbitration is done outside of government courts too. But those are rare cases that make sense for business to step in when government cannot.
RE: Then try to start your own private protection racket, er Army!
Already done…There’s a mercenary outfight called Blackhawk America started by I think an -ex ‘Nam Green Beret.
Who do you think is providing protection for Haliburton people?
Blackwater: Even getting their own combat Air Force. Scary.
RE: Blackwater
Yes, RVG…that’s the name.
Thank you for the correction.
Gettin’ senile in my old age.
“A lot of arbitration is done outside of government courts too. ”
Arbiration was set up by the insurance companies soley for the purpose of trying to screw you over before the case goes to court. I know, because I recenly spent almost eight hours in arbitration with the lawyers of the insurance company of the trucking company over my eldest son’s death, which was clearly the truck driver’s fault. Even though the truck driver was charged with death by vehicle, driving left of center, and passing in a no-passing zone, the insurance company’s lawyers tried to place the blame on my son.
Doug: sorry for your trouble
That’s horrible, Doug. It sounds like they’re trying to take advantage of an emotionally bogged-down person. I hope you have your own lawyer as well.
There’s something in the constitution about Congress being in charge of interstate commerce. Having access to a road close to your home is not a Constitutional right.
As far as fire/police protection, that is local government, not federal. There is no requirement that a state or municipality have a fire and police service. That is up to the citizens. I suggest you take a few basic government courses.
For the local and state highways, once again, that is up to the citizens. There is nothing in the Constitution that requires the government to build highways or roads. They do so because it benefits EVERYONE in the state. My rights are not being violated because I don’t have a nice highway close to my home.
There is nothing in the Constitution that requires the government to build highways or roads.
————————————–
If I remember right, there is a requirement to build Postal roads.
Found it…
Text of the Constitution of the United States
Section VIII
[7] To establish post offices and post roads;
ok like the pony express
BTW - I’m not opposed to all government programs. I’m just saying that they aren’t rights. Our rights are enumerated under the Constitution. Everything else is up to our elected officials.
“police … local” — quite right. Here in this (coastal Maine) town, there were no police for years and years. And, we had no crime worth worrying about.
So, are you saying that by creating a police force you created crime? If so, just get rid of the police. That would solve all the problems with crime. See, I too can think with the logic of an FB.
Also, highways can be built at a profit (or operated at a profit), and are … it was Eisenhower who chose to emulate the German model to create an American Autobahn.
Of course, we spend way more on ours than they did on theirs (we’re number one!), and we plowed through city centers (they did not) with horrible social and economic consequences. And we overbuilt in many areas (spending by seniority, not need).
The feds could pull the plug on highway funding and we’d get along just fine with public toll projects and even private highways. The govt subsidy is stupid and unnecessary.
Happy Labor Day to all!!
I have read this blog for approximatly 2 years and find that there are a lot of deep reasoning, forward looking, and financially astute readers and posters here. There are also some folks with some views that are a little off the bubble but they all are interesting and show a trend that the MSM simply missed earlier in the cycle and are only beggining to report on.
I would enjoy adding to the discourse here but in the vein of full disclosure let me state that I have been a R.E Broker in California since 1985 and spent over 25 years with public builders as a sales excutive. I also have owned 23 to 27, can’t remember exactly, homes as primary residences, long term investments, and as a dreaded “flipper”, since 1971. During that period I also operated my own brokerage company for my own purchases and sales as well as representing people on a referral basis.
This period was spent in Sourthern California in general and Orange County in specific.
Based on this I am a perfect target for many on this forum. But wait-there is more!!!!
Based on what I was seeing in the industry, both on the builders and sellers side as well as the buyers side, I put a 5 year plan into motion in 2002 to basically convert my equity into cash or move it out of California, reduce my debt to zero, have any remaining properties un encumbered with a positive cash flow, and leave the building industry and southern California.This has been done.
My position is neither “bull” or “bear’ but a believer that real estate is cyclic and is driven by a herd mentality as well as forces directed by the government using both the FED Reserve and the tax code for social direction and control. My experience has been through 2 prior boom-bust times and this most recent run up and beggining of the biggest bust to date. I hope that the insite and knowledge based on this history of 25 years of working through the ups and downs and making personal decisions can add value to this discussion.
I am no longer in the R.E. business and have left south Orange County for exactly the reasons that many people here expouse so I have no ax to grind or profit to make.
I too spoke out for the past 2 years on the pending price decline and mortgage melt down in direct opposition with many of peers. I can say that I did not realize the depth or the world wide implications that the US housing drop would have. A lot of what I was seeing in the marketplace was a red flag that caused me to put my money where my beliefs were and move on.
Lenders were always the worst part of my business dealings and I usually warned my clients that if a “Lender’s lips were moving, odds were that he is lying”.
While agreeing with many of the thoughts expressed here it is unfortunate that I do see many remarks based on untrue or innacurate information. This may feel good for the poster but does little for the person who accepts the information as true.
With all of this said-enjoy the holiday and let the fun begin.
Your screen name says it all.
feel better now?
I, for one, welcome informed contrary views. If you have something to contribute then I am ready to listen.
I am glad you have been and continue to be part of the HBB community. I value your comments and hope you have been able to dispel any myths, point out specific inaccuracies and provide factual support for any rebuttals. A large part of what I seek here is the truth or at least the wisdom of experience and I have found that to a very high degree. As in any forum emotions can run hot and silliness descend into outright rudeness, but I think this is a decent forum run by a good dude. Based on what you wrote you certainly can provide an insiders perspective and I welcome that. Just refrain from bringing the kool aid to the party, which it sounds like you stopped drinking a while back if ever at all.
Dear FCnT:
Can you expound on that? Can you give examples of untrue information? I always appreciate it when people can site sources of reliable stats.
-Big V
Flash ,cash ,an trash. It’s interesting to me that you say lenders lie .The realtors were big liars in this run-up and they set the borrowers up to buy houses that they could not afford . Don’t tell me that many realtors didn’t play a part in getting people to over spend and lie on loan applications .How about all the double escrows that were going on . Don’t tell me that realtors didn’t pressure appraisers to hit the mark on appraisals . And please dont tell me that many realtors didnt set up cash back deals and raise listings accordingly .
If you have been in the profession as long as you say you have been , than you would know how low your profession went in this mania with the hype ,false promises, and crooked dealings .
Just droping a line that there are untrue statements on this blog and leaving it at that is so cheap shot ,I can’t believe it .
anyone notice that Washington DC is now down 20% from their 9/05 peak and Phoenix is down 19% (according to Housing Tracker)? this is huge, doesn’t seem like the MSM is putting out those kind of numbers, so far it’s all low single digits in most reports.
Are you talking about sales volume or price levels? Everyone admits sales volume is down by 20% or more, but prices according to Case-Shiller are down by single digits only, in the major metropolitan areas. Which is not to say that there can’t be pockets where prices are down a whole lot more.
From the O.C. Register:
“Real estate’s slowdown trickles through local economy”
http://tinyurl.com/2xahb6
“and even newspapers that have seen a decrease in real estate advertising.”
And the more those fees decrease the more honest the newspapers can be about what is really going on. Ouch!
Oh, man, NYCityBoy, I overheard a couple of steamed realtors at the grocery store this weekend cussing the media for all the stories about the RE market. One said “If they’d just shut up, maybe we could sell some homes, but they’re scaring people off”. Dang. I guess it was Ok when the media was singing the praises of the housing market and how people should buy now or be priced out 4ever.
It’s like the mob saying,” If they’d just shut up, maybe we could keep whacking people”.
It is like the mob. Increase the payments to them or the pain starts. Since the Realtors ™ are not increasing their advertising, its time to increase the negative stories until the pay up.
Because so many depended on a pie that’s half as big as it was in 2005, professionals of all stripes are eating out less and cutting back on personal spending.
Professionals?!? Sorry, but their education level isn’t up to that level. And if they can balance the budget just eating out less… bwaaa haaa ha.
I’ve noted before one of my relatives is a realtor. Guess what, she’s spending more money now. Why? More free time! She laughs at her competition that goes broke during these downturns. She knows that she has two or three years with negative incomes (cost of keeping up the business will be greater than the income). Ok… it was planned for. During the darkets days, she’ll just take six months off.
Now she is in NYC, but I’m sure the OC realtors are doing that too. 
Oh, I like the idea of listing inspections. Not a bad idea (not that I’d trust it, but it is a trend in a direction I like).
Got popcorn?
Neil
Ha ha!
So, who in South Bay (San Jose, etc) wants to get together for a HBB party? Respond here if you wanna do it. We’ll have to make plans.
This brings up a bigger question. When is Ben going to put together a national HBB gathering? It could be at the Sheraton in Phoenix or something. I would bring the wife for a weekend in Phoenix in January.
cool
The Daily Breeze reference is the ‘South Bay’ south of Los Angeles…Manhattan Bch, Hermosa Bch, Redondo Bch etc. I never have figured out how San Frisco got the tag So Bay.
I think it’s because San Francisco has an actual bay, as opposed to a mild curvature of the coastline.
Because there is this giant bay that reaches inland and south of San Francisco. SF is on a penninsula.
Hence… south bay.
Actually, San Francisco isn’t the part that’s called South Bay. South Bay usually refers to Santa Clara County (a.k.a. Silicon Valley), although some people include Santa Cruz as part of South Bay, too. I usually just call it Silicon Valley because we don’t really touch the bay here. In any case, it has to do with being at the southern tip of the San Franciso Bay.
Thank you. You are correct for the most part.
Frisco? Frisco? I believe you mean San Francisco.
“The only difference between health care in Canada and health care in the US is that most people in the US have access to SUPERIOR care, whereas some people only have access to the same level of care as the Canadians.” - Melvin
You don’t know what you’re talking about.
That was Big V who said that, not Melvin.
Can you please tell me why you think I don’t know what I’m talking about?
Because it’s not true.
Can you expound on that? How do you know it’s not true? I have heard an awful lot of stories about people with socialized health care who can not get the most advanced treatments at all. I work in the medical device industry; I guess that’s why I hear so many stories.
It’s true. Not only that, you have to wait until they have time to do your particular procedure. My father-in-law, a citizen and resident of Ontario, Canada, died while on a waiting list for stomach surgery. If he had come to the states and paid cash, they could have saved or atleast prolonged his life.
Why didnt he? You could have helped pay for it…
Nationalized healthcare does not negate private insurance.
Healthcare is not a right. It is a service one pays for. I have often thought that the national programs in Canada and France were to make sure the poorest and lower middle classes got healthcare and were not made destitute due to healthcare costs while in their prime wage earning years.
Healthcare for the old (those 60 plus) should be a pay as you go system or insured by elderly pools. If you have been inactive, a smoker, a heavy drinker, or a drug abuser one should pay even more.
Yeah it would be tough but …so is life.
I second that!
Driving through Venice today, I saw a house on 7th (about 7 blocks from the beach) not too far south of Rose with a nice fat “Foreclosure” sign hanging out in front, that’s a new one. Any realtors who can look that one up?
They usually have the realtor’s phone number on the sign.
When you hear about foreclosures, you mostly hear about people who bought homes post-2003 w/sub-prime loans.
I live south of Boston, MA. I, personally, know 3 home owners going into foreclosure. They all bought between 1995-1999. They all put down decent-sized down-payments. They all bought at a good time for prices. They are all currently going through bankruptcy/foreclosures…
Why are these people losing their homes? The problems started with the 2001 Stock Market Crash and the GW Bush Presidency.
My friend, Cody, had a modest house house and an IT job making $95k. His IT career ended because of job out-sourcing and the dot.com crash. He tried valiantly to save his house. Towards the end he was working as Dog Kennel Attendent. His duties included cleaning up dog feces/urine with a nasty chemical called bleach. He got chemical burns inside his lungs and skin. Now he’s living in a trailer park working at Wal-Mart….he’s barely treading water now!
My point is many people are losing their homes solely because of the job market…not because of infalted home prices and a bad loans! Everyone on this blog seems to point to the post-2003 sub-primers. These buyers are easy targets for ridicule. I, myself, love to hear about the “interesting times” that they are currently living in. But let’s not forget about the good people who bought pre-2000 at low prices w/downpayments. The people who suffer from the enemic economy and inflation. The root cause of all the foreclosures is the weak economy. The FED lowering rates and creating the housing bubble is merely a symptom of the root cause.
It’s ironic because we all predicted the housing bubble. And we are all happy that it’s finally burst…but there is a saying “Be careful what you ask for, you might get it.” It’s going to get ugly folks and the root cause of an enemic economy will still be with us. Sure, there is going to be fire-sale home prices for a long time to come…but with that will come one nasty recession! It’s relative. How are people to take advantage of great home prices if they don’t have jobs or are under-paid?
The IT job market is not bad right now, but the point is well taken. Offshoring is at the very least keeping salaries static, while prices skyrocket. I would say the majority of folks losing homes who have owned for a long time took out HELOC’s. Perhaps not all, but given it appears a majority of people who bought with no down option loans after 2003 will end up in foreclosure, this is most definitely the big risk area.
95K IT job down to cleaning animal urine? Is this for real?
Believe it! There are many a story of people being laid off - this quarter alone thousands are being laid off if you read the stories. These are from the very same companies crying they need H-1Bs and threatening to offshore their R&D. There are many many many of these stories out there of college educated people locked out of jobs controlled by single source vendors of international origin. It is a very sad situation.
The dot.com bubble really screwed up the IT, software development job market. The “fog a mirror” to get a loan. Well, think, “fog a mirror and become a programmer or system administrator”. At lot of people got jobs they were not really qualified for or needed for after the bust.
Now that the dot.com bust has happened, these workers are being purged yet they still feel entitled to the jobs they had during the boom.
But the dark side of this was that people with real experience and credentials were passed up for those who were most adept at lying. This hasn’t changed with H1-B, as once the pool of qualified Indians and Pakistanis is tapped, the outsourcing companies are happy to provide nudnicks with fake credentials to fill your cubicles.
There’s a reason the Dilbert crowd called HR staff evil. It was because they would toss out resumes listing less than ten years of experience with Java even though the language was less than five years old, thus rejecting honest and qualified applicants for the best liars.
But let’s not forget about the good people who bought pre-2000 at low prices w/downpayments.
Perhaps, but those people should have enormous equity enabling them to sell if things go sour. The only way for that NOT to be the case is if they took a second mortgage/home equity loan to bring the loan balance up to 2005 prices, which is even stupider than actually buying at 2005 prices!
jbunniii: those people should have enormous equity enabling them to sell if things go sour. well maybe not enormous but substantial
“I live south of Boston, MA. I, personally, know 3 home owners going into foreclosure. They all bought between 1995-1999. They all put down decent-sized down-payments. They all bought at a good time for prices. They are all currently going through bankruptcy/foreclosures…”
Did they HELOC and spent all the money?
“How are people to take advantage of great home prices if they don’t have jobs or are under-paid?”
Then the home prices are still too high, the market will decide the price, for ex., another 50% drop.
In my opinion, this recession will be the wakeup call that America needs. Until now, we’ve had market bubbles to prop up our economy and hide the pernicious truth that we have been giving away all our jobs. Unless our gov’t can find a way to blow another bubble (highly unlikely), the American public will very soon be very pi$$ed. If all works as it should, we ought to see increased turnout at the polls. I have a feeling globalization is about to be revised.
we ought to see increased turnout at the polls
I have hope for many things. But not that.
Neil
RE: I live south of Boston, MA. I, personally, know 3 home owners going into foreclosure. They all bought between 1995-1999. They all put down decent-sized down-payments. They all bought at a good time for prices. They are all currently going through bankruptcy/foreclosures…
How can this be in Ted Kennedy country?
Land of the his and her matching BMW SUV’s and 4,000 sq. ft. McMansions?
Why, Nordstrum is coming to Natick with their $3000 Loius Vitton handbags and $850 woman’s ankle booties?
Foreclosures only happen to the little people.
If you bought a house in the 600-800K range and you basically lose your job. You are toast!. coming up with 4-5K at the end of the month is near impossible. Now if you have to come up with 2k, it can be done. People are losing their houses today because they can’t afford that mortgage payment. You hear stories people walking away even with two income earners.
I am probably more qualified for a 800K house but I’m not going to pull the trigger because if I lost my job, coming up with 5K a month is not realistic. Again 2K, my wife’s income can handle it.
Realtors convinced families to buy houses based on both spouses’ incomes in the 1980’s. This went along with “buy all the house you can afford”. The realwhores even pushed this idea as “feminist”.
Of course we know the result–two incomes means twice the risk of unemployment and not being able to make the mortgage payment. Oops.
‘I, personally, know 3 home owners going into foreclosure. They all bought between 1995-1999. They all put down decent-sized down-payments. They all bought at a good time for prices.’
- The answer is simple. They must of ‘Liberated’ equity from their homes. There is no equation for the loss without this scenario.
I agree. Foreclosures don’t just happen. Someone who bought 10-15 years ago should have plenty of equity and be able to sell for a tidy profit unless this happened in Youngstown or Detroit.
Exactly. If someone bought pre-bubble (2000/2001 or earlier), they should have a boat load of equity. Heck, 50% of peak would still be a hefty profit. So instead of talking about these poor people being foreclosed, lets see the vacation footage! Take us for a ride in the car/boat/plane (I know people who liberated equity to buy aircraft… Talk about violating the old advice that if it floats, flies, or… rent it!).
I’m trying to leave a large chunk of cash to buy used toys in 2009.
Got popcorn?
Neil
Sure, I know a guy I dug clams with, Bob M. who bought a house in 1999…the problems all started when they cleaned all the raw sewage in Boston Harbor…this killed the food source for the clams. The clams are now a lot less abundent because they have less of a food source. So now there’s less clam$ for Bob M. - Anyways his wife lost her IT job and with digging not what it used to be…Bob M. thought he had a gold mine in home equity…he stopped working and starting bringing home 30 packs of beer. This is a true story! In one day he lost $50k gambling on an Internet Web site! I figure lot of people gambled with their home equity via regular casinos, Internet casinos and state lotteries. I am sure the drug dealers and booze peddlers got a good slice of home equity money, too…
Too many Americans have lost their minds. If I ever gambled away my savings or home, I would never ask for or accept a bailout. People want all the freedom without any of the responsibility.
You may have a boat load of equity in your home but it will not last that long if you don’t have some kind of income to go along with it.
I know that from personal experience.
There are some real horror stories around and , in fact, many of the bad things you read about (re downsizing, outsourcing, H1Bs, etc) happened to me. The situation with a lot of people is much worse than you can ever imagine.
Fortunately, I lucked out. Completely. But I know those who I’m even afraid to contact today.
Dan,
Now that’s a story. I don’t know of any amount of equity that a 30 pack of beer couldn’t overcome.
Neil
True, but this why it’s important to live below your means. I have an income of 85K in Wash, DC - not gov. and not gov. contact related job. But fairly secure. I figure if I need to get a new job in my field my new salary would be bout 50% - 70% of current. Will include this in my model if / when buying again. Sold in 2005 renting and saving a bundle.
An interesting thing to think about. A lot of free market types argue that the contract between the lender and the borrower is a private contract and the government has no business getting involved. This has been the official position of the banking industry, the real estate lobby, and the republican administration for the last 6 years.
I would like to point out that the government is allready involved in a big way. The entire process of foreclosure and bankruptcy is enforced by the government. New bankruptcy law, product of federal governemt. Registration of real estate titles, local government. Enforcement of foreclosure evictions, government. Whenever there is a dispute, the government is usually backing the bankers in a pretty heavy handed way.
When a bank writes a mortgage; they are counting on the full force of the government to help evict the borrower in the event of default.
So any banker who says that the goverment has no business regulating mortgages is really a hypocrite. If the goverment is going to use its power to enforce foreclosures and bankruptcy; i think its only fair for the government to treat borrowers fairly. This can include laws against usurus interest rates, arbitrary fees, failure to disclose mortgage terms in advance, etcc…..;
I’ll post this again here, since I mistakening dropped it in another area:
Even in the non bubble area of Rochester, NY, the housing/credit crunch is felt:
Home starts are lagging
Tight credit, rising costs slow new construction
http://tinyurl.com/2cdrss
“mistakenly” is what I meant….
“‘I see (situations) where nobody is buying a house,’ said Warren Snyder, co-owner of Carriage Realty, based in Torrance. ‘You now have houses for four and five months on the market, and you get one or two offers and they are 20 to 30 percent below price.’”
It amazed me how they continue to berate those that bid. Fine. There is a reason I won’t even approach the playing field. No markets are yet ready to accept true low ball bids and be thankful for any bid.
But in another six to eight months… they’ll beg for any bid. Then we’ll see prices march down to non-bubble levels. Note that I’m not saying this is over in six to eight months. Rather, that is when they’ll understand there will be no spring bounce and to sell the price must drop.
Got popcorn?
Neil
You are completely right, Neil. I am hoping to insult them with my silence. Repeat after me, ” “.
That’s my offer.
sorry……………How much was that?
“”
Ha!
I’ll underbid you by ‘ ‘
Woo hoo! That was the funniest line EVER on this blog. I now love NYCityBoy as well as a couple other peeps on this blog.
NYCityBoy: I love you!
-Big V
Uh oh!
Maricopa County AZ (Phoenix metro) Notice of Trustee’s Sales:
Jan 06 726
Feb 06 687
Mar 06 790
Apr 06 638
May 06 764
Jun 06 797
Jul 06 851
Aug 06 1019
Sep 06 1114
Oct 06 1238
Nov 06 1493
Dec 06 1407
Jan 07 1624
Feb 07 1577
Mar 07 1720
Apr 07 1709
May 07 2007
Jun 07 2325
Jul 07 2501
Aug 07 3248
fun
http://realestalker.blogspot.com/
Surprising how little style some of these famous people really have. My $1,700/mo sfh is decorated more tastefully than most of those places.
Not that I don’t still like to spy on famous people, though
Not sure how the jobs that have gone overseas, especially China can ever come back to the US. We have lost our manufacturing base. The infrastructure is about gone. We haven’t kept up with manufacturing technology. The housing bubble was government and banking industry smoke and mirrors to cover up the lack of a real economy. As long as people kept spending, the economy kept rolling. Since money wasn’t coming from jobs and pay increases, it had to come from somewhere, hence the “easy money” HELOC. So now that is tapped out. People are waking up from their stupor and seeing that all we have left is shopping malls, fast food joints and a service sector.
I’m in healthcare in MA and making what I made in 1995 and am happy to have a job with good benefits. My son is moving out of MA this week because he is a city planner and the cities and towns are so strapped they are not hiring. Article in Boston Globe today about higher taxes and fewer services. Our roads are a mess, can’t even affort to paint the lines down the middle in most places.
Personally, I feel my quality of life in 2007 is much less than it was in 10 years ago. My taxes are through the roof, so is water and sewer, electric, oil, insurance.
On the other hand, the former Natick Mall is now the “Natick Collection” and everyone is jumping around because MA is getting its first Nordstrom’s . They say the mall has gone high end because there are so many more people with money to spend. This is with foreclosures all over the place.
Here we are on Labor Day. What happened to the Unions? What a sorry-ass mess.
I will be $100 for one of those houses. I used to live in Torrance CA.
Hehehe, former neighbor has his house on the market, after 4 weeks of open houses with no one showing up to view his outdated POS 2 story tract home listed for 1.5M, he fired his broker and went with Help U Sell, as if that will help. Anyway, the broker says he has to get rid of some of his listings because he has “too much inventory” and the neighbor can’t expect him to “waste” his time all day Sunday running the open house for him. Hilarious, but sad because the neighbor’s actually a nice guy and he already bought his next house at 3 month ago prices.
The only reason I can see going with “Help U Sell”, other than cutting out the Realahore, is if you shave the portion you would have given the original broker off your asking price. It’s probably still way over priced anyway.
I know of several people who used their heloc’d money for trips to the local casinos in the calif. central valley. I wonder how well the casinos will be doing in the next year.
That’s sad, at least the people who heloc’d for a BMW have something to show for it for a few years.
OC-Ed Thanks and feel comfortable that I never did drink the kool-aid but I do understand why you would bring that up.
Big-V I will comment the next time I read something that I can refute with a logical argument or statistics although statistics can easily be manipulated. I really don’t wish to go back and find something to refute or challenge just to say I told you so.
Wittbelle I took my screen name from my view of what was happening in the housing excess and to add a little humor. Life is waaaay too short to be uptight. I live my life in the very opposite way.
Enjoy
OK.
OT: Just saw a flyer with the following under the agent’s name; “Man of Integrity”. Isn’t that an oxymoron for someone in the RE business?.
Housing Wizard
You are correct that the things that you referenced happened. There are honest, ethical, and experienced people in every aspect of business as well as those who are crooked or just plain incompetent. Hopefully in life we can choose which people we wish to work with. I have worked with both types as I am sure that you have. In my experience lenders have been the biggest problem that I have delt with in both good times and bad.
There are certainly good ones as well as the less desireable ones. I have always referred my clients to 3 types of lenders: A mtg broker, a mtg Banker, and a bank or credit union, to give the client the widest array of options. This was the best way to represent the needs of each client. I did this with all consultants involved in transactions. There is sometimes a chemistry between people that is important in making all parties satisfied and this can only be arranged by the principle not the broker.
Most of the problems that we are now dealing with are based on the greed of either the buyer, broker, or lender as well as the easy credit promoted by the Feds and Wall Street. I am not defending any of the parties but each person should have responsibility for their own actions. The buyer usually made a decision to do or not do something and should be responsible to read and understand what they were agreeing to.
I didn’t mean to do a hit and run with my comments. I look forward to future discussions on this blog. That was why I laid out my background as I do believe in being upfront.
Enjoy
Last post!
Wrong.
You say enjoy ,but I’m not enjoying my fellow man and economy ripped apart by a fake real estate investment scheme that was promoted by the NAR/real estate agents and the lenders .This real estate run-up was sold on investment lies and the industry took advantage of the sheep . Until you admit that the whole industry was corrupt ,you won’t be able to challenge me on anything . Look back at the record on the blog going back on predictions and you will see how accurate the information and predictions have ben on this blog .
America being on the verge of a Greater Deprression is no laughing matter .
You made a point of disclosing that you were one smart guy and got out of the business with all your money in your pocket . I would only wish that some of your client where as lucky as you and you called them all up and advised them accordingly instead of putting them into another piece of inflated real estate .
The fact that you turned your clients over to 3 different kinds of commissioned lending agents is like throwing a party to 3 sharks instead of one .The point is that you knew that each lender would make the deal and hit the mark on the appraisal .
So, you can try to tell me enjoy ,or Happy Labor Day ,as you enjoy your wealth ,but I find it hard to enjoy myself when one of my kids might lose their job , or a friend might lose their property ,or my taxes might be raised to bail-out your pass clients . Just like all commissioned salespeople ,it’s all about you ,isn’t it .
Ben ,please post my response because ,this guy is getting on my nerves . Message to flash,cash and trash .
I’m not laughing either, but I have a hard time broad brushing all Real Estate Agents as the perpretrators of the manic bubble, much less for not calling the endgame. It isn’t their job to be the conscience of the nation, they can only sell what poeple want to buy. Brokers don’t make the market.
What really scares me is that the wizards who made this thing possible with manipulation of the money (and of us) gained power on the way up and will gain power on the way down.
lost post?
Real Estate Agents didn’t bring on the manic bubble. Brokers don’t make the market.
The wizards who manipulated the money (and us) gained power on the way up and will gain power on the way down. The rest of us are pawns.
Blue Sky …I think there is alot of blame to go around ,including the borrowers buying homes they knew they couldn’t afford . Without the loose low down lending the whole unstable boom market would of not taken place .
The real estate agents found out that anything goes in lending ,and in spite of anybody being in the business for a long time knowing that was wrong and a ponzi scheme ,the REIC promoted the mania and promoted people buying real estate that was beyond their means . Remember how a huge % of realtors were saying ,”Real Estate always goes up “,We are running out of land ,”‘Buy now or be priced out forever .” I’m sure alot of realtors got their talking points from the NAR.
It was a real estate mania in which nobody was thinking right and the motive was greed . I myself could never put someone in a property where the numbers didn’t work out ,and I could never promise someone future financing as a sale pitch to get them to buy now and go on a toxic loan .
People/real estate agents that have been in the business for a long time should of know that the people were sitting themselves up for a big fall.
I was in the situation many years ago in which I felt the real estate was becoming to inflated . I advised my clients to not buy ,even when they could afford it .I took a big cut in pay by not being willing to put clients into inflated real estate at the time . I just feel bad that the sheep trusted the advice of people who where not looking out for their best interest . Still, the borrowers signed on the dotted line and took the gamble because of greed or fear .
Realtors are suppose to pre-qualify people for housing ,not get people to over buy because they know some flake lender will cook the numbers and let the borrowers buy beyond their means .In fact ,getting people to buy beyond their means was part of the ponzi scheme of convincing people that debt was good and greed was good on the part of the REIC.
I just wish that the real estate community of salespeople would of stuck to not showing people property they couldn’t afford ,and than the property would not of inflated beyond reason .I wish the builders would of stopped building just to sell to a bunch of stupid flippers who couldn’t even qualify for their liar loan . Because so many realtors were in on the RE ponzi scheme and they were investors themselves ,it didn’t pay to not promote any price in real estate and any loan or debt will be fine .
I agree that there was plenty of greed to go around. I respect that you did not play that game.
I mean …
Last post.
Wrong again.
Yeh, you post em. I win, I’m last.
Shoot.
‘Absurdly low offers’. That burns me up. Get real.