It’s A Far Cry From Three Or Four Years Ago In California
The Desert Sun reports from California. “Uncertainty surrounds Escena, the much-touted 1,400-home project that is the first golf course development built in Palm Springs in two decades. Home-building giant Lennar Corp. has stopped pouring foundations for new homes at the upscale gated development south of Vista Chino. ‘They shut down their sales offices and are not finishing construction on the clubhouse. It is 95 percent done. They are not going to finish it,’ Councilman Chris Mills said. ‘The market drives everything.’”
“Dozens of homes from about 1,900 to 3,000 square feet along the golf course and in courtyards stand empty and ready for occupancy, but buyers have not materialized as envisioned. It’s a far cry from three or four years ago, when buyers sat on waiting lists for new homes in many valley developments.”
“Mills said city staff told him that Lennar has refunded deposits that were taken from prospective homebuyers. ‘You don’t want people out there,’ he said, because Lennar would be responsible for maintaining the project.”
The Orange County Register. “New stats…for the 22 business days through Sept. 21 show an O.C. median selling price of $590,000. If that held for the full month, that would be the lowest since April ‘05.”
“In addition, that price would mark a 8.1% drop from August, the biggest one-month drop in DataQuick’s 20-year history of O.C. buying patterns. And the 6.3% decline from a year ago would be the biggest year-to-year drop since Dec. ‘95.”
The Voice of San Diego. “As the number of San Diegans facing foreclosure rises meteorically month after month, landlords and property managers are bracing for an influx of former homeowners now looking for a place to rent.”
“In August, the number of foreclosure filings jumped by 80 percent from July, and by nearly 250 percent from August 2006, according to RealtyTrac.”
“Gabe del Rio, director of homeownership for nonprofit Community HousingWorks, said he and other housing counselors tell prospective tenants with a foreclosure on their record to draft a letter of explanation to the landlord or property manager.”
“‘They’re really going to need to explain that they’ve gone through a situation recently, and why and how that is not a good reflection of their ability to pay rent,’ he said. ‘It could be something like, ‘My mortgage was $2,500 a month and then it adjusted to $3,500. I was not late before it adjusted. And this rental amount is $1,200.’”
“Industry experts said the trend has yet to hit in full force. ‘It hasn’t hit in great numbers yet,’ said Robert Pinnegar, the apartment association chief. ‘The speculation out there is that the wave of foreclosures is largely investor properties. The next wave, that’s what everybody’s watching.’”
The Business Journal. “Standard Pacific Corp. will merge its South Bay operations into its East Bay office, its Northern California regional President Douglas C. Krah said today. Of 75 people working in the South Bay, Irvine-based Standard Pacific laid off about 25 people. The South Bay office has been open about a decade.”
“At the same time, the company is merging its Central Valley operations into its Sacramento office. About 10 of 35 people in the Central Valley lost their jobs in that transition.”
“‘This is clearly a cyclical correction, and we are not shocked. But we never know the magnitude of a correction or the duration. It will get better when people start buying again, as obvious as that sounds,’ Krah said.”"
From CBS 5.com. “On Thursday we visited a San Jose home that had recently been foreclosed on. After residents moved out, gangs moved in, taking over the vacant property.”
“Neighbor Diane Ludwig says she was scared, watching all the activity. ‘Drinking, parties and other things. I don’t want to mention too much,’ said Ludwig.”
“And at another foreclosed home we found more evidence of squatters– two blankets. A window to a bedroom was shattered. Both homes are in east San Jose. That’s the area with the most homes in various stages of foreclosure in the city. There are also high numbers of foreclosures in south San Jose and downtown.”
“Real estate agent Mark Detar of Intero thinks the squatter problem is only beginning. ‘With an increase in foreclosures, you’re going to see things like this,’ Detar said.”
Inside Bay Area. “Despite an initial setback, outraged homeowners in the upscale Paseo West subdivision plan to continue their informal protest against a developer planning to auction off 34 brand-new homes.”
“Anderson Homes plans to stir up homebuyer interest with the Oct. 13 auction of vacant or under-construction homes in the Manteca subdivision, said Craig Barton, chief financial officer for the Lodi-based developer.”
“Following a meeting last Friday with Barton, homeowners crafted a letter asking Anderson Homes for a $20,000 per owner rebate for their property.”
“On Wednesday, homeowner Dave Cantrell, the de facto leader of the protest, received a response. In a letter via e-mail, Anderson Homes president Larry W. Anderson said he was ‘perplexed’ by the rebate request.”
“‘In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased,’ he wrote. ‘Housing is cyclical and values will fluctuate as history tells us. Housing has been hit especially hard this cycle due to the financial market crisis and large number of foreclosures.’”
“‘In a nutshell, they blew us off,’ Cantrell said. ‘The way they talked around it; it’s somewhat insulting.’”
“On Thursday, Cantrell says he sent a short reply to Anderson simply saying, ‘Not acceptable.’ ‘At this point, they’re not being part of the community,’ he said. ‘They’re acting like a corporation and not looking back.’”
“The consensus from homeowners is that the auction will undercut property values by hundreds of thousands of dollars and that the current tight credit situation will mean only investors will participate in the auction, and would rent out the homes.”
“Though the best-case scenario would be no auction at all, getting some sort of rebate would be a token of good will, homeowners said. Or, as Joseph Leon put it, it wouldn’t help, but ‘at least it wouldn’t be a slap in the face.’”
The Recordnet. “A minimum auction bid of $265,000 will be required for most of the homes in the Paseo West project in Manteca, which Anderson Homes said runs about 60 percent of the ‘reduced asking price.’”
“The financial repercussions of homes sold at prices far below what current residents paid could damage families in the neighborhood beyond repair, said Manteca construction contractor Randy Brown, the newest resident of Paseo West.”
“He got the keys on his $440,000 house in mid-August, two weeks before finding out about the planned auction. The minimum bid on an auction house such as his is $285,000. ‘To put this in the shortest term possible, this sucks,’ he said.”
South San Jose is a scary place. In 1999, you could still buy a house on King Road (south of Tully) for $50,000–now they are selling for 8-10X that. But it is still a ghetto.
Hasn’t anyone noticed “moral hazard” is gone. Ghetto dwellers having become 1/2 millionaires are nicer kinder folk. No more gang bangers in the hood.
THis is a temporary phenomenom. Wait till things get ugly in the next year or so. Peopl all over won’t be so friendly. Stress over money tends to make people very rude.
In 1997, you could still buy a decent 3BR/2BTH, 2CG in Santa Clara (I seriously considered one near Lawrence Expressway and El Camino Real) for $280K-$300K. 10 years later, every seller wants $800K+ for a house in Santa Clara. Even more in Sunnyvale. But salaries haven’t gone up that much in 10 years.
It sometimes saddens me. Back then, I had all my friends in Santa Clara / Sunnyvale - right out of college. It was fun living close to each other in apartments, going out on weekends. Then everyone got married, bought a house, moved away to - South San Jose, Morgan Hill, Milpitas, Fremont. Eventually, some just moved out of the state like I did, or another friend who moved to OR. Some moved to Southern CA because it was cheaper than the Bay area.
Most of us still fly out to see each other once a year or so; but it is not the same as jumping in the car and going off to your friend’s place over the weekend.
Well, 2008 is going to be interesting for the Bay area.
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I bet that the house costs the same in CSCO!
Jas
“Then everyone got married, bought a house, moved away to”
That is shocking! That also happened where I grew up.
Yeah, well, I don’t think human beings evolved in conditions where social networks were being torn up like that. Think village life. No wonder so many Americans have serious mood disorders. (The debt might be part of it too.)
King Rd is solidly in EAST San Jose; it turns into Silver Creek Rd in the area some call “Evergreen”….So. San Jose is down by Santa Teresa/Cottle Rd. area, though you might get away with calling the area south of Capitol Expwy “So. San Jose”. I owned house in E. San Jose… bought it for 58K in 1978 and sold it in 1987 for 127K. I haven’t seen the 50K range in this part of San Jose for a very long time.
Sounds like South SJ is back to being South SJ. Wonder how Milpits is doing.
Milpitas! Im employeed in a start up next to a white trash trailer park… nothing nice there…Lots of laundry hanging out on the lines every Monday Morning…
There’s nothing wrong with hanging laundry out to dry… unless it’s all wife beaters and baggy pants.
““Real estate agent Mark Detar of Intero thinks the squatter problem is only beginning. ‘With an increase in foreclosures, you’re going to see things like this,’ Detar said.”
And some people think homes In So SJ really are worth $500K…
But wait its gets better in Palo Alto… next to East Palo Altos ( home of AKAs and Crack… lots of shady places there…) which are supposed to be worth $1-2M for starter homes….
“‘In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased,’ he wrote. ‘Housing is cyclical and values will fluctuate as history tells us. Housing has been hit especially hard this cycle due to the financial market crisis and large number of foreclosures.’”
check this out. I completely agree with this. when house price increased, the flipper never, ever gives the builder more money; so when it goes down, don’t be a sh*thead and ask for some back. You’re not in fifth grade anymore. It’s the real world now. grow up.
King road is north of Tully
This whole bubble get-rich-quick-without-lifting-a-finger scheme truly represents the mentality, the thinking, the ideology of the whole Americano nation. This capitalism piece-of-human-excrement from Adam Smith is going to haunt the Americano economy for sometime. I for once is waiting for the replay of the movie “1929’s”. I want to see people jobless, homeless, hungry, begging for hand-out on the street. That will teach the Americano some lesson about the true value of life and living.
The Wreck of the Escena Fitzgerald…
“Uncertainty surrounds Escena, the much-touted 1,400-home project that is the first golf course development built in Palm Springs in two decades. Home-building giant Lennar Corp. has stopped pouring foundations for new homes at the upscale gated development south of Vista Chino. ‘They shut down their sales offices and are not finishing construction on the clubhouse. It is 95 percent done. They are not going to finish it,’ Councilman Chris Mills said. ‘The market drives everything.’”
Just went to check out the models at Escena and Standard Pacific..the entire area is a deserted 355 acre area. It was eerie, as after I went, I discovered the article in Desert Sun..there isn’t ONE construction trailer or worker anywhere..and the part time NON sales person said the entire sales were laid off. He was only there 2 days wk…said that if I were really interested in the INCENTIVES.. if the property didn’t have flooring they builder would take off 90 k immediately and if it had flooring -60k off.
So eerie..
And still no one wants to lower their prices on already built homes..
After ( in same exact location ) viewing Standard Pacific homes …came through sales office and NO ONE was there. They had left..No cars in lot but mine..
“The financial repercussions of homes sold at prices far below what current residents paid could damage families in the neighborhood beyond repair, said Manteca construction contractor Randy Brown, the newest resident of Paseo West.”
“He got the keys on his $440,000 house in mid-August, two weeks before finding out about the planned auction. The minimum bid on an auction house such as his is $285,000. ‘To put this in the shortest term possible, this sucks,’ he said.”
- Whatsup with Randy? He is supposed to be a ‘contractor’? He sounds more like a disgruntled jackass.
This one had me laugh. Kind of sucks not to be informed, eh?
As these stories get out, a greater fraction of the ready and qualified buyers will head to the sidelines. As I look at the WSJ graph of pending and exisiting home sales… I see one thing and one thing only: declining sales. Well… I can look at another graph and see unseasonal increases in inventory… Hmmm…
Got popcorn?
Neil
I drove by this Manteca development just a few days ago….That general area is in deep do do…..
I drove by Manteca also to check it out……had to take a wiz …..a homeowner saw me and said I would cause a drop in his home value and demanded a $5000 refund…….so of course I gave it to him.
did he also suffer irreparable psychological damage that would require years of therapy and $10,000,000 to cure him/her?
Uninformed? I doubt it bigtime, or at least he had the opportunity to be informed. C’mon, at this point in the game he had to of had at least a couple co-workers, one or two family members, a fellow church member, heck, the guy at the corner store tell him that he was f-n crazy and to wait. This guy chose to drink the hardcore Koolaid, and now only the hardvore suckers are stepping up to the table for their dose.
the solution is quite obvious. current Manteca owners need to purchase the sorrounding homes at full value. That will protect their comps.
Good idea, cereal. They should be able to afford it since they’re all wealthy real-estate geniuses, after all.
Or as my daughter says “sucks to be you.”
“The financial repercussions of homes sold at prices far below what current residents paid could damage families in the neighborhood beyond repair, said Manteca construction contractor Randy Brown, the newest resident of Paseo West.”
The financial repercussions of homes selling for much MORE than I paid can damage me beyond repair! I’ll be paying for inflated valuations in the form of increased Property Tax (not to mention homeowner’s insurance, etc), for the rest of my life.
It could be worse for Randy; if the houses DON’T get sold he could end up living next to neighbors like Diane Ludwig is seeing.
Screwed either way…..
That’s a very good point. I’d rather have a homeowner living in the house next to me than a boarded up house, etc.
Quite a haircut in two months. LOL.
Quote:
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Quite a haircut in two months. LOL.
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That is not a haircut. That is going BALD like a penis head. Heh… Heh… Heh…
Damn CA Midas-Son-Of-An-Ass…
Want to get rich huh ? OK. Go ahead and sell the damn house now and get rich instantly !!!
I am in esctacy when I read news like that. It uplifts my heart and soul to the utmost pleasure. I like to see trashes getting pounded, burned to the ground like these S.O.A…
‘To put this in the shortest term possible, this sucks,’ he said.”
We’ve been saying it’s a SUCKERS market. You’re it, Randy.
Exactly what I was thinking. All these people are realizing that they were suckers. The illusions that they all bought into, where just that, illusions.
When you look around the room and don’t know who the sucker is. It’s you.
I really LOL at this.
What a bunch of idiots.
Didn’t some RE shill say at a conference that the housing marke was gonna suck? Who was that? I can never remember names of people I don’t actually know.
D.R. Horton CEO Donald J. Tomnitz said it back in the spring.
But Donald Trump’s Weekend Millionaire Course (55,000 attend in SF) said I could parley this into a fortune in 5 years. Did the Donald lie to me???
“He got the keys on his $440,000 house.. two weeks before.. the planned auction.
Dragging his large suitcase, he ran for over a mile and, drenched in sweat, arrived at the dock just in time to board the Titanic as they were ready to withdraw the gang plank.
Wow! Joey, that was priceless.
i’m glad you liked it but I will take no credit.. because i’m inspired. I’m on a mission from God.
Must have been reading the same SCI FI book Oral Roberts was reading when God spoke to him to build University.
*screams with laughter*
~Misstrial
I still get a kick out of “minimum bid.”
So, if I decide to offer $265K they won’t take it?
Randy should have known what was going on. Looks like he caught a falling knife. Wonder if he ‘ground’ a buyer in the bubble. What comes around goes around or some such!
Randy made a bad choice, but it doesn’t make him a jackass. If you were in his shoes, you would have much more colorful phrases than “this sucks”.
I love a good meteor shower, just like the next guy…
“As the number of San Diegans facing foreclosure rises meteorically month after month, landlords and property managers are bracing for an influx of former homeowners now looking for a place to rent.”
Me too! I LOVE meteor showers!!
I LOVE meteor showers!!
Meteors do not hit the earch, it is a meteorite, that is what hit San Diego.
Somebody convinced me to buy a meteor time share…
Friend’s 25 yr old son with 90k job just offered bank 500k on Orange CO home =bank asked 750k, but accepted.. right away.
I would have said OOPS if I were that kid and his parents..or advisors. anytime a bank decides RIGHT away..something has got to be wrong..
Here’s what’s wrong with this picture: a 25-year-old is spending a HALF MILLION BUCKS on a house! Even if he manages to keep his $90k/yr job with recessionary storm clouds approaching, that’s still nearly 6X income –about double the recommended limit. When did it become common wisdom that everyone –regardless of age/maturity, employment stability, creditworthiness, etc.– automatically ‘deserves’ a house?
Oh, and, yes, the bank wasn’t about to look a gift horse in the mouth –they saw their opportunity to unload *yet another* non-performing McAlbatross from their books and wisely jumped on it. And I don’t buy the banks supposed $250k “discount” story either. Asking price was probably peak-bubble + 30% ’sunshine’ premium. No bank is going to let any asset go for less than market value (barring family/insider sales, of course).
“Following a meeting last Friday with Barton, homeowners crafted a letter asking Anderson Homes for a $20,000 per owner rebate for their property.”
“On Wednesday, homeowner Dave Cantrell, the de facto leader of the protest, received a response. In a letter via e-mail, Anderson Homes president Larry W. Anderson said he was ‘perplexed’ by the rebate request.”
“‘In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased,’ he wrote. ‘Housing is cyclical and values will fluctuate as history tells us. Housing has been hit especially hard this cycle due to the financial market crisis and large number of foreclosures.’”
“‘In a nutshell, they blew us off,’ Cantrell said. ‘The way they talked around it; it’s somewhat insulting.’”
Why doesn’t Cantrell answer the point made by Anderson Homes, namely that would these FBs have been willing to pay extra if home prices increased in a short of amount of time and Anderson felt they were underpriced???
It is “somewhat insulting” that these FBs want rebates but wouldn’t have been willing to pay extra to Anderson had prices gone up quickly!
“somewhat insulting”???
How about this Dave, your grasp of Econ 101 is “somewhat” wrong. In fact, it seems you might be “somewhat” stupid. Although “somewhat” may be something of a weak adjective in this instance.
Did you buy an I-Phone too?
hahah, LMAO iphone….
that $500 unneeded gadget amazed me!!!
They give phones away!!! why the hell did these morons line up to pay for phones!?!?
I don’t give a shit about the bells and whistles, get a clue its a phone!! Granted a fancy phone, but a phone none the less. I am sure that vast majority of iphone buyers used borrowed money. Most that actually had to earn that $500 would say “I’ll take the free phone”.
I allways felt that the iphone was gonna be the canary in the cole mine for the the credit driven consumer economy.
“On Thursday, Cantrell says he sent a short reply to Anderson simply saying, “Not acceptable.”"
Oh, not acceptable, well that changes everything…here’s a hundred grand.
Hilarious! I felt the same way when I read this. I could just see the Anderson boys at their office rolling on the floor, holding their sides, and slapping each others backs at Cantrell’s comedic retort. You just know they had a good laugh at that one.
You people are killng me today! These comments are CLASSIC!
what are they.. too freakin cheap to hire a lawyer?
but of course, they’d be satisfied with a “token” gesture wherein the builder admits he was an idiot to sell to these idiots.
They got a token gesture from the builder. I’m pretty sure they would have included a picture of their middle finger along with the letter had they thought the dolts were so clueless as to totally miss the meaning of the letter.
anderson could at least do something for these poor saps.
lawn jockeys. that’s it. give them all lawn jockeys.
“lawn jockeys. that’s it. give them all lawn jockeys”
Lawn jockeys are soooo 2006. They will have lawn hobos instead, once the squatters move in…
Or pink flamingos.
“At this point, they’re not being part of the community,’ he said. ‘They’re acting like a corporation and not looking back.”
Then Cantrell stamped his foot, lay on his little tummy, beat his hands on the floor, whined “They’re being MEAN, it’s not FAIR!” and held his breath until he turned as blue as the Pacific Ocean.
Hey Cantrell; They aren’t part of the community. They are a corporation.
He should have said “Nuts!”.
homeowners crafted a letter asking Anderson Homes for a $20,000 per owner rebate for their property.”
These guys shoulda sent the letter to someone with really deep pockets and who has a reason to care, like Hillary.
Although I understand what the homeowners are saying i have to side with the builder. Buying a house in this market was a risk the homeowners accepted (knowlingly or not) when they bought. The housing market sucks now compared to when they bought - their place isn’t worth as much. It’s pretty straight forward. They have no leverage. But if they hold on to their places they should be able to break even again around 2011 (12?)
Yes, owning a home and living next to renters can be something short of a good experience. However, I did it for several years and never had any real problems - in fact we made a few good friends.
Dear Hans:
By what reasoning/with what evidence do you conclude that these mortgage owners will break even by 2011/12? It seems to me that, by that time, the values of their houses should be about 50% of what they paid (adjusted for inflation).
Oh, and I’ll let you in a dirty little secret: Some of the bloggers here are renters having to suffer the experience of living flanked by FBs.
Cantrell strikes me as the type that thought me made a smooth move buying when he did. As a kid he was the one that would take his bat and ball and go home because others were not playing his way.
Hey a$$wipe shut up and go home, nobody wants to hear it!
It’s insulting that this clown wrote his letter to begin with. Dear Builder: I wanted my house at the price at the time, but now that prices have decreased, I want you to pay me $20K as a token of your affection. And I’ll also be asking for tokens from everyone that I’ve bought merchandise from who has put those items on sale later. You all owe me. And the best part is this clown doesn’t see anything wrong with publically saying I’m a greedy fool.
Hey, if some crazy woman can sue for $1M because Apple lopped $200 off an iPhone, why the heck not??
Ah - because it’s just plain wrong. Just because someone tries something doesn’t mean it’s the right thing to do. She’s crazy for the same reason as him - you can’t get rebates just because something goes on sale down the line.
Not saying it’s right but mark my words, some stupid liberal jury is going to give this woman her money!
why do you assume “liberal” jury? And you can bet that she and Mr. Cantrell are both NOT liberals - How ironic is that - all the small government folks that now want to be taken care of.
It’s not a political jab, it’s true. Liberal juries as a whole believe that corporations are the root of all evil and tend to award obscene amounts of money to the percieved “little guy”. But still, your argument makes no sense. Even if they were conservatives, they aren’t asking for the government for money - they are asking for it from the corporations.
Maybe there will be a lawyerly bubble to come out of this?
Slight problem…
Where’s the do re mi for settlement, gonna come from?
“At this point, they’re not being part of the community,’ he said. ‘They’re acting like a corporation and not looking back.’
The nanny mindset in all it’s glory. Yo Randy, Anderson is a corporation, and having sold what they could to great fools like you, they are taking their money and blowing this pop stand. That, my boy, is what corporations do…sell, make money, pocket profit.
Unable to find any more fools at your price point, they are dropping the price, and chumming for more fools. Again, that is what corporations do…work for profit.
Apparently, Randy does not realize he lives in a market economy. He also did not realize that the Anderson Corp. is not “part of his community” or his family. Big mistake.
This is capitalism bub, you pays your money and you takes your chances.
Remember a couple of builders, about a year ago, were putting in the sales contract words to the effect that if the price went down the builder would rebate the difference to buyers . Wonder how many loopholes the builders had to get out of that one ,or if they are really paying now ? That was at a time when realtors and the MSM where predicting a rebounding market in 2007 ,remember ?
Anyway ,if a person buys in a new home tract ,maybe they should play hardball and put a few clauses of protection in the contract about getting money back should the builder auction or reduce prices in the next 24 months ,whatever .
maybe Anderson homes should offer them a $20,000 decorating credit at their decorating center if they buy a second home for a high enough price at the auction??? that way they can pay $100 per yard for carpet that costs $30 per yard at a retail store.
When i saw the Cantrell/Anderson story, i just knew it would generate a record number of funny comments. I would just like to point out that the builder is taking a major bath too. It was fully expecting these auction houses at full price, its loss per home is just as bad as the residents and it has many homes. The developer probably also has a lot more undeveloped lots and land that it will have to unload at a major loss as well. Anderson maybe putting on a brave face, but they are sweating the losses just as much as the residents.
I wonder how they came up with the amount of $20k?
I have this picture in my head of a room full of morons arguing vehemently with each other over how much free money they should ask for.
“Perplexing”, indeed.
“…Anderson Homes plans to stir up homebuyer interest with the Oct. 13 auction of vacant or under-construction homes in the Manteca subdivision, said Craig Barton, chief financial officer for the Lodi-based developer.”
“Following a meeting last Friday with Barton, homeowners crafted a letter asking Anderson Homes for a $20,000 per owner rebate for their property.”
A bunch of desperate bag holders. Hey, don’t worry housing prices can only go up….Bwwwaaahhh!!!
“Real estate agent Mark Detar of Intero thinks the squatter problem is only beginning. ‘With an increase in foreclosures, you’re going to see things like this,’ Detar said.”
Ooh! the squatters are coming. What’s a bank gonna do now? Hold on to the home since they don’t want to give it away and chase the market down?
I got an idea for the builder! They should cancel the auction and keep the homes themselves!
Rent some of them out to “Section 8″ people, and make a few of them halfway houses for drug offenders, pregnant teens, and recovering sex offenders.
I’m writing a letter to Larry W. Anderson right now!
This was a great answer! Good for Lennar:
I’m glad he didn’t try to coddle them, like “We’ll give you a $200 home depot coupon.” He told them straight that they were stupid idiots. I like that in a manager.
lol!!!!!!!
For once, I can cheer for the homebuilders. Straight up..
Randy doesn’t seem like a cry baby he seems like a “cheerfully accepted” kind of person. I agree it SUKS.
Dave Cantrell seems like an entitled person. God only knows what he thinks he is entitled to, not being an FB when the world is drowning in FB’s.
Dave denial is a powerful force get over it just get a second job and stop handing out “your right to be stupid” card to the newspapers. Take it like a man and cry in the bathroom when no one is watching.
Off topic
What is with wall street going up like bonkers when Merril writes of $5.5B?
Lots of people see the storm coming most heed the warnings and flee, a few stay behind and get destroyed and wonder when the bailout is coming to them which this time around ain’t going to happen?
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Because all the bad news is out already and nothing but sunshine ahead.
Jas
i agree with your view, although i think lots more bad news is coming and everyone knows it.. but if it is released slowly and carefully, panic may be avoided.
Markets hate uncertainty, and things are very uncertain. Fear of the unknown magnifies people’s negative expectations and the truth, when finally known, is commonly less negative than was imagined.
Even a little bit of “less-negative”, factual news is considered positive and enlightening, and lots of people see it as a “buy”.
Yea, I don’t understand it, I’ve been tuned into CNBC all day. The cheerleading is amazing.
I’ve heard the term “sugar high” used three times today regarding this rally. Everyone knows how those end.
“Washington Mutual Inc., the biggest U.S. savings and loan, said third-quarter profit fell about 75 percent after the worst housing slump in 16 years caused more borrowers to default.”
“After the worst…?” It’s only just begun.
My mother has struggled with mental illiness for a good portion of her life. When she is on the right medication, she is a happy, agreeable, and reasonable generenous person.
When she is on the wrong medication or none at all, she believes that everyone is out to get her. She withdraws and act irrationality.
A 2 decades of experience with mental ill people (my mother and my parents owned the equivalent of a board house for the mental ill and retarded), as taught me to not try to understand or reason with crazy people. They are, well, crazy. Ironically it’s easier to predict and/or control their behavior when you accept there’s nothing rational about it.
Mr. Market, in the short term, is pretty much my mother without medication.
It just is. I figure someday when the eurphoia breaks, Wall Street will receive endless streams of good news by plunging and/or standing still.
Warren Buffett made big bucks by understanding and taking advantage of the very irrational and crazy behaviour of Mister Market.
I don’t mean to make a joke about it, but there really are a lot of people trying to “get” us! The whole War On Savings. The fact that responsible behavior isn’t rewarded.
The trick is to do the right thing, anyway, and have a good time. I also like to believe it’s stupidity and not malice, that makes Hillary Clinton propose bailouts, etc.
And the more I’ve thought about it, the more I’ve come to think that Bush’s plan not to tax forgiven mortgage debt is OK. We don’t have debtor’s prisons in this society, and also for years people got a tax break on capital gains when selling a home, even when you don’t roll it into another one. I just wish he did a few things that would make me feel like they’re not out to get *me*:
1. Make sure it only applies to people with only one mortgage on one home
2. Make it a once-per-lifetime exemption (like the capital gains exclusion on home sales used to be)
3. Call it what it is. A handout; a gift from your fellow taxpayers. Not “eliminating a surprise tax” on “phantom income” which is how lawmakers described it.
I’m sorry to hear this, Vermonter. Mentally ill people are not so great to be around. You’ve done good, though, so that speaks very well of you.
“Real estate agent Mark Detar of Intero thinks the squatter problem is only beginning. ‘With an increase in foreclosures, you’re going to see things like this,’ Detar said.”
yup its already started in my hood, not street thugs, the agents themselves. lol!
US is being bought by foreigners. India, China & Europeans. Soon I expect Mexico to start buying US.
Japan was the major bagholder in the early 1990s U.S. RE bust. I guess it is the south Asians’ turn now?
I think Asians will step in to buy firesale prices.
Your comment makes it sound as though they are stepping in right now to catch themselves falling knives. (This is the mistake Japan made in the early 1990s). Whether they are trying this strategy or waiting until the real fire sale, I doubt your scenario will play out.
Are you sure? Dollars must go somewhere.
Don’t expect them to save prices, however. Well, unless the Chinese are stupider than the Japanese. Where money is concerned, don’t bet on it.
Well, unless the Chinese are stupider than the Japanese.
The Japanese weren’t actually dumb. Anyone who bought Japanese real estate at the peak lost 80-90% of the money invested over 15 years. The folks who bought American real estate have made money over that same period. The Chinese are in a similar situation. Chinese real estate and stocks are overpriced. Way overpriced. Anyone who buys outside China today will probably lose less money than he would if he bought in China. You can buy Procter and Gamble in devalued dollars, which dominates the Chinese market for detergent and shampoos, or you can buy the Chinese equivalent for 5 to 6 times the P/E ratio of PG, for a Chinese company that makes a big chunk of its current profit from stock speculation in Shanghai.
Well, unless the Chinese are stupider than the Japanese.
The Japanese weren’t actually dumb. Anyone who bought Japanese real estate at the peak lost 80-90% of the money invested over 15 years. The folks who bought American real estate have made money over that same period. The Chinese are in a similar situation. Chinese real estate and stocks are overpriced. Way overpriced. Anyone who buys outside China today will probably lose less money than he would if he bought in China. You can buy Procter and Gamble in devalued dollars, which dominates the Chinese market for detergent and shampoos, or you can buy the Chinese equivalent for 5 to 6 times the P/E ratio of PG, for a Chinese company that makes a big chunk of its current profit from stock speculation in Shanghai - income that will disappear when the Chinese stock market falters.
Tijuana-adjacent is toast
“In August, the number of foreclosure filings jumped by 80 percent from July, and by nearly 250 percent from August 2006, according to RealtyTrac.”
irish bubble leaking onto banks:
Friday October 05 2007
Irish banks face taking a €1bn bad loans hit between this year and 2009 as a slowing domestic property market leads to rising defaults among mortgage holders and commercial property and development borrowers, according to Swiss investment banking giant UBS.
This compares to a combined €380m bad loans charge for the Irish operations of listed banks over the past three years.
http://tinyurl.com/2r6dhx
Irish I hadn’t bought a house.
“Housing is cyclical and values will fluctuate as history tells us.”
Didn’t somebody say “RE never goes down” ? One of their history books must be wrong.
–
RE is in a secular bull market when it is going up and it is cyclical when it is going down.
Jas
“On Thursday we visited a San Jose home that had recently been foreclosed on. After residents moved out, gangs moved in, taking over the vacant property.”
Squatters moving in on vacated foreclosed homes…check. Another prediction on this blog comes to pass.
I think we’re batting 1000 on this team.
Also, late last night I posted a link to a story about a man who commited suicide at a City Council meeting. He did so because the council declined to rezone his house, thereby preventing his property value from skyrocketing so he could refinance as a way to get $$ to pay off his current debt. It was very sad.
“On Thursday, Cantrell says he sent a short reply to Anderson simply saying, ‘Not acceptable.’ ‘At this point, they’re not being part of the community,’ he said. ‘They’re acting like a corporation and not looking back.’”
Well DUH! What did you think they were going to act like? Your parents cleaning you up when you were two years old after you crapped yourself? And if YOU were in the same position, you would’ve done the same thing, Cantrell.
His attitude is partly the reason why this mess has gotten out of hand. I’ve never seen this level of greed and entitlement before… No one wants to see anyone else make a dollar, no one wants to work for their gain…they want it handed to them, no one wants to take responsibility for their error in judgements, or simply take their losses like a man and/or woman and just stfu, put your head down and work your way out of a hole you created. After awhile it begins to get sickening to read.
Amen…
This level of delusional thinking, until relatively recently, would have been the preserve of the questionably functional and definitely underclass - now, unfortunately it is people with $ 500,000 mortgages who feel disenfranchised and cheated.
I imagine, in some ways that this must have been how the “Roaring Twenties” felt at the end where the vision of perpetual plenty gets replaced, and rapidly, with the spectre of future want. It will be quite an adjustment for the likes of
Mr. Cantrell.
Cantrell has a point. When he bought his house, Anderson sold not only a house, but a lifestyle.
Well, as it turns out, he was only renting the lifestyle until the market turned. So I think he should get at least the 20K back.
Lifestyle buyers are sheep lining up for shearing.
Found a clubhouse for us to hang out…
“They shut down their sales offices and are not finishing construction on the clubhouse. It is 95 percent done. They are not going to finish it,’ Councilman Chris Mills said. ‘The market drives everything.’”
Heck yeah, I can swing hammer and use a paint brush! Us HBB’rs can finish it up, install a T1 line and coffee urn and have a great time!
==‘At this point, they’re not being part of the community,’ he said. ‘They’re acting like a corporation and not looking back.’”==
did anyone else catch this?! LMAO. umm, they ARE a coporation. of course they’re acting like one. whadya expect, the compassion of Mother Teresa?
‘It [a rising demand for rentals] hasn’t hit in great numbers yet,’ said Robert Pinnegar, the apartment association chief. ‘The speculation out there is that the wave of foreclosures is largely investor properties. The next wave, that’s what everybody’s watching.’”
What if there are actually far more available housing units than households? I wouldn’t bet my financial future on a rising demand for rentals.
I think that rents for crummy apartments will go up, while rents for newer SFHs will drop. If the ratio was $900 to $3000 before, than can become $1200 to $2700 (apartments vs. houses) in the next few months, as more FBs (borrowers) and FLs (lenders) decide to “wait for the market to come back”.
Well, if the banks decide to start landlording it (not likely), then your scenario will play out. However, I don’t see a way for FBs to hold out, since they have no way of making their monthly mortgage payment.
Unless unemployment goes way up, these people have to live somewhare…unless major migration out of CA…..possible I guess, some of that in the 90’s but much higher unemployment (9%) back then…
John F:
The other variable is that builders may continue to produce more units. On the street one block away and parallel to mine, they are about 3/4 done with a 90-something unit condo complex, and I just got a letter saying they’re gonna start building a 35-unit “townhouse” complex like this month. About 1/2 mile down the road, a huge complex of condos or apartments (I don’t know which) is about 1/2 complete. Like 1,000 units in that one. Condos are just popping up everywhere.
The gross thing about it is that most of these condos are in really undesirable locations that would be more appropriate for business development. I wouldn’t live in one, but their presence is still bound to drag down the cost of housing over the next 1-2 years.
The waves are breaking left to right, today…
“Industry experts said the trend has yet to hit in full force. ‘It hasn’t hit in great numbers yet,’ said Robert Pinnegar, the apartment association chief. ‘The speculation out there is that the wave of foreclosures is largely investor properties. The next wave, that’s what everybody’s watching.’”
Kilgore: You either surf or you fight.
Willard: Are you crazy God damnit? Don’t you think its a little risky for some R&R?
Kilgore: If I say its safe to surf this beach Captain, then its safe to surf this beach. I mean I’m not afraid to surf this place, I’ll surf this whole f*cking place!
“You know…some day, this bubble’s gonna end…”
“that smell, that napalm smell”
http://youtube.com/watch?v=z5eXFeW0aI0
Charlie don’t surf.
“It was a way we had of living with ourselves over here….we’d cut their equity in half with an auction, then give ‘em a bandaid. It was a lie. And the more I saw of it, the more I hated lies.”
“Oh man….the bullshit piled up so fast in the REIC you needed wings to stay above it. They were gonna make me a homedebtor for this, and I wasn’t even in their f*#king market anymore…”
OK, enough already…
so classic!
At the White House, President Bush met with his economic advisors and called the results “good news.”
“It’s an indicator that this economy is a vibrant and strong economy,” Bush told reporters in the Oval Office. The revision in August’s numbers “means that we’ve had 49 consecutive months of job creation, and that’s the longest uninterrupted job growth on record for our country.”
these comments are “Crimes Against my Sanity”
“President Bush met with his economic advisors ”
MISSION ACCOMPLISHED!
Dude, does that mean seriously still think that he can control the economy by instilling a false sense of confidence into the general public? I think he’s scared to death that people might actually start saving. Then what would he do?
“Dozens of homes from about 1,900 to 3,000 square feet along the golf course and in courtyards stand empty and ready for occupancy, but buyers have not materialized as envisioned….”
That’s rich. What happens next?
Gang members learn how to play golf?
good one bear!
(silent golf clap)
This was a so-called high end gated community. Today the wind is howling and the sand is flying. Nothing happens next - people who bought, can’t sell and no one else will buy in a community with no clubhouse and a public golf course.
“On Thursday we visited a San Jose home that had recently been foreclosed on. After residents moved out, gangs moved in, taking over the vacant property. Neighbor Diane Ludwig says she was scared, watching all the activity. ‘Drinking, parties and other things. I don’t want to mention too much,’ said Ludwig.”
Cool. Coming soon to a mostly-vacant California McMansion tract home development near you: Gangs.
“As the number of San Diegans facing foreclosure rises meteorically month after month, landlords and property managers are bracing for an influx of former homeowners now looking for a place to rent.”
I guess the former homeowners can now become renters of myriad vacant McMansions. Problem solved.
PB:
I don’t think that can happen unless (as I opined above) the banks start renting out their REOs. Otherwise, they will just all sit vacant until prices come down enough to where people can actually buy them. In the meantime, rents will go up.
However, it’s most likely that a lot of these condo complexes will just “go apartment”, largely absorbing the increased rental demand.
Last downturn rents rolled back 50%. Look it up.
Here’s another thing people are going to have to start to learn how to read the news. Amongst all the cheerleading today the fact that Merril, Bear Stearns, WAMU and if I’m not mistaken I heard some grumbling about Wells Fargo reported that the 4th quarter they are going to see significant losses. I think Bear marked down 5 billion dollars worth of mortgage securities just today. What do you think is going to happen 1Q08? After the bonus checks are cashed especially after reading that FDIC nonsense that someone posted below. Nevermind I’ll tell you… Every R.E.O. that has a clear title will be written down to market and reduce 5% every 30-60 days until it sells. Any bank/hedge fund that doesn’t get in lock step will be left holding the bag. You are going to see a race to the bottom that’s going to blow your mind.
“He got the keys on his $440,000 house in mid-August, two weeks before finding out about the planned auction. The minimum bid on an auction house such as his is $285,000. ‘To put this in the shortest term possible, this sucks,’ he said.”
That’s a 35% financial haircut the poor bloke just took. What a difference two months makes!
P.S. I am finally beginning to grasp the meaning of the statement ‘housing is in a freefall.’
These situations are why any attempt to support prices will backfire, IMO. Prices must come down or the builders will continue to oversupply the market. And if a blogger can figure that out, surely the government can, with the hundreds of economist on staff.
You would think an army of govt economists would be able to figure that one out. LOL!
They can figure it out … but they live in the DC area and may have a personal incentive not to do something about it. Suppose you owe $700000 on your now $600000 MD SFH … yeah …
“or the builders will continue to oversupply the market”
ah, another new twist to consider. Think you’re absolutely right Ben……
Like a water-park slide, suddenly everyone is underwater.
Serfs Up!
Wait a sec. This guy is a construction contractor, and he hadn’t even figured out there was a housing bubble by August 2007? A lot of us aren’t in the housing business and it’s been obvious for several years now; given the slowdown in construction, it should have been staring him in the face.
Geez.
NR
He was so busy last few years this was the first chance he had to sign the papers.
This guy gives a whole new meaning to PT Barnum’s old saying.
KCBS has Anderson homes in Manteca story about 250 K haircut for some current homeowners who don’t INVESTORS to buy properties in their neighborhood. Therefore, they oppose the auction.
Because investors will buy turn around and rent it, and they may not have nice gardens.
Dave Cantrell you are amazing.
want?
What??
I wish every part of CA would experience the type of market described in the Desert Sun. But unfortunately that is not the case. I live in Glendale/Burbank area and I have been trying to low ball the crap out of several sellsers selling their multi-family units, but have been unsuccessfull. In more than 1 instance, the seller, via his agent, even called me crazy for offering 10-20% below asking.
When can we expect these a**hole sellers to come down to earth in my neck of the woods, any ideas out there.
Nick
Patience Nick you don’t want to be in Randy Browns shoes.
This is like the people who complained that I was posting foreclosure rates skyrocketing, but ‘it’s coming from a low base.’ It had to come from a low base; it was a housing bubble.
One would expect the IE and other places that could possibly be overbuilt to crack first. You can’t go from A,B,C to Z.
Multi family is not gonna be part of the first wave declines. These owners have to first loose all the equity in that newly upgraded monster they got above Kenneth Road before they let go of that 8 unit.
You are going to have more luck finding 3 SFH on 1 block to scoop up in the near future.
“Kenneth Road”, that is so on point, I can’t even describe it. And the funny thing is, most of these unit holders, are currently monthly paying out of their pockets to cover costs since they bought in 2004-2006 and they still won’t admit that the market has changed. Stubborn bunch of……
–
My advice to you is not to do anything until 2009. There is too much dust in the air due to ‘housing collapse.” You got to let the dust settle.
Jas
Nick, I’m renting in S. Pasadena for the last 9 years.
I know that when home prices here will start falling (as well as in LaCanada, or San Marino, or Palo Alto, for example) we’ll be close to the bottom.
When it crushed in Sacramento they kept saying Southern California is different, when it crushed in San Diego they kept saying LA county is different, when it crushed in High Desert LA county they kept saying the proper LA area is different. Now as it started in SF valley, Pmpona area and places like Encino/Tarzana the still beleave Burbank/Glendale/Pasadena is different. Of course, all bubbles are local, that’s why they crush at different time, but they have no other way to go. Just wait.
I think we will start seeing fear in the more protected nieghborhoods by Xmas. And remember, someone posted here that banks are required to mark their assets down to market by the 3rd week of January.
10 to 20% off is not lowballing… The real players are on the sidelines, what’s left are guys who have taken their SFR money and invested into Multi-Family making the mistake of thinking that the property types are one in the same… Far more hesitant to take the hit then real landlords who have taken the blood sweat and tear approach to their equity gains.
The agents most be rookies or full fledge kool-aid drinkers. Most of the commercial guys I know are beating their sellers over the head for price reductions and considering any offer a good offer.
“Most of the commercial guys I know are beating their sellers over the head for price reductions and considering any offer a good offer.”
Exactly, some commission is better than no commission. LOL
I have to come down on the side of the builder who is saying no to givebacks. He is stuck in the monster role facing the “peasants with pitchforks”. Human nature is that we want it both ways. If we win we are brilliant. If not it’s your fault. What’s the builder supposed to do. I am 100% sure he did not build those houses just to give them away. These are desperate in the industry.
I have been a high end mortgage broker for 30 years and people say to me things like I must be fine because rich clients aren’t so hurt by this. Wrong, wrong, wrong. The few high end sales are cash and 1 1/2 to 4 million market is very slow. Refis’ are not happening either. I’ll be happy to still be standing when this is over. I wasn’t born in this boom. I sure don’t want to die in the bust.
I’m on the side of the builder, also. The alternative: No sales ever otherwise anyone who has ever bought anything at the original price could take the same attitude. Like I said the other day, does Dell owe me money because a desktop I bought on 01 is now half the price? Cantrell bought the home he wanted at the going rate when he bought it. Everything else is just greed. Winds are howling today making me one cranky girl.
Do you Zevon?
I saw a werewolf with a Chinese loan in his hand
Talking about who’d be feeling financial pain
He was looking for a place called, in the black
Going to get himself a big dish of Asian pay
Werewolves of Loandom
If you hear him howling around, newly poor
Better not let him in
Gamblers are getting mutilated left and right
Werewolves of Loandom again
Werewolves of Loandom
He’s the hairy handed gent, that ran amuck and spent
Lately he’s been overheard, not playing fair
Better stay away from him
He’ll rip your equity out, Jim
I wouldn’t want to meet this traitor
Werewolves of Loandom
Well, I saw loan danger walking with disdain
Doing the
Well, I saw loan danger walking with disdain
Doing the
I saw a werewolf shopping at Trader Joe’s
His cart was loaded
Werewolves of Loandom
Draw Blood
http://www.youtube.com/watch?v=nhSc8qVMjKM
My oh my what a pleasant Friday afternoon I’ve spent here with fellow bloggers. I know it’s only 2pm but I’m leaving early for Happy Hour and I just can’t wait to share all the ‘gems’ I’ve read here today! Have a good one!
When this is over, will anybody admit to being party members of the 3rd REIC?
HA!
“Though the best-case scenario would be no auction at all, getting some sort of rebate would be a token of good will, homeowners said.”
Yeah, do you want a rebate or just the $20K? We’ll give you a rebate if you sell your current property and buy in our Bakersfield development, or perhaps in LV. I imagine the home owners haven’t even considered that the ‘rebate’ would be taxable income when given as cash, but I suspect some might consider it seed money for when they stop paying their mortgage and get evicted. PS. I’d love to have been a fly on the wall in the board room when they got that letter (I know it made my day, hee,hee).
I think quite the contrary. Their own real estate markets have more potential longterm than does a debt-beseiged economy like the US. Also, a declining dollar may further diabuse them of this notion and don’t forget that contrarions are always a small minority.
Today’s Master of The Obvious (MOTO)
“‘This is clearly a cyclical correction, and we are not shocked. But we never know the magnitude of a correction or the duration. It will get better when people start buying again, as obvious as that sounds,’ Krah said.””
http://money.cnn.com/2007/10/05/real_estate/fdic_rate_freeze/index.htm?postversion=2007100517
Now, I feel stupid not to have used ARM. Why did i pay more using the fixed rate mortgage ?
Holy cow! I’ve been busy all day having a medical procedure done and checked CNN Money to see this!
FDIC to servicers: “Put up your ARMs and freeze!”
Ok, now that you’ve made me laugh. What do you think of this proposal?
Wow, it’s now clear the FDIC has no concept of how these loans work or the loan market in general.
Can Jan 20, 2009 come any quicker so we can purge DC of some the stupidest people ever to walk the face of the earth. They make the dinosaurs look like PHD’s
This is just dumb. If banks froze poeple’s interest rates at the teaser rate, then all those banks would just lose a bunch of money due to the fact that they all operate by borrowing money from eachother, and the Federal Funds target rate would be higher than the rate being collected on frozen mortgages. They are better off foreclosing and writing a new loan for the new buyer.
Hmmmm, that’s an interesting proposal.
Can anyone comment on where this $2b of additional borrowing is destined to land in the CA housing market? Will it somehow be used in a futile attempt to prop up falling prices?
It sounds like it might be yet another ill-conceived scheme to help low- and middle-income families catch falling knives, while pricing out those who cannot qualify, even as they are forced to pay for the home purchases of those who do. These demand-side low-income housing programs face their own future day of reckoning, IMO.
Friday, October 05, 2007
By Matt Carter
Inman News
California lawmakers will allow the state’s Housing Finance Agency to take on another $2 billion in debt while criminalizing attempts to pressure appraisers and adopting federal guidance for subprime and “exotic” loans.
…
Schwarzenegger said he will also sign Assembly Bill 929, which raises by $2 billion the total debt that the California Housing Finance Agency (CalHFA) can take on through bond issues, to $13.15 billion. CalHFA issues bonds to finance housing for low- and moderate-income families.
According to a Senate analysis of the bill, CalHFA plans to provide $9.2 billion for home ownership and multifamily lending, and $3.6 billion in loan insurance through 2013. Without an increase in its debt cap, the agency was on track to bump up against its borrowing limit by early 2009.
http://www.inman.com/inmannews.aspx?ID=64801
Hopefully this will be the very last actor/politician/whatever, this country endures…
What is the point of debt caps anyway? Every time a prodigal agency nears its debt cap, all it has to do is go to its boss and say “Hey, I’ve almost spent all my money!” Then the boss just goes, “Oh, OK, let me raise that cap for you then.” Sort of defeats the purpose, doesn’t it?
“He got the keys on his $440,000 house in mid-August, two weeks before finding out about the planned auction. The minimum bid on an auction house such as his is $285,000. ‘To put this in the shortest term possible, this sucks,’ he said.”
When you are told that your investment was stupid, you want to find someone other than yourself to blame. “How could anyone know that the $440,000 house that I bought would drop $100,000 in 2 weeks”? The answer is that I and many people here knew this could happen, and you are stupid and have been suckered by your real estate advisors.
Stupid ought to be painful and expensive. Welcome to capitalism.