Housing Sales Are Falling Like Stone In California
The California realtors report on August sales. “Home sales decreased 27.8 percent in August in California compared with the same period a year ago, while the median price of an existing home increased 2 percent, CAR reported today. ‘Despite the overall increase in the statewide median price, prices declined in nine regions last month, falling 11.5 percent in the Central Valley region and 12.1 percent in Sacramento,’ said C.A.R. President Colleen Badagliacco.”
“‘Price softness is even more pronounced when we look at different segments of the market. For example, the statewide median price in the entry-level price range of less than $500,000 fell 5.1 percent in August to $349,360 compared with $368,210 for the same period a year ago,’ Badagliacco said.”
“‘The median price per square foot for a single-family home is also on the decline, falling 4.3 percent this year to $336 compared with last year’s record high of $351 per square foot,’ she said.”
“‘While low affordability, tighter underwriting standards and expectations of lower prices continue to pose challenges for the market, the decline in sales accelerated in August as a result of the so-called credit or liquidity crunch that began in July,’ said C.A.R. Chief Economist Leslie Appleton-Young.”
“‘With credit drying up, even qualified buyers were unable to receive funding for home purchases,’ Appleton-Young said. ‘We expect the impact of the credit crunch to play out over the next several month, and that it will continue to negatively impact sales.’”
“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2007 was 11.8 months, compared with 5.9 months (revised) for the same period a year ago.”
The Recordnet. “Lodi-based Anderson Homes will auction off 34 homes in a Manteca subdivision and 25 more in Los Banos because sales are so slow. A minimum bid starting at $285,000 will be required for homes in the Manteca project, about 60 percent of the ‘reduced asking price.’”
“‘We decided that the auction format for us was probably the most efficient way of finding what the bottom-line price is for the buyers today,’ said Craig Barton, Anderson Homes’ chief financial officer. ‘The alternative is to continue to carry these homes for who knows how long.’”
“New-home auctions are starting to pop up as some builders try to come up with ways to keep cash flowing, and they likely will become commonplace in 2008 while new-home sales remain very sluggish, said Greg Paquin, president of the Gregory Group in Folsom.”
“‘Even if the return is not positive, it does bring some cash into the company,’ he said. ‘And in the Central Valley, where it’s challenging, it’s providing opportunities to sell homes where you wouldn’t sell otherwise.’”
“Over the weekend, Sacramento developer John Leonard auctioned off 22 new 1,600-square-foot townhouses in West Sacramento for between $270,000 and $320,000. The townhouses originally listed at more than $400,000.”
The Press Democrat. “Along Domenigoni Parkway northeast of Temecula, dusty graded lots, tattered flags and sagging orange fences are conspicuous signs of a stalled plan for 6,000 homes and new commercial parks in the unbuilt community of Winchester Hills.”
“Inland developers continue to plan for new housing, but Riverside County officials say many have put the brakes on construction of new communities amid the most significant housing-market nose dive to hit the Inland region in more than a decade.”
“The 2,000-acre planned community of Winchester Hills in southwestern Riverside County — promoted by Rancon Group, one of the region’s most prominent developers — is one of the largest to hit the skids, county officials say.”
“Fred Bell, executive director of the Desert Chapter of the Building Industry Association in the Coachella Valley, said developers are forging ahead with planning and approvals. ‘But they are not going to move forward until the market changes,’ Bell said.”
“The stalled development at Winchester Hills and nearby properties, together called Winchester Ranch, has left the landowners with a huge financial burden. Homeowners and businesses that were expected to occupy the development would have repaid the debt on more than $20 million in bonds for extension of nearby Domenigoni Parkway.”
“Instead, Rancon and other developers who invested in Winchester Ranch are saddled with paying off that debt until the community becomes a reality.”
“Rancon CEO Jeffrey Comerchero has asked Riverside County officials to indefinitely delay issuing $12 million in bonds that would have paid for new roads, sewers and flood-control improvements in Winchester Ranch.”
“The additional debt, without homeowners to share the burden, could have jeopardized Rancon’s ability to pay taxes on the Domenigoni Parkway extension, said Jerry Norris, senior analyst with the county’s executive office.”
“The decision to hold off on bond financing for the Winchester Ranch came as no surprise to Nancy D. Sidhu, senior economist for the nonprofit Los Angeles County Economic Development Corp.”
“‘Housing sales are falling like stone. … We don’t know yet where the bottom is on the housing market,’ Sidhu said.”
The Orange County Register. “Lennar Corp. reported its third quarterly loss in 12 months today amid news that the company is facing delays in the pace of development at two big housing projects in Orange County.”
“Lennar Chief Investment Officer Emile Haddad said that his company is evaluating when to launch construction of more than 3,500 dwellings in Anaheim’s Platinum Triangle and may decide to postpone some projects until market conditions improve.”
The New York Times. “The Torralba family’s taste of the American dream began to sour in May 2006, two months after they bought a modest home at the southern end of Silicon Valley, when they received notice from a man who claimed that they owed him money.”
“Without realizing it, the Torralbas had taken a $74,000 ‘down payment assistance’ loan from the man, Pablo Curiel, who now wanted them to pay $679 a month.”
“The Torralbas are one of nine families suing Mr. Curiel and the brokers and real estate agents who arranged mortgages for them. As the housing boom turns to bust, hundreds of lawsuits are being filed on behalf of borrowers who legal advocates say were shoehorned into homes beyond their means with creative and onerous mortgages.”
“Lawyers for the Torralbas assert that the family was never told about a third loan from Mr. Curiel, in addition to two from Washington Mutual, a mortgage for $446,000 and a revolving line of credit for $89,000. (The bank is not named as a defendant.)”
“All the documents signed by the family were in English. Mr. Torralba acknowledges speaking the language but says he is not fully conversant. His lawyers say the negotiations of his home purchase and mortgage were primarily in Spanish.”
“Families that resisted claim that their broker, Linda Tran, and real estate agent, Norma Valdovinos, told them that they would lose their deposits — usually a few thousand dollars that accounted for most of their savings. Some said they went ahead after being assured by Ms. Tran and Ms. Valdovinos that they would be able to refinance in a few months.”
“Tomas and Martha Hernandez said Ms. Valdovinos had convinced them that they could afford a $745,000 home in San Jose, even though Mr. Hernandez earned about $4,000 a month and told them he could pay no more than $2,500 a month.”
“The couple balked after learning that their monthly payments would be $4,660. But Ms. Tran assured them that they would be able to refinance in a few months and reduce the payments to less than $2,900 a month, according to the lawsuit and Mr. Hernandez. They moved into the home two days before Christmas in 2005.”
“‘They said not to worry, that we were in good hands,’ Mr. Hernandez said of Ms. Tran and Ms. Valdovinos.”
“In April 2006, the family sought to refinance after exhausting their modest savings. They now have the following loans: a $596,000 pay-option loan with a prepayment penalty from Countrywide; a second loan for $74,450 from National City with a balloon payment of $57,000 due after 15 years.”
“The third loan for $108,125 from Mr. Curiel was revealed on the day they signed the loan documents, according to the lawsuit and Mr. Hernandez. The loans included more than $40,000 in fees.”
“‘The American dream of buying a home, it may be real for some,’ Mr. Hernandez said. ‘But not for us. And many people are going through the same or worse.’”
“‘Everything was too easy,’ he said. ‘But nothing is easy now.’”
The Mercury News. “Although the Federal Reserve’s dramatic move to slash interest rates last week has lubricated the locked-up credit markets, it has offered comparatively little relief for Bay Area borrowers shopping for traditional fixed-rate mortgages, experts say. The simple reason: fear.”
“Lenders are insisting on top-notch credit and shying away from exotic loans that helped millions of borrowers stretch their home-buying budgets. Skittish investors are demanding unusually high premiums to buy so-called jumbo loans that are commonplace in high-cost regions like Silicon Valley.”
“‘All the disruptions, all the losses, all the bad credit issues are not going away any time soon,” said Keith Gumbinger, a mortgage analyst. ‘We all become accustomed to instant changes - you pull the switch and the light goes on. It doesn’t work that way in the credit markets.’”
“Rates on 30-year fixed-rate mortgages actually inched higher after the Federal Reserve’s unexpected decision last Tuesday. That’s because fixed-rate loans are more closely aligned to long-term bond rates, not the short-term rates that the Fed regulates.”
“Investors feared that rate-cutting will spur inflation, which gnaws into the value of long-term bonds. Mortgage specialist Debi Zenter anticipated such a scenario. A week before the Fed’s move, she encouraged her clients to lock in their loans when rates dipped Sept. 10 and 11.”
“‘I tell clients all along, ‘If you see inflation, that is not good for us. Rates will be higher,’ said Zenter, who works in Pleasanton. ‘There’s no way they can’t be.’”
“‘What it’s going to take to clean this out is to find out what these mortgages are really worth - and we don’t know at this point,’ said Tom Higgins, chief economist for Payden & Rygel Investment Management in Los Angeles. ‘We’re in the delinquency phase, and we haven’t gotten to the foreclosure phase yet. Nobody knows how many pennies on the dollar they will get.’”
“A Wells Fargo rate sheet provided to mortgage brokers last Friday was notable for what you don’t see. It included two entirely blank grids of ‘expanded financing alternatives’ for exotic ‘Atl-A’ loans.”
“‘It doesn’t matter the credit score - that product is gone,’ said a retired mortgage banker who shared the rate sheet on condition of anonymity. ‘You’re seeing what everybody is going through now.’”
The Mercury News. “Although the Federal Reserve’s dramatic move to slash interest rates last week has lubricated the locked-up credit markets, it has offered comparatively little relief for Bay Area borrowers shopping for traditional fixed-rate mortgages, experts say. The simple reason: fear.”
Is this because the resulting dollar devaluation drives up long term rates?
Damn straight.
“Rates on 30-year fixed-rate mortgages actually inched higher after the Federal Reserve’s unexpected decision last Tuesday. That’s because fixed-rate loans are more closely aligned to long-term bond rates, not the short-term rates that the Fed regulates.”
“Investors feared that rate-cutting will spur inflation, which gnaws into the value of long-term bonds.”
Another HBB prediction comes to pass.
“The third loan for $108,125 from Mr. Curiel was revealed on the day they signed the loan documents, according to the lawsuit and Mr. Hernandez. The loans included more than $40,000 in fees.”
Man these mortgage people can be down right sleazy.this just pathetic to screw over people like this.The lender should be in jail I think.
Mr. Curiel is a moron, a crook but a moron nevertheless. Does he think he will really get his monthly payment from these people who can’t afford the loan? Unless, he is involved in selling the property for a huge profit and take some of that to lend back to the buyer, he is a moron.
Not to mention his loan is in third position if (when) they default. Not sure how it works there, but in the state of OR that means he gets nada if the proceeds from the Trustee’s sale don’t cover all loans.
I remember a few years ago seeing a news program that had a story about a site where you could sign up to give a loan to someone you’ve never met. All transactions would be facilitated through the site. Sounded like a bad idea at the time…
http://www.prosper.com
~Misstrial
I have a friend who has had entirely favorable experiences making small loans through that website. I wouldn’t do it myself (don’t need to, prefer lending to sovereign governments OR trailer-park flesh-and-blood borrowers), but my friend has had no problems with these unsecured loans. (Why. I don’t know.)
“The lender should be in jail I think.”
Yeah, like a financial Guantanamo, complete with televised waterboarding.
On the Today show this morning Housing expert said “Do not, do not, do not buy right now” I loved it!!
I’d have thought it was at least as much a reflection of inability to sell risk in the “bye-bye!” manner to which these lenders had become accustomed. Retaining risk increases (or causes) due diligence in a heartbeat.
No, it’s because the interest rate cut was never intended to help defaulting loanholders. The reduction in interest rates and the infusion of capital was intended to help Wall Street, in particular a series of mergers and acquisitions that were suddenly having trouble obtaining financing. Most of the loanholders can’t be helped, as they can’t afford the mortgage with an interest rate above the teaser rate.
infusion of capital was intended to help Wall Street
i agree and think it went much further than that.. like the word on the whole Street was “Quick! Pack the bags and gas up the car. The exits will be crammed.”
“entry-level price range of less than $500,000″
So what’s wrong with this statement?…….
Bingo - complete detachment from reality. And if that auction sees 40% declines in comps its going to leave quite a mark.
like a shat stain in the sellers pants, perhaps?
“Bingo - complete detachment from reality.”
This is a huge side effect of the bubble…folks throw these numbers around like they’re nothing. It’s easy when the borrower has no skin in the game, but once you start talking downpayments again ($50K, $100K), then $500K for a house starts to mean something. And the $500K house, by the time you include interest on a 30-year loan, is probably pushing $1M. That’s a ton of debt, any way you cut it.
How long before it is common knowledge that entry-level California incomes (say those under $50,000) are not sufficient to service ownership costs on a $500,000 home?
How long? When word gets around that the “real” payment on 500K is over $3500 and you won’t be able to subsidize that payment repeated cash-out withdrawl. Return to sane underwriting and declining values should start waking folks up fairly quickly.
Plus the absence of $40,000 fees as incentives to do the loans.
When I was young, I dreamed about owning a Ferrari. If one had been offered to me for a monthly payment of $200 a month, I would not have bought it. I think the reason “why” is important: first, I would have realized that someone making, say, $12K a year cannot afford an $80,000 car and that there is something unknown and dangerous lurking in the paperwork that gives me the keys for $200 a month. Second, my friends, family and colleagues would have asked me, “How in the world can you afford that Ferrari on your income? Did you inherit a lot of money? You runnin’ numbers or something?” I would not want to deal with that.
But in the housing bubble, both of those natural barriers to stupid decisions vanished for the simple but dangerous reason that “everyone was doing it” and therefore it must be OK and work out in the end.
“But in the housing bubble, both of those natural barriers to stupid decisions vanished for the simple but dangerous reason that “everyone was doing it” and therefore it must be OK and work out in the end.”
I think the single biggest reason was tied to the mantra that “real estate priced ALWAYS go up”. No matter how stupid the buying decision rising prices will always bail you out. When the “prices-always-rise” perception was shattered is when it all became unglued.
I would have bought the Ferrari, secure in the knowledge that I would not survive to make the second $200 payment.
Thing is . . . EVERY ONE of my friends & family has hundreds of thousands of dollars of equity from this run-up.
Plenty of co-workers who bought late are skrewed, but people like me who were in position to buy 1995-2002 have done very, very well in this bubble.
“Thing is . . . EVERY ONE of my friends & family has hundreds of thousands of dollars of equity from this run-up.”
In 2010 your sentence will read: “Thing is . . . EVERY ONE of my friends & family HAD hundreds of thousands of dollars of equity from this run-up.”
You understand that until you sell, this equity is an illusion.
Any money taken out via HELOC is just a loan.
“Plenty of co-workers who bought late are skrewed, but people like me who were in position to buy 1995-2002 have done very, very well in this bubble.”
Actually as an actual homeowner who resides in the home that unless you’re on the verge of downsizing or doing a reverse mortgage or selling and moving to, say, a low housing cost area, having housing prices rise is not a good thing.
Rising housing prices mean higher taxes. It also means that if you were to want to trade up to a more expensive place that the absolute difference in price has increased because if say your house doubled in price so has the move-up house that you want to buy. So if both houses doubled, your house price difference has doubled as well!
Unless you’re a specuvestor, or on the verge of retirement, or downsizing or selling and moving to a place with cheaper housing, increased housing prices are not a good thing!
I can remember before this whole mess started that $500,000 was a very used starter home in the oldest section of Greenwich CT.
A nice quaint area but mostly reserved for the Maids and blue collar workers
And what about the price per square foot? It’s still over $300 a square foot in California?? We must be talking McMansions with lots of granite, a nice pool, an in-ground jacuzzi, and gold-plated plumbing fixtures, all in gated communities, right?
Where I’m at it’s $500+/sq ft, but w/o the gold plated fixtures (they tarnish too easily), gates optional. I have a neighbor friend who bought a 2400 sq ft fixer next door to him for $1m, remodeled, landscaped, filled in the pool (yard was too small), and it’s on the market for $2.4m. I think he needs to get $2.2m to break even - it was quite the remodel. Yes, it’s close to $1000 sq/ft.
And what is this fellow’s annual income? Presumably, he is rich.
Who in the HELL said entry level is $500,000 or less. Oh I know now it is the Realitors as they know all………
I was beginning to think that I was the only one earning under $200K a year.
Us reality experts, aka bubble bloggers, are finally getting the recognition long overdue: the SF Chronicle has Patrick from Patrick.net as a cover story.
Of course the sarcastic realty trade people are quoted throughout the story, with mocking comments of any contrary views, but an overall good story.
just google SFGATE.com for the story.
‘…with mocking comments of any contrary views,…’
Many “realty trade people” are mocking themselves any more these days with their out-of-touch stopped-clock assessments of the picture.
Agree — they mock at their peril. JSP Fred the FB finally get the picture and do not want to see any more housing cheerleaders.
A quote: “Truth passes through three stages. First, it is ridiculed. Second, it is violently opposed, Third, it is accepted as being self-evident.”
“First they ignore you, then they laugh at you, then they fight you, then you win.” Mahatma Gandh
Hey, she forgot to ad FB to her glossary.
Cripes, the amount of denial and venom in the reader comments puts the SF bay area in 2005 time frame. No Bubble here, prices will always go up, tenants are losers, I bought a house and now I’m rich bitches !
Mo — I was thinking the same thing.
I could barely read the comments to the article because the posters were so clueless. There were people on there saying stock investing (buying and holding) was “old” and that real estate is the only way to become rich.
Really scary comments. The Bay Area is in total denial - STILL.
I also thought it was funny that many commenters were going on and on with the old “they aren’t making any more land in the Bay Area” argument (and everyone wants to live there) when right now in Vallejo (45 minutes from downtown by high speed ferry) there are over 2,000 homes for sale- many sitting there for months without an offer. Dozens of them are in foreclosure.
But I thought everyone wanted to live in the Bay Area?
They are delusional there.
those are 1930-31 type numbers
11.5 percent in the Central Valley region and 12.1 percent in
“The loans included more than $40,000 in fees.”
Add to that the rebate recieved for the pay-option ARM that came with a pre-pay. I’m gonna guess a 2-point YSP on 500K+, giving the loan broker in excess of 50K. Unbelievable…..
Just talked to a broker guy who I actually like. I asked how business was - “OH UH UH UH OH” - after 20 seconds of that he said “well I am adjusting and am doing really good”. “Oh and I am trying to sell my house and boat. I need to downsizze”. Why (I asked)? “OH UH OH UH. I just need to adjust…” LIAR!!!!!!!!!!!
My friend’s brother who lives in the OC is a mortgage bropker and banker is planning on putting his big home on the market and downsizing. They just had a son. I guess are getting tough.
Confirmation -
Lennar $hit canned 60% of local staff!
Crispy,
When will you have details on your blog?
They guy who told me was fired from there, I will ask him if I can post all the details.
How many living souls does that translate into?
At the home office: Two.
The rest already sold their souls and are thus technically “undead”.
My vote for funniest comment today!
LOL!!!
About 100 or so.
Please stop…my in is out, eyes leaking, face muscles hurt.
Stop!!!
YJCMTSU.
good one…
Aliso Viejo? I thought I saw some people walking around in shock on Enterprise rd this afternoon.
$13.5 trillion estimated SS shortfall GW wants covered by higher taxes on younger workers.
No $500k starter home buyers in this crowd.
The smart ones will emigrate to Canada.
In about 470 days GW goes into the dustbin of history. This is bait for Pelosi, etc - they will run with it as usual “Hey, we can just raise taxes!” That will work really well for them, as it did for Mondale.
Why go to Canada - 70% income tax rate? Save your pennies, boomers.
How about Australia or Singapore?
Thailand?
RE: Why go to Canada - 70% income tax rate?
Commodity based economy in a world of 6 billion who all want a US consumer consumption level.
This country has oil. US is tapped out.
35 million population who rally around one flag.
No $600 billion military where it takes the authorization of a 3 star general to pull a trigger in a Baghdad firefight.
Low crime, friendly populace.
With $53 trillion in Federal old age entitlement and government parasite pension payments comin’ down the pike who is to say the taxes in this country won’t be @ 70% levels
21st century sure isn’t gonna belong to the world’s biggest debtor.
Plus, it’s winter from September ’til May!
Where to start on this rather idealized view of Canda??
Commodity based economy in a world of 6 billion who all want a US consumer consumption level.
We are their #1 customer. Commodity based economies are also extemely subject to boom and bust cycles.
This country has oil. US is tapped out.
We have oil shales, too, which are always extremely expensive to mine. We also have some of the greatest coal reserves in the world.
35 million population who rally around one flag.
HAHAHAHAHHA!!! If you don’t count the Quebec separatist movement that’s been around for the last few decades, then sure. Newfoundland only joined in 1956 and only then to get welfare benefits. Canada is also far less of a “melting pot” than the US with people more likely to think of themselves as French, Scotts, English or whatever.
No $600 billion military where it takes the authorization of a 3 star general to pull a trigger in a Baghdad firefight.
Or any significant fighting force (or navy) to speak of.
Low crime, friendly populace.
Feel free to exclaim aloud in Montreal why more people don’t speak English, the other official language of Canada. See how many warm and friendly greetings you receive then.
Low crime and friendly (non violent) is generally how Canadians like to view themselves, especially in the backdrop of the US “aggression”.
I will agree that some of the cities are generally safer and cleaner than their US counterparts.
However, Canada certainly has a history of violence. Some of the fiercest fighting units in WWI and II came from Canada. They are pockets of rioting and oppression that match the US history.
The truth is, I rather like Canada. I’m of French Canadian orgin and I also have English speaking relatives who live there. If you like it, live there. But there’s no need to make a weird escape utopia to run to if things turn south (tee hee) here.
“oil” shales have produced nothing commercially significant and they won’t ever.
canada’s actual oil sands are large, practical, and will be immensely profitable (and environmentally disasterous).
There is a titanic technical difference between them. Canada’s will produce real world oil. The USA’s will never.
Dr. Chaos - thanks! The oil shale/sands bit was the part I was shakiest on. (I earned a geology degree in Colorado and had a prof who worked on oil shales in the 40’s. We didn’t talk much about the Canadian oil shale and sands reserves.)
And you are right: either shale or sands mining them is an environomental disaster.
hd,
Last I looked, Canadian’s per capita national debt was just about equal to the US.
Congrats on not being there in Iraq.
Russia has the same idea about natural resources as you, and in some of the same places ironically. I hope we have learned not to police everything for everyone by the time that gets going.
Will post in more detail later on — went to the local Social Security office yesterday and was shocked. Only one other O.F. about my (retirement) age. Virtually everyone else in a crowded room was 20-40. Lot of talk about Social Security not being there for retirees, but it looks like a huge amount of the payout is going to non-retirees. Wonder if there is any accounting for the differences between total pension payouts to people 62 and over, and payments to younger people for whatever reasons the gummint came up with.
Just got married last year, my wife and I had to sit there for about 30 minutes. Not everyone in there is collecting benefits, we just had to change her last name.
i might visit as soon as all the global warming that ecofreaks are promising warms the place up a little.
btw, Canada has a giant socialized healthcare problem .. As the clock ticks away reality is avoided much like in the USA.. The arrival of Canadian boomers old age is widely said to be capable of bankrupting the country… bubblicious universal healthcare bills are on the way.
You really don’t read much. do you.
Canada’s ’socialized healthcare’ delivers comparable care to privatised US healthcare for 60% less cost and is fully funded ongoing. In other words no debt is growing to cover future services.
Canada has run a trade surplus for the past decade and has the best balance sheet of any G7 country. In addition, our old age pensions are FUNDED, meaning no future huge burden developing in the future. (there is actually 400 billion in actual assets in the fund, not ‘promises’ or “governmental IOUs” as in the US).
You are right about one thing , “reality is avoided”, but in the fiscally irresponsible US.
The reality is that we have the LARGEST single country
energy reserves in the world and have the second largest RECOVERABLE oil reserves, abundant water, minerals, etc. and paved roads to all these resources.
Check the facts before you spout unsubstantiated opinion about factual matters.
1. 2nd most oil
2. 1,000 years of WORLDWIDE
You really don’t read much. do you.
Canada’s ’socialized healthcare’ delivers comparable care to privatised US healthcare for 60% less cost and is fully funded ongoing. In other words no debt is growing to cover future services.
Canada has run a trade surplus for the past decade and has the best balance sheet of any G7 country. In addition, our old age pensions are FUNDED, meaning no future huge burden developing in the future. (there is actually 400 billion in actual assets in the fund, not ‘promises’ or “governmental IOUs” as in the US).
You are right about one thing , “reality is avoided”, but in the fiscally irresponsible US.
The reality is that we have the LARGEST single country
energy reserves in the world and have the second largest RECOVERABLE oil reserves, abundant water, minerals, etc. and paved roads to all these resources.
Check the facts before you spout unsubstantiated opinion about factual matters.
1. 2nd most oil
2. 1,000 years of WORLDWIDE
Actually, the healthcare system is nowhere near perfect. My husband grew up in Canada and my inlaws still live there. When my FIL was diagnosed with prostate cancer, he had to wait 4 months before he got the surgery to get rid of it. In the U.S., you would never have to “wait in line” for surgery. Although, in Canada, at least everyone is covered unlike here.
No, two separate countries - French and English - somewhat rallying around one flag. Strong loony though.
I think I would prefer to live in a place where EVERYONE paid the same tax. I don’t care if it’s 20% or 70%.
But it seems like I’m paying all the tax (self employed owner of “C” Corporation in CA). And Hillary wants to take more from me to bail out greedy borrowers?
The smart ones will go to Canada for even higher taxes? Sigh - everyone in the industralized world has the exact same problem: more and more old people who want retirement and (expensive) health care paid for by fewer and fewer workers.
This type of suggestion is just the start and will outlast our buddy GW. Look for raising taxes, pulling the income cap off SS taxation, reduced benefits, and eventually a means test for SS. We already are expenicing the overwhelming urge to keep official inflation numbers low to keep entitlement payments manageable. I don’t expect that the government will report true inflation numbers within my lifetime.
In short, SS is a demographics problem as much of an economic one. I don’t know if Generation X or Y has it better or worse than previous generations but I do know that trendendous amounts of student loan and mortgage debt coupled with the needs of the boomer population doesn’t make for a promising ending.
I don’t know if Generation X or Y has it better or worse than previous generations
Ok, I’ll bite:
compared to WWII/Great Depression: better
compared to Boomers & Silent Gen: worse
“I do know that trendendous amounts of student loan and mortgage debt coupled with the needs of the boomer population doesn’t make for a promising ending.”
Not to worry… A few more years of effectively negative Fed rates will inflate that problem right away. It’s all good!
I keep saying this, but unless they manage to inflate wages, that debt doesn’t go anywhere.
Got comodities?
Agreed, where will the wage inflation come from this time around? IMHO wages will not be inflating at anywhere near the pace of necessities and taxes.
There will be no wage inflation. Cheap third world labor has seen to that. As a software engineer, my rates have been flat for many years now, in large part as a result of the effects of offshoring, and need I say much about manufacturing? Little sold here in the stores is made outside of China these days.
Well, we were told that without investing our SS contributions we would have to tax the young workers more to prepare for the 80,000,000 baby boomers slamming into retirement. When suggesting such investment uncovered the pyramid scheme for all to see, opponents screeched “risky scheme” to drown out all discourse. You see, if I was to invest some part of my SS in securities, the government would not have it to pass on to the retiree who ran through his contributions at age 69. So, which is the risky scheme for a 25 year old - hoping that the next 40 years of ups and downs in the market will see a reasonable return on his investments, or keeping the system we’ve got and hoping that there will be anything left in SS in 40 years?
Ugh, I am sick and tired of this one. SS has always been a ponzi, oops I mean pay as you go scheme. The problem of the baby boomers retirement was supposedly addressed by ex-pres Ronald Reagan who decided the boomers needed to prefund their retirement and he doubled social security taxes. The person GenXers should be pissed at is Reagan who in cahoots with Alan Greenspan decided to steal, oops I mean borrow from the fund to cover the massive deficits from his military spending programs and his tax cuts for the rich. Remind you of anyone? My dad and I used to go at it about Reagan. I used to tell him Reagan was senile and he had old timers disease. Oh yeah…………
Um, you could be invested in CDOs about now, looking for that high return…
The fraud and deception that is just now starting to be revealed is going to blow us all away. Dateline, 20/20, and 60 Minutes will soon have more stories than they know what to do with.
“Lodi-based Anderson Homes will auction off 34 homes in a Manteca subdivision”
I drove by this project today…
check
I feel nauseous at the prospect.
The nausea comes from the realization that 95% of these fraudsters will get away with it. Makes you want to get all vigilante and go A-team on their a$$es, only Mr. T will be sportin’ a Joshua tree this time around.
Unlike my lovely wife, who dislikes amusements such as roller coasters, log rides and water slides with large vertical drops, I rather enjoy such excitement. But the real estate price drops which lie ahead as the fraud, subprime, speculative and irrational exuberance premiums collectively give way to post-credit-crunch lending market reality are giving me serious jitters in the pit of my stomach.
Me too. I am beginning to dread the next set of data. It drives me nuts that so many people do not see it coming.
PB and Cass — is it because you own property? Not being sarcastic. I sold and am renting and am anxious for the crash to get done so I can get on with the rest of my life, as in buying one last place. I liken the experience to drag racing or maybe the last minute of a football game that your team is going to win by a hair — more of a rush than jitters or dread.
I rent and I dread it. This thing is huge. We’re pretty much standing as far out of the way as possible but the bubble effects almost everyone I know. I have In-laws and friends of family counting on a house to fund their retirement. I know people my age spending way too much of their income on POS houses that will be worth 30-50% less in less than a decade. My sister wants to move and I suspect her house maybe sitting for a long time where in a more normal market she’d be able to move in 3-6 months.
I’m glad I know because we as a family are as preparded as we can get. There are times, though, that it would be nice to have a shred of hope that this the “darkest days” of this downturn and believe, as my MIL does, that it will turn around in a couple of years.
Vermonter — that is the divergence in our views, however minor. If these are the darkest days, then there should be little more drop in prices to hope for. But if for no other reason than comparison of current rent ratios to long-term norms, I think we still have a long way to go. I just wish we’d get there, no matter how hairy the ride.
Wheeeeeeeeeeeeeeee….strap yourself in…this is a ride of a lifetime~~~~~~~~
YJCMTSU.
The only stock to buy now is Orville Reddenbocker’s (spelling?).
Thanks for the tip, Neil!
I have often accused Neil of being a big shareholder in ConAgra (the conglomerate that owns the Orville Redenbacher brand).
Got milk?
Got Ammo?
Got MREs?
I’m cracking up…eyes are a leaking…toooo funny.
got ben? (yup).
ROTFLMAO!
“…‘Everything was too easy,’ he said. ‘But nothing is easy now.’”
O.K., now focus…be a “Happy Camper” go to the Big 5 sporting goods and buy a 3-room dome tent, 20 minute setup, $125.00 USD…see some things are still easy.
“Hey, snap out of it!”
The housing market in Southern California is so bad people are now just “Driving Away” from their homes.
http://www.dailynews.com/ci_6993660
I was driving on the 101 today and saw that house and thought to myself “how the hell does a house land on the side of one of the busiest freeways in the world?”
Also, I so do not buy the owner’s “we were moving it to Santa Clarita for a homeless shelter?” It sounds like a sympathy drumbeat to collect donations to pay for the transportation off the freeway!
Over the weekend, Sacramento developer John Leonard auctioned off 22 new 1,600-square-foot townhouses in West Sacramento for between $270,000 and $320,000. The townhouses originally listed at more than $400,000.”
still asking too much money for their crap!
I know, these prices seem more like catching a primed hand grenade than a falling knife. Be suprised if these fools don’t suffer 50% haircut before there done. I mean $160/ft for a farking condo!!! Get real, I wouldn’t consider a nice one for more than $80/ft when you take the HOA and property mgmt fees.
Quote:
#####
I know, these prices seem more like catching a primed hand grenade than a falling knife. Be suprised if these fools don’t suffer 50% haircut before there done. I mean $160/ft for a farking condo!!! Get real, I wouldn’t consider a nice one for more than $80/ft when you take the HOA and property mgmt fees.
#####
I wouldn’t buy a freaking CONDO even if it is $50 a square foot. What’s a condo but an owned apartment ? I hate apartment ! I hate living neck-to-neck with trash. And I do believe most trashes live in condo.
I’ve gone to look over some of the newer, modern-style developments in Rancho Cordova and West Sac. While I like the style, I’d never buy one. Most of them have a patio that’s as small as an apartment patio, and no common greens or anything. The West Sac ones are at least true urban infill, and can pull off the urban/industrial look. The Rancho ones just look foolish sitting next to corporate business parks in the ‘burbs. All of them try to cram too much into too little space by moving upwards; that works in truly limited space such as San Francisco with the rowhouses. Not so much in West Sac or the ‘burbs.
Plus, the builders are limiting their buyers mostly to younger people whenever they start building vertically.
Now, if only some builder would try modern style SFH’s. That would be a real innovation.
“Over the weekend, Sacramento developer John Leonard auctioned off 22 new 1,600-square-foot townhouses in West Sacramento for between $270,000 and $320,000. The townhouses originally listed at more than $400,000.”
$270k to $320k for a townhome at this point in the game?! Those people just got cornholed!!
These are across the river from downtown Sacramento and actually in a different county (Yolo). Not much to look at. On a busy street. Neighborhood is scary at night. Lots of homeless along the river camping. Drugs and prostitution still strong on the main drag in West Sac. Not horrible, but sub par. Nothing worth $300K or even 270K. Maybe 75K?
“…The loans included more than $40,000 in fees.”
———————————————————————-
I was wondering whatever happened to the Mafia? Hell, it looks like they made their way into Mortgage Banking.
Stay tuned…….
This sort of thing explains the many iterations I experienced of approximately this story:
(1) Prospective client calls on the phone, or stops in to see me.
(2) What is my rate, they ask. What are they buying I ask. Usually it’s a single lot in an RV park, sometimes w/ mobile on it.
(3) I tell them my rate is 9.6%. If I like them, maybe 9.3%.
(4) They say they can get the money elsewhere at 7.5 or 5.7, you name it. I say go ahead, no problem.
(5) Three weeks later they call back. They just found about the fees. They realize they’re getting cheated. Will I still do 9.6?
(6) Yes, everyone’s happy.
This explains why I experienced many iterations of:
(1) Prospective client phones me or drops in.
(2) What is my rate they ask. What are they buying I ask. Usually an RV-park lot, maybe with a mobile home on it.
(3) My rate is 9.6%. If I like them maybe it’s 9.3%.
(4) They say they can get the money elsewhere for 7.5 or 5.7 or you name it. Fine I say, go and do that.
(5) Three weeks later they call back. They just found out about the fees. They are feeling cheated. Would I still do 9.6?
(6) Yes, everyone happy.
ben,
taking a look at you blog history today, wow, i like your mission. i have to say now that the $hit it flying, you and others are being vendicated. thanks for all the good work!
2 items of interest.. sorry if posted before..
Adjustable Rate Loan Resets For 2007–2008
Month Millions
January-07 22
February-07 25
March-07 35
April-07 37
May-07 36
June-07 42
July-07 43
August-07 52
September-07 58
October-07 55
November-07 52
December-07 58
January-08 80
February-08 88
March-08 110
April-08 92
May-08 76
June-08 75
July-08 50
August-08 35
September-08 26
October-08 20
November-08 15
December-08 17
http://tinyurl.com/2oygwj
————————–
(from another board)
I’ll go you one better than that ARMS reset monster.
It’s my understanding from reading elsewhere that the client contact ratio for US foreclosures is currently running at only about 50%, i.e. half of defaulted mortgages are going into foreclosure without anyone actually speaking to the registered homeowner.
That means that the other 50% “not contacted group” represents a combination of (a) legitimate walk-aways who just plain-old bought at the wrong time and perhaps left the keys in the mailbox, plus (b) parties who were involved in some variety of mortgage fraud that don’t want to be found.
Let’s say for the sake of discussion that between 15-20% are of the keys-in-the-mailbox type (which I think is probably a high estimate quite frankly) — that would still mean that a full 1/3 of the defaults are fraud-related (free rent scams, no-money-invested flippers, etc., etc.).
As such, over and above the effects of the cyclical housing bust we’ve seen, the US mortgage/banking system may have been additionally raided for 100s of billions of dollars via bogus valuations and/or 100% LTV loan schemes. And any CDOs written by the banks to try and pass these loans through to investors that incorporate these fraudulent bad loans are obviously going to see abnormally high default rates, and are therefore doomed to fail, along with many CDO holders.
And we didn’t even need that nasty reset schedule for this to happen — the discovery of the scale of fraud is still in progress, and it’s in addition to the reset problem.
If you were an investing institution, it would have been bad enough to drop $100 million on some scam — but how about borrowing another $900 million to buy a whole boatload of the same crap, and then losing the whole $1,000 million? And where are you going to get that $900 million that you still owe?
Hey, check this out:
http://www.smugmug.com/photos/136440158-O.png
I wonder how many FBs are currently thinking, “we’ll put it on the market next Spring.”
LOL.
Suggested editorial revision of LAY’s remark:
‘With credit drying up,
evenonly qualified buyers wereunableable to receive funding for home purchases,’“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in August 2007 was 11.8 months, compared with 5.9 months (revised) for the same period a year ago.”
OH, so close to one year (but not quite).
Dang… This should be interesting to discuss with “bubble doubters.”
And credit is lose compared to what it will be in 90 days… (scary…)
Got popcorn?
Neil
Take heart, my friend. All the important areas are well over 12 months inventory.
it’ll be 1 year by the time we’re eating cheesecake this sunday.
shall we hoist one in honor?
Yes!
We will toast the event.
Got popcorn?
Neil
“Despite the overall increase in the statewide median price, prices declined in nine regions last month, falling 11.5 percent in the Central Valley region and 12.1 percent in Sacramento,” said C.A.R. President Colleen Badagliacco. “Price softness is even more pronounced when we look at different segments of the market.
Folks, lets give credit where credit is due. A realtor mouthpiece actually said something negative about housing, even when they could have said how the median is rising so everything is great. I think the moon will be blue tonight. And watch out for flying pigs.
Lard Sale
“Lodi-based Anderson Homes will auction off 34 homes in a Manteca subdivision and 25 more in Los Banos because sales are so slow. A minimum bid starting at $285,000 will be required for homes in the Manteca project, about 60 percent of the ‘reduced asking price.’”
or?
Lard Yard Sale
Slow Toilet sales…
Wow, 40% off the already reduced price. I love those “take another 40% off the lowest ticketed price” sales on the bargain rack at the back of the store.
Then again, who are they to set the “minimum bid”? What if the only offer is mine at $245K? Take the $245K now or 9 months from now, your choice.
Having been in the credit profession for the past 23 years, I have observed several cycles involving the loosening and then the inevitable tightening of credit-underwriting standards. Of course, the Federal Reserve stands at the epicenter of such cycles. While money and credit are flowing like beer at an Irish pub on St. Patrick’s Day, everyone ends up looking like an attractive credit risk. When it appeared that the U.S. economy was heading into a recession, after the collapse of the dot.com and telecom bubbles, the Federal Reserve opened up the taps and encouraged one and all to imbibe its tasty, low-cost credit – with the most popular “flavor” being the mortgage loan. At this point, mortgage lenders merely became bartenders serving anyone who walked in the door. To reach this nadir in mortgage-lending standards, it is inescapable that the “Five Cs” of credit were ignored regardless if a mortgage loan was deemed prime, Alt-A, or subprime. This is exactly why the home-mortgage meltdown has just begun.
One aspect of my job entails analyzing personal financial statements. Twenty years ago, without a doubt, households had much healthier financial conditions. Back then, in proportion to household net worth, savings were much higher and debt levels (especially automobile, credit card, and mortgage debts) were dramatically lower. It is alarmingly common, today, to see households with well under ten thousand dollars in savings yet half-a-million dollars in mortgage debt – not to mention thousands of dollars in credit card debt and tens-of-thousands of dollars in automobile debt. Such households are literally one or two missed paychecks away from being destitute. Yet, amazingly, the heads of such households are considered to be prime-level borrowers (as long as there is adequate income to cover monthly debt service and expenses). What has happened, in the sphere of personal-credit underwriting, is that risk parameters have been redefined with the word “prime” having been defined downwards.
http://tinyurl.com/2yzaeh
Are you saying that banks were wearing “liquidity goggles”?
Kind of like the ones you get for tanning, with little dark lenses that barely let any light through?
Yeah everyone was looking “loanable” in the room.
LOL
OK, so now is the morning after, and we’re all waking up with poofy eyelids, bad hair, and last night’s wrinkled-ass clothes that we passed out in. On top of that, we all have hangovers so we’re cranky too. So now, and tell me if I’m wrong, you’re saying that we’re not attractive to the lenders any more? Are you saying that they used us last night, having taken advantage of our drunken state?
Well, now aren’t we the cheap little hussie? Time for a morning after pill!
these Lifetime/Oxygen scripts just write themselves!
“A Wells Fargo rate sheet provided to mortgage brokers last Friday was notable for what you don’t see. It included two entirely blank grids of ‘expanded financing alternatives’ for exotic ‘Atl-A’ loans.”
******
Hey - no more of Wells’ exotic products for the Alt-A Bay Area?!
Excellent news…
I missed this… its huge! If Alt-A is dead, we can begin returning back to sane prices. Oh wait, no wonder so many homes fell out of escrow the last few weeks.
Take a tour of an open house this weekend… Its surreal. Certain things remained constant over the last few years, but now one is starting to see desperation. Oh, we’re not there yet (or at least my survey wasn’t large enough to lead me to such a conclusion), but soon my friends. Very soon.
Got popcorn?
Neil
Neil scarry thing. I just learned that Countrywide is still writing stated incomes for a new development in Manteca, Just south of Stockton. They are in cahoots with the builder just like the good ol days, you send in the app they send it back altered with BS numbers for the buyer to sign. I was shocked to find that this stated income crap was still going on anywhere. Guess the billions that CW just borrowed are simply more cheap grain booze for the punch, they won’t quit till everbody is blind or CW is bankrupt.
My vote is that CW is bound for the heap,
if you look at their finincials they have $10billion in assets after removing the bullshit ones @ 576million shares i get a stated book of $17.36/share ignoring currant bad loans and REO (which in CA alone has to be well over a billion!!!). They are negative cash flow $30 billion/yr and still borrowing to make losing investments!!!
That $30b = ($4.34/share negative cash flow per month!!!). How long can an $18 book value company get financing while consuming over $4/share/mo???
This is why they can not afford to sell their REO as soon as they do it will become apparant to their creditors that they are sitting on billions in losses, plummeting cash flows and negative operating margins!!!
I initially thought that CW would make it, but that obviously is not the case. Anybody who buys this pig is hosed beyond compare.
ENRON anyone?
“Tomas and Martha Hernandez said Ms. Valdovinos had convinced them that they could afford a $745,000 home in San Jose, even though Mr. Hernandez earned about $4,000 a month and told them he could pay no more than $2,500 a month.”
$50,000 a year illegals buying a $750,000 house - now THAT is priceless!!!
Man, Dude…
Quote:
###
“Tomas and Martha Hernandez said Ms. Valdovinos had convinced them that they could afford a $745,000 home in San Jose, even though Mr. Hernandez earned about $4,000 a month and told them he could pay no more than $2,500 a month.”
$50,000 a year illegals buying a $750,000 house - now THAT is priceless!!!
###
I am a freaking U.S citizen for 24 years with an advanced degree in science in an accredited university and I make 6 times as much as Senior Hernandez makes annually and I can only afford a $160K and I still feel kind of dumb buying the house instead of just renting one after getting to know this blog. Senior Hernandez is a truly Americano hero. He and his wife are certainly doing their parts to the damnnest to support the invincible economy of the great U.S of A.
Mr. Hernandez earned about $4,000 a month and told them he could pay no more than $2,500 a month.”
“The couple balked after learning that their monthly payments would be $4,660. But Ms. Tran assured them that they would be able to refinance in a few months and reduce the payments to less than $2,900 a month…”
I can’t care what language they speak, check the numbers…if he makes 4000, even calling it net, tho unlikely, he signs for a payment of 4660.???
WTF?
In Spanish, Swahili or Swedish, the numbers are the numbers. These Hernandez fraudsters forgot the part of the broker’s conversation telling them what easy money they could make, and how much they could refi, and how to use this POS as an ATM and more. So, they’re the plankton in this scam and the sharks too 50k. So what. They’re all thieves. Some are bigger and better thieves, some are stupid thieves.
“These Hernandez fraudsters forgot the part of the broker’s conversation telling them what easy money they could make, and how much they could refi, and how to use this POS as an ATM and more.”
No matter what the scam - the scammers usually make sure the mark is in on the scam, in order to protect themselves. The Hernandez’ are a pack of liars - they were told they could refi and extract the equity from the ever rising price of their house and use the proceeds to make the payments. Wait another year, refi again and extract more cash. Continue as long as they live.
They’re low-life lying losers who expected the house to subsidize their lifestyle. Now that their scam didn’t work out as planned, they’re ‘victims.’
and they didn’t LOSE anything! In fact, they won! They got to live in a house for a couple of years. Stop making all payments, hand the keys back to the bank, and move into an apartment again.
“‘Even if the return is not positive, it does bring some cash into the company,’ he said. ‘And in the Central Valley, where it’s challenging, it’s providing opportunities to sell homes where you wouldn’t sell otherwise.’”
Translation:
We will lose as much as we have to, to rid ourselves of these white elephants…
And what were we thinking building them, in the Central Valley?
Barclaycard cuts consumer credit limits
http://money.guardian.co.uk/news_/story/0,,2176781,00.html
Not having to live your life based upon the whims of a credit card…
Priceless
Wow! That has been predicted here for a bit, but seeing it happen is a shock. My prediction is that this will go underground for a bit, but right before Christmas, there will be a bunch of credit limit cuts.
But here in the US, it won’t be official. The card will simply trigger the “call 888-555-1212 for customer service” trigger. Now, every time I’ve bought anything over $1,000, this happens to me. (No big deal. Yes Mr. Neil, can you please confirm you’re spending way beyond your normal?) etc. This will happen in Toy-R-Us/Walmart when they click past some preset amount. (Maybe after the mentioned cash withdrawal in the article.)
My favorite bit:
The provider also stressed its actions did not have anything to do with the current credit crunch
Of course not…
Nice find.
Neil
Yep, for years I’ve had to call them and tell them to REDUCE my limit as they would raise it at least once a year. Surprising to see it actually happen in reverse.
They didn’t cut my limit (which is preposterously high), but they did up my interest rate because of a bum item on my credit report. Good thing I never pay interest anyway, but the new rate is nearly 30%. That’s just usury if you ask me.
That’s funny, Citibank just sent me a letter today saying my limit was being increased by $3,000. Too bad for them I don’t carry a balance from one month to the next.
I got the same letter, I have a 16K limit now, but I never carry a balance and never charged more than 4K in a month. I wonder how the higher limit will affect my FICO score?
The higher limit helps your FICO score because it lowers the percentage of available credit that you’re using.
Winchester Mystery Houses…
http://en.wikipedia.org/wiki/Winchester_Mystery_House
“Along Domenigoni Parkway northeast of Temecula, dusty graded lots, tattered flags and sagging orange fences are conspicuous signs of a stalled plan for 6,000 homes and new commercial parks in the unbuilt community of Winchester Hills.”
Recently, I interviewed law students for summer internships at a so cal law school. The most popular area of interest for these wannabe lawyers was “real property law.” In fact, the law school added a second class due to the popularity of the class. I would guess that 50% of the students have an “interest” in real estate, probably more than entertainment, which is odd for so cal. Real estate is now the sexy thing to go into. 7 years ago, when I was a law student, guess what was the sexy practice area was? “Venture Capital” My girl friend is actually getting into what I see as the smart practice area, personal bankrupcty… and business is good (mostly caused by botched real estate investments or monster mortgage payments pushing people to max out all 3 credit cards at once).
Your firm wouldn’t happen to be looking for laterals, would they?
(Hey, if you can’t make shameless self-promotions on a quasi-anonymous blog, what are they for?)
Along Domenigoni Parkway northeast of Temecula……
That would be in HEMET! it’s just west of Diamond Valley Reservoir. They seem to be trying to make Hemet seem less like Hemet.
It was a beautiful effort, a flying forward one-and-a-half somersaults, pike and a clean entry…
Unfortunately, there was no water in the pool
“Inland developers continue to plan for new housing, but Riverside County officials say many have put the brakes on construction of new communities amid the most significant housing-market nose dive to hit the Inland region in more than a decade.”
It was a beautiful effort, a flying forward one-and-a-half somersaults, pike and a clean entry…
Unfortunately, there was no water in the pool
Mark my words. They are trying to create another technology bubble to offset the housing bubble.
Thank god. I can do technology, but I hate spending weekends working on houses.
Might as well profit from it. AAPL is up. I am eyeballing EMC because VMWARE has moved and EMC has not even though EMC owns 88% of VMW (VMWare).
Thanks for the heads up. I used to own some EMC in a former life….
EMC seems to be expanding in Asia — tied to VMware and Citrix — know someone they hired in Bangkok. Not knowing squat, otherwise, about technology stocks, I’d buy EMC and Garmin if I were buying.
Quote:
###Mark my words. They are trying to create another technology bubble to offset the housing bubble.###
What kind of new technological invention ? Faster-than-speed-of-light transportation ? Car that drinks water instead of gasoline ? StarTrek sh*t or something like that ? Heh… Heh… Heh…
Americano is as TOAST as an overcooked charring piece of bread…
plumbing in India.
Ha ha… India is so nasty, you could actually have a bubble in plumbing.
“‘Even if the return is not positive, it does bring some cash into the company,’ he said. ‘And in the Central Valley, where it’s challenging, it’s providing opportunities to sell homes where you wouldn’t sell otherwise.’”
We lose a little on every sale but we make it up in volume.
warning will robinson
http://biz.yahoo.com/ap/070925/economy.html?.v=12
Here’s a great new idea that will profit buyers, builders, and developers. Say you’re a developer with 30 townhouses to sell. You hold an auction, as usual, and sell 18 units. You get contracts of sale and down payments on each of them. However, you notify everyone that THE DAY OF CLOSING WILL OCCUR WHEN ALL 30 UNITS ARE SOLD. What will that accomplish?
(1) Each buyer will know that he will not be buying into a
development where there are unsold houses. (2) Each buyer will know that with a completely sold development, the prices of all the houses will go up. Maybe not by a lot these days, but they will go up rather than down. (3) As more houses are sold, the impetus to buy will increase because the subdivision is nearer to being sold out and hence nearer to a general rise in prices. (4) The builder’s incentive to take a lower bid on the last few remaining houses (to get them off his books) will be counterbalanced by the buyers’ incentive to grab one of the last remaining houses before the subdivision sells out. (5) Hence there should be no drop-off in prices as buyers sign up.
If you put this dynamite plan into action, be sure to call it the D’Amato Plan. Named after the inventor, of course. Or, if you prefer, you can call it the “So-Called D’Amato Plan.”
Builders have big payments due on their loans. They need money as soon as possible. They will never ever do this.
“‘With credit drying up, even qualified buyers were unable to receive funding for home purchases,’ Appleton-Young said.”
Wow…just…wow.
I love how the loose credit standards of the last few years have somehow become the expected norm for these people. I think it’s starting to slowly sink in, even with the most dense shills out there, that easy credit isn’t coming back (Yun, LAY, and others may be beyond saving…)
“I love how the loose credit standards of the last few years have somehow become the expected norm for these people. I think it’s starting to slowly sink in, even with the most dense shills out there, that easy credit isn’t coming back.”
Yep. And it will take YEARS, not months, for people to get their finances in order to qualify under more traditional lending standards. Saving $50K or $100K for a downpayment isn’t a quick thing to do. Nor is paying off credit card debt and having 6 months cash in the bank and 2-3 years of steady employment.
I see these great headers like “Housing Sales Are Falling Like Stone In California”, “Home sales decreased 27.8 percent in August in California compared with the same period a year ago” …. but when it comes to reality…like me wanting to buy something in Santa Clara County, nothing seem to be down… it would have marginally come down like $10k to $20k..but nowhere close to like 27% … Any predictions on when is a good time?
That’s funny, bubbleswarmy. According to http://www.dqnews.com, the median price in San Jose is down about 20% y-o-y, and the median price per square foot is down like 12 or 15%. Although prices obviously have a long way to go before they bottom out, it is innacurate to say they’re hardly budging.
Offering prices for my segment, the 1-2 bedroom midrange condo, are pretty sticky at $400-$500K+.
Nothing’s moving any more, but the prices are still at peak levels. . . things are still over-valued 40% compared to rents, but it’s going to take years to beat the sellers down.
Based on tlink you sent the prices are still up year over year in the Bay Area.
“The median price paid for a Bay Area home was $655,000 last month. That was down 1.5 percent from the June and July peak of $665,000, and up 4.0 percent from $630,000 for August a year ago. The median was down in Solano, Sonoma and Napa counties and flat or up in the other counties. ”
When are prices going to fall in the Bay Area? Nobody can tell for sure, but right now nothing is moving, it’s just a matter of time.
“‘What it’s going to take to clean this out is to find out what these mortgages are really worth - and we don’t know at this point,’ said Tom Higgins, chief economist for Payden & Rygel Investment Management in Los Angeles. ‘We’re in the delinquency phase, and we haven’t gotten to the foreclosure phase yet. Nobody knows how many pennies on the dollar they will get.’”
Finally, an economist not afraid to face facts
Pennies on the Dollar, indeed
as in, less than 10
Otherwise we’d be talking Nickels or Dimes on the Dollar
“‘What it’s going to take to clean this out is to find out what these mortgages are really worth - and we don’t know at this point,’ said Tom Higgins, chief economist for Payden & Rygel Investment Management in Los Angeles. ‘We’re in the delinquency phase, and we haven’t gotten to the foreclosure phase yet. Nobody knows how many pennies on the dollar they will get.’”
Finally, an economist not afraid to face facts
Pennies on the Dollar, indeed
as in, less than 10
Otherwise we’d be talking Nickels or Dimes on the Dollar
‘We’re in the delinquency phase, and we haven’t gotten to the foreclosure phase yet…’
What? We’re NOT in the foreclosure phase YET??? WHAT THE #$%%eOg.s@
%*$E
gJ.#.$.#$%…34..5.234. SSSSSSS
NO CARRIER
“‘What it’s going to take to clean this out is to find out what these mortgages are really worth - and we don’t know at this point,’ said Tom Higgins, chief economist for Payden & Rygel Investment Management in Los Angeles. ‘We’re in the delinquency phase, and we haven’t gotten to the foreclosure phase yet. Nobody knows how many pennies on the dollar they will get.’”
Oh, I know, I know. Pick MEEEEEeeeeeeee. I’ll give you 40 cents on a bad day, and 50 on a good one.
LOL
“A Wells Fargo rate sheet provided to mortgage brokers last Friday was notable for what you don’t see. It included two entirely blank grids of ‘expanded financing alternatives’ for exotic ‘Alt-A’ loans.”
“‘It doesn’t matter the credit score - that product is gone,’ said a retired mortgage banker who shared the rate sheet on condition of anonymity. ‘You’re seeing what everybody is going through now.’”
So it was those “exotic ‘Alt-A’ Loans” that caused all the problems?
Virtually every house for sale in San Diego, Los Angeles and San Francisco is a Jumbo Loan, @ around 9%++
Old: The Golden State
New: The Beholden State
“Lenders are insisting on top-notch credit and shying away from exotic loans that helped millions of borrowers stretch their home-buying budgets. Skittish investors are demanding unusually high premiums to buy so-called jumbo loans that are commonplace in high-cost regions like Silicon Valley.”
From that Times article
I do feel a bit sorry for these people because I do think they were dealing with a dishonest salesperson.
But *what* sacrafice? It’s not like they had $250K in the bank and now it’s all gone. They started with 0 in the bank, and they’re ending with 0 in the bank, except they got to live in a nicer house for couple of years over what they could have gotten by renting.
Prospero seems to have been born, named, and raised specifically for this occasion. For the day when he will be showcased on the HBB as “Prospero the FB”. God sometimes graces us with an irony.
…in other news, former Heidi Ho Mortgage loan officer Chastity Goodman of Irvine was arrested for running a brothel which reportedly also traded in meth, crack, and Viagra. She told reporters “My husband and I worked so hard at this business - how else is a gal supposed to afford these mortgage payments? Play the lottery like my sister Hope? Chastity’s husband Chance was in Las Vegas and could not be reached.” [Note - names chosen for humor purposes - no resemblance to anyone real was intended.]
Sometimes I would feel sorry for these clowns that thought they could get a house beyond their means and maybe somehow make it work . The REIC was right there talking them into it and making it seem easy (and it was ). But when I think about the kind of damage it will cause the greater society because of these over buying borrowers that went on toxic low down liar loans , my pity is replaced with anger .
All the players in this big ponzi scheme mess will somehow cost us all tax dollars that I would rather the money be spend on a better cause .These clowns have already cost me money in higher property taxes and bonds ,etc. ,that I should get a rebate on ,but never will . These la la land borrowers that were lead around by the nose by the REIC and all the advertisers who were behind pushing all the RE investment myths ,will throw this country into serious pain because of their greedy acts.The FB’s want the American Dream ,but they want it to be easy.
Sure , the REIC had a great sales pitch that the sheep bought hook line and sinker ,but if FB’s are this dumb ,and they are affecting my fate in life ,that causes me alarm .To think that this kind of la la land borrower had a hand in sitting the real estate prices, because they would buy anything at any price as long as they got in for no down and had a absurd teaser payment .Talk about fake real estate inflation by a bunch of frenzied unqualified liar borrowers .
I often wonder how people who had nothing to do with the stock market during the Great Depression felt about the greedy clowns that bought stocks on margin ,which resulted in banks closing and taking the whole country down .
This group of FB’s were just buying on margin during a mania with no thought to what it really cost, just like the margin stock buyers leading up to Oct ,1929.
These FB’s can all go to hell for their folly, and I hope they take the commissioned salespeople with them .
They better hurry and start applying for the Christmas- extra help jobs. ” Excuse me would you like this giftwrapped? Yes Please ,I just have to find a card with some money on it”
“The stalled development at Winchester Hills and nearby properties, together called Winchester Ranch, has left the landowners with a huge financial burden. Homeowners and businesses that were expected to occupy the development would have repaid the debt on more than $20 million in bonds for extension of nearby Domenigoni Parkway.”
Proposed new name:
Done-and-gone Parkway
SO….when does the stupidity stop in the LA area? Glendale, Pasadena, Burbank, Arcadia…what gives? I see plenty of people still driving around in nice Lexus/Benz cars, buying condos and homes…should we even bother staying around these overpriced holes?
test
Stupid-Ass Home Builder cheat on their home buyers again. When will this ever stop ? Is this what this country, the great U.S of A is all about ? One cheats on another so that another then has no choice but to cheat on another-another ? Where is morality and obligation as a human being or as a collection of human-beings, a corp. ?
http://www.news8austin.com/content/top_stories/default.asp?ArID=192534