Sellers’ Only Hope Is To Price To Sell In California
The Bay Area Newsgroup reports from California. “Many home sellers, bogged down in a housing downturn, are now doing the only thing they can to sell, dropping prices. Only this time, the sagging market often means taking a loss if the home was bought in 2005 or 2006. Christopher Thornberg, the former UCLA Anderson Forecast economist who predicted the ‘housing bubble’ since 2002, said that sellers’ only hope is to ‘price to sell.’”
“‘You want to get out of the market,’ he said. ‘There’s no point in holding out if you want to get out before the next three years.’”
“The credit collapse unnerved people so ‘they’re not willing to buy, not willing to bundle and not willing to provide credit,’ said Max Neiman, associate director of a think tank based in San Francisco ‘Any number of people don’t want to get caught up in the process and worry about prices falling even further,’ he said. ‘They want to sell now.’”
“Research by the Contra Costa Times found that although east Contra Costa and Alameda counties as well as Solano County have lower-cost homes, homes in Alameda, Walnut Creek, Pleasant Hill and even blue-chip San Francisco are affected by the price drops.”
“‘This will spread,’ Thornberg said. ‘It will eventually have an effect. … It will circulate through the entire Bay Area and it will be a stubbornly slow process.’”
“‘The regular homes will not sell until all the foreclosures are gone,’ said Dave Konesky, a Tracy-based real estate agent.”
“He said that now many buyers look at a house and offer what the foreclosed home down the street is selling for. ‘They offer the foreclosure price, take it or leave it,’ he said.”
“Konesky said that there were only two home sales pending recently in Tracy, one selling for $1.4 million and another for $1.2 million.”
“‘I just had one for 173 days and they kept saying to leave it on,’ he said. ‘Eventually I told them, ‘This is a waste of my advertising dollar, you haven’t had a showing in months.’ People have to get realistic.’”
“One of his Tracy listings, on Brighton Drive, is a home selling for $419,000 was previously bought in 2004 for $430,000. ‘It will probably be priced at $399,000 soon.’”
“The phenomenon isn’t isolated. In Brentwood, agent and broker Bryce Ellsworth tells story after story of owners selling for less than they bought their home for in 2004 and 2005, many just eating the loss. ‘We’re at the 2004-2005 prices and some are even 2003-2004,’ he said.”
“A quick perusal of the MLS and Ellsworth says the same thing is happening in Walnut Creek, Pleasant Hill and other areas. ‘I think our area is more impacted because our homeowners don’t have the long-term experience or cash reserves to ride it out,’ Ellsworth said.”
“Dale Cose in Tracy, is now looking for a home and has a lot to choose from. Cose…said he hopes to get a good deal with so many foreclosures on the market. ‘I don’t have the same feeling of what happened in 1988 and 1992, where everything started free falling,’ he said. ‘You only see investors dumping their properties.’”
“Cose lost his home to foreclosure in 1995 and has been renting since. He said he’s sure buying now will be a good investment later, but most people find the housing market difficult to predict. ‘The thing is that you never know where the top or bottom of the market is,’ he said. ‘You never know until after the fact.’”
The Union Tribune. “Most economists and market analysts are now pointing their fingers wildly in the air – sometimes in several directions at once, as they try to assess blame for what may turn out to be an extremely dire economic downturn.”
“David Shulman, an economist at the Anderson Forecast at the University of California Los Angeles, predicted that all this finger-pointing will result in ‘a made-for-TV extravaganza,’ with a series of trials for mortgage fraud, securities fraud and other crimes.”
“‘In terms of the theater of it all, there will be clear heroes, clear villains and before it is over, there will be ritual sacrifices,’ he said. ‘Think of the ‘perp walks’ that came out of the corporate scandals. The entire process will be examined, from the mortgage broker to the lender to the Wall Street securitizer and on to the ratings agencies. It won’t be pretty, and before it is over more than a few participants will be called ‘merchants of debt.’”
“The merchants of debt were especially active in San Diego County, where notices of foreclosure and default are now at an all-time high and home sales are at a 15-year low. And it’s likely that we are only at the beginning of the downturn.”
The Union. “The sound of nail guns thumping roof sheeting into place echoed across a cul-de-sac in Morgan Ranch, where crews were building the last house in a subdivision of 400 homes.”
“This week the 15 men will receive their last paycheck and begin job hunting at a time when many contractors are laying off workers because there’s not enough work to go around.”
“‘I’m worried about these guys — the housing market is hurting,’ said Tim Rowe, foreman of the Morgan Ranch Development since 2001.”
“New home construction is down in western Nevada County, and the development of four major subdivisions is still years away from gaining approval, said Kevin Casey, owner of Caseywood Corporation, a major lumber supplier to area contractors.”
“In two years, Casey’s deliveries have fallen by 20 percent, he said.”
“Only two years ago, when business was booming, many construction-related companies upgraded with new equipment and shiny new trucks. Then business came to a grinding halt.”
“‘You’re carrying all this new overhead. It can be a little unnerving,’ Casey said.”
“Compounding the problem is the influx of Sacramento-based contractors coming into the region to build homes in Nevada County, said Keoni Allen, president of the board of the Nevada County Contractor’s Association.’
“The number of building permits issued by the county dropped from 390 in August 2005 to 275 in August of this year, said Brian Washko, director of the county’s building department.”
“The number of additions and remodels have increased while new home construction has fallen — a change Washko attributes to homeowners who decide to fix up their homes rather than try to sell them. ‘The value has gone down. They can’t get what they hoped to get for it,’ Washko said.”
“Some out-of-work laborers are seeking employment outside of California, said Eric Fullmer of an employment agency.”
“Construction workers such as Rob Belendez are worried. He worked at Morgan Ranch for the past 11 years. He has a wife and four children to support, plus a mortgage and car payment.”
“A large bonus anticipated with his last check will get him by for awhile, but the lean times of winter are coming. He’s sent out a few résumés around the area but hasn’t yet landed a job. ‘It remains to be seen,’ Belendez said, shaking his head.”
“It’s not the first time economic hard times have befallen the local industry, said Casey, who recalls a similar dip in the early 1990s. ‘We stumbled and fumbled, and we all got through it,’ Casey said.”
“On the bright side, now is a great time to build because lumber is at a 20-year low and property owners have a pool of quality contractors with time to devote to their clients, said Jeff Pardini, owner of Hills Flat Lumber. ‘You’re crazy not to do something right now,’ Pardini said.”
“Added Casey, ‘You’re going to get a lot of attention.’”
The Daily News. “Monday is the one-month anniversary of Meltdown Friday, the day Calabasas-based Countrywide Financial Corp. took a big hit, the day the mortgage business as we knew it ceased to exist. Investors in mortgage-backed securities stopped buying them, and the home-loan industry is still feeling the aftershocks.”
“Countrywide’s meltdown is reminiscent of the one that hit Lockheed Corp. in the early 1990s. The Cold War ended, defense spending plummeted, and Lockheed eventually moved out of California - selling its building to Countrywide for $33 million.”
“In the past month, Countrywide Chairman and CEO Angelo Mozilo has ordered lending standards tightened and arranged for $25.5 billion in financing to keep the business going. He has also said as many as 12,000 jobs will be eliminated.”
“While you and I keep making our monthly mortgage payments, the Countrywides of the world don’t wait 30 years or however long to get their money back. They get it back from the investors who buy the loan package. And the loan cycle begins anew.”
“On Meltdown Friday, that cycle broke. Scrambling ensued. John Karevoll, an analyst at DataQuick, said Aug. 17 was a Countrywide day, for sure.” “The market was continuing to take Freddie Mac- and Fannie Mae-guaranteed loans, which are capped at $417,000. But lots of the loans made by Countrywide were jumbo loans because the houses cost more than the Fannie and Freddie limit.”
“‘Investors that were buying them said they were no longer buying them,’ he said of Countrywide’s loans.” “Keith Gumbinger, VP of mortgage tracker HSH Associates calls that day a fracture point. ‘There is a trust issue going on between the buyer and seller,’ he said.”
“In other words, those on the buying side are sort of saying to the sellers, ‘We’re not sure about your MBS (mortgage-backed securites) anymore.’”
The Pacific Coast Business Times. “The paths of Countrywide and Amgen, two beleaguered firms that are Ventura County’s largest private employers, are diverging. Amgen is beginning a rebound, while Countrywide’s fate remains unclear.”
“For Countrywide, the question was whether massive job cuts and an infusion of loans and $2 billion in convertible debt from Bank of America was enough to guarantee its survival.”
“Despite Calabasas-based Countrywide’s recent announcement that it will cut between 10,000 and 12,000 jobs, Thousand Oaks and Simi Valley, the Ventura County cities closest to the potential fallout, were taking the developments in stride.”
“‘Whatever the current layoffs are in our area, we are certainly disappointed, and for those directly impacted, there are obviously going to be significant challenges, so I don’t want to minimize that,’ said Gary Wartik, Thousand Oaks’ economic development director.”
“Simi Valley City Manager Mike Sedell said foreclosures and collections are also functions of Countrywide in the area. ‘That work will need to go on and even beef up.’”
“Sedell said he was comfortable that if a major credit crisis hit, the Countrywide departments in Simi Valley would not be significantly affected by it.”
“Wartik said the layoffs could be an unfortunate, but beneficial, lesson learned for Countrywide and other residential lenders that have deviated to riskier sub-prime lending practices in recent years.”
“‘One of the things that this whole subprime market at Countrywide and others effects is they had good business models when they then moved outside of and then began lending to people wholly and largely unqualified,’ said Wartik. ‘This retrenchment or shakeout was inevitable and hopefully won’t be repeated.’”
‘LOMA LINDA - The absence of two council members prompted the City Council last week to postpone action on whether to limit real-estate signs. The proposal calls for allowing no more than 10 real-estate signs per open house.’
‘Officials say real estate agents sometimes flood the city with dozens of signs, blocking streets and sidewalks and endangering public safety.’
‘Real estate professionals say they need all the signs they can get because the housing market is slow right now.’
‘Solano County saw the sharpest drop in the Bay Area in the number of homes sold and the average home price in August, according to DataQuick. The number of homes sold in Solano County fell to 418 from 730 in August 2006 - a 42.7 percent drop. The average home price decreased to $420,000 last month compared to $465,000 in August 2006 - a 9.7 percent drop.’
‘Homes in the Bay Area are more expensive than elsewhere and most of them are financed with ‘jumbo’ mortgages,’ said DataQuick president Marshall Prentice. ‘The turbulence in the mortgage markets has made it more difficult to get this type of financing,’ he continued. ‘The question is, does this pull the plug on some market activity, or does it just slow things down? We won’t know the answer for a few months.’
‘Officials say real estate agents sometimes flood the city with dozens of signs, blocking streets and sidewalks and endangering public safety.’
Today “signs” tomorrow “bodies”
c’est la vie
I saw Greenspan’s interview on CBS 60 minutes and what I saw was an old man whose brain stopped working. He said that there was nothing the fed could do about the fraudulent practices by the mortgage industries, while technically and legally could be true, but he had so much personality and authority that he could just sound the alarm and the whole thing could have stopped in its track. Instead the man goaded the public into taking on subprime loan. Incredible. Now he is sitting around and claiming that there was nothing he could do. So much BS.
This just illustrated the vagary of history. Hero today; villain tomorrow. This will surely be the case with AG.
Yeah, its funny, I am of the opinion that Greenspan did what he did(lowering rates and encouraging the housing bubble) because he did not want a post dotcom recession to be his legacy. Now he is defending himself so this housing bust will not be his legacy, it just keeps getting worse for the old man.
This just proves when you create a financial bubble to avoid a bad financial time, it just prolongs the misery and it is worse in the end, sometimes you just have to let things run thier course.
I saw something about him talking about the end of the cold war? What the hell does this have to do with anything here lately?That happened some time ago and it is not relevant at this point. I think he has lost his mind.To to check in to wrinkle city.
It’s only been 16 years since the end of the Soviet Union. That’s really not that long in the macroeconomic scheme of things.
It’s not unreasonable at all to argue that the end of the Cold War set in motion forces that, after years of development, set the stage for the last five years’ unprecedented global credit bubble.
I mean, World War II could trace its origins back 21 years to 1918. The Great Depression was seriously magnified because the Federal Reserve Bank had been established in 1913, 16 years earlier.
Political economy doesn’t have a 35-second shot clock. You can’t just rule all of history older than five years old irrelevant to current events.
The reason Greenie is sucking up to the Clintonistas is so his wife, Andrea Mitchell ,will still be able to get exclusive interviews with the iron maiden.By the way, who was that guy she was bagging who was found dead in the park.
I saw the interview, I thought Leslie Stahl looked great.
All of this is predictable, according to Robert Prechter. The Elliott Wave Theory he espoused morph’d into “Socionomics,” the Wave Principle applied to human behavior.
It makes sense - markets move more by herding than by fundamentals, and the same factors that lead to her behavior also lead to various human behavior. Thus, according to Prechter the human behavior which leads to a bull market also lead to inclusivenss and making nice-nice. Bear markets are aptly named - people growl at each other, war break out, and humans behave badly.
So, while everything is going great, AG is the great god of economics and finance. Now, he’s sh-t. What a difference a day makes.
“Homes in the Bay Area are more expensive than elsewhere”
Only been true for the past 7-8 years, else back in 1997 affordabilty was around 75% with price to income being 4-5x. In fact SoCal has always been more expensive to live.
Only realtors will tell you BA RE has always been more expensive, but many of them are from SoCal anyway. SoCal has always had
more realtors than NorCal for many years. Forget the Killer Bees from Mexico, get rid of the pesty SoCal Realtors I say!
And 1997 was the hey day of the Nor Cal economy.
1997 was a so-so- year for NorCal. More balanced on risk and reward. The hey day was actually between early 1999 and peaked in early 2000. Even so, only a few made out like bandits…. the rest were just dreamers.
Man, is this City Council short-sited. As we all know, the housing slump is due to the scarcity of real estate signs. We need real estate signs out the ass, not just dozens.
Problem solved.
Gotta rant…
“‘Real estate professionals say they need all the signs they can get because the housing market is slow right now.’”
What BS. Whenever my wife and I go to an open house, we do a little bit of research (at least a cursory Zillow), Mapquest it, and head on out. We’re never just in the car, see a sign, and say “Oh boy an Open House!”
In the go-go early years of this decade, maybe there were people who would be driving to the grocery store and just decide “Hey, let’s buy a house!” But those days are long since gone. The only qualified potential buyers out there are deliberate, circumspect individuals like pretty much everyone here who will probably do more research before even visiting an Open House than many subprime borrowers did before signing the bloody purchase contract!
So please, Realtors, save some trees and stop putting up all these dumbass signs every 50 feet. Get used to attracting a much tougher, more intelligent buyer who’s only motivated by price, not some frilly banner or day-old cookies.
How about those big red balloons that say “New Homes”? Like I need a giant balloon to tell me where all the brand new (soon-to-be-white) elephantine McMansions are located?
“Officials say real estate agents sometimes flood the city with dozens of signs, blocking streets and sidewalks and endangering public safety. Real estate professionals say they need all the signs they can get because the housing market is slow right now.”
Man, this city council just don’t get it. What we need is real estate signs out the ass - yeah, that’s it. Signs out the ass.
That’s the ticket.
Ben! Stop enjoying this so much!
Be sure to go over to MSNBC.com and place your vote for what the fed will do Mañana. Can’t let Cramer pull all the strings.
I think they will drop .25%, but I voted “unchanged” just to screw with people!
25 is already in the bag. The Fed needs to raise some pulses. 50 should make the bulls salivate.
Market Maven:
I still just don’t see why people think that 0.25 is in the bag. What would he gain by that? If he follows Greenspan’s logic, he won’t cut at all.
I’ll tell you something, boys. There ain’t no tellin’ what they’re gonna do. In the span of 14 days, Ben went from “all is well, move along” in his Fed statement to “oh shit, we’re f_cked” in his discount-rate-cutting statement.
My guess is that they will cut by .50. I think they now know that Wall Street is fixin’ to take a butt-f_ckin’. A lower fed funds rate will decrease the too-big-to-fail bank’s borrowing costs. This will slightly offset the billions in losses they’re about to take.
…like peeing on a forest fire.
The Fed will do whatever it takes to keep the sheeple from pressing the sell button. They already eased by 25. If they don’t cut by 50 or more, the stock market will plunge.
http://tinyurl.com/39u6p5
So what would be wrong with that. The stock market could use a good correction right about now. It’s not the feds job to bail out investors. I say lets get a reality check going and the sooner the better.
Hey, I know. Let’s all nominate someone from the blog to run for Federal Reserve Chairman. Then, every time one of the members disagrees with our Chairman, he/she can just say something like “See, Mr. ________, now that’s why nobody likes you.”
“If they don’t cut by 50 or more, the stock market will plunge.”
Good. Let the stock bubble deflate, too. This hair of the dog crap has gotta go.
I think they will drop .25%, but I voted “unchanged” just to screw with people!
I voted the same way. I also noticed the conspicuous absence of an option “…will raise rates by XX”. Hmmm? Trick poll?
I couldn’t vote, as they did not offer “0.25% increase” as a choice.
LMAO! That’s sadistic. Cramer’s head would spin around and around and then explode.
I’d pay to see that.
Lyndon B. Johnson: [Putting medal on Forrest] America owes you a debt of gratitude, son. Now I understand you were wounded. Where were you hit?
Forrest Gump: In the buttocks.
Lyndon B. Johnson: Oh that must be a site.
[Whispering to Forrest]
Lyndon B. Johnson: I’d like to see that.
[Forrest shows him; Johnson walks away embarrassed]
Lyndon B. Johnson: God damn, son.
Is it safe to conclude msnbc.com has tied BB’s hands into the range of 0% to 0.5% easing? The tail seems to be wagging the dog any more.
Good for you Prof. I knew you were a patriot.
Can’t let Cramer pull all the strings.
HE KNOWS NOTHING!!!
HE KNOWS NOTHING!!!!!!!!
I am getting sick and tired of people whining about Texas being unaffordable. 90% of Texas is cheap! Please avoid that 10% with wishing prices, let those FB’s and speculators rot! I am going to show you a few houses below that anyone can afford. If they are not “good” enough for you, you have no business being in Texas, go relocate to NW Pennsylvania, prices are even *cheaper* there. Rent is generally *not* a good deal in Texas because there’s plenty of houses that cost *less* than rent. 90% of Texas did *not* see much of a bubble!
http://homes.realtor.com/search/listingdetail.aspx?ctid=27116&ml=3&typ=1&sid=d62c5c1a752348e38cc8a5721b0030eb&sdir=1&sby=2&pg=111&lid=1084392266&lsn=1106&srcnt=5743#Detail
Nice big house in perfect condition in good, established neighborhood in Dallas for $85k.
http://homes.realtor.com/search/listingdetail.aspx?ctid=27116&ml=3&typ=1&sid=d62c5c1a752348e38cc8a5721b0030eb&sdir=1&sby=2&pg=221&lid=1079058664&lsn=2203&srcnt=5743#Detail
Large 3 bedroom house in established neighboorhood for $130k.
http://homes.realtor.com/search/listingdetail.aspx?ctid=27116&ml=3&typ=1&sid=d62c5c1a752348e38cc8a5721b0030eb&sdir=1&sby=2&pg=220&lid=1088063110&lsn=2191&srcnt=5743#Detail
$129,900
5 Bed, 3 Bath
2,680 Sq. Ft.
Huge house at under $50/foot!
http://homes.realtor.com/search/listingdetail.aspx?ctid=27116&ml=3&typ=1&sid=d62c5c1a752348e38cc8a5721b0030eb&sdir=1&sby=2&pg=255&lid=1070565407&lsn=2542&srcnt=5743#Detail
Very nice house for $158k(you can get one like that for a few thousand cheaper, actually)
I hope this clears up any misconception about Texas being unaffordable. Texas is *not* like California or south Florida where almost nothing is affordable! People are running away from those locating and running to Texas where they can get a very nice house to live in at sane prices. I am tempted to relocate to Texas but big city life isn’t for me and NW Pennsylvania costs half as much. Texas would be a great bet for my parents, wish they had sold in south FL, they will lose their equity and south FL will become cheap enough that they might not want to bother selling if they don’t sell soon. Prices here will fall big time.
That’s what I would call reasonable for housing… I remember when Arizona was priced similliar and that wasn’t long ago. Unfortunately the day California becomes priced that well Arizona will be shoreline.
A hundred grand is a lot of bucks for Texas, and I don’t see why it shouldn’t be cheaper in Arizona than Texas. There is a lot more open land and the general pay is meager here as well.
Don’t forget high utility bills, 110+ degree heat, no ocean, no amusement parks (Castle-golf and Coaster doesn’t count), etc, etc. There is NO REASON AZ should be more expensive than TX.
the equity locusts from calif. cross arizona b4 they hit texas??
Judges 6:5
They came up with their livestock and their tents like swarms of locusts. It was impossible to count the men and their camels; they invaded the land to ravage it.
Yea, I really didn’t get it while I was there recently… They took overpriced to an entirely new level. This coming from someone who is somewhat numb to L.A. pricing. Which leads me to ask how far do they drop in Az?
TAXES TAXES TAXES Property Taxes are double (or more) higher in Texas.
Taxes are somewhat higher, but there is no state income tax.
Also, prices for other things are usually a little lower.Some parts of the state have reg. unleaded in the $2.30’s. Car ins. is lower, etc.
Maybe the reason AZ is higher than TX is proximity to CA?
Property taxes in Texas are high, makes owning expensive. And some future bubble leaves people in tax fear, an insecurity over the issue.
How are Arizona property taxes?
AZ prop taxes are pretty low. On a $275K house, they run about $1600.
Median Income in Houston is only $40K while prices are 4x or so..
Texas over the past 5 years has never been considered a bubble state, unlike California, Neveda, Florida or Mass. In the case of
California we are seeing prices nearly 8-10x income. Thats why
ARM loans were big in CA. Also check how prices actually went up nearly 500% in certain parts of CA. This has never happened before in CA RE history.
ahem….that was just froth, my good sir.
I suggest you spend a couple of weeks in Texas, in the month of August preferably and you will see why Texas is so “cheap”.
or load supply truck in Beaumont following a hurrican in early September.
I suggest you don’t…
Yeah, you know what I’m talkin’ about.
I live about 15 minutes from the beach. The Caribbean, it ain’t, but my girlfriend and I consider it heaven on earth. We’d just as soon nobody else know about it, though.
So, if any one asks, Texas sucks.
Texas does suck….bigtime. You couldn’t pay me enough to set foot in that crapola state again. So your “secret” is safe.
I don’t recall speaking disparagingly about your state. Some of us are very proud to be Texans, even if we don’t live there anymore. Let’s keep this blog on housing rather than on attacking the heritage of others.
When someone upthread states that Texas is “… heaven on earth” it’s perfectly acceptable to rebut that opinion. And there was nothing in Nozferatu’s commentary impugning anyone’s heritage.
Yeah but it was rude. What’s the adage? If you can’t say something nice, don’t say anything at all.
Texas can be a bit steep when you consider property taxes run 3% to 5%. The 150k price tag may look attractive, but the property tax can run you a chunk of money per month. This is balanced out somewhat by the lack of income taxes.
I’m afraid that could happen to Florida - 3-5% property taxes. It would kill off the state for good, as a retirement destination, unless prices fell to offset the taxes — meaning PRE-1998 prices.
I dunno, txchick lives in Texas, and she says the housing there is overpriced. Apparently, house prices aren’t in line with incomes in out there. I don’t track the TX market, but I don’t think it’s reasonable to say “Well, it’s cheaper than CA, so it must not be overpriced”.
Austin, San Antonio, Dallas, and Houston have gotten out of hand, but other places, not so much. As long as you don’t mind 98% humidity, mosquitoes out the ass, and an occasional hurricane, you can get a helluva deal.
Wow some of you still think Texas is overpriced? Well it is a little overpriced, but you will be hard pressed to find a cheaper location unless you want to relocate to the rural midwest. I bet you are getting ripped off more on a house elsewhere or even paying more for rent than what it costs to buy in Texas. Please click the above links, I have shown you that you can get a nice house in the first link for $85k.
Yes the heat sucks in Texas and Arizona, but it isn’t any worse than the cold far up north and prices are the same! Would you rather take a 100 degree summer or -20 degree winter? Pick your poison.
Property taxes in Texas is 2% to 3.5% where did you get the 5%? Florida property taxes are going up, the corruption in Florida sucks, they are driving millions of people out.
Dear Bye FL,
Shut the f_ck up! Didn’t you hear? Texas sucks!
“Wow some of you still think Texas is overpriced? Well it is a little overpriced, but you will be hard pressed to find a cheaper location unless you want to relocate to the rural midwest. I bet you are getting ripped off more on a house elsewhere or even paying more for rent than what it costs to buy in Texas. Please click the above links, I have shown you that you can get a nice house in the first link for $85k.”
There’s something suspect about those properties…..from what I know about Dallas, the area in which they’re located isn’t such a good area. But I think there are some other reasons why they’re so “cheap.” I google earthed them and it looks like they might be near some nasty industrial area.
I’m not seeing what appear to be “nice” properties like these in San Antonio for those prices…..those are more like the asking prices in the ghettos.
I wish TxChick would enlighten us.
You can see a hurricane coming,not so much with an earthquake.
“I am getting sick and tired of people whining about Texas being unaffordable. 90% of Texas is cheap!”
I’m not sure I’ve heard many here say Texas is unaffordable. However, cheap Texas housing aside, I’m not so sure many here feel car and home roof crunching softball-sized hail, stifling brain-fry humidity and heat, hurricanes and tornadoes sounds like sexy living either…but hey, the houses are cheap!
I’ll pass.
DOC
Be sure and get your kids the Kevlar backpacks, those are some rough schools there in Dallas. On the other hand, they will be fully fluent in Ebonics & Spanglish by the time they drop in 9th grade.
If you think $150k for a 2500 square foot Texas house is too cheap, then go ahead and pay $175k for the same house on a much more expensive lot. I think some people are just too picky in Texas. I suggest they come to south FL, they will be shocked at how little you get in my neck of the woods for $150k. What you get in Texas for $150k is three times as nice!
Come to my neck of the Bay Area and $150k will buy you 3 times nothing
Stop exaggerating SFBA Gal. Everyone knows you can get a parking spot for $150,000. Even one that will fit a Hummer.
Parts of Dallas proper are rough, BUT THEY AIN’T COMPTON.
There is nothing like this in the Tampa area at that price.
Even BEFORE the bubble (2001) that would have been inexpensive.
Dale Cose in Tracy, is now looking for a home and has a lot to choose from. Cose…said he hopes to get a good deal with so many foreclosures on the market. ‘I don’t have the same feeling of what happened in 1988 and 1992, where everything started free falling,’ he said. ‘You only see investors dumping their properties
Somebody must be making this stuff up UFB!
It’s good to see we still have some glue-sniffers out there. I thought huffin’ was dead.
I guess I picked the wrong week to stop sniffing glue.
“I don’t have the same feeling of what happened in 1988 and 1992, where everything started free falling,”-YET!
Was that quote by ‘Sea Hunt’ in Airplane? Loved that flick. Off topic, what was the name of the guy who did the Jap car commercials who was a Krishna in the movie?
Pismo
thats Joe Isuzu.
and
Using the term “jap” is outta line. You know it.
I’m a caucasion & if you said that in my presence I’d b*tchslap you. Azzhole !
I had a history teacher in college who said if any of us said “Jap” or wrote it on a test, he’d automatically flunk us.
“There’s no reason to become alarmed, and we hope you’ll enjoy the rest of your flight. By the way, is there anyone on board who knows how to fly a plane? “
Yes, but I never bothered to learn how to land it…
Uh-oh, VT Dan, your phones are being tapped as we speak…
“Konesky said that there were only two home sales pending recently in Tracy, one selling for $1.4 million and another for $1.2 million.”
“Dale Cose in Tracy, is now looking for a home and has a lot to choose from. Cose…said he hopes to get a good deal with so many foreclosures on the market. ‘I don’t have the same feeling of what happened in 1988 and 1992, where everything started free falling,’ he said. ‘You only see investors dumping their properties.’”
“Cose lost his home to foreclosure in 1995 and has been renting since. He said he’s sure buying now will be a good investment later, but most people find the housing market difficult to predict. ‘The thing is that you never know where the top or bottom of the market is,’ he said. ‘You never know until after the fact.’”
Me thinks that Dale will be back in foreclosure circa 2009 if he happens to buy now. Also $1.4M & $1.2M homes in Tracy - no bubble here in the SF Bay Area.
Wow, Tracy is Bay Area now? That bubble expanded over the hills!
“Many home sellers, bogged down in a housing downturn, are now doing the only thing they can to sell, dropping prices. Only this time, the sagging market often means taking a loss if the home was bought in 2005 or 2006. Christopher Thornberg, the former UCLA Anderson Forecast economist who predicted the ‘housing bubble’ since 2002, said that sellers’ only hope is to ‘price to sell.’”
Ahhh… sweet music. Yes, from Thornberg, one of the few economists who have been on top of this bubble. But if J6P can hear this from enough sources, he’ll react to it.
Got popcorn?
Neil
J6P was being fed the Britney story last week, and is being fed the OJ story this week. He is clueless as to which direction prices are headed and even less so about how far they will fall.
Dude,
So true. Coworkers are talking OJ. I’m talking Northern Rock bank runs… HELLO!
Got popcorn?
Neil
Munch, munch.
Did you see Britney’s outfit at the VMA (also on the cover of Entertainment Weekly)? Ye gads!
Now compare that to Modonna who is over 40!
Hey, Professor, you tellin’ me you’d kick Britney out of bed?
Be nice you guys … and try to stick to the topic - housing. There are women who participate in this blog too …
“Hey, Professor, you tellin’ me you’d kick Britney out of bed?”
If the Professor won’t, I will. I’d need a half-gallon vodka and a Viagra the size of a football to even consider it. Since I’ve been sober for seven years and have no plans of fallin’ off the wagon, then yeah..I’d kick her outta bed and all the way to the curb (with a Joshua tree firmly lodged, of course).
“is being fed the OJ story this week”
On CNBC one newsman said to the other, “If the OJ case goes to trail it might last for two months”, to which the other replied “That would be a godsend.” Anything to assure themselves a pay check while opining about the trivial.
Its BADDDDDDDDDD out here my friend who used to work audio and cameras, for CNN had only 1 days worth of free lance work so far this month… the phones just stopped ringing.
So an OJ trial IS A GODSEND, people have to eat and pay rent. Sorry guys sometimes triviality is all we have to make a living on. We all can’t work for Bill Moyers.
“J6P was being fed the Britney story last week, and is being fed the OJ story this week. He is clueless as to which direction prices are headed and even less so about how far they will fall.”
My girlfriend and I are bloody sick and tired mindless tv crap, but the goddamn commercial ads are REALLY contaminating TV. Every frickin’ ten minutes…ads, then another string of ads and more ads. Widgets, toys, cars, real estate, credit, on and on…
All we want to do is watch a movie and we’ve got to deal with a non-stop BARRAGE of freaking stupid commercials over and over. Check this out. The major networks call the stuff we want to watch (tv shows, movies, etc.) the “filler” and commercial ads the “content.” Advertizing $$ are GOD to these schmucks and they’re shoving it down our throats. Try to sit through a game or movie but end up getting disgusted and turning it off lately. Mostly just watch DVDs now.
What a freakin’ tragedy.
I swaer to God, the company that comes out with a device that edits commercials “real-time” and let’s say–turns on an appealing screen saver on your tv with music of your choice until the show/game you want to watch returns–will make a frickin’ fortune if they can patent it….
Hell, I’d pay a couple hundred bucks for one, just to avoid the mindless, bullshit commercial ads.
RANT OFF
I have a DVR box and am able to fast forward through commercials. Tape everything and watch at another time. Saw 3 hrs of Emmys last night in about 1 hr 45 mins. It’s the only way to go.
I didn’t believe in a higher power…until I met my DVR, that is. To know it is to love it. I hardly ever watch *anything* in real time anymore.
Umm, the mute button on your remote also works real well during those irritating commericals.
Price to sell, or catch the falling knife of what Alan Greenspan himself has said will be “larger-than-expected” price declines.
Sort of like, “that cadaver’s pulse is lower than expected.”
By November, Suzanne’s Slippers may not be Ruby but they WILL getting blood Red.
The Local Sheriff researched THAT one
First, nice find…
The Pacific Coast Business Times. “The paths of Countrywide and Amgen, two beleaguered firms that are Ventura County’s largest private employers, are diverging. Amgen is beginning a rebound, while Countrywide’s fate remains unclear.”
Rebound on Amgen? They are still getting ready to execute announced layoffs?!? Oh, the article is referring to stock price. I’m sure that will prop up the price of all those Thousand Oak McMansions. (And I have friends in those McMansions. So I think I have an idea of what is going on.) Not to mention Amgen seems focused on moving employees out of state.
Countrywide… well that’s easy. Its a nuclear implosion.
sigh… the media doesn’t get it… still!
Got popcorn?
Neil
Neil,
We are currently renting in Thousand Oaks, after selling our 3,800 sq ft Garage Mahal. In their dreams it won’t hit the housing market.
Between Thousand Oaks, Simi Valley, Calabasas, and Agoura, the first 14,000-15,000 lay-offs involves a lot of families (houses). You’re right, this is just the beginning, and Amgen & Countrywide aren’t going to be replacing those jobs.
Maybe some of the want to be’s, will finally get off their attitudes.
Countrywide’s meltdown is reminiscent of the one that hit Lockheed Corp. in the early 1990s. The Cold War ended, defense spending plummeted, and Lockheed eventually moved out of California - selling its building to Countrywide for $33 million.”
The building is ‘haunted’ by layoffs from the past…..good Halloween material for the ‘Tanman’.
As a side note…..how do i know when i am in Thousand Oaks……when i drive past the 1st oak…or the 999th oak?….also….i would not want to live in Boil Heights….gross.
Or how about the Silicon Valley Bust in late 80s when the Japanese started to flood the market with cheaper IC below cost causing the US manufactures to close shop and start massive layoffs. Man was the party over really quick!
Home prices dropped like a rock.
The idea that the building has ‘bad Karma’ is amusing.
Very amusing!
Got popcorn?
Neil
That’s the joke, 1000 Oaks hasn’t been for a long time. (try maybe 40+) I remember Jungle Land in the 60’s. All us kids saved our $ up, and we piled into the station wagon, and drove 40 minutes to ride the elelphants at Jungle Land. Back then, 1000 Oaks was full of Oak Trees.
Prices in the Thousand Oaks area will go down a max of 30-40%. They rose 300% from 2002 levels so most people will simply ride it out and still do very well, there won’t be any panic selling. Only a very small percentage of homes transacted in the last 5 years (
BWAHAHAHAHAHAHA!!!
Thanks for the laugh, John.
Dear John:
That “small percentage” of transactions over the last few years were enough to cause a 300% increase, so they will be enough to cause a 50% decline when they start going in reverse. Sorry.
hey didnt happen to the stock market.. a few tech stocks moved the whole nasdaq and few tech stocks drove it down.
I work in entertainment, I have never seen it this bad, lots of kool aid going around though.
Hi Neil,
Amgen has opened a facility up here in South San Francisco.
SFBayAreaGal-
Thanks for the information. So, they jumped from ‘frothy’ prices to sizzling prices. Lots of H1-B’s filling those positions at Amgen So SF?
Thousand Oaks Amgen has lots of ‘dot heads’.
In California my husband and I have known a number of IT professionals, from programmers to managerial, who lost their jobs in the dot.com debacle or subsequent rounds of right-sizing/outsourcing, but got through periods of unemployment/underemployment — sometimes very, very *extended* periods — because the “house ATM” was there.
I’m guessing a lot of home-debtors in Calif and elsewhere have done this, as the ride up for the housing market tracked with the ride down for employment and wages. And that people knew all along that they were just deferring pain, without even adding depreciation to the equation. The house was going to mitigate against that, but now it will lay waste to what little is left for an awful lot of aging boomers.
“There’s no point in holding out if you want to get out before the next three years” ? Ha! There’s every point in holding out. The war is on between the soon to retire and the non-landed non-gentry. (Before you all hurry to place your bets, take a sec to recall who has the better political lobby.)
“In California my husband and I have known a number of IT professionals, from programmers to managerial, who lost their jobs in the dot.com debacle or subsequent rounds of right-sizing/outsourcing, but got through periods of unemployment/underemployment — sometimes very, very *extended* periods — because the “house ATM” was there.”
I did this in 2001 & 2002 (I’m in advertising in the BA). Rode it out thanks to my HELOC, sold my house in 2004 and still made a bundle. Homeowners today may not be so lucky, especially the 0% downpayment IO/Neg AM crowd.
That’s what I don’t get about the whole lending insanity….having equity in your home is a safety net when push comes to shove…without it, you have all of the responsibility without the cushion. Way better to rent in that case.
Reading these stories are scary. Homeowners (for the most part) kept Heloc’ing when the times were good! So now they’ll pay pack 2001/2002 plus interest, plus the RV, SUV, Vacations, etc.
The war is on between the soon to retire and the non-landed non-gentry. (Before you all hurry to place your bets, take a sec to recall who has the better political lobby.)
Gulp… But thankfully congress is slow.
Got popcorn?
Neil
The house was going to mitigate against that, but now it will lay waste to what little is left for an awful lot of aging boomers.
It couldn’t happen to a more deserving lot. California boomers had (in retrospect) an extremely easy economic life and passed coastal anti-growth laws that destroyed the standard of living for following generations. The “I got mine–you go away” crowd thought house equity would milk following generations for retirement income. It looks like it won’t work out now. Boo hoo.
Got catfood?
Unfortunately those in California that are suffering the most are not those on the coast who are still doing well. The suffering is in the commuter neighborhoods, the central valley and San Diego. It’s fairly easy to track. Just look at those counties that vote consistently Republican and they are usually upside down. Kool-aid drinkers?
The war is on between the soon to retire and the non-landed non-gentry. (Before you all hurry to place your bets, take a sec to recall who has the better political lobby.)
I suppose it all depends whether it’s a political lobbying war, or a real one.
“Just like the AARP — bringing a lobbyist to a gun fight….”
Given the growth of MS13 and other south of the border gangs coming into CA, your quote “Just like the AARP — bringing a lobbyist to a gun fight….” might be quite adept.
The Surenos are not a south-of-the-border gang. They are locally grown.
“Who has the better political lobby?”
There are quite a few baby boomers, but they aren’t the majority. There will be no bailout for homedebtors.
“There are quite a few baby boomers…”
About 80 to 100 million of ‘em.
“The war is on between the soon to retire and the non-landed non-gentry.”
This is the first time that I’ve seen this verbalized, bravo! You better believe it is. There are many talented
Man… I’m finding way too much good stuff today. Well done Ben! Big thumbs up.
“Only two years ago, when business was booming, many construction-related companies upgraded with new equipment and shiny new trucks. Then business came to a grinding halt.”
“‘You’re carrying all this new overhead. It can be a little unnerving,’ Casey said.”
I’m so glad “the experts” see this as contained. For I read declines in the following industries:
1. Trucks (specifically, Detroit Big 3)
2. Construction equipment: CAT (doing ok in exports), Ditch Witch, etc.
3. Commercial RE. (Time to cut the staff)
4. Temp agencies (no need for a new secretary)
5. Low end hotels (for the construction crews)
6. Any tool maker (Sorry Milwaukee, its going to sting)
Got popcorn?
Neil
Hey Neil,
It’s “normalized”, “stabilized”, and “contained” …. babeeeeeeeeeeeee
Oh garçon, some more Single Malt Scotch…and some imported:
“Neil’s Buttered Derivative Popcorn”
Single Malt Scotch and microwave popcorn?!?
No!
Take a pan. Put a layer of olive oil in it (2mm to 3mm thick). Add four popcorn kernels. Heat on high heat (gas or electric. If its high power gas, med-high). When you hear the four pop, throw in 1/4 cup of popcorn. Shake while it pops (in the pan, on the burner). When it slows down, take the pot off the heat. Salt to taste and enjoy. You can substitute other oils or add other spices. (Garlic salt is a nice touch…Garlic oil has too low a smoke point though, so it will just burn.)
No effen food by Dupont. ok!
Neil
Hey Neil:
Try popping your corn using ghee. That’s clarified butter that doesn’t burn when you heat it. It’s butterier than butter, almost like that really good fake stuff they give you at the movie theater.
Neil, I agree with #1 - 5, but I get the feeling that these homebuilders were using mostly imported tools - cheaper and a good match for the imported labor. It seems that the whole boom was based on selling spit and chickenwire for top dollar.
I just can’t picture a skilled craftsman using fine woodworking tools as he framed a house in Subprime Arizona - more like Walmart nail guns and low-grade alloy nails shot randomly into warped 2×4s.
I agree with lots of imported tools. But look at the quarterly reports of Black & Decker (e.g., Dewalt) and I see a slowdown. The WSJ did an article on this a while ago on how the housing boom was really helping domestic tool makes. Hence… the unwinding…
Got popcorn?
Neil
I remember offering my B&D cordless drill to a contractor once. He told me with a grin he didn’t use that “Homeowner” crap.
Plus the pawn shops are stuffed with used construction tools. This’ll eat into the desire to buy new.
Also, new homeowners love to go out and buy a bunch of tools and a truck and a bunch of plants and furniture and dishes and stuff.
Very true. Furniture stores tend to follow construction for the get the 1st buyer and the resell. By the time the neighborhood is “established,” their lease is inflated away enough (or else they walk away).
Neil
I sense that we’re getting a little too giddy.
Hey Sweeney:
I don’t think I’m too giddy. I think I’m just right. I’m still a little scared that the Fed might cut, but I don’t think it will change anything really.
Back on topic, though > In my neighborhood, all the RE offices and furniture stores are going out of biz. I’m really bummed because one of the furniture stores was selling antique (like 500-year-old) and hand-made Chinese furniture. I thought that place was cool.
Also, a lot of the pricey restaurants and stuff have gone away, and new cheaper places (pizza joints, etc) are taking their place. Fine with me. All those expensive places were never any good anyway, just expensive.
In the span of 14 days, Ben went from “all is well, move along” in his FOMC speech to “oh shit we’re screwed” in his discount-rate-cut speech. So, what the Fed does tomorrow is anybody’s guess. My guess is that they cut by 50 to reduce the borrowing costs of the too-big-to-fail banks. Compared to the billions Wall Street is fixin’ to write off, it won’t help, but they’ll do it any way.
And, by the way, I am giddy by nature, so I wasn’t trying to break balls.
Hey, I’m giddy by nature. I wasn’t trying to break balls.
And the Fed will cut by 50 tomorrow. They went from “all is well” to “oh shit” in 2 weeks. A fed funds rate drop will decrease the borrowing costs of the too-big-to-fail banks. But it won’t be near enough to prevent the impending implosion.
We just somehow need to get the powers-that-be to let Wall Street bleed profusely.
I’m watching a grading/pool excavtor contractor expand his yard next door to my office (SoCal). This poor guy started the project right at the crest (Feb) but work on the improvements slowed down as more and more of his fleet took up more space during the workday. He is finnaly got the stucco started. I don’t know how he is gonna pay for it when his fleet of trucks is parked in the yard all day.
“‘The regular homes will not sell until all the foreclosures are gone,’ said Dave Konesky, a Tracy-based real estate agent.”
Posted this website this am in bits– http://www.ushomeauction.com/
The cat is out of the bag in the Sac Bee and T&V ads. Absent the shills etc, starting bids are 50% of previous and $100 sq ft. + or - a few bucks.
Didn’t Neil call for 50%? Wish I could be in SoCal for the popcorn and cheesecake.
Didn’t Neil call for 50%?
Ummm… 45% was my prediction.
It appears I was an optimist. 
Got popcorn?
Neil
My cousin the repeat rehabber/flipper was talked (largely by me) out of buying anything recently. Today, though, he couldn’t resist making an offer on a PB county FL foreclosure, 50% old asking price. This may still be knife-catching. (And/or, maybe his offer will not be accepted.)
Interesting. In my opinion, in PB country, 50% off is still overpriced, but at least it isn’t super STOOPID. I hope he’s not planning to make a buck off that…
Neil
Let us know if he wins the house at that price. At this point in the game, I have a feeling he’ll be outbid.
LOL! Those seem way overpriced for the homes the auction is adverstising… some of the condos listed were selling well under 100K …so 250K doesnt seem reasonable to me. The homes are in really poor shape or space to warrent such a price…
no thats a suckers rally!
I looked online at the house in San Mateo that’s in the auction. They wanted/valued the house at 699,000 and the opening bid is 350,000 something. But the house is located on a landfill in a flood zone and recent reports indicate that this area is one of the most likely areas to liquify in the even of an earthquake; so you need earthquake and flood insurance.
Then we get to the house itself - inspection dated 8/07 already shows extensive dryrot and the inspection states they don’t inspect roofs, so that still needs examination. It’s on the wrong side of 101 and although it’s close to the Bay, there’s something like a wind tunnel over there and it’s in the aircraft flight zone.
I looked at one of these houses in Shoreview back in 1999, when it was priced at $179,000. Shabby, poorly built narrow house with tiny rooms and a tiny, one car garage. Huge backyard but not zoned for adding a duplex.
OT. What’s next for Hovnanian? Will it repeat sale? Will competitors respond? According to Bloomberg, “the company had gross sales of 2,100 homes. More than 1,700 potential buyers signed contracts and 400 gave deposits….”
http://www.bloomberg.com/apps/news?pid=20601087&sid=ah6D5AD31WlE&refer=home
let’s see how many (few) close….
It will be amusing to know how many of the “non-closers” end up in the ‘hidden inventory.”
Got popcorn?
Neil
let ‘m close. it sounds like neighborhoods in 19 states will be getting new comps.
I’ll throw the BS flag on this one, like their going to tell us it tanked ? Stick a fork in the house sales it’s done. Is the pop corn going to have a “Thermal Incident” (get cooked).
We had a little hiccup with the comments, should be fixed now.
“‘One of the things that this whole subprime market at Countrywide and others effects is they had good business models when they then moved outside of and then began lending to people wholly and largely unqualified,’ said Wartik….”
WRONG! The Russians blew it. It’s Yuri’s fault. If they had stuck to communism, this whole housing bubble mess never would have happened according to highly revered sources. Damn the KGB!
Whats up with those Russians? Where did they all get rich from? Mercedes Gucci, Dolche and Gabana?
And why the hell are they all here? Who won the cold war anyway?
OIL.
(the Austrians are starting to really gripe about the Russian invasion of Tirol. Lots of huge, tacky mansions going up, to be occupied by people who drive through pedestrian zones like they’re on the Autobahn)
At the end of the Cold War, a few powerful families took over the state-run industries. They went from wealthy bureaucrats to monopolistic tycoons overnight, and have stayed that way with the help of the government and mafia.
And thus Moscow is the most expensive city on Earth.
“The Bay Area Newsgroup reports from California.”
The NG is the San Jose Mercury News which for a couple years
now has dismissed any talk about “Housing Bubble”…
Now they are flipping to the Bear side on the issue.
Partly because builders are no longer buying large color advertising
in their Saturday edition.
SJMN created so much in terms of myth is was mind numbing..
– SJ RE inmune to downturn… thats why so many turned to ARMs
– Great weather … as if that mattered
– Everyone wants to live here… and so many have left
– Lots of Jobs… thats why so many left
– Never had a 40% decline… pure lie
– The next Googles IPO with stock options will
fuel higher prices… that was before companies had to expense
options as compensation and take a hit on earnings.
They were the worst cheerleaders this side of the Bay!
Beauty of all things is the high % of ARMs that are resetting.
Even in the best spots of Saratoga Los Gatos and Palo Altos
will get a bad smacking. LG Times did report prices declined
by 20-25% in 2001 before the ARM buying.
There was also a Stupid writing for the Chronicle, Carol Lloyd. She even had a class for buyers, flippers or some such.She bought her own place last year if I remember. Lereah and LAY had nothing on her as far as BS goes. She was a cheerleader. What a bit-h.
You, sir , are a moron. Carol Llyod’s column is entitled “Surreal Real Estate” Perhaps you don’t know the meaning of the word surreal.
Reading Sue McAllisters real estate articles is like hearing fingernails on a black board. I can’t resist correcting what she has written in the comments section. Now her latest angle is that the problem is psychological and is the MSM to blame for all the negative articles ?
OT I was watching some program last night that had three guests: one guy from some housing advocacy group, a senior person from Moodys, some other guy that I can’t place. Anyway, the guy that I can’t place raised a very interesting point.
I’ll paraphrase here, ..”if the borrowers are bailed out or if the lenders rewrite the loans or change the terms, what happens to the investors who shorted the ABX Index, making the bet that the loans would go bad (which is what is happening now)?”
Wouldn’t these people be screaming, because they made an honest bet, and now the rules are being changed? Would this undermine the notion of shorts, puts, swaps, etc.?
That’s just more of the same, war on savers, common sense gets penalized etc etc
rules? what rules?
rules are for Democrats!
I think the investors are screwed. These were risks inherent their bets (i.e., that the govt wouldn’t bail them out; that banks wouldn’t modify loans). If they failed to account for these risks, then they were not doing their due diligence. I’m sure that they’ll cry bloody murder, but I think that these are simply are risks that they accepted (whether they realized it or not) when they made their bet.
I think the same logic applies to investors who purchased MBS; the value of their securities may be impaired if the servicers modify the loans (e.g., reduce the interest rate) in accordance with the terms of their servicing agreements. I think the only time an investor would have a claim is when servicers are trying to do modifications that are not authorized by the servicing agreement.
JMHO
Interesting comments, but it still seems to have the potential with everything in the derivatives markets.
It’s like insurance that won’t pay claims. So much for Free Market Capitism. When you can’t make money from someone else’s misfortune, you know things have really moved towards socialism.
“So much for Free Market Capitism”
I think that what we have had is “Managed Market Capitalism.” Nothing “free” about it. Bill Gates just learned what it tastes like (chortle).
“When you can’t make money from someone else’s misfortune, you know things have really moved towards socialism.”
RDF… because it’s so true.
It’s no different than shorting the market and having a surprise FFR or discount rate cut. The government always interfere’s in the market and those who do not take that into account will suffer the consequences.
As an investor, if you modify my agreement this time, I will not invest again.
Emm Bee Ess,
Big fat Mess!
Kept all the notes
I ever wrote.
Yes yes yes.
(az_lender cheerleads the credit implosion)
Cee Dee Oh!,
No more dough!,
Refi’ings done,
Payments, you ain’t made none,
Let’s go repo!
From what I’ve heard, the lenders can’t change the terms of the loans because they no longer own the contracts.
Disagree - what you have w/ the workout is a true “mark to market”. The portfolio value has still decreased due to the loss on the original paper.
I should say here, valuing the [now] new porfolio, and assigning it properly among the many tranches, now that’s a different story. Oh, I forgot, we’ll just plug it into the computer model - Joe down the hall has that on his spreadsheet doesn’t he? Let’s catch him when he gets back from lunch.
Need your advices… I have an uncle who is retiring and has put his house on sale for $645,000 in Glendale, CA (3bed 1.5 bath, 1,450 sq.ft). In order to pay his expense until he sells his house, he has taken out a HELOC(not sure how much). First, is it a good idea to take out the HELOC. I am thinking that he should just lower the price and sell, ASAP. BTW, he purchase his house in early 90’s, so he has plenty of equity built up. Looking forward to your feedback, and thanks in advance.
You’re absolutely right — he needs to sell ASAP. The HELOC won’t hurt provided he’s not using it as a means to “wait for the best offer” and (if necessary) to give some of it back.
I know we dog realtors here, but an aggressive one that knows your uncle would be willing to entertain all serious offers could be of enormous value. Price it below comps and be ready to compromise.
One thing you must absolutely convince your uncle of is this… He’s bleeding equity every day that house isn’t sold. Time is money.
Jinx!
Price it to be the NEXT TO SELL!!!
If another in the area prices lower he must move below that.
The goal now is to sell today! If he doesn’t price it low enough to get a deal in a week he can easily chase the market down and lose BIG BUCKS.
And have him take a look at all the REO property has on their website!!!!
Im telling you guys, once the banks finally have to bite the bullet and really sell all their REO anyone that bought after 2000 is going to be under water. Really take a look at their site
http://www.countrywide.com/purchase/f_reo.asp
All these in my area are are overpriced (at levels to avoid big losses) by well over $100k at todays rent levels. Their site has over 2,900 REO homes in CA alone!!!
Quick math @ $150k loss per REO countrywide is set to take a $435million dollar loss!!! I feel that with the currant credit collapse they will be lucky to sell for only $150k loss per home, especially if they try to hold out much longer and get ate up with more holding cost.
At some point the decision to cut bate will be made to avoid further holding cost, at that time all “VALUE” issues will be off the table and what they can move them for in cold hard “CASH” will set the market. It will take real people with real money— CASH not Loans— to absorb this inventory. When we reach that point we will swing undervalue as much as we swung overvalue in 2005.
If he doesn’t sell before the banks do he will cry over spilt milk the rest of his life.
Hi Pcman:
I probably speak for all on the blog when I say “Sell now or be priced in forever”. It may already be too late for him to sell for 645, since only a lateral mover will be able to get the financing for that amount. Perhaps he should reduce the price by 5% every week until he gets an offer.
“Forecast economist who predicted the ‘housing bubble’ since 2002, said that sellers’ only hope is to ‘price to sell.’”
For me ‘priced to sell’ means 1999 prices. The home next door to where I rent was put on the market back then for $167K. Today it, along with other POS homes on my block are going for $650K. The last waves of buyers were mostly illegal immigrants who earn minimum wage and jumped on the home-ownership bandwagon during the ’suckers rally’ of the last couple of years. Now they’re cramming every nook & cranny of their homes with renters (at the tune of one WHOLE family per room) just to meet the monthly mortgage payments.
What drove them up to these outrageously stratospheric price levels was nothing but pure, unadulterated GREED. Flippers came in -one after another- bought up these homes and then put them right back on the market again. AFTER the prerequisite $60-100K price hike each time.
I’ll be DAMNED TO HELL if I’m gonna put my REAL money into one of these homes now. I’m NOT paying for the mistakes of others. Let ‘em eat sh*t now. Homes aren’t overpriced by 30 or 40% ..THEY’RE ACTUALLY OVERPRICED BY 100-300% in relation to REAL wages and earnings capabilities.
“Construction workers such as Rob Belendez are worried. He worked at Morgan Ranch for the past 11 years. He has a wife and four children to support, plus a mortgage and car payment.”
“A large bonus anticipated with his last check will get him by for awhile, but the lean times of winter are coming
Imagine the look on Rob’s face when he opens the envelope and the bonus turns out to be a subscription to the “Jelly of the Month Club”, you know, the gift that keeps on giving all year long.
How do we know that the Big Down has befallen us? Because even the Mercury News has published an article acknowledging price decreases. There is no turning back from here, folks.
Guess I finally figured out that your handle (Big V) is supposed to simulate some kind of financial chart. So why wasn’t it “Big Backslash” ? You see a rebound in the offing?
I fancied it more of a down arrow. I just don’t have one on my keyboard. Also, my “real” name just happens to start with a V.
OT, but this is too good not to share. One of the guys who was arrested with OJ lives in Mesa. He was shown on the local news just now getting out of a car with reporters shoving microphones at him and asking questions. His comment? “I’m not a thug—I’m a realtor! I’m licensed in the state of Arizona!”
The comedy just on keeps coming…
The OJ story is going to go nowhere. It smells fishier than the Duke Lacrosse team “rape”. The dude is dumb, but surely not that dumb.
“The dude is dumb, but surely not that dumb.”
If he got away with hcd, why not ARMed robbery?
They’ll convict him of verbal assault, and sentence him to life in prison.
Paybacks are hell…
“The dude is dumb, but surely not that dumb.”
Mix dumb with a life history of getting away with whatever you want and you end up with surely that dumb.
He’s a psychopath - psychopath’s don’t realize the consequences of their actions. ANYTHING they do is justified in their minds.
Were he to admit to the murders, he would also say he’s surprised anyone is upset; after all Nicole was a whore who deserved to get her throat slit and Ron should have stayed out of it.
“Dale Cose in Tracy … lost his home to foreclosure in 1995 and has been renting since. He said he’s sure buying now will be a good investment later.”
Good thinking, Mister. Sell low,buy high.
AZ…
As a lender, can you answer the following question?
If a bank forecloses and then the property becomes an REO, does the bank have a duty to get as much as they can for a property? or can they just blow it out at any reasonable price?
If the first mortgage, was, let’s say $500K, are they required by law to try to recopu as much as possible, as to not totally screw the FB?
Hi Pen:
Since it doesn’t looke like az is still on, I think I’ll chime in here. From what I understand, the bank first tries to sell the house at auction for some “reserve price”. I don’t know how they calculate that, but if they can’t get that much, then they at least know that market price is somewhere below that. Then they just put it on the market and take the best offer they get. That best offer is, by definition, “as much as possible”.
“People are screwed”
-Big V
I’m seeing one bedroom condos/townhomes sell for 1.2M as though no bubble’s going on, this is really pissing me off, don’t these people here read the newspaper, and how are they getting financing anyway.
Drug money. If drugs were not “illegal,” there would be no drug money. That could have a negative price effect on some housing markets.
No, I’m not going to stretch it that if drugs weren’t “illegal” (quotes meaning I don’t accept it as a legitimate definition), the housing bust would be [whatever].
LEGALIZE MARIJUANA!
There, I said it.
AH LEEGALISE MARY JUANA…The Pope smoke Dope!
DAVID PEEL & THE LOWER EAST SIDE…….Yeah i’m met him a few times……funny as heck, and has lots of projects he is working on…hard to talk to its like his mind is racing 200 MPH and he can hold conversations with 4 people at the same time……ask him a question he answers somebody else’s then yours….
Dear LA Investor Girl:
From what I understand, most house purchases these days are just lateral moves being made by people who already had a house with a lot of equity in it. That’s why we’re seeing an increase in the median price in some areas. It’s because there are very few first-time homebuyers getting in, and only the older folk who didn’t already spend their equity are setting the new median. Of course, even that type of move is on the decline, since every move creates a vacancy, and there has to be a first-time buyer at the end (beginning?) of the line to fill the lowest spot.
I concur. Despite the absolute FLOOD (I’ve been detailing the drip-trickle-stream progression for the last couple of years here) of foreclosures coming through my office for BKs, prices in listings are STILL amazingly high. There is a concensus among the real estate professionals here in CA that the state will raise the conforming loan amount to $700k plus, allowing/enabling a further expansion of the bubble. A recent article stated that a full 70% of loans written in the last 3 years in CA were no-doc “liar loans”. I have spoken to hundreds of real estate agents at seminars where they freely admit to “exagerations” on loan docs. The creative lending has basically stopped but if the conforming amount is raised then we’ll start hearing the “It’s a no-brainer” idiot with some new exotic loan on your local radio commercial. I feel extremely job-secure until I retire. . .
Hey BKlawyer:
Isn’t it Congress who will decide whether or not to raise the conforming loan limit? I don’t think there are enough Senators and Representatives (or voters) supporting that bill for it to pass. Also, King George 2 will veto it if it gets to him. Then Senate will need 2/3 or something like that. ‘Taint gonna happen.
“Research by the Contra Costa Times found that although east Contra Costa and Alameda counties as well as Solano County have lower-cost homes, homes in Alameda, Walnut Creek, Pleasant Hill and even blue-chip San Francisco are affected by the price drops.”
I sold my house in Pleasant Hill in 2006, just before most of the homes started reducing their asking prices. I know someone who bought in the same neighborhood at the same time with zero down and an interest only loan. Maybe they will break even in 10 years. Maybe not. They also had 2 rentals bought a few years earlier a couple towns east and had already taken out equity. So it looks like 3 houses could go on the market if they have any emergencies.
“Maybe they will break even in 10 years.”
As a BA resident I doubt that will happen.. we will need to have extreme inflation. This bubble will leave a not so pretty scare on
many in the future. Keep writing.. they will read it 10-15 years from today when they do a search on “housing bubbles & San Francisco Bay Area”
Welcome to the information revolution.
What’s your problem? I didn’t mention names, dates beyond a year, how I know them, or who I am. I don’t use my real name, say if I or they are male or female, young or old, etc. I’m sure they’ll spend hours and hours sifting through many 1000s of decade old comments to see if someone wrote something that may or may not have been about them.
LOL … Google it…
I don’t give a #^*% if someone reads a comment that sounds remotely about themselves and then try to figure out who posted it. And no, this blog doesn’t come up in google for “bay area housing bubble or san franisco bay area housing bubble” yeah… LOL
“Bank of America, the second-largest U.S. bank, said on Monday recent volatility in capital and credit markets will have a “meaningful impact” on third-quarter results at its corporate and investment bank.
Speaking at a conference in San Francisco that the bank sponsored, Chief Financial Officer Joe Price said results are being hurt by “unprecedented dislocations” in the credit markets, as investors ascribe greater risk to a variety of loans and securities where the bank has exposure.” cnbc
Well, here in LA, this is the latest mantra (shamelessly stolen from Westside Bubble Blog comments section…
It is all relative. Prices in Europe London, Paris (or even Bombay India) are much higher than that. Try a 1000 square feet or less condo in prime areas of these cities for equivalent of 2mln$+, no land. Average salaries are not higher than here - mostly lower and there is no favourable tax laws for the mortgage deduction like in US. LA is a famous big international city and there are only few exclusive zip codes here including 90402, 90210-2 90049, 90024 etc. Not too many in the 10 million +city. There are only 20-30 or so houses for sale in 90402. Don’t hold your breath for these prices to come down too easily. I have seen the same gloomy predictions on the Internet in 2001. $ is down 50% since then and many people come here from abroad - 2007 prices are very reasonable for Europeans and others. It is close to 2001 prices for the foreign capital. Typical uppper-middle class LA families 200k+ (dual income) and there is many of them here will be easily priced out since there is only a few properties in the key desirable places, so you need to have much higher income to compete. Unfortunately high-end areas of big metropolitan areas are rarely afordable and this is how it has been for decades in the world. I don’t see why this should suddenly change now.
I give up…
Sounds like sumbudy’s feedin’ an alligator.
Dear Plysat:
These people will be fodder for your pocket book. As they stupidly hold out for higher prices on their POS condos/houses, but no buyers step up for lack of financing, they will come closer and closer to the brink of foreclosure (since they all have ARMs, you know). Let them spin their silly little yarn until they get to the end of it. Bah.
Encourage them to buy more!
Well, 90402 will fall in price later than a lot of other areas. The thing to keep in mind is that the median income in that zip is $125K and there are about 1250 households (out of about 5800) with median incomes over $500K. These are not your typical FBs: although some of them are FB++
I remember the last downturn - even at the bottom, I still considered 90402 overpriced - but I should have bought several houses there during the 94-96 time frame and sold them in ‘05. Oh Well.
Explain to this dingbat that those “europeans” may currently be standing on line to get their money out of northern rock. or alliance and leicester. The british re bubble is already popping…and the credit crunch is on. Or don’t. Let the news be a surprise.
45% off todays Price ?
Looks like Light at the end of this RealEstate Economic Depression
Got some Popcorn
“On the bright side, now is a great time to build because lumber is at a 20-year low and property owners have a pool of quality contractors with time to devote to their clients, said Jeff Pardini, owner of Hills Flat Lumber. ‘You’re crazy not to do something right now,’ Pardini said.”
I don’t know about building from dirt right now, but I’m looking forward to being able to hire quality contractors for some repairs and improvements on my buildings. I have some staircases that need replacing, maybe a roof and some concrete work. Maybe even some upgrades if I get ever get some vacancies - we have vacancy decontrol now, so certain upgrades could be worthwhile.
omg people please respond to this:
http://www.zillow.com/forum/site/ViewThread.htm?tid=6530
We all hear about “greedy and delusional” sellers, but the same principle should apply to buyers. Mainly, some of them are looking to get something for nothing. They want a house that has everything they want, but they do not want to pay for it. They want the granite counters, the marble floors, the stainless steel appliances, etc., but they do not want to pay for it. Buyers who can only afford a cape cod want a side-hall colonial, those who can only afford an older colonial want a McMansion, and those who can only afford a McMansion ant an estate. And buyers are not looking at comps when they make an offer. Many will make an offer $100,000 + under asking just because they think they have the right to do so. They go under the principle that “A house is only worht what someone is willing to pay for it,” BUT they also forget that a seller does not have to accept an offer. A house is only worth what someone is willing to pay for it AND the seller accepts.
Many buyers out there are looking to steal a house. Usually, they are looking at houses that are way out of their price range with the idea of lowballing. I actually know someone whose max is $400,000, yet they are looking at homes priced at $600,000. Many buyers are bitter that they got priced out during the boom and want to get some sort of “revenge” on those who priced them out, and they are slowly seeing that there is no revenge to get.
That is why sellers should stop lowering their prices. However much you lower it, it is not enough. Someone will come and put in an insane lowball offer. If a buyer TRULY wants a house in the immediate future, they will have to pay at least 90% of the asking price. If you want to play games and do not care when you buy a house, then go around and alienate all of the sellers and realtors.
Did you see this one:
“Jarrod, I think we’re actually in agreement over this. I’m sure you see it all the time, but I was a little bit shocked when my agent told me about my offer. Again, I couldn’t imagine making such an insulting offer to somebody that is priced below the competition. It’s one thing to low-ball someone that is asking too much, but in a market where feelings shouldn’t be hurt it really can cross the line. ”
“In a market where feelings shouldn’t be hurt”?????
Man oh man, I really wish the world operated this way, I’d have sold my worthless Worldcom by appealing to the sense of “don’t hurt my feelings” on Wall Street!
Bubble madness sucked a gazillion rank amateurs into the RE market.. these former clueless buyers are now equally clueless sellers.
The chase is over. The antellope, laying on it’s side with it’s neck securely clamped between the jaws of the lion, accepts his fate after a few moments.. and stops struggling..
Remember when making a LOW offer (hate phrase low ball), if you aren’t ashamed then your offer is too high. Also, if you want a friend of the seller, get a DOG!
I read a few of the comments (boring), then posted this:
Dear Alpine:
The reason buyers are asking for a huge discount is because they are trying to price in future declines. With builders such as Hovnanian (sp?) offering $100-200K discounts and “depreciation insurance”, it’s natural for buyers to demand the same treatment from other eager sellers.
And don’t forget, Alpine, the reason why most people are selling their houses today is because they have to. I guess they shouldn’t have gone out and overpaid for the damned thing thinking they’d just sell for a profit before their teaser rate ran out. They shouldn’t expect today’s prudent buyers to finance yesterday’s reckless speculators.
Mine
Dear Alpine:
Buying or selling a house is a business transaction. If I make a bid you can accept or reject it. I am not holding a gun to your head. To get this emotional about it is a little concerning. Yes, there will always be low-ball offers. So what? Say no thanks, and if they can’t get the house they want they will have to offer more on the next bid. But market price is also an agreement between sellers AND buyers. Both have to agree to the price. You can price your home at anything you want. The consequence of too high a price means it will not sell. You cannot fix prices in real estate - there is too much need for certain people to sell (or sit by sadly as the bank takes it away, which will be a growing situation over the next four years.)
You will be very happy to know that I will NOT be making any low-ball offers on your home. I believe we have several years of decreasing prices and have no intentions of buying for quite awhile. When I do buy, I will offer what I think is a fair price. I will not be trying to hurt you - but I have to make the payments for the next 30-years on what I purchase and it has to be of value to me. I hope your home is sold by then because my guess is that you will find my offer not as a business transaction as I see it, but as an “insult” that I would dare to find your home less valuable than you do.
A tornado hit Cape Coral and damaged 150 homes. I guess this is God’s way of answering the NAR’s prayers to help reduce the inventory.
“A tornado hit Cape Coral and damaged 150 homes. I guess this is God’s way of answering the NAR’s prayers to help reduce the inventory.”
Guess one guy will be amending his complaint:
http://www.ketv.com/news/14133442/detail.html
“If you want to play games and do not care when you buy a house”
That’s pretty much my attitude…though I can think of more amusing things to do than deal with realtors. Do I need a house/ Nope, I could rent forever. Do I have an ARM resetting, am I underwater, having trouble with mortgage payments, property taxes and the like? Nope.
So, insult buyers. When you’re broke and foreclosed, and the bank dumps your 600k house, I’ll pay cash for 150,000.
“Konesky said that there were only two home sales pending recently in Tracy, one selling for $1.4 million and another for $1.2 million.”
The median sale price in Tracy is at $1.3 million! Buy now or be priced out forever!
No thats the average, there is no median with just 2 numbers.
Actually the median is the average of the two middle numbers, otherwise there could never be a median for an even set of numbers.
Here’s an even set of numbers (4) where the median is not the average of the two middle numbers.
1,1,1,9
1+1+1+9=12
12/4=3
Wrong… the median of that set is 1. The mode of that set is 1. The mean of that set is 3.
tomthumb…..
sorry, but I think that the person you know should be looking in the 700K range, his 400 will easily cover it soon.
Does anyone else remember Tracy being called “The Land of Many Smells”? Or is that ancient history before the McMansion fields exploded out there over the former cow pastures.
Hi N2LCA,
Smells around Tracy is not that bad anymore. Yes it is due to the McMansion fields explosion. Still gets hot as heck out that way. It can also still flood during heavy rains.
there was Holly sugar in Tracy, and Spreckle’s sugar about 2 miles away, in Manteca.. Spreckle’s was closed around 1998 i think.. dunno about Holly.
you aint smelled nothin ’till you get a whif of a sugar beet refinery in action.. i think it’s the waste-water that does it.
Panic in England
Comments don’t work !!!!
P A N I C in E n g l a n d
google for N o t h e r n R o c k
You couldn’t even wait 3 minutes to see if your posts showed up?
BTW, this news is quite old at this point. You should be figuring out which bank is next. My bet? WAMU
Sorry for the spam, I did NOT know about this three minute rule.
Also I am quite surprised, that this event is downplayed not only in the mm.
“The creative lending has basically stopped but if the conforming amount is raised then we’ll start hearing the “It’s a no-brainer” idiot with some new exotic loan on your local radio commercial.”
Wasn’t his name Leslie? “The biggest no-brainer in the history of mankind” for “savvy, affluent homeowners”.
SFBayareagal. I didn’t smell it as bad last time I was in Tracy (2006) as when I first moved to Bay area (1992). Back then, I dreaded going through that smelly place. One benefit of a field of McCrackerboxes (and way overpriced at that). I had a lot of former coworkers living and driving into Pleasanton/San Ramon area from there
Foreclosures up bigtime from July and August. I then did a look at Housing Tracker and places like Washington DC saw huge jumps in housing prices.
Same thing here, but there has been a need for balance. Those who buy now will double their money in 10 years. But those who need to sell for the next 3 to 5 years need to sacrifice.