Correcting The Price Imbalance In California
The Tracy Press reports from California. “The number of houses on the market in Tracy, 946, is closing in on the total number of houses built in town at the peak of the housing boom in 2004, the last year the city added more than 1,000 houses. At the same time, RealtyTrac reported this month that 1,138 Tracy homeowners had received notices of default. As a result, homeowners have slashed their asking prices to 2004 levels.”
“‘Actually, I’d have to say it’s a little lower than that,’ said local broker Dave Konesky, a director with the California Association of Realtors.”
“Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, ‘with no bites, and it’s a beautiful home,’ Konesky said.” “He said that’s about as low as the homeowners want to go. ‘They said they’ll sell it for less than they paid for it,’ he said, ‘but they won’t give it away.’”
“This summer, the median asking price for existing homes in Tracy, Banta and Mountain House dropped below the median sales price. As of this week, that price was $475,000, $35,000 less than in mid-July. Local real estate agent Donna Baker said that of the 946 homes for sale in Tracy right now, about a third either are bank-owned, meaning they’ve been through foreclosure, or are ’short sales.’”
The Recordnet. “Homeowners in the upscale Paseo West development in Manteca are getting organized to see whether they can convince Lodi-based Anderson Homes to change plans to auction off 34 homes next month.”
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year, said Dave Cantrell, one of the first to buy a home in the subdivision.
” “‘We’re looking at a loss of potentially up to a quarter million dollars (per home),’ he said.”
“Earlier in the week, Craig Barton, Anderson Homes chief financial officer had said the slow housing market had pressured the company to turn to auctions as a way to sell homes in the partially finished subdivision. Otherwise, the homes would remain vacant for the foreseeable future, he said, and that wouldn’t be good for the neighborhood.”
“Cantrell said he doesn’t like the empty houses around his house, ‘but at what cost do we fill these?’”
“Stockton resident Zelda Falkner said Thursday that she and her husband will be checking out homes in Anderson Homes’ Teal Landing development in Los Banos. Twenty-five homes in that development will be auctioned off Oct. 14 in San Jose with minimum bids starting at $215,000.”
“The Falkners want to live closer to friends there, and they’re hoping to get a great deal on a new home and would pay cash. She wouldn’t feel a twinge of guilt if they snagged a great deal, Falkner said, ‘because I’d be getting a bargain.’”
From News 10. “In some cases, the starting bids are about half of what some current homeowners paid for nearly identical homes just over a year ago.”
“‘They didn’t treat us very good as far as I’m concerned at all,’ said Amy Sturdevant who in August 2006 paid $585,000 for her family’s four-bedroom, two-bathroom home. Now, a nearly identical home with the same floor plan right across the street from Sturdevant is set to be auctioned at a starting bid of $295,000.”
“Barton said this is their neighborhood, too. He said that they will keep building there. ‘This is the right decision for us,’ Barton said. ‘In this type of market, the auction will tell us what the current fair value of the homes is.’”
“Barton said it’s not because they’re in financial distress but instead to spur a sluggish market.”
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
The Press Enterprise. “Home construction is falling more dramatically in Riverside and San Bernardino counties than anywhere else in the state, as builders put on the brakes until they sell a glut of completed houses and wait for the market to rebound.”
“Steve Johnson, a director of Metro-Study, said even homes for which builders have obtained permits from counties and cities may not get built. He said there are about 15,000 permits for single family homes that recently were close to expiring.”
“There are also 27,000 lots prepared for new homes on which construction has not begun, he said. Johnson said a majority of the empty lots are in emerging housing markets such as Banning, Beaumont and south Riverside County.”
“Alan Nevin, chief economist of the state builder’s association, said (buiolders) are trying to ignite buyer interest with price cuts and a host of other incentives.”
“‘Now is the time to buy,’ said Frank Williams, CEO of the Baldy View chapter of the California Building Industry Association. ‘If buyers go to the builders they can pretty much cut their own deals.’”
“To sell homes, he said some builders are willing to just break even while others are taking losses. He said all are laying off personnel and he believes there is ‘a good chance’ that some Southern California home builders will go out of business.”
The County Sun. “From the 15 Freeway, Rosena Ranch is advertised with great fanfare. Flags are waving. Signs and banners lead drivers into a newly paved and planted community of homes. But then the excitement stops.”
“Construction is coming to an end - at least temporarily - at the project just north of Fontana off Glen Helen Parkway where the developers, Lennar Corp. and SunCal Cos., once envisioned a school and 2,100 homes.”
“Now there are fewer than 100 houses and no indication of when new foundations will be poured.”
“In Rosena Ranch, 54 homes are occupied or ready for occupancy, and when “a handful” more are finished, it’s not clear when construction will continue, Rynerson Rock said.”
“‘My staff says they have been frighteningly quiet, and that’s not typical for them,’ Rynerson Rock said of the developers working on the project.”
“But the developers are continuing to plan and seek county approval for their homes, Rynerson Rock said.”
“Chino’s director of community development, Chuck Coe, said building has slowed at The Preserve but that no one is talking about making changes to the project. ‘There’s no panic or going back and rethinking,’ he said.”
“Rynerson Rock said the developers are being prudent. ‘We don’t want them going out of business, going broke and never being able to come back again.’”
The Appeal Democrat. “If misery loves company, area residents trying to sell a home should be feeling plenty of love. The Yuba-Sutter market’s 35 percent drop in housing sales between August 2006 and August 2007 puts local homesellers in the same lousy neighborhood as nearly everyone else, according to numbers compiled by the Sutter Yuba Association of Realtors.”
“Comparing August to August sales, Yuba-Sutter weighed in with a relatively steep median sale price drop of 8.1 percent – $290,000 to $260,000, according to the SYAR numbers. Yuba City Realtor Lloyd Leighton noted that in December 2005, when the area’s house prices peaked, the median sale price was $315,000 – 17.5 percent higher than in August 2007. ‘That’s been a pretty dramatic decrease over less than two years,’ Leighton said.”
“Among the reasons for downward pressure on prices, he said, is the continuous growth of new housing developments. ‘The new homes compete with all the other homes,’ he said.”
“Companies like Lennar, which cater largely to first-home buyers, are under increasing pressure, ‘to sell their product, even if it means lowering price and sacrificing profit,’ Leighton said. ‘They’re offering huge incentives.’”
The Orange County Register. “Mid-September sales data from DataQuick show further evidence of how that midsummer credit crunch has iced an already chilled O.C. real estate market. Sales for the 22 days ended Sept. 14 are off 35% from a year ago. The mid-September median for all residences of $605,000 is the lowest since January; 4% below a year ago; and 6.2% off June’s peak.”
“Sales of new autos plunged 17 percent in Orange County in August, one of the steepest drops in memory, the Orange County Automobile Dealers Association reported Thursday.”
“‘Blame it on housing,’ said Art Spinella, auto market analyst for CNW Market Research. ‘Buying a car with a home equity loan is a California pastime and when home equity drops, it’s tough to get a home equity loan.’”
The Union Tribune. “San Diego County’s leading economic indicators took a sharp plunge in August, according to a report released yesterday by the Burnham-Moores Center for Real Estate at the University of San Diego. All six components used in the index were negative last month.”
“The index fell 1.4 percent in August. That is the steepest decline since 1979, although USD economist Alan Gin, who compiles the index, cautioned that there may be some upward revision. The index has fallen 16 of the past 17 months.”
“‘Things are pretty bad,’ Gin said. ‘Not only are all the components down, but they’re down by hefty amounts.’”
“At the center of the economic problems is the continuing decline of the local housing market. ‘There’s a connection to the weakness of the housing market in every one of the components,’ Gin said.”
“‘This is very painful for homeowners, but for an economist it’s a good sign. It may begin to correct the housing price imbalance,’ said Stephen Levy, who heads the Center for Continuing Study of the California Economy in Palo Alto, referring to the gap between high home prices and relatively stagnant incomes.”
“Mid-September sales data from DataQuick show further evidence of how that midsummer credit crunch has iced an already chilled O.C. real estate market. Sales for the 22 days ended Sept. 14 are off 35% from a year ago. The mid-September median for all residences of $605,000 is the lowest since January; 4% below a year ago; and 6.2% off June’s peak.”
Sounds like YOY price declines are in the bag for the OC a few months from now.
Oops — I guess 4% below a year ago means they are already seeing YOY price drops…
“Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, ‘with no bites, and it’s a beautiful home,’ Konesky said.” “He said that’s about as low as the homeowners want to go. ‘They said they’ll sell it for less than they paid for it,’ he said, ‘but they won’t give it away.’”
This stuff just cracks me up.Soon the bank will be takeing it away most likely. Add another to the FB club.
“not going to give it away…”
As long as someone gives you some form of consideration, whether that be 1 cent, 100 grand, or a pair of sneakers, you technically are not “giving it away.” These people are so damn stupid, they deserve to be FBs. Arrogant a$$es. Cannot wait for the day that Americans realize that buying a home is not a path to riches.
What’s especially humorous is that the FBs assume the house is theirs to “give away,” rather than it being the bank’s property until the mortgage is paid in full.
House prices are a matter of opinion. Debt is real.
They should put that on a Starbucks cup.
Well, IMO there is some break even to consider. At some point walking away, getting an IRS bill, and not being able to buy a house for 7 years might be a better value than simply trying to unload the house at any price. But certainly a loss of “only” $11K ain’t gonna do it.
7 years sounds just about right. They might coast through the downturn and bottom and then become an “experinced real estate investor” (lol) just in time for recovery 2013-2015.
The “Broken Mirror” economy?
“At some point walking away, getting an IRS bill, and not being able to buy a house for 7 years might be a better value than simply trying to unload the house at any price.”
What IRS bill? Look ma — presto chango: short sale, no tax bill!
Given the propensity of this piece of legislation’s reduction of short sale costs to increase the rate at which FBs hand back the keys to their lenders, I propose it be nicknamed the Short Sale Acceleration Act of 2007
Loan forgiveness bill: Some win, someone else pays
Mark Schwanhausser
02:24 PM on Wed, September 26, 2007
Congress took a crucial step today to eliminate a tax bill facing many homeowners who lose their homes in foreclosure. But to raise revenues to pay for that tax relief, lawmakers intend to close down a tempting tax-saving gambit for wealthier homeowners with second homes or rental properties.
The House Ways and Means Committee — where federal tax legislation typically starts — unanimously approved the Mortgage Forgiveness Debt Relief Act of 2007 (H.R.‚3648). As the title implies, the primary goal of the proposed legislation is to buffer homeowners who currently face an unwelcome tax bill when lenders forgive some of their loans.
The push for such relief has two important backers: President Bush, who called on Congress to provide help last month, and Ways and Means Committee Chairman Charles B. Rangel, who calls the tax hit a “double whammy” for people who already are losing their homes.
http://www.mercextra.com/blogs/realestate/2007/09/26/loan_forgiveness_bill_some_win/#000714
Quote:
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“Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, ‘with no bites, and it’s a beautiful home,’ Konesky said.” “He said that’s about as low as the homeowners want to go. ‘They said they’ll sell it for less than they paid for it,’ he said, ‘but they won’t give it away.’”
#####
Giving it away meaning the owner is giving it away as NIL, ZERO, NO CASH PAYMENT. That is the definition of giving something away: Like I give my car away to my brother. Now this dumb-ass owner is reducing the price of his piece of turd $11,000 out of $430,000 and he thinks he is giving it away. Man, Dude… I hope these human trash would die soon. They are tainted the Earth with their sewage mind.
Apologies for hijacking the thread.
Breaking news: Netbank shut down due to “high mortgage defaults.”
http://www.netbank.com/
On September 28, 2007, NetBank, Alpharetta, GA was closed by the Office of Thrift Supervision and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. No advance notice is given to the public when a financial institution is closed.
Tomorrow (effective Monday) I will have my last account below the FDIC limits. I feel for anyone outside of the REIC who losses any funds due to this bank closing.
However, as best I could determine, this was a really small bank. Interesting… but not a sign like Northern Rock.
Got popcorn?
Neil
Laguna Hills examples,
Home # 1, Vista Firenze - purchased 01/2006 for $820,000, on market now $749,000 (asking)
Home #2, Kim Circle - purchased $789,000 in 2005, on market 763,000 (asking)
Home #3, Encanto, listed in July $975,000, price reduced $789000, about 20%, again asking
Home #4, Zumaya, had an offer of $949,000 in 01/2007, it fell through as it appraised at 900,000. Back on the market at $865,000 (asking), still not moving - open houses every Sunday.
All the above homes are single detached, 4 bedroom homes.
The party has just begun….
Got 20% down?
Suddenly, a light bulb goes on…
“At the center of the economic problems is the continuing decline of the local housing market. ‘There’s a connection to the weakness of the housing market in every one of the components,’ Gin said.”
With glee I just saw 2 signs in Playa Del Rey advertising ‘Reduced’, 2 more listed at a real estate agents as ‘will take any reasonable offer’ and ‘motivated seller - short sale’ - and then 2 in Manhattan Beach with ‘Reduced’ on them as well. All within one day.
Remember, it won’t happen here…we’re prime coastal property and everybody wants to live here. Rubes.
Hmmmm…. define reasonable offer…LOL
Hey Income, for the first time I can sense the “real” panic in the air that we knew was coming. Yeah, we’ve been on a downward spiral for some time, but this feels different. I’m noticing a recent surge in inventory at a time when it should be declining, almost seems like an “oh sh*t” reaction by all the folks who pulled their properties off the market thinking the ship would be turned by now. Also, the chatter I’m hearing these days is all about people freaking out. And then you got Kramer on the Today show this morning basically saying you were an idiot if you buy in the next 12 months (sounds like the idiot got some death threats over it too). What do ya think?
At open houses last weekend me and the MRS could just feel a little panic. I can not wait until we tour a few tomorrow. Snicker…
I love that quote by Cramer on the today show. I’m not a conspiracy theorist, rather I believe in following the money. Does anyone else think that the Realtors ™ have been told to get in line behind flowmax?
When you’re buying credibility don’t ever skip a payment…
Got popcorn?
Neil
My work supposedly is prepared for the downturn, according to why we didn’t get raises this year. But our office is slowing down a lot, and another job looks like it has client paying issues. I work at a small land development firm that does lots of different sized commercial, residential and govt. projects. Residential is their bread and butter though.
Yea, I’m noticing something to but was hesistant to use the word panic. I’ve been out and about a lot recently checking up on some of my properties and just business as usual. I’m noticing a lot of new signs especially on the Westside for rent signs and for sale signs, nevermind the open house signs. It also seems that the high end is running for the border moreso than the low end. I found that interesting. Everyone seems to be aware of the status of the market not many have missed the coverage. I have found that out in general grocery line conversations. There is a difference in tone of some folks that are in my close circle who are in the business a little more tense now before it was “ahhh someone will always need to do a transaction, remember last time we sold R.E.O.’s, the conversations are shorter and tense now”. I missed Cramer on the Today Show but heard about it secs after his appearance. Lot of folks looking over their shoulder right now, I’m getting the impression that L.A. may be worse off than I thought.
“I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,” Cantrell said.
Brilliant realization… only three years and one hour too late.
He better stock up on lube because he is in for a real treat.
They don’t make a lube that’ll effectively lubricate the pounding he’s about to endure.
Yea they do, Krytox. It’s about $135 per tube and can take a lot of heat. But the FB can’t afford that.
Now that’s what Bernanke should be dropping from helecopters!
Quit giving away trade secrets!
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
Hmmmmm….Later that night….. Dave Cantrell was reported missing by his wife!
and applied for the life insurance policy the next day…
Really funny line, L. My question is symantics - Did he “overpay” if that was the going rate at that time? Will anyone really be “underpaying” if they buy while the prices decline? I always thought the real value of RE is the price someone will pay when you want to sell.
There is another standard though: cash flow. In that regard yes, the Cantrells vastly overpaid. Those who buy after let’s say a 40% decline will not be “underpaying” unless rents also decline sharply.
Price and value are two different things. Price is pretty obvious - it’s whatever is agreed to by buyer and seller. The value of an asset is the present discounted value of its future income or utility. If the price of an asset greatly exceeds its value you have a… drum roll… bubble.
“I think we made a very serious mistake by buying this home,” Cantrell said.”
Hey, I give the guy credit for his candor. I know I made a mistake selling my Apple shares at 84, and there’s no way to pretend otherwise; but lots of people in his position are still play-acting.
Hell, I sold a couple thousand shares at 13 and a quarter.
The “mistake” of selling something, i.e., trading it in for liquid assets, is a lot less serious than the mistake of getting locked up in illiquid assets if their relative value declines. In some sense we have all made an infinite number of financial mistakes, in that a perfect record would make you richer than Warren Buffett. So what. The big thing is, not to make yourself a whole lot worse off than you used to be.
If this FB is just waking up to the fact that he grossly overpaid for a 600K house, seems that a lot of other housing zombies will be waking up soon or at least between now and Christmas. Last Christmas in ‘their house’ probably for a lot of folks.
Housing zombies… contrary to all zombie flicks, instead of the undead mindlessly pounding on the doors and windows to get in, they will be mindlessly pounding from the inside of the house to get out.
Meanwhile, happy renters will be walking past them on the sidewalks, unaware of their despair and fruitless attempts to escape.
Too funny. Housing zombies pounding from the inside trying to get out.
“I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,” Cantrell said.
Time to get Suzanne on conference call and figure out what could have possibly gone wrong!
“We’re sorry, the number you have dialed is not available. Please grab your ankles and hold on tight, this is gonna hurt.”
And now for the thunderclap, as air pressure corrects the gap between the air masses of home buyers and sellers created by the lightning bolt of absurdly easy money striking the mortgage lending market.
“‘This is very painful for homeowners, but for an economist it’s a good sign. It may begin to correct the housing price imbalance,’ said Stephen Levy, who heads the Center for Continuing Study of the California Economy in Palo Alto, referring to the gap between high home prices and relatively stagnant incomes.”
Where is Gary Watts ? Oh where has he gone? I miss his ‘real estate always goes up’ comments. Seriously, is he sick or laid up from an automobile accident. Please ,Bloggers let me know.
He is now claiming he was “half in the bag” when he made his comments. There are many FB’s who wish to kick him in the bag.
You’re right. Bear. After all a hurricane, tornado and earthquake are all basically an equalization of an imbalance.
You forgot tsunami…avalanche…car falling off a jack.
Very seldom do people die from lack of energy…when they do it almost always ends in the words “to death”. It’s that sudden release of energy due to a potential energy buildup that usually kills you.
It’s easy to laugh at chicken littles who call the bubble too soon…they have no idea when the energy release will occur, they can only watch it build. Like the boiler in “The Shining” :-).
“From the 15 Freeway, Rosena Ranch is advertised with great fanfare. Flags are waving. Signs and banners lead drivers into a newly paved and planted community of homes. But then the excitement stops.”
The first time I read it I thought it said “But then the excrement stops.”
I think it is actually supposed to read, “But then the excrement drops.”
“Cantrell said he doesn’t like the empty houses around his house, ‘but at what cost do we fill these?’”
At your cost Dave…at your cost.
Actually, at half his cost. Or lower! And here we see the difference between cost and value.
His cost minus 200K.
Oh Ben…psst…I think the spammers are at in again.
Muttle Heads.
Leigh
Could also be the FED trying to take everyone down with the ship.
Perhaps spamming operations are outsourced to Russian computer hackers?
Gave me a good old fashion belly chuckle Tom (not much belly, but ya know what I mean…LOL).
Leigh
House Belly Chuckle.
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
Ya think? This maroon is just catching on. As prices begin to fall, the fall will excellerate and they will plumet for a time below where they would have been had we had normal appreciation. Thats when you can buy and make money.
“Sales of new autos plunged 17 percent in Orange County in August, one of the steepest drops in memory, the Orange County Automobile Dealers Association reported Thursday.”
“‘Blame it on housing,’ said Art Spinella, auto market analyst for CNW Market Research. ‘Buying a car with a home equity loan is a California pastime and when home equity drops, it’s tough to get a home equity loan.’”
So, buying a car with a home equity loan is a California pastime? It became a national past time when the tax laws changed.
I wouldn’t say buying a Honda or Toyota with an equity line is not new. It’s the BMW, Hummer, Jet Ski, Big Boat, Boob Job, Vacation in Tahiti, etc. buying with home equity lines that is the real problem.
Good grief, how do renters buy cars? I mean, it’s not like they can HELOC the apartment…
In cash, like me?
Maybe they will allow you to buy using a credit card? I actually tried to buy my current car with a credit card. But Acura would only let me charge $2000. Maybe that will be California’s new pasttime on buying cars?? Our neighbors just traded in their Audi A8 for a Mercedes S500. That must be nice.
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
I caught that hour or so too. Where in the h*ll has this guy been the last 5 or 6 months?
Wow, with my home equity loan I bought a new roof, carpet and bought a Honda to replace the Saturn that kept breaking down. How stupid was I to not buy the BMW instead. Doh!
“Barton said this is their neighborhood, too. He said that they will keep building there. ‘This is the right decision for us,’ Barton said. ‘In this type of market, the auction will tell us what the current fair value of the homes is.’”
And my idiot banker will believe my financials when I ask him for more money to build houses that I couldn’t sell unless at fire sale prices. Sorry, Barton, betcha your banker ain’t going to buy your song-and-dance when you need more money
“auction will tell us what the current fair value of the homes is”
= “we don’t dare conduct an absolute auction, because we aren’t ready to take actual losses, but the phony auction will tell us how many suckers will still cover our costs”
“‘Now is the time to buy,’ said Frank Williams, CEO of the Baldy View chapter of the California Building Industry Association. ‘If buyers go to the builders they can pretty much cut their own deals.’
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.
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“An editor is someone who separates the wheat from the chaff and then prints the chaff.”
Adlai E. Stevenson, Jr.
test
“Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, ‘with no bites, and it’s a beautiful home,’ Konesky said.” “He said that’s about as low as the homeowners want to go. ‘They said they’ll sell it for less than they paid for it,’ he said, ‘but they won’t give it away.’”
Patience, young Jedi.
“…they won’t give it away.”
I don’t know anything about Konesky’s mortgage but I hear this kind of statement a lot. Correct me if I’m wrong, but until you pay the mortgage off, doesn’t the bank actually own the house? Haven’t millions of Americans fooled themselves into thinking they “own” something when in fact they are more like renters because they purchased with $0 down and are accumulating so little equity (interest-only, neg-am)? Joe and Jane 6-pack might not want to give the house away, but the bank that forecloses might have no problem with selling at a 50% discount.
As I understand deeds you “own” the property if your name is on the deed, you’re just at their mercy ’til you pay the loan off or sell. Or get foreclosed.
However, the renter analogy is probably more accurate in terms of having to pay to stay.
You own the liability, maintenance, etc but until it’s paid for the bank/mortgage company owns the property. By inking the paper and taking the risk you are hedging you outflow of money. Renters can walk but ‘homeowners’ are on a leash.
Even with your name on the deed you don’t really own the property. Your property is owned by the federal, state, county or city government. The government can tax you out of your home or claim eminent domain.
Geez, I just finished posting the same thing, but about 1-1/2 hours after you. No plagiarization intended, BV; I should know better than to post up the line before I read through all of the threads.
… and it’s a beautiful home …
In Tracy, a beautiful home in Tracy. Fail! What part of location, location, location did these people not understand?
LOL! No $hit, Tracy sucks, and so does all the central valley. It has extremely fertile lands, but outside of farming there is nothing. For these $hit boxes to be selling for even half of current pricing is ridiculous.
They won’t have to, the house will be taken from them or sold at a great loss. Discretion is the better part of valour……..
“‘Blame it on housing,’ said Art Spinella, auto market analyst for CNW Market Research. ‘Buying a car with a home equity loan is a California pastime and when home equity drops, it’s tough to get a home equity loan.’”
I gotta better idea. Blame it on the UAW!!!!!
Speaking of the UAW, the vultures are already starting to circle:
http://online.wsj.com/article/SB119093789807141998.html?mod=hps_us_whats_news
Very funny, the returns on the health care trust funds will have to outpace traditional pension returns in order to keep up with health care costs. Whaddaya bet they’ll go into hedge funds, MBSs, and other crap — bankrupting themselves by trying to beat the market.
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
A couple of Rhodes Scholars there!
Okay, not Rhodes scholars, but hey - give’m some credit. At least they are admitting the mistake. I have relatives that appear to believe the universe as we know it collapses if they admit to an error, however large or small.
I have relatives that appear to believe the universe as we know it collapses if they admit to an error,
Maybe it will. I sure as heck can’t figure out what does keep it from collapsing.
Dark matter, dewd.
Hawking says it WILL collapse, and time will run backwards while it does so. However, I believe that phase of the Universe Bubble will not be seen by us unless we personally come back into existence when time runs backward.
Education doesn’t mean anything. The guy who posted this crap is a Stanford MBA:
http://tinyurl.com/39repj
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year.”
No big surprise here. This is only the beginning. Punch drinking Nimrods getting a mainline dose of reality…they paid HUNDREDS OF THOUSANDS OF DOLLARS over the true value of these homes and now there’s no denying they’re screwed. I’ve lived here in the central valley of CA since I was a youngster and still can’t believe how insanely far this thing has gone–AND–how lazy, greedy and ignorant people can be.
LAZY: Won’t do the homework or research; “where do I sign?”
GREEDY: “Well make a ton of money! Equity will increase forever!”
IGNORANT: “Real estate only goes up!”
DOC
You were great in that movie…
Punch drinking nimrods…toooooooo funny!
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year.”
But seriously, do the punch drinking nimrods want vacant homes with squatters, unkempt lawns, spawn of the devil, etc?
Jeesh,
Leigh
“But seriously, do the punch drinking nimrods want vacant homes with squatters, unkempt lawns, spawn of the devil, etc?”
Of course not…no more than they wanted to be $200k+ upside down within one year. Problem is, because they are/were punch drinking nimrods, they’ll incur all of the above.
Laziness, ignorance and greed-driven home purchase=nasty fallout
DOC
The “is treated them badly” makes me think that many of these people aren’t English speaking people- including the reporter.
Yeah have to look at that auction as really dangerous in Lodi. Those poeple that go badly underwater will absolutly generate even more forclosures.
Further downward pressure in the neighborhood that you just bought into and firmly established low comps with the auction sales.
So… that will be severe knife catching. Fingers all over the floor.
Severe knife catching?
Let’s see, a absence of sales creates a vacuum. In a vacuum there is no air resistance. A knife falling under the force of gravity in a vacuum could theoretically reach relativistic velocities given sufficient time falling.
Yes, I’d say that’s severe knife catching. They won’t even know what hit them.
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year, said Dave Cantrell, one of the first to buy a home in the subdivision.
” “‘We’re looking at a loss of potentially up to a quarter million dollars (per home),’ he said.”
this sounds like there is going to be blood bath in this neighborhood can you imagine the tension between neighbors when this happens. o well, this has to happen for the market to correct itself.
Yeah, I bet the stupid neighbors who overpaid on their homes resent and blame the not-so-stupid neighbors who didn’t pay as much, as if it’s their fault they’re stupid. I run into the same thing from automatons who can no longer deny things are tanking, now somehow it’s my fault everything is falling apart, even though I tried to warn them.
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year, said Dave Cantrell, one of the first to buy a home in the subdivision.
” “‘We’re looking at a loss of potentially up to a quarter million dollars (per home),’ he said.”
Then sell your homes before the auction… oh, wait… you can’t.
It makes me wonder how well the new residents will be received. Would you wan’t to be surrounded by a bunch of angry Greatest Fools, only to find out you’re stuck as well?
Simply put, it’s just business. Of course the greater fool are those who bought high, but what of the fool who buys now? Is this really a good deal? (Serious question, as I am not familiar with this particular area).
Smiles,
Leigh
Leigh: no it is not a good deal at all. Even if you buy at the starting auction price you will be underwater in the future. That area literally sprouted homes from the ground in the last five years. To make any kind of decent salary they have to commute for one to two hours into the bay area. In the summer it is hot and smells due to the farming. Not a good deal at all…
It’s best to wait until ALL the GF are purged from the neighborhood. I can really envision a lot of neighbor-on-neighbor animosity, if not downright harassment or worse…
By then, a more realistic picture of the homes true value should be apparent.
They could just say you did a 30-year fixed loan, so arent you planning on staying there through ups and downs? Seriously nothing just keeps going up and up and up without leveling out sometimes. Does everyone also think their job is 100% secure??
“Patience, young Jedi”.
Glad to hear the SD economy is slowing.
Not glad to see our dollar plunge.
Glad the Government is worried.
Not glad wheat and corn are going straight up.
Glad whole neighborhoods are in foreclosure in Stockton.
Not glad prices don’t budge in OC, SD, and LA
Glad costco is empty this week.
Not glad traders whip up the markets.
Glad the hedge funds might get whacked even more.
Not glad the 90 day treasuries I just purchased were 4.49%
Very glad I moved to house in the hills with ocean breezes.
Glad Ben Jones keeps this blog going.
What happened to Gwenster?
If you bought a home to live in, what difference does it make what someone else pays for theirs? It’s as if each of these people thinks that, somehow, $200,000 is being taken from them. They were happy with the price when they bought the house, weren’t they?
To paraphrase James Howard Kunstler, the most dominant religion in America is the worship of unearned riches.
I’m a huge fan of James Howard Kunstler. I’ve read everything he’s written, both fiction and nonfiction. He’s books on urban planning and landscape (geography of nowhere, etc) are excellent
“Konesky said one of his clients bought a Tracy house in 2004 for $430,000 and now is asking $419,000, ‘with no bites, and it’s a beautiful home,’ Konesky said.”
—————————————————————————
Tracy, California….YIKES! Tracy used to be called the “Distribution Center” of the bay area because of all the hugh big-box DC’s constructed there (which was out in the nmiddle of the desert!).
ALso, the last time I drove the Tracy-thru-Livermore route I felt that I’d arrived in “Commuter Hell” because the traffic was so bad.
OC: the traffic is even worse now, I watch it from my office every day. 580 east is the worst commute in all the bay area. In Tracy you have the Safeway and Costco distribution plants, and those are GREAT jobs for there. Otherwise you head west each morning to make any $. By 3 pm that highway is a parking lot. It is really pathetic that prices got so far out of line there. I’m not sure you could pay me to live in Tracy.
CA Guy,
If your not through 580 east by 2:00 pm on a Friday, you need to wait until 8:00 pm or after.
Yep, you can say that again. When I leave work in the evening I shake my head and wonder how those people can take that drive every day. 580 east is a disaster.
I’ve been able to find what I call back roads to get around some of the traffic.
“The Falkners want to live closer to friends there, and they’re hoping to get a great deal on a new home and would pay cash. She wouldn’t feel a twinge of guilt if they snagged a great deal, Falkner said, ‘because I’d be getting a bargain.’”
Hi we’re your new neighbors… the Fockers. We just bought this same as your home for sooo much less than you did…..isn’t that great?
I was amused by this. By why did they even say “no guilt” for paying 50% more than 5 years ago?!?
But the name’s poetry does drive home the state of the FB’s.
Got popcorn?
Neil
On Yahoo is says, “Spending up, inflation slower.”
WTF does that mean? This is a play on numbers and words. The dollar plunges to an all time low, Gold is at an all time high and yet they say, “inflation slower?”
Did they expect inflation to be much “faster”?
I don’t get it. Where did all these analysts get their education?
Harvard? Oh wait, that is Jim Cramer’s alma-mater. If I got a degree from Harvard I would be pretty pissed off that these guys devalue it with their actions and comments as much as the FED devalues the U.S. dollar.
Focus on that higher spending (August / last month’s news) and ignore the plunge in consumer confidence (September / this month’s news). Also ignore that consumer spending rose twice as fast as incomes (0.6% versus 0.3%) — not relevant, apparently!
http://afp.google.com/article/ALeqM5hJBku11c53qLSzO3gstCXpTN5QRw
http://www.reuters.com/article/topNews/idUSN2438992120070926
Jim Cramer may be a fine human being, I shouldn’t judge.
So why do I find myself hoping he’ll be brought up on SEC violations?
Maybe it’s the stick ponies.
speaking of Cramer, check out this post on Tampa Bay Craigslist by the HousingPanic blogger:
http://tampa.craigslist.org/rfs/434421907.html
Gotta love it.
Funny.
Yeah, I guess I have to be happy when someone with a following steps forward and throws another log on the bonfire - but still, this guys creeps me out.
Jack Lemmon went to Harvard. Benazir Bhutto went to Harvard. Harvard prepares people to do a lot of things, such as (a) nothing at all or (b) playing the part of an a55hole on TV. Cramer must attract some audience, just not us. The value of my first H degree to me became evident when I was hired to teach undergraduates elsewhere before I had ever enrolled in any graduate program. Cramer cannot undo that history. The H diplomas are framed and hung in one of my bathrooms. Must say I will never give H any money, they are over-endowed. Also, the dominant political philosophy there is the antithesis of Ron Paul’s. Just sent Ben Jones a small check, Ron Paul is next.
“‘I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
CANTRELL: “I think we made a very serious mistake by buying this home.”
WIFE: “But Suzanne researched it!!”
CANTRELL: “Suzanne can go @*%# herself.”
DOC
Hey, watch it. Suzanne might just enjoy doing some of that @*%#-ing with herself. May be the only pleasure she gets these days. Especially since all of her clients ditched her.
That makes me wonder. I Wanda… I Wanda… How many “Suzanne’s” out there have been receiving some serious grief from “friends” because of the bone-headed advice they were handing out about how “RE only goes up” and “you could be priced out forever”? Oops!
Anyone who takes financial advice from some high school educated, dimwhitted realtor deserves to be taken to the cleaners. 99% of them are as credible as the sales guy at Radio Shack, IMO.
So you’re saying you assume that someone who only graduates from high school has no credibility?
No, I’m just trying to imply that your average realtor lacks the kind of financial and economic knowlege to be handing out advice on what will be most people’s biggest investment. High schools no longer seem to be teaching any kind of econ or finance, and many of the “Suzanne” realtors I’ve come across act like they’re still in h.s. A recent bbq I attended comes to mind. I think someone else mentioned they do part-time investment advising, and they have to go through all kinds of disclosures, yet these moron realtors throw around “it always goes up!” like it’s nothing. Of course I am only stereotyping above, and you should see that. If you are not a college grad I meant no offense.
I too wonder this. Although I cannot help but notice how many stories of people put into sucker loans were sold down the river by “friends.”
Lol
The REIC won’t have a shred of credibility in two quarters. Yea… it will take that long for J6P… but they spilled his beer, so he’s noticed something is off.
Got popcorn?
Neil
One of the guys who works for me has a girlfriend working in originations at CFC. She has been working on a loan for a close friend of hers from high school in the bay area. She told my guy that if that loan doesn’t close she’s toast.
With friends like that…
BTW, same guys brother got his pink slip last week from CFC. He said that they got rid of low producers first, he was in a second round of “the new guys”. That means they are laying off sales people that are producing leads.
I think I hear the sound of credit crunching.
Here is the suzanne researched this spot.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
I would like to see a follow up to see how they like their ARM.
“There are also 27,000 lots prepared for new homes on which construction has not begun, he said. Johnson said a majority of the empty lots are in emerging housing markets such as Banning, Beaumont and south Riverside County.”
The slang term is called “prarie-doggin”, see Urban Dictionary.
Where you have an emerging supply, and you try to hold it back before taking a big dump…
“emerging supply”
LMAO!
Neil - in case you didn’t see post on Chicago thread. Hoist one for me in absentia (with you having cheesecake in Redondo in spirit) at your gathering. I would love meeting and chatting HBB with all LA/OC/IE HBBers. Make a note there that the friend I am coming to visit next week in Ontario inherited his grandfather’s house in Rancho Palos Verdes (very expensive/exclusive area of LA) free and clear. Since he listened to me and stories from HBB (Oct 2005 timeframe), he put the house up for sale the second he could. He got the long term tenant to get in a bidding war and overpay about $900K for the house right at the top. My friend then used proceeds to pay off his home in full (much less expensive) and invest the rest in safe accounts and is now financially OK. Him doing that is thanks to Ben (and he personally has not read it, just took the sound advice from me I got from here). Have a great party. We want a full report, and pictures of everyone. DON’T FORGET THE PICTURES. And a big bag of popcorn in a prominent position in some of the pictures.
Our house we sold in RPV in July 05′ still zillows for $50k more than we sold it for…
How does that work?
On Sunday we’ll hoist one for you.
(Folks, click on my name for more information.)
You just reminded me… I have to charge my camera!
Note: I’ll put a black bar across people’s eyes and of course respect anyone who doesn’t want a picture taken. I think the REIC is going to get snippy…
Got popcorn?
Neil
I’m relieved your friend inherited an unencumbered house in RPV and is now financially “OK.” Make sure he doesn’t proceed to mingle with the “south Orange County working class white trash making $100,000 AGI.”
This summer, the median asking price for existing homes in Tracy, Banta and Mountain House
I lived in the Bay area for over 12 years. I have travelled all over it. I know Tracy is the Land of Many Smells (prior to the days of overpriced Mc$hitouthouses), Mountain House. Never heard of Banta. Can anyone share anything about Banta? A new city of $hitboxes on former cow pastures? Thanks for any info.
I’m betting Trona could top the eau de stink of Tracy.
I thought Banta was the natural habitat of the Bantha herd on Tatooine…
Bantha
The beasts of burden on the planet Tatooine, used by the moisture farmers.
^spooky, isn’t it…
need 2 leave: Banta is an unicorporated area on the northeast edge of Tracy. From what I know, which is little, it is a couple of somewhat funky and older subdivisions with large lots. It will be decades before Tracy growth reaches them. Probably what Tracy looked like 30 years ago.
“‘We’re looking at a loss of potentially up to a quarter million dollars (per home),’ he said.”
Hope he has a big bag for that loss. Get Gary up to Manteca to swim in some of that lard and help these poor broke folks.
Houses in Tracy shouldn’t even BE worth $250,000, let alone have that much value to lose.
“‘We’re looking at a loss of potentially up to a quarter million dollars (per home),’ he said.”
How many floppers double and tripled down? Can it get any funnier? The opposite side of greed. And I didn’t do anything to help these folks lose $250K per house. Oh, but Gary said there was no bubble.
How many floppers double and tripled down?
That’s easy. Every single one of them that was allowed to by a broker.
How can they lose $250K per house. Doesn’t everyone want to live in Lard? Or The Toilet? I am so glad I am out of that hellhole of an area.
95% drop in the central Valley. Count on it. If an area of the country has 25% unemployment and gangbangers and rampant drug use, no way any sane person would want to buy there.
People think this is impossible, but it’s not. I’m sure we’ve all driven through neighborhoods where once nice houses are now boarded up.
Detroit, for example. Some of those boarded up houses were built back in the day when quality really meant something.
Yeah Slim, anyone who thinks today’s stucco box subdivisions can’t be boarded up never saw real urban decay in the big northern cities. Real mansions - made of stone with fine woodwork boarded up for blocks and blocks.
See what happens when entire generations are only taught about the sunny side of American history?
A housing Bubble in Yuba city with this unemployment rate??
==============
The unemployment rate in the Yuba City MSA was 9.3 percent in June 2007, down from 9.6 percent in May 2007, but above the year-ago estimate of 8.6 percent. This compares with an unadjusted unemployment rate of 5.2 percent for California and 4.7 percent for the nation during the same period.
Yuba City snapped up the dubious title of the worst city to live in, in the entire country, some years back…
Yuba City is in the middle of nowhere, it’s like an hour from Sac at least. And there’s nothing out there other than Air Force base. Everyone I know is looking in Lincoln Crossing.
I was talking to my wife just an hour or so ago and I told her, you know, I think we made a very serious mistake by buying this home,’ Cantrell said.”
Someone having buyer’s remorse. Must really suck seeing $585K owing on your CountryPuke statement and seeing the house across the street not selling at $295K. No bubble? That is what everyone in CA kept telling me before I left. Only a $300K and 50% haircut in a little over a year? Who could have predicted? Certainly no HBBer saw that. If only Mr. Cantrell had paid a visit to Ben’s site before buying, he would have saved himself a lifetime of financial slavery to pay that $300K phantom equity. But the dollars/interest are mighty real.
too funny! i love the term “countrypuke”
fyi i saw on the housing doom site that countrypuke cannot afford to send statements in the mail. they are going to make debtors go online to look at their bills. lol
“…a lifetime of financial slavery to pay that $300K phantom equity.”
You can coin the term as ‘fuctquity’…
A little OT, but I hadn’t seen mentioned the piece on DataQuick’s mouthpiece in Sunday LAT. He no like us.
http://www.tiny.cc/WXAdx
Or, if you listened to them you saved yourself a lot of grief.
Why does this dummy equate buying a house with speculating and timning the market to sell at the peak? Because that’s what he is inferring.
I resisted getting into buying foreclosures as far back as 2001 for the simple reason that homes are not a liquid investment. As a lot of people are finding out.
close italics
Beware, got a virus hit when looking at this link
Wow - I just took LAT site and tiny urled it and then posted.
Bubbleviewer’s quote “House prices are a matter of opinion. Debt is real.” should be branded on the forehead of every FBer who walks away from a house. Anyone agree?
I think bumper stickers.
That way you know who probably is driving with expired car insurance…
…the big fat ankle bracelets…red dots all over the computer screen…uhh…pretty lights…and so many of them!
How about a bumper sticker that says:
This is my new legal residence
Bought with a heloc
FTR, the real line is “Debt is real; equity is a matter of opinion”.
OOPS!
Actually, it’s “Debt is fact, whereas equity is a matter of opinion”.
Oh well.
Pismo Clan - I received an email from Gary’s office last June. Just yesterday was thinking of Gary after wife and I did some yard work and asked her to hold a bag so we could clean up. Although posted in June, here again is Gary’s office opinion for June.
From: Gary Watts [mailto:gary@impactre.com]
Sent: Friday, June 15, 2007 3:14 PM
To: ‘Donna’
Subject: RE: some questions on OC real estate going forward
Alan,
When I have time, I answer some of the more sincere emails and I find yours to be one of them. The first thing that I noticed is the 10 years you did not buy California real estate. It might have been because of what the San Francisco Examiner had forecasted in 1996: “a home is where a bad investment is!” That line may have kept you and others out of the housing market. Had you bought that $400,000 home, then sold in last year in California and moved to Albuquerque, you could have purchased at least 3 to 4 more homes, had no mortgage and more monthly income. I am happy that you did finally buy and that you love it there. In the future years, you should find that you made a great investment decision.
In California, the days of really big housing price run-ups are over for now and probably for quite a few years. However, despite what you read or hear in the media, the Bay Area and southern California are holding their own. Last month the Bay Area, even with declining sales, posted a new peak median sales price of $660,000 which represented a gain of 3.4% from May of last year. In southern California, even with declining sales, the median price rose 4.9% over the past 12 months to a new high of $505,000. Here in Orange County, our price was up but barely at 0.01% from last year. This is not bad when you consider all the media news about foreclosures, late payments, sub-prime collapse, etc. There are still so many buyers fence-sitting but I assume that a couple of more months of prices continuing to increase versus the same period last year, will get them back into real estate homeownership before interest rates begin to rise.
I am not naïve about the problem areas, especially the newer communities where a lot of building, exotic loans, and rising house payments are hurting buyers. When you look at the numbers, they are very small compared to all the homes, condos, mortgages that exist in this State. Today, the notices of default for the last quarter totaled 46,760. While that seems like a huge number, it represents only 0.008% of all mortgages in California – a number too small to effect or affect home prices in any meaningful way. Also, I should point out that only 11% of those “notices” actually end up as a foreclosure. The other 89% were successful is stopping the foreclosure by obtaining new financing or selling their home. By the way, last month 24 states saw a decline in their foreclosure starts. Maybe, just maybe things are near the end for those individuals who purchased a newer property near the beginning of 2005, with little or no money down, using the exotic loans. The good news is that when you measure those types of loans versus all mortgages in the U.S., they represent only ½ of 1% of all loans in the U.S.
I hope this clarifies some of your issues and in another year, we can once again compare notes and see how things are going. A year ago, many emailed me about the immediate Housing Collapse. Here it is a year later and despite what they have read in the media, most of the housing market is still in good shape.
Gary Watts
P.S. To address your other statement about people moving out of California, you are correct. Maricopa County in Arizona received 11,375 Californians in the past
year. Yet with all those departures – even to other states, the State of California and especially southern California still had positive population growth.
——————————————————————————–
From: Donna [mailto:donna@impactre.com]
Sent: Friday, June 15, 2007 12:30 PM
To: gary@impactre.com
Subject: FW: some questions on OC real estate going forward
—–Original Message—–
From: al jones [mailto:housingbubblesobstory@yahoo.com]
Sent: Thursday, June 14, 2007 10:34 PM
To: info@impactre.com
Subject: some questions on OC real estate going forward
Gary. I am a former California and Orange County resident. I made what seemed to be pretty good money working for Pacific Bell/SBC during 16 years in California. I made on average about $70,000 per year. When I got married, my wife made about $55,000. Together that appeared to well above the average income for CA. I couldn’t conceive of paying $400K for any home, yet alone $623K. Alas, I never purchased a home in CA (was in the Bay area from 1996 to 2006). We were finally disgusted with CA and I was burned out on my job. We moved to Albuquerque, bought a nice home for under $300K (2700 sq ft, one of best neighborhoods, safe). Even paying a fixed 30 yr, best interest rate note takes enough chunk out ($2200/mo) of our $100K income. This house would have been $1.3M in Irvine or East Bay area where I last lived. People like me are leaving CA in drove. The best proof is Uhaul one way rates. Lake Forest CA to Albuquerque NM $2176 and reverse was $360. That means 8 trucks leaving your area for my area for every one returning. I also did financial planning for a couple of years and the people’s finances were in terrible shape. Best example, a family where husband/wife made $13/hr bought a $850K house. They were told they had a $2000/mo loan that wouldn’t change. Well, fine print said differently. Those folks are probably a foreclosure statistic. There are 10 of thousands of such people in CA that bought into those suicide loans. It should be obvious the math doesn’t add up. How can you sleep at night pushing more people like this to financial bondage and future homeless people? How can prices in CA do anything but go way down? Is the undocumented workers picking strawberries at $15K per year going to keep buying the $720K homes (documented case of such in Hollister). Please advise. I will share your answer with thousands of interested folks if you have the courage to answer this email.
Thank you
Alan - a former CA resident and glad to be out of there. If more people knew how nice life was outside of the crime, traffic, smog, high cost, crowds, high taxes, subpar health care, falling apart infrastructure, etc even more would be leaving and CA will be left with the uber rich (Paris Hilton if she is out of jail) and the dirt poor (draining what is left of any public money). I don’t think Arnold can save the day here.
I am not trying to be mean, negative, or anything. I would just like some straight answers and not the NAR fluff.
I see 3 flaws with his answer and I hope you respond in a sincere way.
1st, he says the population in Southern California is increasing. I bet most of those are immigrants from Mexico. They don’t necessarily make the incomes needed to afford the RE price there.
2nd, he mentions the median keeps increasing even though sales keep declining. Does he realize this probably has to do with the skew of more purchases happening at the higher end while lower priced housing keeps dropping and increasing in inventory? If inventoyr keeps increasing while sales decrease, something has to give. I cannot imagine that many people on the fence. more who are able to pay tend to be moving out while those living at or below the poverty level (illegals) are moving in.
3rd, for those who do want to buy, how do they get financing now that the mortgage market has frozen up? Many are requiring down payments which most do not have.
“Today, the notices of default for the last quarter totaled 46,760. While that seems like a huge number, it represents only 0.008% of all mortgages in California – a number too small to effect or affect home prices in any meaningful way.”
Google calculater sez 46 760 / (0.008%) = 584 500 000
Now *that* seems like a huge number!
Did he mean 0.8% maybe? 1 in 125?
good catch
I personally think anyone who see’s they are a fb is finishing off their equity line ( maxing it out ) and then will walk then
we are in a full blow,no denying it recession. yikes
CANTRELL: “I think we made a very serious mistake by buying this home.”
WIFE: “But Suzanne researched it!!”
CANTRELL: “Suzanne can go @*%# herself.”
Correction:
WIFE: Suzanne researched her TITS.
I can see a high double murder/suicide probability in this scenario….
Dang…who’s gonna buy the excess? (bad Leigh)…going straight to time out.
I do part time investments. I open a $25 a month Roth IRA and have to give all of this disclosure “Not guaranteed, can lose value, etc” - all for $25. Yet these Realtwhores sink people hundreds of Ks with lies? Where is the logic? And the disclosures a broker gives is the right thing to do, not arguing that should be changed. But even if it went to $0, my client is out - what $25 - big deal. But $250K - yeah, BFD.
Yeah, good point. If I give you ‘investment advice’ without a valid securities licence for even a 1,000 investment its a felony in the us I believe, but some Realtwhore whose licencing doesn’t even cover the rudimentaries of finance can advise someone on the biggest ‘investment’ of their lives and endorse the purchase at clearly inflated prices, afforded only by exotic and risky borrowing? In the litigous US I think there may be a cause of action at least civilly for breach of trust if not for malpractice.
Riding the wave - glad you liked my term countrypuke. I send them my house note (much smaller than CA are). We need pictures of the freeloading squatter realtor, and please do tell the neighbor. Videotape the owner visit and put on youtube. That will be an instant hit.
“‘Things are pretty bad,’ Gin said. ‘Not only are all the components down, but they’re down by hefty amounts.’”
——————————–
See, there it is again. Home prices coming down to where average families can afford an average home to live in is a BAD thing according to Gin.
Of all Californian cities, San Diego will suffer the most…
My sister’s house she bought 10 years ago for $165k, maxed out @ $650k.
No other houses in a bigger city in the Golden State, appreciated anything like that.
Add a ton of new houses and condos, whose occupants are woefully upside down, and you have the makings for a disaster, economic-wise.
Timber!
add a large population of mostly undocumented workers, now unemployed, to that mix…
sprinkle a more overburdened infrastructure (like police and fire) due to increased activity and decreased tax revenue…
And what do you have now?
Why are all these economists so opposed to affordable housing? I thought affordability was a policy goal?
alidsane - good thing that San Diego is nearby where all of those Joshua Trees grow. NNVbroker is going to be really busy there in SD personally delivering some trees.
Feds unplug NetBank
Internet-based company’s failure is the largest ever in Georgia
http://www.ajc.com/business/content/business/stories/2007/09/28/netbank_0929.html
I’m feeling much better about making sure I have ONLY the FDIC insured amount in my accounts, the Netbank holders are taking a 50% loss on anything over $100K deposited.
Housing Slide Yet to Hit Bottom
The latest evidence of a decaying real estate market came in a government report Thursday that new-home sales in August hit their lowest point in seven years.
But for a more vivid illustration, look at Akron, Ohio. In 10 of that city’s hard-hit neighborhoods, a report given to the city council this week said 79% of all homes sold from February to August this year were unloaded by lenders for a fraction of their value. In Akron, as elsewhere in the USA, the dumping of foreclosed homes on the market has squeezed both builders and sellers who must compete against additional properties.
http://www.abcnews.go.com/Business/story?id=3665392&page=1&Business=true
I might be late on this but looks like flippers aren’t going to get the tax benefits they once did:
http://www.fatwallet.com/t/52/768373/
“‘Now is the time to buy,’ said Frank Williams, CEO of the Baldy View chapter of the California Building Industry Association. ‘If buyers go to the builders they can pretty much cut their own deals.’”
“To sell homes, he said some builders are willing to just break even while others are taking losses. He said all are laying off personnel and he believes there is ‘a good chance’ that some Southern California home builders will go out of business.”
No Frank, there is a “great/excellent/absolute sure thing/like money in the bank/it is always a great time to buy chance” some SoCal home builders will go out of business. Maybe we should go research the number that closed shop during the 90’s. Frank, love the “Baldy View” chapter since most builders and FBs have their head up their @$$. They’ve got a great view of “Baldy”.
Speaking as a statistician, that is the first time I have heard a 100% probability referred to as a “good chance”. I’ll have to add that to my teaching dialogue.
Another mortgage lender bites the dust: SCME from San Diego.
Half-off condos in SD:
http://www.msnbc.msn.com/id/21038386/
Still too much, imo, but damn it’s nice to see. I’ve been out here from the Midwest for 4 long in-law chanting “you’re crazy not to buy” years.
ah another fake auction to pull in the headlines. These aren’t true auctions, you can win the bidding and the bank can say “No deal”.
They should start the bidding at the reserve price and call it an auction, anything else is just drumming up excietment for the local press.
“[Orange County] mid-September median for all residences of $605,000 is the lowest since January; … and 6.2% off June’s peak.”
If you interpolate that linearly it translates into 24.8% decline annually. Hooh hooh! In your face Greenf@rt.
“Owners of 26 homes there think the home builder is treated them unfairly and in bad faith by planning to auction off vacant or under-construction homes at prices that could be more than $200,000 less than what current residents paid for their homes within the past year, said Dave Cantrell, one of the first to buy a home in the subdivision.”
If prices continued to go up would we be hearing complaints? What if the builder went to the buyer after six months of appreciation and asked for a cut of some of it because he/she sold the property to cheap?
“The Falkners want to live closer to friends there, and they’re hoping to get a great deal on a new home and would pay cash. She wouldn’t feel a twinge of guilt if they snagged a great deal, Falkner said, ‘because I’d be getting a bargain.’”
Ya gotta lov these folks. They are like a horse at the starting blocks with blinders on. Only look at the price people, just focus on the price and ignore everything else.
“Cantrell said he doesn’t like the empty houses around his house, ‘but at what cost do we fill these?’”
I’ll tell you how you fill them. You drop the price until they truly become affordable housing. Here in Salinas you charge $500K to $800K and put people in them making $40K because you don’t want them to ‘feel badly’ about where they live. So tell me Mr. Government official what are you going to do to get wealthy people to move into the future ghettoes the excess housing inventory is going to create, limit the wealthy on how much they can spend for a house? If everyone doesn’t have the same amount of skin in the game, why in the hell would someone want to spend $500K-$800K to live in the same neighborhood?