Everybody Thinks Prices Are Going To Fall
A report from the Coloradoan. “While it’s no surprise the real estate market is battling with foreclosures stemming from the subprime fallout, some industry experts say the region hasn’t seen the worst of it. For the first quarter of 2007, the Colorado Division of Housing reported 9,254 foreclosure filings in the state, equal to one-third of all filings for 2006.”
“The Genesis Group reports 738 foreclosures for Larimer County in the first half of 2007, on pace for a record year. ‘We have not tightened down our underwriting guidelines,’ said Pete Lansing of Universal Lending Co. ‘There’s not enough appreciation in the market.’”
“With new home sales down 23 percent, builders are regulating their construction with inventory down 26 percent, reported John Gerhard, senior market analyst with the Genesis Group.”
“The slow down in production has created an increase in vacant lots. John Covert of Metrostudy pointed to an almost 60-month lot supply for Larimer County and almost 70 months for Weld County.”
“‘We’ve been completing more homes than closing,’ he said. ‘It has taken awhile for our developers up here to respond to the housing slowdown. It’ll be awhile before we return to that path of growth.’”
The Arizona Daily Star. “A Tucson housing market analyst is projecting a much deeper, longer slowdown than earlier anticipated. In his monthly Southern Arizona Housing Market Letter, analyst John Strobeck said it might not recover until 2010 if inventory levels remain high and the sales pace stays the same.”
“‘It will be at least that long, maybe longer,’ he said.”
“Earlier this year, Strobeck predicted that a recovery might come as soon as the first quarter of 2008.”
“Strobeck’s report, released Tuesday, showed drops of about 20 percent in the number of new-home sales and about 18 percent in the number of existing-home sales in September compared with the same month last year.”
“The median, or middle price, for new homes fell about 8 percent to $235,496 compared with September 2006, according to Strobeck’s report. The median price for existing homes rose by about 3 percent to $206,000, compared with the same month last year, according to the report.”
“The volume of new home permits in September dropped to 286, the lowest monthly number since January 1993, according to the market letter.”
“Strobeck, whose company is called Bright Future Business Consultants, said tighter mortgage-lending standards, a growing number of foreclosures and other financial problems may have a greater impact on the market in the future.”
“‘It will be at least that long, maybe longer,’ he said about the 2010 projection and joked that he is now ‘wearing black all the time.’”
“Tucson-based mortgage lender First Magnus Financial Corp. says it can pay wages to employees laid off before the company filed for bankruptcy, according to a plan filed with the court Tuesday.”
“But other unsecured creditors could end up with pennies on the dollar under the plan.”
“Tucson bankruptcy attorney Matthew R.K. Waterman, who is representing unsecured creditor National Bank of Arizona, said it is too soon to tell how much money will actually be available for unsecured creditors because the company is still determining how much it owes.”
“As a ‘ballpark figure,’ Waterman said he expects creditors to receive around 20 cents on the dollar. ‘I wouldn’t be surprised if it’s substantially less than that,’ he said.”
The Arizona Republic. “If you’re a renter looking for a new apartment, you could be in for some good deals in the coming months. Apartment managers around the Valley are starting to offer rent specials again as occupancy falls and rents increase at a slower rate.”
“The culprit behind the trend, according to brokers and property managers, is a burgeoning number of single-family homes that are being rented out by their owners.”
“Falling home prices and ‘condo reversions,’ or the transformation of apartments that were to be turned into condos now being turned back into apartments, also has had an impact on the supply of vacant units.”
The Associated Press. “A bankruptcy judge this week converted Spectrum Financial Group Inc.’s Chapter 11 case to a Chapter 7 liquidation after the mortgage lender said it lacked the ability to reorganize. Judge Sarah S. Curley of the U.S. Bankruptcy Court in Phoenix signed off on Spectrum’s conversion request Tuesday.”
“A trustee will be appointed to sell off the company’s assets, pursue claims on the estate’s behalf and oversee distributions to creditors. The Scottsdale, Ariz.-based company sought shelter under Chapter 11 on Aug. 28, one of a number of housing lenders to succumb to the credit crunch squeezing the U.S. mortgage industry.”
The Wall Street Journal on Nevada. “During the height of Las Vegas’s real-estate boom two years ago, property investor Rob Rozzen bought 16 homes, hoping that skyrocketing prices would pump up his retirement nest egg.”
“Now, Mr. Rozzen says he is considering filing for bankruptcy protection. As the housing market slowed, the 40-year-old was unable to sell the homes, and his full-time job as a real-estate agent was no longer able to support mortgage payments totaling $45,000 a month.”
“So one by one, over the past 14 months, Mr. Rozzen has stopped making payments on his investment properties, for which he paid between $226,000 and $390,000, and lenders have foreclosed.”
“He says, walking away from his investment properties was his only option. ‘You get to a point where your hands are tied,’ he says.”
“Certain data point to the trend. According to an August study by the Mortgage Bankers Association, defaults on mortgages where the owner doesn’t live in the house are a major driver of the defaults in Florida, Nevada, California and Arizona, four of the states with the fastest rising rates of seriously delinquent loans.”
The Gazette Journal from Nevada. “The Truckee Meadows’ ongoing housing slump has left its mark on the office market in south Reno, according to area commercial real estate firms.”
“Colliers International’s third-quarter report shows cutbacks at Lennar, Centex and other homebuilders have swelled office vacancies in south Reno to what officials believe will hit 25 percent by early next year.”
“Added co-author Kevin Annis, Colliers senior associate, ‘With (vacancy) of upwards of 25 percent, it doesn’t make sense to build.’”
“Don Welsh, VP of office properties at Grubb & Ellis, said his pending report will show the same trends. ‘They (homebuilders) don’t need the square footage,’ he said. ‘So it’s a little bit scary. We could easily be up 25 percent.’”
The Salt Lake Tribune from Utah. “The news just keeps getting worse for home builders along the Wasatch Front, where demand for new homes in September plummeted to the lowest level since 1990.”
“Builders took out permits for the construction of 485 homes locally last month, down from 1,191 in September 2006, according to Construction Monitor. The last time residential building activity along the Wasatch Front was this low was 17 years ago, when builders pulled 396 permits for new housing units.”
“Utah’s real estate market, like many others, is being hurt by tighter lending standards put in place after the nation’s subprime lending debacle. Perhaps an even bigger issue is that several years’ worth of home-price increases, from Ogden to Provo, have put homeownership out of the reach of Utah families whose incomes haven’t kept pace.”
“Laura Murdoch and husband Matt said they have been trying to sell their home in Draper since early July. They have lowered the asking price by $50,000, but ‘barely anyone has even looked at it,’ Laura Murdoch said.”
“The problem is that the Murdochs signed in January a contract to construct a new home, which is scheduled to be finished in three weeks. With no buyer for their old home in sight, the couple is facing the specter of two mortgage payments.”
“The couple is considering further price cuts on the home they are trying to sell. Even better, the couple said, would be if the builder would let them out of the contract of their new home.”
“‘We’re even willing to walk away from our down payment,’ said Laura Murdoch.”
“Builders say the biggest problem they face is fear among prospective buyers. ‘People are afraid to purchase’ a home right now, said Jordan Bangerter, a managing member of Bangerter Homes in South Jordan who also is the first VP of the Salt Lake Home Builders Association. ‘Everybody thinks prices are going to fall.’”
“And that is a concern for a number of builders in the state, who are grappling with high levels of unsold inventories and layoffs. ‘There’s a tough adjustment ahead of us,’ Bangerter said.”
‘Three years ago, Colorado truck driver Roger Rodriguez was in the market for a new mortgage loan. With radio and Internet ads trumpeting easy approvals, he picked up the phone.’
‘That call set into motion Mr. Rodriguez’s descent into the subprime mortgage mess. Over the next several months, his adjustable-rate loan passed through many hands.’
‘Little good has come to any party that touched the loan. Mr. Rodriguez, now 61 years old, has lost both his job and his home. All the middlemen, from the broker to CIT to RBS, have either shuttered their mortgage businesses or are struggling. Mr. Kelsoe, once a star mutual-fund manager, has hit a career low as defaults on subprime mortgages decreased the value of his investments.’
‘The paper trail from Mr. Rodriguez to Mr. Kelsoe illustrates how the mortgage market meltdown scalded millions of homeowners and investors. It also foreshadows how the domino effect stands to continue.’
‘The mortgage crisis is ‘a case study on the way that greed convinced everyone there wasn’t risk,’ says Ivy Zelman, CEO of Zelman & Associates, an independent real-estate research firm.’
Did you see the way Mike Morgan ripped on good old Ivy? She was apparently pretty late to getting it right, too. What do you think her excuse is?
Wait, is this the same Ivy from Credit Suisse fame? The infamous ARM reset charts? What happened here? Has she gone rogue?
Ivy was separated from Credit Suisse soon after she gave a deposition in the Mike Morgan lawsuit against Lennar.
She was better than any of them. I know her and she, of course, couldn’t say all she thought. It’s just the game. If an analyst on WS is going to get ripped, it should be Stephen Kim.
Real estate: location, location, location. and psychology, psychology, psychology. the rest are just lies, lies lies.
Oh so true!
In the RE world, TRUTH is a ‘fixer-upper’ that only needs some ‘TLC’ for it to really have any ‘curb appeal’.
‘The mortgage crisis is ‘a case study on the way that greed convinced everyone there wasn’t risk,’ says Ivy Zelman, CEO of Zelman & Associates, an independent real-estate research firm.’
Actually, convincing market participants there is no risk is an unintended consequence of managing the economy through bailouts and Greenspan puts on the stock market. The cumulative effect of a long-term pattern of rescuing too-big-to-fail entities from their bad bets is very costly to the real economy from which Wall Street skims its income stream.
That, Professor Bear is the most concise real world definition of ‘moral hazard’ I’ve heard yet. Thanks for that.
I thought I was defining ‘conundrum.’
Notice I said ‘real world’. You contextualized the concept rather well (at least for me and hopefully other readers), I thought, that’s all.
Peter, thanks. I am glad someone found my post informative.
“The cumulative effect of a long-term pattern of rescuing too-big-to-fail entities from their bad bets is very costly to the real economy from which Wall Street skims its income stream.”
Well said, GS.
“It also foreshadows how the domino effect stands to continue.’
That is truly the unanswered question. How many domino’s are we talking about and how far outside of “housing” does it extend?
“During the height of Las Vegas’s real-estate boom two years ago, property investor Rob Rozzen bought 16 homes, hoping that skyrocketing prices would pump up his retirement nest egg.”
Uh, you don’t need 16 freaking houses as a nest egg, this guy just got plain greedy and wanted to be a Donald Trump.
‘You get to a point where your hands are tied,’ he says.” Hands tied and shot, I say.
monthly payment was $45K! What salary can support that?!!??? How is this even possible beside fraud? Come on now, the stupidity of lenders to loan money to this guy is out of this Freakin world.
I am sure that if he was a successful agent in a very hot market that there was at least one month showing 45k income (pre-tax). Perhaps he had a lot of closings fall into one month sewlling his total for a month or two. He simply extrapolated his income from his best month or two - every LUCKY saleman does this. But even annualized (45k X 12months) is only 540,000 and that would the very best year possible in his entire life. And with 16 houses, wanna bet he’s an ego spender, not a saver?
As a result, Mr. Rozzen’s credit score plunged from 730 to the high 400s, he says. The Prada clothes, luxurious vacations, and full-time housekeeper and pool cleaner he once enjoyed are things of the past. Still, he says, walking away from his investment properties was his only option. “You get to a point where your hands are tied,” he says.
The is the point where I get angry. Where do you think he got all the money to pay for his lavish lifestyle? By exploiting the system that was supposedly to provide a fair balanced market for real estate. Instead, he not only uses the system to purchase homes, but to pull out cash, spend it, and leave the system (i.e. you and me) holding the bag. This is what debtor’s prison was intended to negate.
I dont have a problem with people going for broke by thinking big as in buying multiple houses to achieve their dream of riches . . ..
what I DO have a problem with is the WAY they do it … did this realtor lie on the mortgage apps & claim all houses were his primary residence? any straw buyers? other skullduggery in these deals??
to make an honest effort to succeed is the american way. always has been. you fall down, get back up & try again. learn from mistakes. get another chance to get it right without a millstone around yer neck forever.
however, all these scamsters deserve no breaks when their mess unfolds.
they intentionally break the law in these schemes = effective punishment/ no breaks / no sympathy.
anything less just makes a mockery out of our legal system & is a slap in the face to the HONEST citizens who play by the rules.
Just want to send a little shout-out to my man Aqius here. Right on, bro’!! (And thanks for the Walkin’ Lawton comment, got a kick out of it).
right on Palmy - figured you’d get that Lawton reference.
This was the point I was trying to make on the earlier thread. So many speak of the morality or lack thereof in the bubble years, but then turn around and suggest that the FBs just walk away. And they are still whining about losing money and houses when so many, it turns out sucked all the life out of their homes, lived high on the hog and now want to slither away with no penalty.
You won’t hear me say that. I think all of these marthafackers should be thrown in prison. A few nights with Snake and Icepick would be fitting restitution.
Do we have that many prisons? Or are you suggesting that we let the Larry Craigs of the world go free, as well as the honest pot smokers?
“So one by one, over the past 14 months, Mr. Rozzen has stopped making payments on his investment properties, for which he paid between $226,000 and $390,000, and lenders have foreclosed.”
“He says, walking away from his investment properties was his only option. ‘You get to a point where your hands are tied,’ he says.”
I’m with NYCityBoy here. I don’t consider myself a violent person, but it’s grubs like this guy who I want to just tar and feather in the middle of the town square. As someone said above, there was really no need for him to sign on the line for 16 houses for his retirement nest egg. Any way you slice and dice this action is greed, plain and simple.
Walking away from his obligations…I want to slap him. HARD. I’ve been in rough patches myself…wanted to make it all disappear, but I hunkered down and fulfilled my obligations. That’s what I want to believe that most people do. But these clowns…UGH I want to just slap ‘em.
BayQT~
“I want to slap him. HARD”
Talk to Jigsaw/John Kramer first.
“So one by one, over the past 14 months, Mr. Rozzen has stopped making payments on his investment properties…”
This guy has got to be the poster-boy for slow learners / glass-is-99%-fullers. The rate at which properties dropped off his paying list likely correspond to his dropping commission income. Funny that he couldn’t even decide to “give away” one. Imagine the advice he’s been giving to clients during this period.
You said, “and leave the system (i.e. you and me) holding the bag?”
The way I see it, the lending bank is holding the bag.
In 2005 the lenders created a crazy valuation for houses and land, but they also created a crazy level of construction.
I plan to buy land and houses at 1/2 the price they are today. At the least, I expect to buy at prices that are below the construction costs.
The way I see it, the lending bank is holding the bag.
Until our “too-big-too-fail” government gets involved and starts doing things like creating taxpayer-underwritten Super-SIVs, raising GSE loan limits, and passing “Protect the American Dream Act” laws. We just can’t abandon the banksters & Pig men so easily, now, can we?
It aggravates any decent person to think that rats such as this fellow with 16 houses and the lavish lifestyle were able to achieve this with quasi or outright felonious activities and live the high life recklessly. But one has to consider the longer term, which few scumbags, criminals, thieves do and to their great detriment. Check out how this dude is faring on the seas of life a couple of months or years into the future and let me know if he isn’t experiencing more than just a little payback. He’ll get what is coming to him, don’t worry.
Don’t forget, if you never had it, you don’t miss it; but, if you’ve had it and lose it, then it makes your situation all the worse.
–
“Instead, he not only uses the system to purchase homes, but to pull out cash, spend it, and leave the system (i.e. you and me) holding the bag. ”
Seriously, isn’t exploiting the system the American way? Could it be that the system is crooked. I mean the whole financial system. The HB was not an individual or local problem, but one of systemic problem. In a bad system, “shift” happens all the time. People don’t see the shift until the light shines on it.
Jas
But Jas, we are the system in systemic. There are so many kindred spirits on this board.
I shake my head. I sooooooooooo want to believe there are as many good ones as naughty, but alas, I am naive.
Let’s shine the Pistol Star this shift!
Best,
Leigh
From the same article:
Mr. Adkisson, the Newport Beach, Calif., lawyer, says he has received about 30 calls a week in recent months from real-estate investors seeking to shield their assets, just as lenders are beginning to chase after them. “There’s just an absolute flood of people seeking asset protection, and it’s all after the fact.”
I think this is what we are all concerned about - the proliference of these bad loans among “prime” borrowers. My guess is that a lot of “prime” borrowers mistated their income and got Alt-A loans to try to cash in on the real estate bubble. Their own income would not cover the multiple mortgages, so they chose to use a “liar” loan. Now they are scrambling to find a way to protect their other assets from this decision gone bad.
Does anyone have any experience with this among people you know?
How much you wanty to bet much of the assets they want protect came from the houses they want to walk away from. Most of these guys didn’t have a dollar in their pocket before this mess began. So now they want to take the money they borrowed, default on the obligation, and protect it from the people they borrowed it from. Top that with how they’ll get all that money tax free due to the new changes in “Debt Forgiveness” bill. Yeah, that sounds fair to me.
How does this all work txchick, you know…..?
Oh yeah. I saw that done a time or two . . .
Saw one guy “protect” 11M in assets while walking away from personal guarantees on several multiples of that in the last RE bust.
That’s just plain f-ed up.
I’m sick of these as clowns being refered to as investors. They haven’t invested anything, zip, zilch, nada. I have nothing against REAL INVESTORS. And by that I mean people who actually use some of their OWN money. A RE investor to me is someone who put 20% down and the rent covers the mortgage payments.
Or understands that the concept of “risk” implies potential for loss.
Confession here, I seriously considered doing a series of flips in Nevada to come with more money for a downpayment on a home here in San Diego. My sister who is a small time RE investor and has done quite nicely for herself suggested it. I nixed it though because well, for one thing it would have been ALL our cash and two, it was out of state. Hindsight here, I more than likely would have done fairly well but I still wouldn’t have made enough money to buy here. I think though when you are using your own money and not somebody elses you are a lot more likely to consider the risk or potential for loss. I know I did.
“Does anyone have any experience with this among people you know?”
Yes….half the city of San Francisco.
Honest to heavens, NO. Thank you Lord.
Amen.
Leigh
“…this guy just got plain greedy and wanted to be a Donald Trump.”
Speaking of The Donald, he was on CNBC last night saying what a great time it is to buy residential real estate. Oooohh, better hurry while there are still 4 or 5 million homes to choose from!
You first, Donald.
To The Donald’s credit, on Larry King he suggested that it is a great time to make lowball offers, not to buy at the sellers’ perceived value. At least that’s how I heard it; but I guess we all hear what we want to hear.
I was flippin’ through channels last night and I saw Larry King with the big D and I just kept right on flippin’. The only thing coming out of these RE types mouth’s is diarrhea, and I really do not care for people with bad breath.
Hopefully, he put a whole bunch of the ‘cash back’ at closing into his retirement fund. Give the houses back, the bank can’t touch the retirement!
Just heard a very strange ad for Century 21 on the radio - basically said that the C21 Realtor will be able to handle the stress when the seller becomes angry and emotional due to much lower offers than expected and long lists of contingencies on the inspection report. This in Phoenix metro. Maybe the realtors are finally getting real?
Are Realtors now qualified Psychiatrists or Crisis Counselors ? Is this part of their two week intensive training ?
Well, they don’t know $hit about economics. They must know something. It may as well be psychology.
The ones I worked for were walking manifestations of psychopathology.
Some day I will try to describe to this esteemed board what an Alice In Wonderland experience it was, but I’m still in recovery from REIC abuse.
Look forward to it, PhillyGal!
This much I can tell you without heaving or breaking into a rash: I nicknamed the head of our department The Red Queen, (who we were convinced had pix of the company’s president doing a barnyard animal); and my co-worker in the production dept. christened the incompetent unCreative Director “Sasquatch”.
We downloaded a pic of the famous Sasquatch picture and pinned it to our bulletin board. When unCreative walked in the first time and commented on the image, we derived great satisfaction from the fact that she did not realize she was in fact, remarking on a portrait of herself.
“she” was the Sasquatch? who thats usually a male related term. like Chewbaca. I cant even begin to imagine what this woman looked like …. and thank god I wasnt around when she saw the pic because my big mouth & eccentric SOH would of had me laughing so hard right then n there she probably would have taken me back to the HR rubber room for an interrogation!
RE: Is this part of their two week intensive training ?
2 weeks???
That tenure might imply a degree of professionalism.
Around here, it’s a 3 days seminar for future C-21 housing peddlers
Interestingly, when I sold a couple of properties on my own back in the day, I had moments when I wished a realtor had been involved, because I experienced the stress of wanting to give some meatheads who had no idea what they were doing an a$$-pounding they so richly deserved. And then there are the folks who really do want to buy your property, but haven’t a clue what to do next, what paperwork they need, etc. So of course you have to prepare the paperwork for them, with the written caveat that they have it inspected by an attorney, or title company, etc. This usually handled any suspicions they might have, because even if there’s nothing to be suspicious about, the prospective buyer feels that there must be something, but if you insist they have an attorney check everything, they feel better.
Yes, you may think FSBO is the way to go and it can be, but you’d better know what you are doing, because 9 times out of 10 your buyers won’t have a clue. I’ve done it successfully, but it can be a royal pain in the arse, too, trust me. Phone calls in the middle of the night with stupid questions, showing up on the spur of the moment with all the extended family before the place has even closed to proudly display their potential new abode, hyperactive kids running around blowing snotters on the furniture, crazy offers requesting an inflated price that includes cash back to the buyer, rudeness beyond belief, I’ve been through all these things and that was before the bubble. The better realtors, the ones that are worth the money they get paid (yes, there are some), this is their true value, handling a$$hats, emotional and hyper buyers and sellers, IMHO. And also shielding one party from the rudeness and stupidity of the other.
interesting post Palmy
had no idea you had a real estate background as such. always thought you were a retired jimmy buffet roady now shucking oysters part time at the crab shack while selling boiled peanuts roadside.
you florida guys are full of surprises !!
“always thought you were a retired jimmy buffet roady now shucking oysters part time at the crab shack while selling boiled peanuts roadside.”
Nah, yer onto me, Aqius, you know darned well I’m a NE refugee carpetbagger (not the Jeb Bush kind, though) who took on the persona.
Yeah, I have bought and sold a few properties here in Fla over the years, but I am not now, nor have I ever been, a realtor. I’ve studied the course, so as not to get screwed by realtors and also to know what I’m doing legally. I also listened to some lectures by one of the real estate gurus back in the day. I know people laugh at these guys and I must admit, a lot of them are shysters, but I did pick up some tips that made me some money, one of which was to be kind to the sellers and compliment them when viewing their property. Never forgot that one. Many people think, when looking at property, that the way to deal with sellers is to act like a jerk and intimidate and point out defects. This “guru” says otherwise and dang if he isn’t right. We got one place cheap by showing an interest in some of the landscape work the sellers had done (the place wasn’t in very good shape, and most of the potential buyers had beaten the people up about it, so they were pretty on the edge and all it took was a few kind words to make a successful negotiation).
well worth the 5% saved
GO FSBO
mine were before the net- now I can screen like mad, remotely
“GO FSBO”
Yes, but know what you are doing, have the paperwork ready, a title company lined up and an attorney if you need one. And be prepared to deal with an a$$hat or two. If you’re at all thin-skinned, let a spouse or relative take the heat.
Palm,
Believe it or not, I sold 2 properties and a acre of land FSBO. In Florida!
Here’s the kicker, took the licensed real estate course, but did not take the test. (Didn’t have the stomache for it, probably why I didn’t enter medicine either!).
NEVER an investor. First property we design and built with a construction loan and held for 14 years. First one to view an online add, was the first to purchase.
Condo (the new five letter curse word) across the street from a nice college. Of course, I know, I know, for our son. He lived there, and remodeled it with dad, for 2 years (? plus or minus). Sold to the first looker FSBO.
Third was lake land we hoped to build future retirement home upon (shifts happen). A builder sought us out, over a period of 6mo (or more) and sold FSBO.
I wouldn’t advise others to do the same, but if you know the ropes, why not swing like Tarzan and Jane?
Chuckles,
Leigh
I did a FSBO as well. One couple looked at the house, and while I was showing her the kitchen or whatever, the guy took a load off in one of the bathrooms, and didn’t flush. That was really gross, and incredibly rude.
You’re lucky that’s all he did. Did you check the medicine cabinet afterwards? Some of these clowns looks for meds. If I ever do a FSBO again, I’m putting a bottle of super strong laxatives in the medicine cabinet with a phony painkiller label on it.
Betcha can’t eat just one! LOL, seriously, though, the way things are today, I’d probably get sued for doing something like that.
It’s called “assumption of the risk,” although in an era where you get sued by burglars, who knows?
“putting a bottle of super strong laxatives in the medicine cabinet with a phony painkiller label on it. ”
AHAHAHHAHHAAAahhaaaaa funny as HELL !!
Ha ha ha! I gotta laugh at that….because I’ve done it at open houses! In my defense, though, I always flush. But it still drives the realtors nuts….I figure it makes the place feel “lived in,” with the aroma permeating the air long after I’ve left.
I apologize for pulling this forward from the last thread but I just saw it.
The quote below is from Ken Lewis (CEO of BofA)
He added that “some scaling back” is in order. “I’ve had all of the fun I can stand in investment banking at the moment,” he said. “So to get bigger in it is not something I really want to do.”
BofA is building a massive building at 6th Avenue and 42nd Street for guess what? Yep, their investment banking. This building is huge and its main purpose is to hold investment banking personnel. Oops! Please resume the Colorado thread.
Hope Lewis gets what’s coming to him. He’s an asshat with an enormous ego. When IB was going well, he was all about it, but now that the risk has become apparent, he wants nothing to do with it. He’s no different than ma and pa subprime borrowers…
actually everyone KNOWS prices are going to fall
As a matter of fact, THEY’VE ALREADY BEGUN TO!.
“There is a real incentive for both lenders and borrowers alike to do a workout and avoid foreclosure. Lenders are not good at being homeowners,” says Fred Witt, national director, real-estate tax services, at Deloitte Tax LLP, in Phoenix.
Yes, this is exactly what I was told by a Realtor at Christmas of last year when I warned him there would be a deluge of foreclosures. No such thing would happen and the banks would be leaping to do work outs. Now he is selling nothing he has listed by owners and is thinking of becoming a “Foreclosure Specialist” whatever the hell that means.
I keep hearing about that “incentive,” but so far the “evidence” I see is fairly anecdotal. There are still way more stories of lenders stonewalling and going to foreclosure than there are of any flexibility on their part, at least where I live.
A friend of mine called for advice last night about his brother who’s losing a house. Countrywide just gives both brother and friend the runaround. Friend would like to buy the house and let his brother rent it. Friend has given CFC a VERY generous offer IMO based on condition of the property. CFC told him to just give $6,000 to his brother to catch up the payments. I don’t see much incentive there.
Look at it from Countrywide’s perspective. This sounds like a big scam to them. I don’t give them much credit but they know a scam when they see it. They’ve perpetrated enough to have that knowledge. This would have sirens going off to me.
Exactly, NYCityBoy. Countrywide oughta know.
Don’t get me wrong, I do see your point. In fact told Friend that unless at a minimum realtor was involved he would just get ignored. Also told Friend his brother has already lost the house, he just doesn’t know it yet. Friend got real quiet on that one. Told him I have an investor friend that can throw CFC a lowball offer, but other than that, brother is screwed.
Foreclosure specialist. Boy, he might even have to work for his money. Some of these places are downright disgusting. Wait till he gets called out in the middle of the night because some gang has invaded the property. He can exterminate roaches, dispose of dead rats, get rid of the garbage and maggots, drag out dead carcuses of animals left behind, plus board up holes where windows used to be. The list goes on and on. This is going to be the only avenue some realtors will be able to earn money and believe me they better not wear their fancy clothes or shoes. Some of them have no clue how bad foreclosures can get.
He will have plenty of work.
Holy Foreclosure Batman!!!
More than one million homes in foreclosure? To give that some perspective, assume the average home is 40′ wide. If we squished up 1,000,000 40′ homes side-by-side like a continuous line of townhouses, we would have a townhouse community that stretched from NY, NY to LA…back to NY…back to LA…and then back almost to Vegas.
40,000,000 ft = 7575.757 mi.
OR 7575 mi. and 1333.333 yrd
And it’s only going to get worse!
RE: “Foreclosure Specialist”
Cleans up all the dog/cat shit in the basement and bags up all the rotten food let in the frig.
Respirator mask required.
Personally-I’ve always felt that should be the job of the dumb-azz who did the loan.
A friend of mine worked for countrywide during last bubble in OC. He’d walk through a foreclosed property, then call a “trash-out” guy (usually an illegal with a truck) to do the dirty work. Then call guys to paint, carpet. There were some really trashy places, including in the “good” OC zip codes of Anaheim Hills, Costa Mesa, Laguna, Seal Beach, etc.
I saw this letter in the OC Register and wanted to share what one particular OC Realtor thinks of Gary Watts.
—————————————————————————-
We’re in the eye of the subprime storm
It is disingenuous of Mission Viejo real estate economist Gary Watts to say he didn’t foresee the subprime mortgage meltdown ["More loan money ahead, Watts says," Marketplace, Oct. 16.]It was brought to his attention last year at the OCAR Broker’s Forum.
The use of subprime mortgage loans began to take hold in 2004 and increased in 2005 as fixed rates started to increase. Now, two years later as the teaser rates adjust up dramatically, we are in the eye of the storm. The backside of the storm will hit in 2008 when the mass of subprimes that were sold in 2006 begin to adjust. Those 2006 loans were made with even more reduced verification of the three requirements for a loan: credit, assets and income. Thrown in was the overvaluation of homes. That was and still is a guaranteed recipe for disaster that Watts ignores as he panders to the Pollyanna Realtors of Orange County.
(Name Withheld)
Realtor
And here’s an interesting tidbit heard on the street today. I know some folks in the stuff business who have their property under contract, they were going to close in 90 days, until their buyer got a frantic call from the mortgage broker that they have to close by November 1, because interest rates are going up!! LMAO, even if the FED cuts, it makes NO difference in the mortgage rate and people just don’t seem to get it.
‘People are afraid to purchase’ a home right now, said Jordan Bangerter … first VP of the Salt Lake Home Builders Association. ‘Everybody thinks prices are going to fall.’”
Must still be in the ‘denial’ phase, looking for a reason. How about this - that minus the sub-prime, investor, spec, idiot crowd the only thing left are long-term saver types, first-time buyers and move-ups.
The savers were never a factor as their hard conservative money bias has been screaming ‘run’ for years. First-timers are priced out, end-of-story. Move-ups are caught with the choice of selling their current home at less than mortgage value, or giving up on their fantasy of untold housing riches - either way they won’t or can’t move.
This ain’t about waiting, dummy. The waiting room is just empty.
I think that sums it up quite nicely.
The waiting room is just empty.
Yep. Sales will only continue to slow.
As to the emotional state, I believe its fear. Fear is denial crying oneself to sleep. Otherwise hard to distinguish.
Got popcorn?
Neil
A lesson on the price one pays for giving good (and obvious) advice. One of the employees at my local Costco, a friendly guy in his early 60’s, told me about a year ago that he was buying a house in Camarillo, ca. as a rental. He owns his own sfh. I told him he might want to think about it for a while because prices were waaaaay out of whack when compared to incomes and it looked as if prices had topped out. He said he had a really good realtor in Camarillo who had found him a property which was under-valued and would certainly hold it’s price. The realtor told him the price might not go up much for a year or so but it wouldn’t fall because of companies like Amgen and CountryWide which have their HQ’s nearby.
A short while later, he told me he had also bought a Las Vegas sfh as a rental. It gets worse. Later, he told me he had bought yet another property on the edge of a golf course in Palm Desert, ca. for rental income. It was obvious my advice wasn’t sticking so all I said was, “Well, I hope things turn out okay.” He replied, “These properties can only go up. They might level off for a while but then they start going up again.”
Jump to now. The guy has stopped talking to me. As property started to tank, he started to give me a weak (worried) smile. That has since changed to zero greeting and he looks the other way when I see him. Sad really but a good lesson. Never give advice.
Happens even if you didn’t give advice - if you just tried to mention the possibility of a bubble in the last few years, they now avoid you like the plague. It’s as if you made it turn out the way you predicted.
Amazing how common a reaction like “shoot the messenger” is. As though ordinary people can somehow sway massive international credit markets with bearish thoughts.
Good thing Costco has all those sample tables. He’ll need a low-cost dining option.
Omigosh you guys are funny on here. This blog is the highlight of my day.
RE: Good thing Costco has all those sample tables. He’ll need a low-cost dining option.
ROTFLMAO!
Tears in my eyes!
I guess it never dawned on this Einstein of retail that there may be a bubble if a Costco clerk can buy three homes.
“The problem is that the Murdochs signed in January a contract to construct a new home, which is scheduled to be finished in three weeks. With no buyer for their old home in sight, the couple is facing the specter of two mortgage payments. The couple is considering further price cuts on the home they are trying to sell. Even better, the couple said, would be if the builder would let them out of the contract of their new home.”
Even better would be if people like you were lobotomized & neutered.
And another greedy ” Real Estate Professional” gets HIT by reverse LEVERAGE and goes down to HELL in FLAMES..Oh My !
Everytime I do a little background check on some “Motivated Seller”
that turns out to be a RE agent with a Property Tax Lien on THEIR Primary Residence, a little Angel in Heaven rings a tiny Bell.
DING DONG …another WITCH is DEAD
LOL! i just love to hear stories about greedy agents getting sacked.
“Real Estate Professionals” are like roaches in the south. The only way to kill them is deny them food for about a year or tent the house.
The Wall Street Journal on Nevada. “During the height of Las Vegas’s real-estate boom two years ago, property investor Rob Rozzen bought 16 homes, hoping that skyrocketing prices would pump up his retirement nest egg.”
“Now, Mr. Rozzen says he is considering filing for bankruptcy protection. As the housing market slowed, the 40-year-old was unable to sell the homes, and his full-time job as a real-estate agent was no longer able to support mortgage payments totaling $45,000 a month.”
i knew it, i have been trying to get this across to so many people that are starting to sway on a bail-out plan for those “poor homeless familys” that lost their home. i knew that the majority of repos have to be investor related. if our government does act stupid, i hope they do not include these a$$holes!
An even worser story:
My girlfriend inherited approx. $2 million dollars. She decided to go into the Fixer Upper business. She would buy several homes at a time. Doing “light” cosmetic work, not too much but just enough to make the place look better.
She took a lot of classes, they cost around $80,000. Next, she incorporated. The attorney charged her $14,000 to “do it right” after all you don’t want to skimp do you? They told her she would make millions. This was about 2 years ago she got started. She ended up buying 2 houses.
Cost: $700,000 “fixer” in questionable shape, needed FAR more than just paint & yard work. I’d say the mess cost her around $60,000 to fix. #2: $500,000. This was a fairly nice house. She did do the cosmetic work, and it looks great now. Update: It’s been sitting on the market for around 1 1/2 years. No takers. No visitors. She has decided to let a friend “rent” it, for $1,000 per month. But she has to pitch in $2,000 to make the mortgage payment.
She told me her monthly mortgage payments are around $8,000 for the 2 houses, not including property tax, water, electricity, insurance, the list goes on and on.
Bottom line: she is slowly going broke. All that money she inherited has gone into the pockets of the “instructors” the “classes” the “attorneys”. They LOVED her.
Even last week, she said, “NO the market is just going through a temporary bump in the road. They are temporarily down, but in 1 month they will start going up, and even higher this time.
I just looked at her, and said nothing.
She took a lot of classes, they cost around $80,000.
Really? Did she go to school here?
they charge about 16k/week.
And all she really needed was this blog (and a few other like-minded sites) and this.
Most women have very poor judgement when it comes to investing and money management.
Despite my opposition, my girl friend bought five parcels of land in 2005 in bakershfield (CA) area. Now, she is paying about $4000/month on asset that has and will be depreciating. She beleives in 10 years she will make a fortune. I tried to bring it to her attention that for the next 10 years she will be paying too much in interest and in final analysis she is not going to make money.
When it comes to money and money managment, I just stay quiet and do not say anything.
Amazing. Is loss-aversion so powerful a force that it can always overcome facts, reason, and even the instinct of self-preservation? $4,000/mo. X 12 X 10 = $480,000. I sure hope those are BIG parcels. Either that, or I recommend she starts growing something… uh, ‘highly lucrative’, on them.
Oh, and whatever happens, don’t open any joint accounts with your GF.
They are 1 or 2 acre parcels and they are not in good areas.
At least she listened to one of my advices. I asked her to open stock account at TDAmeritrade, and let me manage it for her. She started with $20K She have more quadruple her money so far, I shorted the hell out of HBs.
Where are they located?
I’d amend your statement to say that most “people” have poor judgment when it comes to investing.
There’s more than enough bright ladies on this board. And more than enough dumb dudes
Steve,
You are my hero. Are you single?
Most men are chauvanistic pigs… how’s that for a sterotype.
This chick has better credit than 97% of the population according to FICO score. Not bad if I do say so myself.
Schnooks,
You are a goddess
Wow. You must be a magnet for the less than smart women. I’m not going to tell you how much I’ve made or saved using my “woman’s intuition.” You might ask yourself why you attract “most women” with poor judgement.
Magic Kat,
I worship the ground you walk on.
Wow, that is one sad story.
My calculations.
1. She inherited $2 Million.
2. She wasted time and money on worthless classes.
3. She will lose $400 Thousand on those 2 houses.
4. She still has $1.5 Million of the original $2.0 Million.
She is not the sharpest tool in the shed, but at least not all of the money is gone. There are and will be more stories of people losing every dollar they own.
I don’t have any tears for this girl, I don’t think she is worried.
Why is it that people who hit the jackpot so to speak have a compelling need to try and make it even bigger and lose it all in the process ? All she had to do is bank the $2 Mil and live off the interest.
Exactly my thought. Why did she have to go into business? She didn’t need to work for the rest of her life.
You ain’t kiddin’, Mo. 5% of 2mil is….100K a year. Assuming you lose half to fed and state, you still have 50K, which means amost 4200/month to live on. Sheesh, rent something cheap in a less-bubbly area, pay your life, health, renters, and auto insurance, All of that can be had for 2500. Throw in food, gas, and utilities and she should still be able to bank 500/month.
This isn’t rocket science or neurosurgery. Instead of seeing this money as an endowment and use it to live off as much as possible, people want to double down or leverage 10-1 and then lose it all.
So much for the Lottery Winner’s Curse.
14K in fees just to incorporate? Something isn’t quite right there. Even NYC attys couldn’t get away with charging that much just to form a single shareholder inky.
Were those fees coupled with anything else, such as work on the estate from which she received her money?
No, I think that was just to incorporate. But ~ I do recall she told me that they set up 2 “shell” corporations, incorporated in Nevada. This was designed to “shelter” her millions as they would start coming in.
One of these phony corporations even has an “employee”, just to make it legitimate. I think it’s someone who handles the mail (what mail?) coming in. She has to pay him $500 dollars per month, just to keep things honest.
So there was more work involved.
I have an advanced degree. I’d look for jobs opening the mail for a dozen or so shell companies at that fee… except for the accelerating rate of paper cuts I forsee in the near future.
Eight Years Too Late !!!!!
The last couple of paragraphs I find interesting……..
Perhaps Greenspan’s most intriguing remark was made to the Wall Street Journal’s Greg Ip. He said,
“Now it turns out politics is less important, domestically, than it was, because globalization is taking over an ever-increasing part of the decision-making process with the exception of national security.”
In other words, it does not matter what the pygmies may think of me or whether you have your elections, whether you pick Hillary or Obama or some lefty fruitcake; you don’t get to decide the big stuff. The major decisions are made away from you by the big guys playing the big game sometimes in New York, sometimes in London, sometimes in Tokyo or Dubai, but always where you cannot see it or know what’s done until it is done, and then it doesn’t matter what you do because you cannot do or undo anything.
Yeah, well, we don’t have to agree with him. He’s just an old shyster who was lucky enough to get a little power in his life. Trashing the US economic system is just his way of getting even with some childhood bully who made fun of him.
Besides, I think he might be having a touch of dementia or something like that.
Why is this statement even controversial?
The US, due to the economic growth of other nations and our dependence on foriegn oil, doesn’t have the ability to control matters to the extent it did when other economies were smaller and oil wasn’t as big a factor.
The first inkling that this was happening was in the mid 70s with the OPEC crisis. Next was Japan’s ascendency. Now its the ascendency of China, India, other Asian producers and the reinvigoration of much of Europe. Add to that, the reversion to the OPEC problem again and, wow! We don’t control as much of the world, economically, as we once did!
What a surprise! I would think most “progressive” people wouldn’t mind this development as it means more “equality” around the world….isn’t that a good thing? Exactly how is the rest of the world going to grow, get out of poverty, WITHOUT the US losing some of it’s economic clout?
I think its good other nations are doing better. The fact that we have problems with parts of this transition isn’t fun or happy but the alternative seems pretty clear; other nations would have to stay horrifically inferior to us.
The (I believe) happy fact is that a lot of high powered technology, that can rapidly better peoples lives, is relatively cheap around the world. Cheap is good for poor people, no?
The alternative to us losing SOME of our influence is for other nations to stay stagnant. Well, that might make us somewhat better off but at what cost to the rest of humanity?
I read this stuff about “globalization” and think; Where did you think a freer world was going to head? Back to an agrarian society of narrow “self sufficiency”? I thought Adam Smith put that notion to bed ages ago.
Ooop’s……here’s the link.
http://www.valleyadvocate.com/article.cfm?aid=3679
“Builders say the biggest problem they face is fear among prospective buyers. ‘People are afraid to purchase’ a home right now, said Jordan Bangerter, a managing member of Bangerter Homes in South Jordan who also is the first VP of the Salt Lake Home Builders Association. ‘Everybody thinks prices are going to fall.’”
do they think people are just supposed to run in droves to buy their overpriced crap! the new way of thinking about a house is the same way buying a new car works, it loses value the minute the contract is signed. only with a higher price tag.
Oh please (hope not) i can see it now, honey we just closed on our 1m dollar dream home where are the keys unlock the front door, now the house is worth the price of a Chrysler product you just drove off the lot???
No one here is “afraid” to purchase a correctly priced
homehouse right now. And we don’t “think” house prices are going to fall –they already are falling. And the fundamentals tell us reality-based folks that they will continue to fall for years to come.Thank you for not using the Madison Avenue created synonym for a house.
God Bless…
The builders’ biggest problem is that there are no buyers forthcoming any longer to buy their overpriced, Supersized houses. Lower the prices, and buyers will be found…
The Denver area is so bad that when somebody see’s a sold sign they think it is a prank, oh well one thing is up in Denver the Rockies?
Oh, there’s no credit crunch, we must be dreaming. Hurry, hurry, step right up!!!!!!!
http://tampa.craigslist.org/rfs/452722333.html
Flippers still in a dream world? Neighbor has more trades at his house, it is like a fire sale i ask him whats up he says, just put in travertine floors and a some cantara stone molding my wife and i think this will spur buyers, I hope he can get a tradesmen to turn the house inside out so “the Buyers” can see all the upgrades, to my knowledge i haven’t seen more then 3 people look at the house in 10 months?
Has there been enough of a decline in property values yet to affect municipal revenues? My company bids on projects all over the country and it seems like I’ve worked on RFPs for all the places talked about here. Some of their money comes from federal grants but I got to think most of it’s from local taxes.
Does seem awful slow these days.
In answer to Cassandra, sales tax, parking, and TOT (bed tax) revenues have declined in Calif. Prop tax revenues have not declined yet because the county assessors haven’t been hit yet with massive appeals. But those are probably right around the corner.
At this Calif city, upper level management is telling dep’t heads that the next coupla years are not going to be like the past 10. And to start cutting costs in their departments.
fair and balanced? i hope you all read this article…google it. WASHINGTON, Oct. 17 — The head of the Federal Communications Commission has circulated an ambitious plan to relax the decades-old media ownership rules, including repealing a rule that forbids a company to own both a newspaper and a television or radio station in the same city.
Not that big of a deal, newspapers are dying and radio has quite a bit of competition from iPods full of podcasts and “Satellite” radio service,
Comment by wawawa
2007-10-18 14:09:55
‘Most women have very poor judgement when it comes to investing and money management.’
Oh, yeah?
I’ll not challenge your opinion. I think instead I’ll just sit here comfortably in my darling house, and in a while I think I will go look at my bank statements, and then I will smile cheerfully, and then get back to work, in my silly, girlish way.
Here’s a thought, wawawa—maybe you ought to hang out with smarter women.
I have seen smart women, but unfortunatly they are rare commodities. As a matter of fact I love intelligent woman so I can learn somthing from them.
My thoughts exactly… In fact, I can name just as many male as female acquaintances who don’t seem to have a clue with respect to financial management, and they’re distributed evenly across age brackets.
Some of the smartest Women I’ve met Education (PhD) and Career wise (Published Scientist types) have been just terrible with money. I rarely meet women who bring any assets into a relationship. I think you may have the rare gift of common sense and good investing acumen.
Coming from the sheltered engineering corner of the campus, my class on the other side of campus in the business buildings was a shock. 50-60% female compared to 6% in my engineering classes.
I’m surprised that all the graduates of that Mythology class aren’t raking in the dough now, though.
You are very correct OlympiaG:
More than 50% of all financial interests in the US are directly held and controlled by women. Primarily because women live longer than men, but also because everybody knows women are conniving and will do anything to gain wealth. Just kidding about conniving and doing anything. “There are people who have money and people who are rich.” Coco Chanel
“Women are like fine
wine. They all start out fresh, fruity and intoxicating
to the mind and then turn full-bodied with age until
they go all sour and vinegary and give you a headache.”
Sing it, sister!
I agree. Stupidity is not sex-linked.
“Utah’s real estate market, like many others, is being hurt by tighter lending standards put in place after the nation’s subprime lending debacle. Perhaps an even bigger issue is that several years’ worth of home-price increases, from Ogden to Provo, have put homeownership out of the reach of Utah families whose incomes haven’t kept pace.”
I suppose Utah’s market is the only local real estate market where these problems have come up?
“The news just keeps getting worse for home builders along the Wasatch Front, where demand for new homes in September plummeted to the lowest level since 1990.”
I’m both surprised and thrilled by the rapid decline in the bubble holdouts: Pacific Northwest and Utah. These places might have been the last to collapse, but they are certainly making up for lost time.
GO UTAH!!!
No doubt. Drop drop drop.
“Utah’s real estate market, like many others, is being hurt by tighter lending standards put in place after the nation’s subprime lending debacle. Perhaps an even bigger issue is that several years’ worth of home-price increases, from Ogden to Provo, have put homeownership out of the reach of Utah families whose incomes haven’t kept pace.”
The problem may be that housing here is way too expensive and wages are very low ,of course that’s the problem.
GO UTAH RAH RAH!!
Well said Olympiagal. I’ve seen a lot of boneheaded financial decisions made by men. Also, as a real estate attorney for the last 17 years I’ve dealt with a lot of brokers - the only two with brains? you guessed it - women (and one of them is even a blonde!).
Smart gals are sexier wawawa - at least that’s what my husband says.
My brother is exhibit A for this. Bright guy overall (physician). Financial stupidity no. 1: Marry the blond. Financial stupidity no. 2: Put everything in her name because you are worried about getting sued for malpractice (chance of getting sued for malpractice 1, 2%? Chance of getting a divorce? 50%). Financial stupidity no. 3: Buy a home for $1M in Florida in her name (saving the poster child of a FB) and throw another $1M at it “improving” it. Chance of recovering it? 0%
“A surge in foreclosures is taking a real toll on families, entire neighborhoods and local economies here in Lawrence and across the Commonwealth,” said Patrick. “Our prevention plan is comprehensive and gives distressed homeowners and communities the immediate and long-term relief they need right now.”
So what is the prevention plan? Do they short sell homes to themselves and then the lender finances them at a low fixed rate?
House prices in CA have to drop and drop big, there’s no other way to go. The market is not moving and buyers are smart enough to wait it out. The boom made most house outrageous overpriced and only a BIG drop will motivate the market to move….but I think the buyer need not rush … housing market is going to be stalled for the next 12-24 months….till spring 2009 at least.