Indicative Of What Needed To Happen
It’s Friday desk clearing time for this blogger. “The number of planned new single-family homes in St. Lucie County, Port St. Lucie and Fort Pierce decreased 65 percent between January and August compared with the same months of last year. ‘These numbers are indicative of what needed to happen,’ said William Pittenger, chief real estate economist for Seacoast National Bank. During the boom that started 2004 and lasted into 2006, Pittenger said builders of new homes outpaced demand by 25 percent to 40 percent.”
“‘They forgot a fundamental economic principal that for every home built there needs to be an owner or a tenant,’ Pittenger said. ‘This really had to come. And it’s only bad news if you are a builder or in an allied industry.’”
“Three luxury condos in the historic Armstrong-Quinlan House remain up for grabs after a live auction Thursday fetched only $880,000 in bids, about half the amount its sellers had hoped. Because the offers failed to meet the bank’s minimum reserve, the highest bidders for three of the four units walked away empty-handed.”
“Susan Spielman, of Bloomington, paced in her sneakers, wavering between excitement and terror. She placed the highest bid on the mansion’s only finished unit, a lavish three-bedroom, 2,200-square-foot condominium. She bid $370,000. The developers had recently asked $750,000.”
“‘I get good deals at the grocery stores on coupons,’ said Spielman, who said it was her first auction. ‘I know I got a good deal here, but I’m shaking.’”
“‘If homebuilding doesn’t drop 25 percent from where it is now, the Texas home market could slow down for a longer period than we would like,’ said Dr. Mark Dotzour, an economist with Texas A&M’s Real Estate Center. ‘The inventory of unsold homes is rising all over the state,’ he said in the report.”
“In the D-FW area, single-family home starts were down almost 40 percent at the end of June compared with a year earlier. Even so, more than 13,000 homes were under construction. About 11,000 unsold new homes were on the market in D-FW at the end of the second quarter, a seven-month supply.”
“No one has been more swept up in the euphoria of the overheated housing market of the last few years than cable television networks. As home values soared, so did the number of real estate programs.”
“But what happens to all of these house-flipping shows now that the real estate market seems to be tanking? ‘The television equivalent of ‘location, location, location’ is ‘timing, timing, timing,’ TV historian Tim Brooks said. ‘Now that the bust has come, now that the wave has passed, some of these shows might be in trouble.’”
“Housing prices in Moose Jaw have jumped 32 per cent over last year’s comparable values. Out-of-province buyers are paying more for homes. ‘They have money to spend. They have just sold their high-priced homes in Alberta or B.C. and have lots of cash,’ said Merv Rayner, president of the Moose Jaw Real Estate Board.”
“New Zealand’s biggest housing market is in the grip of a slowdown. Barfoot & Thompson said the average house sale price fell more than $14,000 last month, the number of unsold homes was rising, people were slower to buy and the number of sales was declining.”
“‘The Reserve Bank will be relieved to see the housing market finally slowing because it has been a significant source of inflation, directly through higher construction costs and indirectly in terms of the wealth impact on consumption,’ Goldman Sachs JBWere economist Shamubeel Eaqub said.”
“A slump in the holiday homes market on Spain’s sun-rich coasts could add to the pressure on Britain’s rattled mortgage industry, which has lent billions of pounds to fund the retirement dreams of UK homeowners.”
“Some fear a vicious circle if Britain’s property market turns nasty, with a surge in second home sales feeding the property glut that is taking hold in Spain.”
“‘It has the potential to feed back on itself as people look to raise money by first selling their second homes, further depressing prices in places like Spain and making it harder to sell,’ Tim Drayson, senior international economist at ABN AMRO told Reuters.”
“The cost of renting a house in England and Wales is cheaper than the cost of buying it with a mortgage, say market analysts Hometrack. Private rents in 2006 were two-thirds the cost of a 100% mortgage on a two- or three-bedroom house, for a young household on average incomes.”
“Professor Steve Wilcox of York University, who carried out the analysis, said that in many areas, people who were unable to buy a house could still afford to rent in the private sector. ‘Not too long ago, there was little difference between the costs of buying and renting,’ he said. ‘But while house prices tripled in the years since 1994, private sector rents only increased in line with earnings.’”
“Vacant houses continue to burn throughout Muncie, with a Tuesday-night blaze along South Liberty Street requiring every Muncie firefighter on duty to respond. ‘We have a lot of vacant houses, and it is obviously a concern,’ said Fire Chief Al Richards.”
“Tom Cherry, who lives down the street, said the entire block was filled with vacant houses. ‘I don’t know who owns them,’ said Cherry. ‘They ought to tear them all down.’”
“Morgan Stanley follows UBS AG, Merrill Lynch & Co. and others in eliminating jobs after record U.S. home foreclosures sapped demand for bonds backed by mortgages. Wall Street firms, which make money by packaging loans into bonds and selling them to investors, bought mortgage companies in recent years to obtain more loans, a trend that is now reversing.”
“‘Everyone who has any mortgage business is cutting back,” said Benjamin Wallace, who helps manage $750 million, including shares of Morgan Stanley. ‘There are fewer mortgages coming through the pipeline for everyone.’”
“The number of Americans signing contracts to buy previously owned homes dropped to the lowest level on record in August, the National Association of Realtors’ said.”
“‘The industry has experienced a fundamental paradigm shift that will require banks to rethink product offerings and capital structures and to provide greater transparency to investors in securities backed by pools of mortgages,’ Bruce Witherell, global co-head of the residential mortgage business, said in the company’s statement.”
Another great week, and without a single server crash. My thanks to those who support this blog. Please check back this weekend for news, your market observations and topics.
It’s getting Veeeery interesting…
OT, but here is exhibit #1 that the MSM is totally controlled by the gov’t. Has anyone here even HEARD of this trial? Go ahead and google “kahre tax trial” if you think this is made up. Very interesting precedence being set.
http://www.nowpublic.com/crime/media-blackout-161-federal-tax-charges-0-convictions
This will probably be a double post but I waited 20 minutes for my first one to appear so here goes again.
This story is/was killed by the MSM. A pretty dramatic precedence, IMO.
http://www.nowpublic.com/crime/media-blackout-161-federal-tax-charges-0-convictions
Wow - this is a *very* big deal. A very impressive line of thinking, too. My only question is how do they get around minimum wage laws? 1099’s???
And I wonder how I can convince my husband’s employer to pay him in old US gold and silver coins??
Neil-
Here you go - Another BANK FAILURE:
http://www.fdic.gov/bank/individual/failed/miamivalley.html
Nevermind. I copied this from CR.
I’m feeling like EF Hutton, when I talk…
Seriously, Ben, Bearmaster, OCRenter, Mish, Calculated Risk, Tantra, Thornberg, Shiller, IrvineRenter, and a dozen others deserve more attention than me!
I’m not surprised at a bank failure in Ohio. Heck, what is Coast doing surviving in Florida?!?
I do feel for my friends in this downturn. Some aspects are worse than my model. Some sentiment, such as the populast “mortgage reforms” and “trade corrections” smack of the very laws that locked us into the depression.
Sigh… Time for an evening glass of wine. 
Got popcorn?
Neil
looks like the world of real estate is about to end. no where to hide, bad news reinforcing one another and self-fulfilling.
She got gamed, as per her name.
“‘I get good deals at the grocery stores on coupons,’ said Spielman, who said it was her first auction. ‘I know I got a good deal here, but I’m shaking.’”
No, Ms Speilman, this isn’t like the grocery store deal at all. This is more like the furniture store “deal” where they close the store before the big 50% off sale and mark up the merchandise 100%. You been had.
furniture stores = household wealth extraction centers
Uh huh. The only stuff you can buy with a coupon is overpriced, preprocessed, unnatural food that you probably shouldn’t be eating anyway. You can get much better food if you just buy unprocessed veggies, meat, eggs, and dairy and then cook it your self for WAY LESS money.
Kinda like the difference between getting a McMansion at auction and buying a modest house in a stable hood at the bottom of the bubble.
great post, cound’nt said it better myself!
“‘They forgot a fundamental economic principal that for every home built there needs to be an owner or a tenant,’ Pittenger said. ‘This really had to come. And it’s only bad news if you are a builder or in an allied industry.’”
Hey, Mr. Banker, you made those loans to those builders so they could overbuild..Why weren’t you stopping the madness?
I wonder if american car manufacturers following this guiding prinicpal of having a driver or passenger for every car that they build. I always find it amusing that they refuse to cut production because that would idle plants and yet still have to pay their unionized workers kickin’ back at the job banks. Human capital…gotta love it!
He had to justify the existence of his job
“But what happens to all of these house-flipping shows now that the real estate market seems to be tanking? ‘The television equivalent of ‘location, location, location’ is ‘timing, timing, timing,’ TV historian Tim Brooks said. ‘Now that the bust has come, now that the wave has passed, some of these shows might be in trouble.’”
THANK GOD!
i dont want to see just some, i want to see all of them cancelled. those floppers make me sick!!!!!!!!!!
Hmmmmmm, I don’t know. Listen up producers. People love a train wreck. I say keep the shows going, and instead of watching these idiots make a profit, we get to see them writhing in pain on every episode as they realize how F-ed they are. You can call it “Screwing The Pooch!” I think it would do quite well, actually.
I have an idea for a show. It’s a followup on Flip This House, a kind of “where are they now” with drama. We’ll called it Foreclosed Borrower, or FB for short.
Son enters stage left.
“Hi dad.”
laugh track: Haha
“How are things going with you son?”
laugh track: hehheh
“We’re ok, dad, but we lost the house.”
laugh track: HAHHHAA hheeehehehe hoho
fade….. and
Cut to commercial: Capital One / 30 second spot.
“What’s that make it for you, son, ..4…5 foreclosures?”
“Jeeze, Dad, that was last Spring. I’m goin’ for lucky #7″
laugh track: HAHAHAHAHA!!!
” Well son, I can’t wait until you get off this street!”
laugh track: HAHAHAHAHA!!!
STOP IT!
You’re bustin me up!
If you look at who the advertisers are for those flip shows ,you can see what they were pushing ….home improvement .
OMG!!! I would LOVE to see some house flipping shows where they can’t sell their POS and have to move into it or rent it out. That would be AWESOME!!! But it has to be the fast forward one so you get to see how deep they are into it and they just keep getting deeper and deeper with more payments and more interest and taxes and maintenance. That would be SWEET!
While you may pay the princiPAL on your mortgage, and the princiPAL runs your school, I think they forgot a fundamental economic princiPLE. In fact, I’m quite sure of it.
Not only is our economy going into the sewer, English is too!
what do you expect? public schools have sucked for at least 15-20 years now.
I swear it’s because nobody reads anymore. I think most people derive both their education and entertainment from the TV.
I’m amazed at how many people my age and younger misspell words or improperly use words like “their, there, and they’re.”
The biggest “nails on the chalkboard” ones for me are “lose/loose” or when I see a woman post something like, “I am a 30 year old women.” (How can you be a woman and not know how to spell the singular form of your own gender??)
How can you see these words in print every day and not get their usage correct? My guess is that people DON’T see these words in print because they don’t read.
(I really hope I didn’t misspell anything in this post)
hmm.. something’s fishy here.. not a single misspelling or grammatical error or even a typo. I think you cheated somehow..
What a looser.
how rich the irony: ‘looser’
loser it be :).
How about:
should of payed the deposit. I now it is difficult for me to undersand the gramer let alone the speeling. wish i could of taken a peak at the dictionary their.
hahaha, nice!
I once got into a lengthy argument with a woman in a creative forum in Usenet who was convinced that “he brushed passed him” was proper usage.
Btw, she was Canadian. The stupid is NOT contained!
For the record, I screw up woman and women quite a bit because in my head with my accent they sound very close to the same word.
That’s because in speaking them (on both sides of the pond) you use what’s called a “schwa” (ə) - an indeterminate vowel sound that’s mixture between ‘e’ (eh) and ‘u’ (uh). Reading it makes it apparent, but in speaking it, context is all.
I get caught on effect and affect.
I spend a couple of years memorizing the difference. It helps that each one is both a verb and a noun, though pronounced differently.
with a recent 80% increase in spending at DOE
=dohhhhhh
“They forgot a principal economic fundamental.” might fly..
Get off your high horse, Reuven (with a lower-case r). Everyone typoes.
Absolutely! But this wasn’t Ben’s typo. It was from a real newspaper.
I fixed my “R”, to make you happy. But there’s no upper/lower case in Hebrew, which is where the name Reuven comes from. We just spell it ראובן. That you’ll have to take up with God. It’s his language
Test
there, their and they’re now….
I attended the Armstrong House auction in Saint Paul last night. The scene was pretty much as depicted in the article: about forty attendees, many of whom didn’t bother to register and obtain bid numbers. The auction house had been running daily advertisements for weeks on the largest local radio station, and both area newspapers ran articles calling attention to the sale. The auctioneer seemed to have expected a larger crowd, as the event was very heavily staffed: at least ten employees, many of whom circulated during the bidding, trying to incite enthusiasm by approaching close enough to smell lunch on their breath (blechhh!) to say things like “Come on, this is a great opportunity!” The “bidding” was very slow: of the four units available, no unit received more than two bids, and all bid increments were only $10k. As the article notes, the bank ultimately rejected three of the four high bids — those three individuals likely will be happy with that outcome at some future date, but that wasn’t the case last night, since the auctioneer failed to disclose until afterward that the seller and bank had set reserve prices for each unit….
Ah, we could only get a legal, enforceable definition of “auction”. I think we could make some more room in our jails for this fake (ie fraud) auctions.
if there’s a next time, stand up, point a finger and shout “I demand to know. What is the reserve price on that property!”
might get your mug on the news..
“2,200-square-foot condominium … the developers had recently asked $750,000″.
That’s $340/sq ft. I’m sorry, but what the hell are the developers thinking asking for that much in Minnesota?
I wonder how many peeps actually paid $750K for those condos!!!
The way to work these auctions if you really want to see what’s happening, it to move towards the front, as to give yourself the same look the auctioneer has, and look back at the audience, as the bidding is going on…
You’ll be able to pick out the shills, rather easily~
They’ll be the only ones bidding, not nervous or anything, no hesitation whatsoever on their part…
Great point aladinsane,thanks.
Some thoughts - in VT auctioneers have to be registered and observe some ground rules. Does MN have anything like that?
Also, at some point it would be bad for the auctioneers in question not to work on full disclosure. Would you bother to attend future auctions run by auctioneers who won’t reveal that there’s a reserve? (Especially with the build up that this one had??)
OK, so write your local paper and suggest this headline: “Local Auction Fails Miserably, Sells Only One House” That’ll put the fear of Jesus in anyone who was considering buying a house at today’s prices.
‘Now that the bust has come, now that the wave has passed, some of these shows might be in trouble.’”
au contraire, mon frere.
it is MORE interesting to watch the stupidity of the GF get their just desserts instead of making a killing…
“‘They forgot a fundamental economic principal that for every home built there needs to be an owner or a tenant,’ William Pittenger said. ‘This really had to come.
- Sorry William, the fundamental that was violated concerns the debtors ability to service a fully amortized loan.
“‘They forgot a fundamental economic principal that for every home built there needs to be an owner or a tenant,’ Pittenger said.”
What about investers, vacation home buyers and folks who want to buy the home they will retire in twenty years in advance?
Yeh, from what I’ve heard Yuppies love homes so much they can’t buy enough of them. One for every season and mood.
Hey, no making fun of that. I’m planning to buy two at the bottom.
Seriously! One to work, one to play. 
Munch munch munch
Yes, we have that far to go. Particularly in vacation markets. Hawaii isn’t going to hold up much longer.
Got popcorn?
Neil
Neil:
I thought Hawaii started to go down last year. What have you heard about it?
I haven’t followed it. To be honest, its like watching a pot of water boil. Since I want it to boil, patience over diligence. We won’t have any trouble hearing the kettle whistle.
Got popcorn?
Neil
Was in (on?) Maui recently. 2br/1ba for $1M. And that was up on the north shore near Haiku.
Get this one - in 89 we bought a big lot on Big Island for $25K, owner financed at $250/month. Moved there in July 91 and came to CA in 2 92 and sold that puppy for double right before RE crashed there the last time. When it crashed last time it was fast. Now that I’m childfree, that would be #1 on my list of where to move. Don’t need heat or air, can grow most anything you want, ocean full of seafood. Once prices come down I’m ready to pounce.
I used to think Hawaii must be paradise, but after watching the Dog, it seems the place is a holding tank for low-lifes, meth heads and scammers.
“Pittenger said builders of new homes outpaced demand by 25 percent to 40 percent.”
I have repeated ad nauseum this point. There are more houses on the market than people available to buy them, at any price point.
My take on the overbuilding is this…
An America, completely uncompetitive against Asian rates of pay, what to do?
We couldn’t be undercut on land values, by anybody…
A final spasm of consumerism, in the guise of homebuilding~
Hope you enjoyed the past 6 years, the next 6 will seem like 666 to many.
Bingo! And the sad thing is that almost all of the spec homes going up around us are big monsters that we would never chose to live in at any price. What a collosal waste.
“Pittenger said builders of new homes outpaced demand by 25 percent to 40 percent.”
Mr. Pittenger is a housing optimist.
In two years we have to get out the bulldozers. ugh… but at some point we will have to force a restart of the construction industry. Between now and then? Bargains! On Kaui the shear amount of construction… the big Island, Oahu, Oh… we’re talking Texas aren’t we? Oops.
Got popcorn?
Neil
“Morgan Stanley follows UBS AG, Merrill Lynch & Co. and others in eliminating jobs after record U.S. home foreclosures sapped demand for bonds backed by mortgages. Wall Street firms, which make money by packaging loans into bonds and selling them to investors, bought mortgage companies in recent years to obtain more loans, a trend that is now reversing.”
The cancerous subprime line of business has been removed, which explains why these firms’ stock prices are going up-up-and-away…
my beautiful ba lo ooooo oooo n.
It takes a loon, all right.
‘I don’t know who owns them,’ said Cherry. ‘They ought to tear them all down.’”
…pertains to my request for the weekend topic.
I say bulldoze. I prefer open land to $hitty houses.
RE: ‘I don’t know who owns them,’ said Cherry. ‘They ought to tear them all down.’”
LMAO…
Wonder what pension fund or Chinaman is holdin’ the paper with this junk as collateral?
Looks like a good upcomin’ Devil’s Night in Detroit.
I was born in Muncie and raised on my Grandparents farm. The area that the article is referring to is a mostly black area. Muncie is a typical rust belt town dependant upon manufacturing - it’s toast. If you can find a $10.00hr job you are lucky…
I say wait 2 years then bulldoze. I’m currently in favor of skyrocketing inventory.
I’m there too. The sheeple haven’t learned anything yet. We need a bit of a downturn to teach prudence.
I’m listening to the governor of Ohio begging the subprime companies to work with them to redo the mortgages.
Oh, Subprime mortgage buyers are going to really get pucker butt!
Expect home sales to keep dropping.
J6P is starting to realize there is a problem. Cest la vie.
Got popcorn?
Neil
You can’t really get open land by bulldozing houses … it takes many decades to get the proper mix of grasses, brush, and trees etc that real “open land” is made of.
“‘Everyone who has any mortgage business is cutting back,’’ said Benjamin Wallace, who helps manage $750 million, including shares of Morgan Stanley. ‘There are fewer mortgages coming through the pipeline for everyone.’”
My pipeline’s workin’ just fine…
http://www.youtube.com/watch?v=R3_M4p-xrD0
Seattle is finally catching up - Median price for a SFH drops almost 6% in September
News Story
Sound the dive alarm!
And… please provide a link.
Sorry - HTML skills failed me…
http://seattlebubble.com/blog/2007/10/05/sales-plummeting-inventory-skyrocketing-prices-crashing/#comments
Because the offers failed to meet the bank’s minimum reserve, the highest bidders for three of the four units walked away empty-handed.”
The good news is their hands are still fully intact and functional.
oops - link didn’t work
http://seattletimes.nwsource.com/html/realestate/2003927842_webhomesales06.html?syndication=rss
Hip Hip Hooray! About time the Pacific Northwest jumped in with both feet!
AP
Consumer Borrowing Up Sharply in August
Friday October 5, 6:27 pm ET
By Martin Crutsinger, AP Economics Writer
Consumer Borrowing Jumps at Fastest Pace in 3 Months, Led by Higher Use of Credit Cards
WASHINGTON (AP) — Consumers have boosted their borrowing at the fastest pace in three months, turning increasingly to their credit cards to replace home equity loans as a source of ready cash.
The Federal Reserve reported that consumer credit rose at an annual rate of 5.9 percent in August, the biggest increase since a 7.9 percent jump in May.
And mean ole Slim didn’t borrow one red cent during August. Bet a lot of other HBB-ers have also been borrowing refuseniks of late.
Just made my last payment for my vehicle in August
No more debt !
paying off debt … guess that makes me one of the ‘haves’
Those that pay credit card interest provide a small subsidy to the Vermonter’s household. (Thanks Citibank for providing timely checks and to all those that are bad at math!!)
The increase was led by an 8.1 percent leap in revolving credit, the category that includes credit card loans. Consumers have been using their credit cards more to finance purchases now that home equity lines of credit are becoming harder to obtain.
Non-revolving credit, which includes auto loans, also rose at a faster pace in August, increasing at an annual rate of 4.7 percent, compared with gains of 3.1 percent in July and 4 percent in June.
In total, consumer credit rose by $12.2 billion to a record $2.469 trillion. The increase was bigger than the $9.5 billion gain analysts had been expecting.
Ryan Sweet, an economist at Moody’s Economy.com, said that the healthy increase provided “further evidence that consumers did not pack it in” after the financial market turbulence hit in August.
During the housing boom, when home sales were hitting records for five consecutive years and prices were soaring, many homeowners tapped the rising value of their homes to finance increased spending by taking out home equity lines of credit.
However, now that home sales are plunging and double-digit increases in housing costs are a thing of the past, home equity lines of credit have become less available. That has pushed consumers back to credit cards to finance their spending.
Analysts are watching closely to see if the steepest slump in housing in 16 years could have a more serious impact on the economy through the wealth effect.
Just as rising home values had encouraged consumers to spend more during the housing boom, the fear is that falling home values could cause consumers to cut back on their purchases. Since consumer spending accounts for two-thirds of total economic activity, any serious cutback in spending could lead to much slower economic growth.
However, the Labor Department reported Friday that businesses added 110,000 jobs in September and a worrisome drop of 4,000 jobs in August was revised away to show instead a gain of 89,000 jobs during the month, easing worries about a possible recession.
In total, consumer credit rose by $12.2 billion to a record $2.469 trillion. The increase was bigger than the $9.5 billion gain analysts had been expecting.
Ryan Sweet, an economist at Moody’s Economy.com, said that the healthy increase provided “further evidence that consumers did not pack it in” after the financial market turbulence hit in August.
how can this guy say its heathy for these morons to just keep barrowing? isnt that just more money we will have to pay to bail these a-holes out. this is just crazy.
But Wave, haven’t you gotten the memo? Borrowing is GOOD. Saving — even for a rainy day — is BAD.
lol!!!!! too funny!!!!! i love that comment.
I’m with you, wave. That “healthy” comment made me want to puke!
TTTTTTrilion.
WOW.
Leigh, trillions aren’t really that difficult to visualise.
For instance, it takes less than two trillion pennies to build a replica of the Empire State Building.
See, visualisation of large numbers is not so difficult….
Further evidence that consumers didn’t “pack it in?” Excuse me, Mr. Sweet, (can I call you Sweety?) but wouldn’t these most likely be the same consumers that “neglected to read the fine print” on their sub-prime, alt-A, interest only, teaser rate mortgage that they have defaulted on and are now using their credit cards as a way of, oh, I don’t know, EXISTING, because they sunk all of their money, (if they had any to begin with) into keeping their American Dream, a.k.a. the S.S. Leaky, afloat and finally decided it was better just to walk away from it and live off of their credit cards until they defaulted on them, too? Are those the consumers to which you refer, Sweety? FYI: These consumers will, as you put it, “pack it in” when the greedy, predator banks stop giving them credit. Ji-ma-ny Christmas! What a tool!
Wait a bit everyone. The $ 12.2 Billion is way less than the interest charged on the $ 2.469 Trillion period. It’s all B.S., figures don’t lie, but liars fugure and i think we all know who the liars are.
And you know those job numbers must be true because they come from the US Government and it’s ally, the Bush Administration
The loss of ability to finance living beyond one’s means is what will bring the recession. Consumer spending supposedly drives the economy big time so when they cut back, everything comes to a crashing halt. I will feel vindicated for all those years I felt like I was missing out because everyone around me was living high on the hog.
Gosh, I sure hope so.
i think mortgage brokers will try anything to keep people buying these overpriced homes. when will they give up?
http://seattletimes.nwsource.com/html/realestate/2003910733_guttentag30.html
I think the family who bought the student dump across the street from me followed this strategy. Dad bought the house, and I’ll betcha that Mom (who’s divorced from Dad but had a job at a local mortgage company) did the financing.
But, alas, things don’t seem to be working out well for this family. Darling Daughter, for whom the house was bought, moved out for several months of this year. Now she’s back and getting around by bicycle. I think this has some connection to Mom losing her job at the mortgage company, which was known as First Magnus.
BTW, when I first moved into the Arizona Slim Ranch in late ‘04, Darling Daughter was tooling around in a late model Jaguar, which Mom had purchased for her. Darling Daughter totaled it in ‘05. The Jag was replaced by an underpowered SUV which had trouble getting up the mini-hill just east of here. SUV has since been passed on to Darling Daughter’s younger brother (poor guy).
you need to go outside and tell them to take that sh!t down to the local trailor park, because they are bringing down the value of your house.
does it really come down to that?
America, for all her faults, has the wealthiest, poorly educated, baffoonish, lowest income people on the planet.
Really, folks…Americas poor people are the shiny example to all the unwashed masses who cant even afford to have shoes. There was a time when new shoes were the mark of the poor, they broke ‘em in for the well to do.
YIKES!
Apologies to Ben. (blush)
I am not trying to spam and didn’t mean to double post a link already published at the top of the thread. I was so excited that I scrolled past the header. You have to realize that the New Zealand Herald admitting weakness in housing is like the Pope becoming an atheist.
(At least the finance company failure was new content) Now off to my weekend - NZR
“‘The Reserve Bank will be relieved to see the housing market finally slowing because it has been a significant source of inflation, directly through higher construction costs and indirectly in terms of the wealth impact on consumption,’ Goldman Sachs JBWere economist Shamubeel Eaqub said.”
what planet is this? Is it me? or does this guy not have any idea what the F-CK has been happening in the credit markets as a result of the bursting housing bubble……..what a stupid f-cking moronic sh-t-stained idiocratic piss-for-brain statement…. these people have jobs? They get paid to think? What a waste of money.
We are in some deep trouble…
the FED relieved…..gmme a break.
those ivory tower jackbooted thugs are “pitting the shants”, daily. Hoping the wheels dont just fall off the economy.
Sorry if this has been discussed today, but this pisses me off.
The head of FDIC is talking about getting servicers to freeze ARM rates at the intro rate. A big F You to all the responsible borrowers who took out a fixed rate 30 year mortgage.
“Keep it at the starter rate. Convert it into a fixed rate. Make it permanent. And get on with it,” Federal Deposit Insurance Corp. Chairman Sheila Bair said.
http://money.cnn.com/2007/10/05/real_estate/fdic_rate_freeze/index.htm?cnn=yes
Lenders borrow short to lend long, and make their money on the difference between rates. So we should ask them to hold loans with long rates below short rates for the next 30 years? Suck it up for the good of the country? Yeh, that’ll be a big hit with the investment banks and pension funds.
The pathetic thing is that even if the FDIC could issue an edict to “make it so” the housing market would still crash. Homes are currently unaffordable. THe current inventory has to move, and it won’t move until prices drop. And requiring lenders to freeze ARM’s at intro teaser rates would absolutely kill the mortgage market.
So we should ask them to hold loans with long rates below short rates for the next 30 years? Suck it up for the good of the country? Yeh, that’ll be a big hit with the investment banks and pension funds.
No quicker way to close down the mortgage market… No quicker way to crash the housing market. Holy cow, could you imagine us shopping for homes in a pure cash market?!?
Ok, half the homes would become the property of Dubai World… but we’d split the other half.
But coworkers already believe this is fact. So expect more trouble in the mortgage market… not to mention an end to “teaser rates” and ARMs.
Got popcorn?
Neil
The complete detachment from reality so well exhibited by Sheila Blair’s cretinous suggestions is a very good reason to sit back and let this market come to you.
As Neil suggests, there will would essentially be a cash market as no lender in his right mind would lend in that environment.
Governments generally, through policy, achieve the diametric opposite outcome of the desired result of that policy.
Bring on the cash market!
So can I get an intereset only loan on a home with the rate locked in for fifty years? Sort of an inflation proof rental.
Just wait till they use that kind of logic to get you to turn in your gold when TSHTF. That is exactly why i have been buying physical gold through my account in Switzerland. These thugs have no morals, no conscience and no integrity. This can and will not end well………. Got gold ???
I’m worried about this. Can the FDIC make them do it? If so can they also relax the rules so that banks can do subprime and alt-a loans to pump the market back up? Maybe that’s the grand plan in Washington to stop any more price declines.
Quote from the FDIC Chair regarding ARM’s…….
“Keep it at the starter rate. Convert it into a fixed rate. Make it permanent. And get on with it,” Federal Deposit Insurance Corp. Chairman Sheila Bair said.
That’s because she knows how bad it will get in the next 12-18 months and the banks have told her to shackle those FB’s to their houses in any way, shape or form. Just don’t have them come back on our books!!
How do you rewrite a loan sold off in a tranch that no one really knows who owns it ?
Talk about redefining F’B…
Can we say Hedge fund implosion? It would be neat/scary to watch that leverage unfold.
Got popcorn?
Neil
So you get caught soliciting sex in the crapper, and you aren’t ashamed?
http://www.nytimes.com/2007/10/05/washington/05senate.html?_r=1&ex=1349323200&en=c96eacb69578a2fa&ei=5090&partner=rssuserland&emc=rss&oref=slogin
What has happened to this country?
shame is only experienced by those who have pride in the accomplishment of a greater goal than they thought they should achieve.
Few goals worth achieving anymore in the Amero-cant world.
He’s entitled. He deserved it.
Nobody is ashamed these days to yackity-yak on their cell phone in the grocery line or a restaurant. What’s another public nuisance? Who cares!
Why should he be ashamed?
A congressman solicited sex from an intern. Outcome? Censored and re-elected several times before retiring.
A congressman has an active prostitute in his home. Outcome? Nothing, continuously re-elected.
A senator abandons a woman after a car accident. Outcome? Continously re-elected and consider the “lion” of the Senate.
A president……you know.
Shame? That concept was so beaten into submission that it fully capitualated when people argued a married man having sex with an young intern was “an act between adults” and no one else’s business.
“Vacant houses continue to burn throughout Muncie, with a Tuesday-night blaze along South Liberty Street requiring every Muncie firefighter on duty to respond. ‘We have a lot of vacant houses, and it is obviously a concern,’ said Fire Chief Al Richards.”
I’m a little concerned what the dry season is going to be like here in FLA. Starts in November and lasts until May, maybe even into June. (IMHO, the seasons appear to have shifted by one month along the easter seaboard. In other words, October is more like September, etc. When I was in Connecticut over the winter, February was more like January and a number of people were remarking the shift in the time of the seasons up there) Anyway, if we get a bad dry season, I will not be surprise to see a development or two turn to ashes. So far, the wildfires have been restricted to areas of brush, but we had some close calls last year.
It’s quite dry all over the country, and the fire risk is extreme…
Want to kill 2 birds with one stone?
Bring home our g.i.’s from Iraq and turn them into firefighters~
as close as i have seen those new homes being built, i would not be surprised if your prediction comes true.
http://online.wsj.com/article/SB119146645724948646.html?mod=hpp_us_whats_news
Big hedge fund money and super rich are betting housing won’t recover until 2011.
Some claim San Francisco is bubble-proof, but the market predicts a decline of 26%. Adjusted for inflation it adds another 17% decline in real value (at a moderate 4% inflation rate over 4 years) to a total loss of 43% ! If SF is considered as one of the few bubble-proof places, how the rest will look like ?
“New Zealand’s biggest housing market is in the grip of a slowdown. Barfoot & Thompson said the average house sale price fell more than $14,000 last month, the number of unsold homes was rising, people were slower to buy and the number of sales was declining.”
We are awaiting the collapse of the NZ real estate market, as we will be looking for a bach somewhere in the South Island mountains…
still a long wait I guess. According to my data, May and August hold the price record at $ 350K. 4% down from the all-time high does not make a trend. As the South Island has been lagging the trend by several years, it might lag on the way down too …
Ok sports fans! I believe we are leaving the “benign correction” stage of the housing bubble and entering the crash stage of the housing bubble. The denial stage is over, everybody’s on board with the market failing, people are expecting things to be over… BUT They’re not… It feels like about January 2001 during the Dot Com Bubble crash..
http://finance.yahoo.com/q/bc?s=JDSU&t=my&l=on&z=m&q=l&c=
Look at the chart half way between 2000 and 2002. There’s been a decline, a dead cat bounce, and now the REAL crash is going to start happening. These empty auctions are certainly a harbinger of things to come IMHO.
There’s been a decline, a dead cat bounce, and now the REAL crash is going to start happening.
I prefer to call the dead cat bounce the “bear trap.” Unless we see a really steep drop cuts right through it, we will have a bounce up which will “trap” a bunch of the bargain hunters. Once the supply of ready bargain hunters is exhausted, we then really see a drop.
Of course, if certain legislation gets passed, then we go straight to prices that can support a pure cash market.
Got popcorn?
Neil
Wait…. It is the FED to the rescue…
http://money.cnn.com/2007/10/05/real_estate/fdic_rate_freeze/index.htm?postversion=2007100517
Calling all banks, calling all banks… “Freeze all ARM rates”
If the real estate crash starts accelerating (and i think it will), just think what will happen to all of the outstanding mortgage debts as they go no bid. How long can these guys keep marking to model before they have to start to fess up? In the meantime one ought to take this lull before the storm to definitely at least get some of one’s ducks in a row. There will be multi trillions of dollars lost in this mortgage market well before this is done and accelerating illiquidity is the harbinger of doom. And any acceleration here will definitely really undermine the global real estate mania markets in spades.
OK, bring it on please … real estate mania in Europe is still in full bloom.
Dutch realtors are predicting another 8-10% price increase for 2008, with incomes flat (real incomes declining as in the previous 5 years or so) that would bring the median Dutch home price up to nearly 9.5x median wage. But all authorities assure us there is NO housing bubble in the Netherlands …
My theory is that Housing Inspector Clouseau is still posting on this blog, disguised as someone else. I wish I could figure out how to search the archives. Whoever keeps trying to spread the rumor that he moved to the Great Lakes area right before the bridge collapse is probably HIC. Who was that? Damn, I have a bad memory for names.
HIC: I know you’re reading this, you stinker.
I encourage you to learn to take better advantage of external search engines.
Google has a “site:” tag.
Search like this on Google:
site:thehousingbubbleblog.com “inspector Clousaeu”
I have no idea whether or not this has been posted but, did anyone notice one of Countrywide’s advertisement in last Sunday’s New York Times, in which they specifically reference the FDIC and the terms by which principal is insured against loss? Indeed, the “advertisement” was, in my opinion, more of a public service message than any explicit attempt at drumming up business. The “advertisement” invites the public to visit the FDIC website for more information.
Love the nick—Falwell? Hahaha.
http://money.cnn.com/2007/10/05/real_estate/fdic_rate_freeze/index.htm?postversion=2007100517
“FDIC to mortgage servicers: Freeze ARM rates
Top bank regulator suggests industry cuts losses now to prevent foreclosures.”
What the hell!
Anyone know the address of the Casselberry, FL flip featured on (I think) Property Ladder? It was called “La Familia DIY Drama” or some such, and the starring role was realtor and flipper wannabe Nancy Arroyo Perez.
It would be worthwhile following up on this one, since instead of selling the property for an outrageous price, she sold it to the bank via an equity extraction HELOC, for much more money than even the Realtors(tm) said it was worth. Then, they were planning on renting it afterward.
I think there’s a good possibility on that one going to foreclosure. Ms. Perez will make a good poster child for all the scammers, ahem, poor indigents whose foreclosures we need to prevent so we can “keep folks in their homes.” (Especially if the C.O.D. tax change goes into effect.)
Tombien- yeah they had the same add in the Seattle Times right after their first little run on the bank last month. High CD rates and all kinds of reassurances about FDIC. It was a very large add. First time i’d ever heard of Countrywide “banks” in Seattle. They crawled out of the woodwork so to speak. Pretty skeazy. Blech.
Popcorn Neil- I’ve been sort of praying all along that the housing market would get so decimated that we’d go back to cash only for a while. Forget 20% downpayments. Unlike many, I actually ENJOY being a landlord and would love to buy a few properties that would cash flow even at low, low sustainable rents for great inhabitants. Kind of a way to do my part at re-building community that the REIC has so skillfully managed to decimate over the past decade.
So whatever the gov. can do to discourage lending, I’m all for it. And of course I would *love* *love* *love* it if we’d wake up some morning to find Fannie/Freddie utterly imploded and completely gone, like they never happened, just a bad memory…