The Housing Slowdown Means Lower Prices In California
The LA Times reports from California. “Are you a homeowner who is having trouble selling your house? National housing experts say you can heap some of the blame on those big builders with their much-ballyhooed sales and the banks that have put too many foreclosed homes on the market.”
“Delores Conway, director of USC’s Casden Real Estate Economics Forecast, points to Riverside County as ground zero, a place that was overbuilt, with new homes now being discounted by builders, and that is witnessing a sea of foreclosed homes on the market, with more expected.”
“RealtyTrac reported last week that Riverside County led the state in foreclosure activity. Neighborhoods that just a year ago were flourishing are today blighted with house after house of ‘for sale’ signs and properties abandoned to foreclosure.”
“Last month, K. Hovnanian Homes showed just how low builders could limbo. It held what was dubbed the ‘Sale of the Century’ and reduced prices of its unsold inventory in 19 states, including California, by eye-popping amounts: e.g., $300,000 off a $2-million model in Orange County.’”
“Dani Babb, a real estate consultant, spared Hovnanian no mercy over its banner sale. ‘What Hovnanian did hurt everyone, including the long-term, broader market — which includes them too,’ Babb said. She explained: The ability to get loans is based on comps — the sales prices of comparable homes nearby. Now, homes near the ones for which Hovnanian slashed prices will appear inflated by comparison and may make financing more difficult.’”
“‘Hovnanian sent a signal to the entire consumer base that things are scary out there,’ Babb said.”
The Washington Post. “The good times are over for the get-rich-quick industry that grew up in Orange County and thrived in the first half of the decade.”
“After more than two decades in the mortgage business, Tony Ventimiglio got his big break in 2001 when he accepted a managerial job with a lender here in the heart of Orange County for $225,000 a year — more than double what he had made in each of the previous four years.”
“When the housing market soured, those lenders and dozens of others nationwide shut down or scaled back, leaving workers like Ventimiglio in the lurch and contributing to an abrupt drop in mortgage-related jobs.”
“‘When I started working there in 2003, I was embarrassed because I was driving a Cadillac and the young office clerks were all driving Mercedes and BMWs,’ said Ventimiglio. ‘There were a lot of people who knew nothing about mortgages. They were simply in the right place at the right time.’”
“At PC Lending in Irvine, some of the most skilled agents previously sold cars or time shares. They had lots of drive but rarely a college education, said Brett Brofman, the company’s VP of administration and operations.”
“Of the 60 agents at her firm, only 15 are actively producing loans now, Brofman said. The rest have left the business or branched out into other jobs.”
“‘One guy quit and is now interviewing for bellman positions at local hotels,’ Brofman said. ‘Another lady is selling tickets at a playhouse at night making $10 an hour’ to supplement her much-reduced commission at PC Lending.”
“Brofman agreed to a pay cut in return for a two-day work week when business slowed. Brofman has since returned to work full-time without a pay raise to help keep the firm afloat.”
“Meanwhile, she’s blown through $200,000 in personal savings and amassed $25,000 on her corporate credit card to support a branch office of PC Lending that she and her husband own. The branch, which used to have 16 agents, now has three.”
“‘It used to be that you could come in a few hours a day, enjoy a four-day weekend and make plenty of money,’ Brofman said. ‘It’s mean to say, but I used to joke that I could get my cat on the phone to sell a loan and a rate: ‘Meow, meow, 5 percent.’ Done.’”
“Kelly Markham earned $200,000 in commission in 2005 as a loan officer at an Irvine mortgage brokerage. When commissions dried up, she began looking for another job to support her six-month-old baby and hang on to her $600,000 home.”
“‘I’ve signed up for work at a temp agency, but all I’ve gotten is five hours of work in the past four weeks stuffing envelopes in some office,’ said Markham, as she perused Starbucks job listings online one recent afternoon.”
The Recordnet. “Countrywide Financial Corp., sharply paring its work force nationally in the midst of an on-going housing slump, has closed its Stockton loan-processing center.”
“The company has two other offices in the city, one which handles only home loans for KB Home homes, and a Countrywide Home Loan office in north Stockton. Both offices had mostly empty desks Friday afternoon.”
“One Stockton resident, Susan Feighery, has been trying to get a Countrywide mortgage loan for a condo purchase, but she said she is frustrated because her loan application has been delayed as it has seemingly bounced from one person to another as staffing dwindled.”
“Feighery has several investment properties in addition to the Weston Ranch home she moved into in 2000.”
“She estimated that perhaps a dozen to 15 people would have worked in the fully staffed loan-processing center but that when she went in recently to the center, she saw ‘empty desk after empty desk after empty desk.’”
“Susan Dell’Osso thought she would be overseeing the building of luxury riverside homes by now. But with area home prices dropping, Dell’Osso announced this week it will be another year before model homes rise out of the Delta soil.”
“‘The last thing I want to do is flood the market with homes that people don’t want to buy,’ Dell’Osso said. ‘Thankfully, we have the luxury of holding off.’”
“A plan to build residential lofts in downtown’s tallest building has been put off, delayed as other plans have been by the housing market’s fall, officials said.”
“‘There’s no market for that right now,’ Redevelopment Director Steve Pinkerton said this week.”
“In March - before it came out that Stockton’s foreclosure rate was among the highest in the nation - the City Council designated for redevelopment the 12-story Sutter Office Center and the block on which it stands.”
“This year, as the housing market has collapsed across the city, officials have increased plans for downtown housing, considering reduced fees and other rewards for those who build downtown. Once the market recovers, the city will be prepared for it, city officials said.”
The Times Delta. “Real estate agents will throw open the doors to their for-sale properties Sunday as part of Tulare County’s first Open House Extravaganza. One goal will be to remind would-be buyers that the housing slowdown means lower prices.”
“‘We’re trying to put a positive spin on the housing market,’ said Gaylynn Heitzig, president of the event’s sponsor, the Tulare County Association of Realtors.”
“‘Our housing market has obviously fallen off and total sales per month are off by about 50 percent,’ said Jeremy Garcia, who is chairman of the association’s MLS. ‘But it’s relatively strong in comparison to the rest of the state.’”
The Tribune. “An increasing number of San Luis Obispo County residents are losing their homes as foreclosure activity continued to ratchet higher during September, according to data from All American Foreclosure Service.”
“Lenders sent county homeowners 859 notices of default —the first step in the foreclosure process—this year between January and September, including 101 notices last month. In 2006, 382 default notices were sent during the first nine months of the year.”
“Meanwhile, 223 trustee’s deeds—the final step in the foreclosure process when the owner loses the home—were recorded through the end of September. That’s more than five times the activity in the same period last year (39) and three times the full-year activity in both 2005 and 2006.”
“Don Vaughn, the owner of All American Foreclosure Service, expects foreclosure activity to continue at a similar pace into next year.”
The Independent Journal. “The number of foreclosures is rising in Marin, with defaults almost quadrupling in September over a year ago, but the number of properties in distress remains relatively small. The same isn’t true for counties like Alameda and Contra Costa, where the numbers are significant.”
“Realty Trac reported 70 default notices were issued in Marin in September, up from 23 in September 2006. Notices of foreclosure auction were sent to 10 households in September, up from one last year. Five Marin homes were repossessed by banks in September, compared with one last year.”
“In the Bay Area, 4,974 default notices were issued compared with 1,962 in September 2006. Notices of foreclosure auction were sent to 1,635 homes, up from 357 in September last year. Banks repossessed 1,017 homes, up from 95 in September 2006.”
“Valerie Castellana, president of the Marin Association of Realtors, said she expects to see increases in defaults and foreclosures in Marin but added, ‘We are blessed to have the default and foreclosure numbers so low compared to other Bay Area counties.’”
The Sacramento Business Journal. “Sacramento’s new-home prices have rolled back to where they were in spring 2004, according to new-home analyst The Gregory Group, and they’re predicted to keep dropping before there’s any recovery.”
“But lower prices haven’t attracted buyers. Sales during the previous quarter also fell to their lowest level in three years.”
“‘Prices are down another 3 percent over the last quarter. Right now, we’re a little above 2003 levels. We’re predicting prices will be there by the end of the year,’ Gregory Group founder Greg Paquin said.”
“New-home communities are now selling property at an average rate of about one home every three weeks. Paquin said he’s talked with builders who say they can hold out for the next six to nine months at that rate, but the slump is expected to last at least until the end of 2008.”
“Builders have already been forced to lower prices to what they were when Janet Jackson had a ‘wardrobe malfunction.’ They’re hoping they don’t have to turn back the clock much further.”
“Delores Conway, director of USC’s Casden Real Estate Economics Forecast, points to Riverside County as ground zero, a place that was overbuilt, with new homes now being discounted by builders, and that is witnessing a sea of foreclosed homes on the market, with more expected.”
“RealtyTrac reported last week that Riverside County led the state in foreclosure activity. Neighborhoods that just a year ago were flourishing are today blighted with house after house of ‘for sale’ signs and properties abandoned to foreclosure.”
- Soon enough the Inland Empire will lead the nation in forclosures - or mexicans aren’t named Juan.
“Delores Conway, director of USC’s Casden Real Estate Economics Forecast, points to Riverside County as ground zero,”
there you have it, the housing bubble grund zero, the answer to the other day’s question…it’s Riverside County
“RealtyTrac reported last week that Riverside County led the state in foreclosure activity. Neighborhoods that just a year ago were flourishing are today blighted with house after house of ‘for sale’ signs and properties abandoned to foreclosure.”
meanwhile, with the NAR running out of excuses for the decline, is asking Congress to ban for sale signs, as THIS is the real cause of falling prices.
‘ Riverside County led the state in foreclosure activity.’
- The Inland Empire will soon lead the nation in forclosures - it has one of the largest illegal populations in the country.
One that dam breaks, everything will go. The financial system simply won’t be able to cope. This winter is getting scary.
Oh well. I can get by for five to seven years on my savings. So I’m not worried. ;)a
And I was utterly shocked to find my “conservative” bullet proof 401k is up 10.5%. (If those companies default on their debts, we’ll debate how it happened in the bread line.)
Got popcorn?
Neil
Neil (and others!!)
I warn ya there a little touched at this site, but the information is good.
Curtsey,
Leigh
http://www.wnd.com/news/article.asp?ARTICLE_ID=58091
Now, I like a nice conspiracy theory as much as the next guy … but let’s read this carefully …
According to a transcript published by CNN, King, near the end of the broadcast, asked Fox a question e-mailed from a listener, a Ms. Gonzalez from Elizabeth, N.J.: “Mr. Fox, I would like to know how you feel about the possibility of having a Latin America united with one currency?”
Fox answered in the affirmative, indicating it was a long-term plan. He admitted he and President Bush had agreed to pursue the Free Trade Agreement of the Americas – a free-trade zone extending throughout the Western Hemisphere, suggesting part of the plan was to institute eventually a regional currency.
Now, from where I’m sitting … the US is not part of Latin America (not yet, anyway), hence, not part of a Latin American Union. I do not claim to have followed this issue particularly closely, or … hell, who am I kidding? … at all. So, I don’t know if there’s a treasure trove of other damning information. However, this seems like people jumping to wild conclusions without carefully parsing what was said. Just my $0.02.
Your 2 cents isn’t worth JACK SQUAT. Let’s take a case example. Did you ever read about the Bush administration’s denial that there were EVER plans to have Mexican trucks come across the border deep into the US? Well, the evidence accumulated that there were indeed plans long standing. Further, I do alot of commuting in Socal and before the Bush administration got slapped down for a week or so many east bound freeways were CLOGGED with mexican trucks. (i.e. the 60 east leaving LA in the early morning hours). Are you so sure this NAU & the “Amero” isn’t a similar situation?
Got Ron Paul?
http://www.ronpaul2008.com
Why is it that when someone dares challenge a conspiracy theory that the zealots jump out of the woodworks? Did I say anything about trucks crossing the border? Did the quote to which I was refering say anything about official denial of a single currency that includes the U.S.? I simply stated that the “damning” quote in the article isn’t so damn damning if you read it carefully. I made no judgment about the eventual outcome of this issue. It sure seems like the US government is going to drive the USD down to a level of par with these other currencies. Am I sure? No. But zealots like you lose alot of credibility by producing “evidence” that isn’t really evidence. Are you sure??? I would certainly hope that you apply the “sniff test” to evidence like this when it arises.
Neil,
I’m giving serious thought of paying charges and pulling money out of my 401k.
Where would you move it to? Both of my 401k’s have good options to “hide the money.” I plan to eventually kick back and have no income but the 401k.
Got popcorn?
Neil
Removing money prematurely from a 401K also eliminates one of it’s most important advantages, protection from judgments.
Pension monies are very difficult to get at to settle a judgement claim.
FWIW
about 401k’s….
just polling others….what is a ballpark decent amount to have in savings & 401k? i am 32 and am worried that my 401k does not have enough in case things go bad. if i have to survive with my spouse for (say) 5 years…..
Well, I’ve thought it over as well. I’m very bothered with the idea that the Fed gov’t hasn’t yet told me what the tax rate will be on withdrawals from the 401K since it is several years in the future. Also, the gov’t could dictate mandatory investment profiles in the future (say gov’t bonds) so they “can assure” that folks have money to live on. I don’t trust the asshats in leadership and I know that once Hillary (I’m an equal opportunity basher of both parties but I believe the fix is in for Hillary to become the next Pres.) gets in office the taxes are going up similar to what ole Mayor Daley just did for Chicago the other day (15% tax raise). Don’t be surprised if you see confiscatory tax rates on retirement funds that exceed a low threshold because after all, you shouldn’t be rewarded for being a good saver or frugal and after all, it takes a village. Just my .02
Scares me too. It’s too big an egg for “them”to leave it alone. I’ve got 1/2 in the 401K and the other 1/2 in tax paid “see if you can find it” fund. Hillzilla says she has more programs in mind than the country can pay for! LOL. I am sure she will win a Nobel Peace Prize too. Not willing to quit my job to cash in the 401, yet.
Neil,
Can you elaborate “have good options to hide the money”?
Sure,
I’ll go more into where I can “park the money.” I guess “hide” was the wrong word.
Both offer T-bill investing (none by yours truely).
But soon I’ll move the money to “high ground.”
Both offer a couple of choices in foreign stocks. That’s been a wise choice on my part.
One offers a very high return in investing in the company. Since they’re a positive cash flow fortune 500 company, I put quite a bit in there.
Now, both 401k’s also offer “high yield bond funds” that I’ve avoided like the plague! Best returns last year. Not so this year.
Basically, I’m a big fan of diversifying. Sadly, neither fund allows the purchase of selected stocks.
Got popcorn?
Neil
ROTH is supposed to be tax free
My comment was eaten, so here is take 2. “Hide” was the wrong word. I guess preserve is the better answer.
I’ve selected foreign funds that are invested in mines, alcohol, and industries we bears like.
One 401k allows parking of money loaned to the company. Since its a very cash flow positive fortune 500 company with a good potential growth (even in the recession I predict), I’ve put quite a chunk of money there. (No, not my current employer.) Its been better than past inflation (no, I don’t believe the Fed’s “core numbers”), but probably less than future; still better than T-bills.
I’ve avoided the “high yield” bond funds like the plague. Note: They were the “best” performers last year. Snicker.
Got popcorn?
Neil
Yup, Roth IRA is the way to go, not 401k or regular IRAs, assuming the tax laws remain as they are, which certainly can’t be guaranteed but still.
My plan is to leave my job, and convert my 401k into an IRA. Then engineer a year where my AGI is under 100k which will allow me to convert all my IRAs into Roth IRAs. By that time I will have saved enough (through renting as well as taxable investment accounts) to pay taxes on the converted amount. When the dust settles I should have about half a million in Roth IRAs, with about 200k in taxable accounts.
No house though. But regardless of the house situation, the goal is to have the bulk of retirement income coming from the Roth IRAs, and therefore tax free.
“Are you a homeowner who is having trouble selling your house? National housing experts say you can heap some of the blame on those big builders with their much-ballyhooed sales and the banks that have put too many foreclosed homes on the market.”
Judging from this MSM comment, these experts appear to be complete morons. The ‘much-ballyhooed’ sales and banks putting ‘too many’ foreclosed homes on the market are symptoms of underlying causes, which are (1) loose lending, which encouraged many folks to buy homes they could not afford and also drove prices through the roof, (2) foreclosures on people who could not keep up on mortgages to buy homes they could not afford and (3) overbuilding in response to bubblelicious home prices. The root cause of these underlying causes go deeper, and include a protracted period of negative FFR rates in the early 2000s coupled with an abandonment of mortgage loan underwriting standards (esp. policies which encouraged or at least failed to reign in 100% I/O option ARM financing). Don’t blame the builders and banks for dealing with unfavorable market conditions in the least unfavorable manner.
“Are you a homeowner who is having trouble selling your house? National housing experts say you can heap some of the blame on those big builders with their much-ballyhooed sales and the banks that have put too many foreclosed homes on the market.”
Chuckle. Its only going to get worse. Sacramento and San Diego are in danger of having foreclosures being the primary source of sales. If that happens, expect everything to fall apart fast.
The underwriting standards have to improve. The easy first fix is high down payments.
If they don’t do that soon, we risk going to a “cash only” market.
Just remember, 2009 should be the year of the peak decline in prices.
Got popcorn?
Neil
LOL how can you blame the homebuilders… sounds like the homeowners who been harping their wealth and encouraging others to buy in plus the realtor more than happy to see the boom encouraging move ups and second market turnover.
“The easy first fix is high down payments”
Not so easy. Most first time buyers don’t have 5k or 10k saved, and those who could make money if they could sell their house,
can’t sell the place. Even long-time owners are still pricing at wishing levels, so they too will follow the market down.
The “super conduit” fund designed to save Citibank is to me the play to watch…all of the big players are in trouble, with the exception of maybe morgan stanley and goldman, but they are all shouldering some of Citi’s pain to hold each other up. When that fails, and I expect it will, then all the rules will change.
Most markets will freeze up, and any buying or selling will be at heavy discounts, for cash on the barrelhead.
Most first time buyers don’t have 5k or 10k saved,
Ah, I was talking fix the mortgage market.
The fact it will really slow sales… Yea. That’s expected. Until prices get down to FHA limits. You are away that they just cracked down on “gifted down payments?” Oh, its still ok for parents to help, but not the REIC.
Got popcorn?
Neil
Most first time buyers don’t have 5k or 10k saved
Tell them to effin’ save 5k or 10k then. I did, back when that was a year’s pay.
No more 100% financing. This is the genie that somehow or other has to get stuffed back in the bottle.
“…they’re predicted to keep dropping before there’s any recovery. But lower prices haven’t attracted buyers. Sales during the previous quarter also fell to their lowest level in three years.”
Sounds to me like Sac housing is in a classic death spiral, as word is out that prices are dropping. No buyer in his right mind wants to catch himself a falling knife, and great reluctance of any remaining qualified buyers on the sidelines to step up and make offers tends to exacerbate the problem of dropping prices.
“‘Hovnanian sent a signal to the entire consumer base that things are scary out there,’ Babb said.”
Hogwash, things are SCARY regardless as to what Hovanian does. They just made a decision to try and stay in business. I stress the word TRY.!.!.!
Babb, here is a suggestion:
1) Stick your head in the ground
2) Keep repeating that “real estate prices never go down”.
3) Change your political part affiliation to Communist
4) Move to Cuba, where Castro could dictate that Hovanian cannot charge lower prices
concur
The other builders now have a choice, join the race down… or forfeit the game.
We might hit capitulation earlier than I predicted… might not. We’ll see.
Got popcorn?
Neil
Capitualtion Date: Nov 15, 2007 Dec, Jan, Feb are normally very slow. With no cash flow coming for the next 90 days, there should be a Capter 11 filing from a major homebuilder and then our beloved Countrywide will follow suit. Stay tuned.
It is amusing that the REIC is unable to get through one slow period. The cracks are appearing. I don’t think Capitulation will be in 2007. But January and February, with their historically low sales rates, are going to be brutal months to get through.
The SAAR (seasonally adjusted home sales rate) has one trend: sharply down. That implies January and February will be essentially quiet.
Not to mention, this will be year two of a weak sales bounce in the spring. Quite a few sellers are pulling their homes off the market to sell in the spring. Yet… look at the inventory. We might hit the peak in October instead of September. That… is scary.
Got popcorn?
Neil
It is amusing that the REIC is unable to get through one slow period
i suppose they could run it like a union, with some dues going towards benefits paid out to support members during slow times, etc.. were it not for the fact that these people eat their own.
“Builders have already been forced to lower prices to what they were when Janet Jackson had a ‘wardrobe malfunction.’ They’re hoping they don’t have to turn back the clock much further.”
Why would anyone want to buy now, unless nesting instinct overpowered their left brain capacity for rational thought?
Dude, you’re going to get a house (maybe 2 or 3) in the next 2 years, if you still want one…I now have daily updates sent to me re San Diego foreclosures, they’re building up like crazy and this is only the beginning.
“…if you still want one…”
I am truly having second thoughts about ever owning a home, especially after recent news that (1) one cannot insure against landslides in San Diego and (2) 90% or so of the homes are in high-risk zones for landslides.
Unless the prices truly adjust to reasonable levels (which may never occur given our govt’s propensity to reflate bubbles rather than letting them naturally correct), I will probably just keep renting.
Oh hogwash, you’ve waited just too long for this opportunity to pass it up, when we hit bottom you go out and buy yourself your dreamhouse, d@mnit! How many houses in SD have actually slid down a hill? Three? Puhlease.
Well, I guess I will have a few years to make up my mind…
You haven’t left LA yet?
Still here and still waiting for a decent price drop. Venice is still up YOY and I just went to a pre-open house of a 2 bedroom condo listed at 1.5M. Townhouse around the corner, new construction: 1.7M. Two bedroom, 1500 SF 100 year old house with foundation problems: 899K. Those are only list prices, of course, but I would think if prices were falling, list prices would too?
Year: 78 AD
Quote: “How many homes in Pompeii have been destroyed by the volcano? Three? Puhlease!”
PS - I’m not disagreeing with your opinion, but the nature of a personal disaster makes it tough to stick to statistics.
I believe you will find the landslide in la Jolla is the result of lack of maintenance of the water, sewer and drainage system. The ground was saturated up there at a time of year when there is virtually no rain. The City has already been making it difficult for homeowners to get land surveyers in and has hired a lawfirm, which tells a lot in this case.
You are correct in general, there are many uninsured risks in homeownership in California, the biggest being earthquakes, but any “act of god” will suffice.
Apparently some 30 years ago, the city of San Diego in it’s wisdom decided to replace a large number of storm drains with corregated metal ones to save money. These are estimated to have a lifespan of 25 to 30 years and will cost millions to replace along with the rest of the infrastructure which is going to hell here. We used to laugh at the folks with their Hummers and 4X4’s but given the condition of our roads, which are rapidly gaining third world status, I am not sure these vehicles are innapropriate. Buy in SD? Not a chance! Somewhere perhaps, but not here. Don’t get me wrong it is still a nice place to live (rent), but I would not consider buying here.
“I believe you will find the landslide in la Jolla is the result of lack of maintenance of the water, sewer and drainage system.”
I believe you will find the lack of maintenance a result of a precarious San Diego City govt budget.
I don’t know where you drive GH, but all the roads that I travel on are fine. I live off of Friars (renting) and the only potholes I find are when I travel down to OB (which is often). Other than that, roads are great, and renting is great as well.
GH
Garbage. Homes should never have been built on Mt Soledad. 7 of these homes slid down the hill when they were first being constructed in 1961. That should have been the first sign that it was a dumb@ss place to build. Numerous geologists have said for over the last few decades that the area is prone to slides and is a known hazard. Mount Soledad was actually formed by landmovement along the Rose Canyon fault.
LOL, It is well known San Diego is in a dire financial situation. Our last Congressman is serving time for Bribary and corruption, and half our city council are under indightment on corruption charges. Illegal schemes to increase administrative pensions have left the City near bankruptcy (saved only by the housing bubble). As to if building permits should have been granted on Soledad Mtn or many other steep sloped areas of San Diego I cannot speak to, but regardless of if you believe the city to be at fault or not, it is a well documented fact that the sewer and storm drain system is in dire need of major work, and there is no money left in what should have been a very wealthy city to pay for it. San Diego is otherwise a beautiful city and has been a great place to live for my family for many years. I hate to see what is happening to it.
we are the engr involved with the HOA next to the one that fell. something tells me thats not so good for the people who caused the dangerous development.
Have you been speaking to my wife? LOL
–
“This year, as the housing market has collapsed across the city, officials have increased plans for downtown housing, considering reduced fees and other rewards for those who build downtown. Once the market recovers, the city will be prepared for it, city officials said.”
Yeah, building more would help “the market recover?” You mean they should be willing to wait for ten years?
Jas
A reminder to my Buffalo Bills and in particular, you
You can punt on 1st, 2nd, 3rd, or 4th Down
Repost from Local Observations thread. Gee, I wonder why Cali is having so many foreclosures? Could it be because of stuff like this? (Sorry, couldn’t post the original LA Times link, so you’ll have to put up with Digger. Just ignore the extraneous stuff)
http://www.diggersrealm.com/mt/archives/002512.html
“Aviles is] sitting in his Santa Ana home, waiting for the bank to kick him out or for his kidney to kill him”
His kidney? Oh, I get it, from sleeping on the couch.
“Soledad Aviles, an immigrant from Mexico with a 6th grade education who can’t read or write English and makes $9 an hour, was approved for a mortgage of $615, 000 by Washington Mutual.”
At 50 weeks of work with 40 hours a week (for the standard assumed 2000 hours of work per year), he earns $18,000 a year. Based on a $615,000 loan, his loan-to-income ratio was thus 34, which sounds a tad on the high side according to my unseasoned judgment.
Fair disclaimer: I am not in the lending business, so I don’t claim any special skills in judging what is a reasonable loan-to-income ratio.
“I don’t claim any special skills in judging what is a reasonable loan-to-income ratio.”
LOL!
“Soledad Aviles, an immigrant from Mexico with a 6th grade education who can’t read or write English and makes $9 an hour, was approved for a mortgage of $615, 000 by Washington Mutual.”
So, did Soledad pay his property taxes? Maintain the place, or use it as a low-rent boarding house?
i do hope Wash Mutual goes down…first for lending big bucks to illegals, second for doing their bit to ruin neighborhoods, third, for doing crap loans like this that will cost the taxpayers big bucks to undo the damage to the neighborhood and the community.
Yeah, and this is one of the suffering victims HILBIL is intent on saving. At the expense of middle class citizens and savers. Man, I am truly bitter.
Hey PB, don’t be a hater!
He just wanted his piece if the American dream. Those bad bad mortgage broker took advantage of him.
I say we reset his interest to 0% with a 50 year loan, what’s that? Oh, he still can’t pay that payment? Nevermind, this guy’s screwed.
He’s not entitled to any American Dream. He’s an illegal alien.
Send his sorry azz back to mexico and he can work on the mexican dream…whatever that is.
This is happening here in the Chicago area, too. I just saw a foreclosure notice in the local paper for a judgment in excess of $600,000. I looked up the records, and the house was a newer McMansion that sold for upward of $700,000 in 2006 (sorry, I don’t remember the exact numbers). The kicker is that one of the named defendants in the foreclosure was the Illinois Housing Development Agency which helps low income borrowers buy homes. The foreclosed borrower was Hispanic.
This is a window to what will happen to the IE, lots of people packed into a house The people living around him must just love him and his renters.
There are plenty of lawyers in CA who would sue on his behalf if he couldn’t get a mortgage. A mortgage is a right, after all, esp. if you’re not a citizen!
–
“One goal will be to remind would-be buyers that the housing slowdown means lower prices.”
Yeah, people are so stupid that they need help in figuring simple things out on their own? You guys helped them a lot already during 2004-06; maybe, they can do better on their own.
Jas
“Real estate agents will throw open the doors to their for-sale properties Sunday as part of Tulare County’s first Open House Extravaganza. One goal will be to remind would-be buyers that the housing slowdown means lower prices.”
I guess every area has some version of this. Down here, we’ve got the “Parade of Homes”, LOL! This year maybe they’ll call it the “Funeral Cortege of Homes”.
Is that a Black Tulip pin on your lapel?
“‘We’re trying to put a positive spin on the housing market,’ said Gaylynn Heitzig, president of the event’s sponsor, the Tulare County Association of Realtors.”
Here is something you don’t see every day — a Realtor who inadvertently makes an honest remark…
Spin.
One little word says so much. Imagine committing decades upon decades of one’s labor and lifetime to purchase a basic need based on “spin”.
lol
~Misstrial
–
“Builders have already been forced to lower prices to what they were when Janet Jackson had a ‘wardrobe malfunction.’ They’re hoping they don’t have to turn back the clock much further.”
Yes, they hope, but their hopes will be dashed. We got to go back to the time of mid-1990s in price. That is if there is no serious depression. Oh, what is a depression? Ask you grandmother or someone who is in her 80s and 90s.
Jas
http://bloomberg.com/apps/news?pid=20601087&sid=al1pBplw2gaU&refer=home
It sounds like the US government is going to buy 100 billion or 33% of the financial communities gambling losses with our tax dollars.
“Under one plan being considered by the banks, lenders would establish a fund of as much as $100 billion to buy assets from the SIVs, said two people familiar with the negotiations who declined to be identified because the talks are continuing.”
Based on that article, I don’t get why you say our tax dollars will pay the bill. My reading is that the lenders would put up the $100b.
I agree that the plan is likely to ultimately include a provision to pass the liability on to Main Street America (most likely through some kind of guarantee which will not be explicitly identified as taxpayer-funded, or perhaps through somehow transferring the toxic debt on to FNM’s black-hole balance sheet), but either I am missing it, or that article does not say anything to this effect.
They are in talks with the treasury.
If they thought buying the SIV’s garbage was a money maker they would have already done it. My guess is they are going to form a fund, fill it with low interest borrowed cash from the US gov and use that cash to buy a bunch of garbage. That garbage will eventually be found to be worthless. The fund now at arms length from Citbank and others will go broke and will not be able to pay the US gov. ie the tax payer takes a bath.
http://news.yahoo.com/s/nm/20071013/bs_nm/usa_credit_sivs_dc;_ylt=AoqdQTyP_tRIZEL3p3oC6NSs0NUE
Treasury representatives met about two weeks ago with sponsors of these vehicles, Wall Street banks and investors to discuss “how to alleviate some of the issues in the SIV market,” one source informed of the meeting by participants said.
One plan that was discussed at the meeting involved setting up a “super fund” where “each SIV in the market could pledge up to one-third of its assets and get financing,” the source said.
A government source also confirmed that there is a Treasury initiative to ease funding costs in the SIV market.
The plan could also get backing banks outside the United States. The Financial Services Authority, the United Kingdom’s markets regulator, has suggested that UK banks consider participating in the plan, the Wall Street Journal reported.
“My guess is they are going to form a fund, fill it with low interest borrowed cash from the US gov and use that cash to buy a bunch of garbage.”
Why bother forming a new GSE when Fannie Mae stands waiting in the wings ready to do the job? What would they call the new fund? I recommend the Toxic Mortgage Superfund.
toxic superfund sites cost a lot to clean up, but it can be done. This problem’s beyond fixing at this point.
Please call this fund The Toxie Mae Avenger.
Taxes come in different forms. Most folks can readily discern a tax in the form of an income or sales tax. Most legislators won’t opt for this tax as it won’t perpetuate their existence in office.
The other tax is through inflation. It is even more pernicious since its effects cannot be known-as to who/what class will be effected the most. What can be known is that those who get access to the money first will benefit the most, and those with access last will be penalized the most.
The notes from the Federal Reserve are what most of the citizens in the US use to measure nearly everything. They are backed by primarily by Treasury debt.
Therefore, everytime the Federal Government goes further into debt, and more of their debt is purchased with newly created Fed Notes, you are being taxed. This new money being created to finance this papering over of dad debt will certainly tax you (unless you are the direct recipient of this new money–in which case the decrease in purchasing power over your saved notes will be greatly overcome by the benefit of this new money).
However, it will be much more difficult to perceive, and take much longer. That is the fundamental reason that every ruling political power has opted for this method of financing their spending to curry favor for votes. This is nothing new, for certain. Yes, they are being bailed out by the taxpayer, since only Fed Notes are accepted for federal tax purposes. If you weren’t required to hold those notes, it would be a different phenomenon.
“The other tax is through inflation.”
Since it is poorly understood and has not been politically demonized by Repubnicans, this is the only politically-viable option. The most likely bailout scenario would be to create some kind of Toxic Mortgage Superfund which is financed by issuing bonds (similar to the last generation’s Resolution Trust Corp bonds) then leave it to the Fed to print enough fiat money (and be sufficiently subtle about it) to reduce the debt burden going forward.
i dont see anything about the govt buying anything… looks to me like they are thinking about brokering an agreement between banks et al to prevent the sudden dumping of distressed securities, thereby causing a mad-rush-selling-panic-stampede… which would be ugly for everyone.. even us little people.
Sorry, i diagree. Until the ibanks are forced to come clean and take their hits, and Fannie and Freddie actually file timely financial statements, we are all of us, the ‘little people’ at the mercy of totally manipulated markets.
For all those posters who claim to hate socialism, what do you see when you watch the markets and see what is happening? Are you confusing what we currently have with what used to be called capitalism?
To be clear, I dont see anything about the govt buying anything in that article you linked to.
All it said was the Fed may attempt to coordinate something among the bankers, which is not at all without precedent.
The Fed occasionally strong-arms banks, advising that they had better cooperate for the good of the overall economy, or else… and most times without the Fed itself being involved in the actual transactions. The Fed can be persuasive.
As to the question of socialism or capitalism, we have a mix, just as supposedly socialist countries are in reality semi-capitalist.
Our economy can withstand a measured dose of socialism… it aint pretty but it’s the way things are.
this is interesting, it seems like they throw or propose to throw a billion or so to the regular folk(if you qualify) while the big boys get billions and a little help with the workout.
how many fucked borrowers do you think Bernanke and Paulson
1. know?
2. talk to?
3. meet?
heck- goldman has their boy on the inside! it’s like fight club except their people are in very high places.
“Some markets have been experiencing illiquidity,” San Francisco Fed President Janet Yellen said in an Oct. 9 speech in Los Angeles, referring to mortgage-backed securities and asset- backed commercial paper. “This illiquidity has become an enormous problem for companies that specialize in originating mortgages and then bundling them to sell as securities.”
Some markets have experienced a shortage of lenders willing to make loans to help people buy homes they cannot afford, and a shortage of home sellers willing to drop their prices to levels the post-euphoria home purchase budgets can bear. This tends to make it difficult to originate new loans to feed into the gaping maw of Wall Street’s voracious mortgage securitization gorge.
Babbs,
If only you could have followed through on your promise to leave the country, if ’ssshrubery was elected, back in 2000?
“‘Hovnanian sent a signal to the entire consumer base that things are scary out there,’ Babb said.”
“When the housing market soured, those lenders and dozens of others nationwide shut down or scaled back, leaving workers like Ventimiglio in the lurch and contributing to an abrupt drop in mortgage-related jobs. The sector has lost at least 76,000 jobs nationwide since peaking at 500,000 a year ago, according to federal data released this month. And more cuts have been announced.”
What is the drop in the rate of lending — 50% or so by now? Against a loss of 15 percent of the jobs in the sector? I wonder where this is heading?
Remember - these people are only qualified for menial jobs - they have no skills aside from lying and ripping off others.
Anyone here who would ever hire one of these lowlifes?
I would never hire one of those blood-sucking LO lowlifes…. and I hope they get a ton of rejection with that on their resume.
Never have so many done so little for so many, or something like that.
Never before have an army of scam artists done so much to harm so many to benefit so few.
they didn’t even help themselves? how pathetic is that? they were too dumb to pay off their house and car. I’m sure they probably didn’t have any problem throwing money around at the mall and the bar.
Hey Professor Bear, there are a ton of foreclosures in Oceanside, can you give me the low down on that area, is it really unattractive? Industrial? Overly military? Or a good investment? How about Chula Vista, that’s another “hot” area, for foreclosures that is, I mean.
My impression: Chula Vista and Oceanside are both less desirable areas of San Diego (lower average income and education quality, higher crime rate, etc) and were also had higher penetration levels of subprime lending than more posh areas. I believe both areas feature higher percentage of military families, which tends to reduce stability as military personnel often have to move on short notice. So it is unsurprising they have a higher foreclosure rate.
On the other hand, I expect the Alt-A and prime resets to disproportionately impact the most upscale locations (SR 56 corridor, La Jolla, etc) come 2009-2010, when prime and Alt-A reset rates peak.
A coworker of mine jsut rented a house in one of the nicer Oceanside neighborhoods a couple of weeks ago. As they were moving in a 15 year old was shot to death on the road just feet from there house. A few days ago, his wife called saying Oceanside police had a number of youths sitting on their front lawn… Personally, I would not want to live in Oceanside, although prices there are a lot lower than where I live.
Since only a few (the best people) are most productive and do most of the work (lending that is) it might be possible that a percentage drop in $$ lending could result in an even larger percentage of job loss..
Easy money is all that kept the majority of these car-salesmen - turned brokers in business. No easy money means the majority is out on the street.
I keep reading that FBs are now turning to credit cards because the home ATM has dried up. First of all, how long can that last, don’t credit cards turn off the spigot if you haven’t made your payment one month? Second, would DFS or MA or ADVNB be a good investment at this point, seeing as these debtors will probably end up paying a ton of fees and interest before they go belly up?
Give em’ a month, and then lights out.
I’d bet that someone who starts off with good credit could deliberately blow off about $50,000 or more during the period of maybe 8 months.. or more.. without ever making a single CC payment.
“…how long can that last, don’t credit cards turn off the spigot if you haven’t made your payment one month?”
It just needs to last until the bubble-jugglers at the Fed figure out a new way to respike the punchbowl.
Are you kidding ! As soon as a negative mortgage payment record hits the FB’s record, they will rapidly move to default % APR. After that it is only time to say say “Ah feck it” and stop paying on cc’s also.
“At PC Lending in Irvine, some of the most skilled agents previously sold cars or time shares. They had lots of drive but rarely a college education, said Brett Brofman, the company’s VP of administration and operations. Of the 60 agents at her firm, only 15 are actively producing loans now, Brofman said. The rest have left the business or branched out into other jobs. ‘One guy quit and is now interviewing for bellman positions at local hotels,’ Brofman said. ‘Another lady is selling tickets at a playhouse at night making $10 an hour’ to supplement her much-reduced commission at PC Lending. Brofman agreed to a pay cut in return for a two-day work week when business slowed. Brofman has since returned to work full-time without a pay raise to help keep the firm afloat. Meanwhile, she’s blown through $200,000 in personal savings and amassed $25,000 on her corporate credit card to support a branch office of PC Lending that she and her husband own. The branch, which used to have 16 agents, now has three. It used to be that you could come in a few hours a day, enjoy a four-day weekend and make plenty of money,’ Brofman said. ‘It’s mean to say, but I used to joke that I could get my cat on the phone to sell a loan and a rate: ‘Meow, meow, 5 percent.’ Done.’ Kelly Markham earned $200,000 in commission in 2005 as a loan officer at an Irvine mortgage brokerage. When commissions dried up, she began looking for another job to support her six-month-old baby and hang on to her $600,000 home. ‘I’ve signed up for work at a temp agency, but all I’ve gotten is five hours of work in the past four weeks stuffing envelopes in some office,’ said Markham, as she perused Starbucks job listings online one recent afternoon.”
Waitresses, bellman, used car salesmen - making $200,000 a year and buying $600,000 houses.
Gee, I wonder how this will play out.
The same way it did for all those web designing, skateboard riding, radical dudes from the .com days - only bigger and much more entertaining.
Living in OK around 1990 I was amazed at all the 1975-80 vintage autos driving around - I wonder how many 2004-2008 model SUVs we will see (everywhere) in 2017?
Hopefully not so many 04-08 SUVs still on the road in 10 years. The graduating classes you named are among the biggest, bling-iest, and most gas-hogging leisure machines ever designed for the motoring lumpenproles. One can only hope that gasoline hits $10/gallon.
I wonder how many 2004-2008 model SUVs we will see (everywhere) in 2017?
ROTFL It will be like those Green 1970’s station wagons. Impossible to miss and cheap enough to keep on the road forever.
lol. Sadly, auto sales haven’t really gone into their decline yet.
I’m not happy about this (it employs quite a few hard working people). But its bound to happen. Oh well, I’ll do my part over the next three years (we’ll buy two cars. Mine is getting expensive to maintain, with 219k miles, its time to replace my wife’s too. We’ll compare new versus used.).
Got popcorn?
Neil
Neil, please get something that gets at least 40mpg or better. That way, you can have your schadenfreude and eat it too
I’m thinking a civic hybrid. My coworkers who own them love them. The owners say they regularly break 40mpg. Note: coworkers who drive as or more aggressively than I do.
The Prius owners admit to getting about the same gas mileage as the civic hybrid owners and the civic seems to be sportier. 
But I’ll look for a bit. Just like with homes.
Got popcorn?
Neil
My scion xA, at $12,995, gets 36mpg (almost all highway). Looks much cooler than the Prius - not that I don’t like the technology under its hood.
I have an older Civic Hybrid and drive it nice and average 50mpg lifetime. I have 100k on the car with no problems. No cost other than oil and airfilters. Brakes are perfect because I use the motor to slowdown. My guess is I can get 150k w/o brakes timing belt or any other usuall maintenance. This is a great investment. It’s like buying oil futures and you won’t have to pay taxes on the earnings.
Buying a hybrid is like buying oil futures and not paying taxes on the earnings.
I have a older civic hybrid 100k mi. Additional costs, gas, oil changes every 10kmi, and filters. My brakes look brand new as I use the electric motor to slow down. My guess is I can get 150k with the same timing belt given that the engine runs less and at a lower rpm, the brakes should last the life of the car.
Holy Man!!!!!!! I’ve read about it but nevr have I seen it. The infamous triple post. lmao (just teasing)
I love the new Civic. Unfortunately, my pig-headed goal is to get another 100k miles on my 250k Jeep. Can’t currently justify spending $15k to save 20 mpg, but I’d like to.
As the dollar drops in value and gas/oil/and tire prices rise you might change your mind.
My Prius eats Civic Hybrids for lunch. Speed, technology and mileage props all go to the mighty Toyota.
Say what you will, but the big SUV may be the vehicle of the energy-starved future. Why? Because you’ll need to haul lots of people and large, heavy things over very bad roads.
Hybrids are not the answer to any gar related issues. If a corvette can get better gas mileage than most cars on the road, that says a lot. I live in LA where everyone drives their idiotic heavy over powered german machines and bling bling SUVs from hell.
Non hybrid civics generally get close to 40mpg. My 275hp supercharged Acura RSX gets close to 30mpg still. Doesn’t go below 20mpg flooring the car everywhere on an entire tank of gas.
Just buy a normal civic and be done with it. Also know that you are doing some good for the enviro because the civic can last forever with minimum maintenance and all hondas are ULEV or better.
I agree for the most part. Gas civic won’t get 40mpg in town though. You can get 50 plus in hybrid w good driving in town, save your brakes and your engine. Prius Hybrids are getting over 300k mi on battery packs by reports. I think there is an economic and LARGE Political benefit when you consider where most of the worlds oil dollars end up. Saudi Arabia, Iran Venezuela.
My little Arab mare gets about 160 miles/bale.
Uhh, perhaps the kindest words for asshats such as these are something like “White trash is as white trash does”.
That’s the difference between rich people and poor people: the rich save, the poor spend, and the poor keep saying they’d like to be rich, which is just another way of saying that they’d like to have more money just so they can blow it on bling and get poor again.
But, hey, those granite countertops sure look swell!
What? The poor people don’t make enough money to save and the rich have all the social connections to get money for nothing. Of course at some point it gets hard to spend all the money you make, once you’ve got a bunch of houses, a boat or two, and a fleet of high end cars.
who is poor?
No car.. no microwave.. no TV set.. no candy or potato chips. No movies.. no liquor or drugs.. and, of course, they are working 12 hours a day..
So, in civilized countries, no able-bodied person is so poor that they cannot save something.. and anyone who starts with saving can eventually gain wealth without limit.
No, the rich invest, the middle class save, and the poor spend.
There was a thread the other day about the existance of “something for nothing” or a “free lunch” in this universe. I said there was no such thing, but i’ve since changed my view.
How much does discipline cost?
How much is it worth?
made 200k in 2005, and now stuffing envelopes…there’s poetic justice here, since these mortgage scammers lived big and apparently never saved a dime.
Now interviewing for bellhop positions…
how in heck could you even spend that much? 200k? I could live well for the rest of my life on that.
200K seems like a lot .. but to live well?
How about a 2K month allowance.. 100 months = 8.3 years
Need 3K a month? Must die in 5.5 years, assuming nothing bad happens and the allowance covers all living costs.
joey, the way I live, all I need is 5 years…
of course the 200K would last a bit longer since it’ll earn some interest for a while, until the principle gets badly chewed up..
Now, $700K sitting in the bank at 5% pays out about $3,000 a month in interest alone, till the cows come home.. not a bad wage for doing nothing.
I thought that withdrawl rate was supposed to be 4%. So, $1m in the bank would be $40K a year.
bob.. i think you’re referring to retirement planning.. withdrawing 4% (or maybe even 6%) of the principle amount while interest acrues.
I was just playing with the numbers.. take 3K a month and withdrawing no principle.
As i understand it (and i know nothing about retirement planning) the object of such a rule of thumb is to safely stretch it out over an estimated retirement period of maybe 30 years… like from 60 to 90 yrs old.. or retire early at 50 and plan on living till 80 with a nest egg of $1Mill.. Live really good and enjoy life and die broke.
I imagine a good plan depends on the return rate and lots of other things.. Age, health, responsibilities, inflation.. risk.. probably better ways than to park the whole nest egg in CDs..
Here’s a page with guidelines gleaned from various studies… Spending earnings is not a very popular topic in the investment world, but a few people have put their minds to it.
http://www.retireearlyhomepage.com/safewith.html
I thought Orange County was a despicable hole even when I was in San Diego nearly 20 years ago. I love reading these stories.
I lived in Mission Viejo 10 - 15 years ago, and loved it there.
“Mission Viejo”
Hey, so did I…(1987-1990)…loved it there. But then, prices were much better then.
I live in Mission Viejo. Txchick57 is right. It is a despicable hole. Dont ever come back, and tell everyone you know how terrible it is and to never ever visit Orange County.
my ex-boyfriend was from OC, he acted like it was something really special. I discovered later that he thought it was so special because that’s where he was born…
I was born in OC and I rarely mention it to anyone. I consider it the blackest mark on my record.
The OC has great beaches. Huntington, Newport and San Clemente have long, sandy beaches. Corona Del Mar has a nice cove-type beach. Laguna has many beautiful cove-type beaches. If you like swimming in the ocean, these spots can’t be beat. They are special places.
What is it with everybody and the “OC has great beaches”? They’re really not that great. Let’s begin with an incomplete list of the places where the beaches are waaaay better:
Northern Cal
Hawaii
Florida
South Carolina
The ONLY thing these beaches are good for is surfing and shrinking your ‘nads down dramatically. And for people who enjoy collecting garbage, urban runoff, and dead animals whenever it rains heavily.
OK, San Clemente and Corona Del Mar are better, but you have to go through hell to get these places because they are so damn overcrowded. Even the Pelican Point part of Crystal Cove was closing this summer because the parking lots filled up!!!
Trust me. I go to these beaches (Newport, Huntington, CDM, LB, etc.) very frequently, and I’ve been to beaches all over the country. I used to surf some time ago. If I still did, maybe I’d think these are great beaches. But I don’t anymore. So they’re sh!t.
Very incomplete list.
Noosa
Airlie Beach
Byron Bay
Bell’s Beach
Glenelg
Scarborough . . .
In fact, large portions of the Australian coastline
Gross. Huntington Beach is the most polluted beach in California. That place is disgusting. My professor at UCI was studying the water quality there and was explaining how if water tests were done where its actually dirty then people would be alarmed. Good thing they just test the quality in the clean areas huh.
I know that beach was known for closings because of sewage spills.
I miss being in fake Irvine. Its so safe and clean. Most of my classmates loved it there, even though its not really a college town, since the college is hidden next to Newport.
and, might I add, I ain’t that old…
whoops - supposed to be an add-on to my comment above…
Again - the bubble bloggers forecats were right. Builders are leading the market down.
How to eliminate competition from existing home sales
Last month, K. Hovnanian Homes showed just how low builders could limbo. It held what was dubbed the ‘Sale of the Century’ and reduced prices of its unsold inventory in 19 states, including California,
The suckers who bought at the peak can’t lower their price because they would be short. Most will attempt to hold on. Thus Hovnanian will be able to scoop up the few knife catchers who come forward, at least until the Banks come in and start slashing prices on foreclosed properties.
correct. they made a smart biz move, no doubt.
Existing homeowners in 2008-09 are about to get an overall equity “haircut” in excess of nearly $2 trillion, due to decline of their current home market value between 10-15%. The only thing that will mitigate that somewhat is inflation, which makes the actual cost of their mortgage less. Of course, the politicians could socialize the debt, and make those who are debt free and responsible bear the cost of those who aren’t. And we all know the ending to that fairy tail story…..
The only thing that will mitigate that somewhat is inflation, which makes the actual cost of their mortgage less.
Only a little. Wage inflation isn’t strong. Overall inflation will be far greater than wage inflation. Thus… that “haircut” is going to strike home with full brunt. And 10% to 15% (nationally), is optimistic.
We haven’t even begun to see the job losses that always result as an aftereffect of such manias. One of my wife’s “commuting friends” just dodged a 58% layoff at a commercial escrow company.
Got popcorn?
Neil
Since nothing is mentioning recession or anything of the sort, the recession is going to rear its ugly head from hiding v ery shortly. Fortune is now talking about the mess with multiple articles.
My job is slowing down tremendously. These guys started a Civil Engr. firm during the low of the 90’s the day of the riots, and this is the first time that everyone in the office is out of projects to work on since they started. I ask a lot of the engr every week about the situation since most of the old timers went through each bust period in California.
No raise, place will shut down for xmas break with no pay, and I doubt we will see any form of bonus. Not looking good.
It took an SC economics director this long to figure it out?
“Delores Conway, director of USC’s Casden Real Estate Economics Forecast, points to Riverside County as ground zero, a place that was overbuilt, with new homes now being discounted by builders, and that is witnessing a sea of foreclosed homes on the market, with more expected.”
No — it just took her till now to feel compelled by glaring evidence to comment on the obvious.
“It held what was dubbed the ‘Sale of the Century’ and reduced prices of its unsold inventory in 19 states, including California, by eye-popping amounts: e.g., $300,000 off a $2-million model in Orange County.’”
$300,000 off isn’t all that eye-popping if that house was $750K in 1998. Dare I call it…..insulting?
was —-> would have been
I hope that one of the ones stuffing envelopes is from the tv show the real housewives of OC.
Housing prices in California have not gone down enough to get buyers interested. It’s a buyer’s market and they know the longer they wait the lower the prices will go down if sellers are really interested in selling their hours. Dropping 5-10% is nothing and will do nothing to stir up interest. Take a drop of 25% and I bet you’ll see some action, but not enough … buyers are patient and they’ll out wait the sellers in time. It didn’t seem so realistic awhile back when they mentioned 40-50% price drop, but from the looks of things it could very well become the truth any day now. Builders are walking away from their projects. Houses are being auction without much success. The fact is plain and clear that in California people cannot afford the house prices and the foreclosures are proof of it. During the housing boom, way too many bought houses they could not afford.
Anyone from Sacramento know the disposition of River’s Side at Washington Square in West Sacramento, CA?
Last I heard, Leonard Development was auctioning off the last 22 townhomes for starting bid of 259K (with 5% buyer premium) at the end of September. There was also a reserve and the builder seemed to think units were worth around 400K.
I heard today that not a single unit hit the reserve price and nothing sold at auction (NOTHING!). So, rumor has it the builder is letting all 22 units go.
“‘One guy quit and is now interviewing for bellman positions at local hotels,’
Ding Dong the Wicked Witch is dead.
Isn’t this a great article Ben dug up for us blogers.
I love hearing the aftermath of those greedy brokers.
Please give us many more stories of the industry recession.
We know all about the FB’s.
Give me Primo Ribo!
Luxury High Rise Living
High Rise Condos in Kansas City Spectacular Views and Amenities
LMAO! Even the ads here on HBB are hilarious!!!