A New Bottom For The Cheerleaders In California
The Voice of San Diego reports from California. “George Chamberlin remains one of San Diego’s most high-profile bulls. Faced with dropping home prices and skyrocketing foreclosures, Chamberlin and others have barely changed their tune, if they have at all. If any of his words were used to convince people to buy with a loan that proved troublesome, Chamberlin disavows responsibility. ‘I have no idea what’s going to happen with prices,’ he said. ‘Sales are obviously much slower than I thought they would be…I do know that long-term, housing prices can only go up.’”
“But critics of that perspective say the frenzy of a few years ago drowned out common sense. ‘These cheerleaders have been disastrous on the way down. The sellers are the ones who are listening to them, thinking, No. 1, ‘It’s not that bad,’ and No. 2, ‘It’ll get better later.’ Those are the two worst things for sellers to think,’ said local Realtor Jim Klinge of the optimistic analysts.”
“Now the buyers waiting on the sidelines have won, he said. If sellers had believed for the last two years that the market was entering a decline, they may have lowered their prices earlier, and the region may have had a hope of a ’soft landing.’”
“Instead? A ‘crash landing,’ Klinge said. ‘Sellers are not doing their homework, or the homework they are doing is listening to the cheerleaders. Literally, nine out of 10 sellers are not selling their homes. That’s not good.’”
“‘Every one of these bubbles always has a group of cheerleaders sitting on the side saying ‘Rah rah, aren’t we great? Rah rah, don’t be late,’ said economist Chris Thornberg. ‘That’s part of the bubble…To some extent, people hear what they want to hear. There have been those of us out here saying, ‘It’s a bubble, it’s not going to last.’”
“The economist often credited with the soft-landing term, Leslie Appleton-Young at the California Association of Realtors, said it’s unfair to judge her statements in hindsight. ‘There’s no doubt that we knew the market was going to change,’ she said. ‘It just happened with a much greater severity (than we predicted).’”
Inside Bay Area. “The bar has been set for new home prices here, real estate experts suggest. When Anderson Homes decided to put 34 brand-new homes in the Paseo West subdivision up for auction to clear out inventory, some were worried the results would negatively affect Manteca’s already inert housing market.”
“Now, real estate agents and developers are saying the auction’s strong turnout, coupled with the successful sale of all 34 homes, is encouraging. ‘It sets the market pricing,’ said Cindy Foster of Re/Max Executive, adding that the auction made buyers realize $380,000 to $390,000 is the range where housing should be.”
“‘A lot of people have been sitting on the fence, but this shows that prices aren’t going to continue dropping,’ she said.”
“Meanwhile there are still 612 resale properties on the market in Manteca — a number that had eclipsed 700 a few weeks ago, Foster said. ‘The number of homes we are seeing available is going down, which is good. It really is a great time to buy,’ she said.”
“Manteca is also dealing with housing problems with regards to vacant properties, as about 300 homes are currently in the final step of foreclosure process.”
“‘I think each of the segments of homes appeals to a different part of the market, whether a foreclosure, resale or new home,’ said Tom Wilson of Wilson Group Realtors. ‘Having a new bottom for new home prices will affect housing in Manteca as a whole.’”
“During the Manteca City Council meeting on Oct. 15, elected officials voted 3-2 in favor of a time extension for home builders to build homes once they’ve obtained building permits from three to five years.”
“There are somewhere between 1,000 and 1,200 empty homes or a three-year cumulative inventory of foreclosures, resale homes and brand-new homes, said Mike Hakeem, an attorney who addressed the council on behalf of the developers.”
“‘If you’re not selling what’s at the end of the production line and you keep producing, then there’s going to be a back-up,’ said said George Gibson of Stockton-based FCB Homes.”
The Record Searchlight. “To borrow from a certain car dealer’s radio commercial — how low will they go? Housing starts in Redding in September sunk to new depths, eight. It’s the smallest one-month total since August, when nine permits were pulled. And August was the lowest month in Redding Permit Supervisor Wayne Gungl’s 27 years with the city.”
“2007 is on pace to be the first year that housing starts in Redding drop below 200 since 1981, when 174 were issued. Nearly 1,900 single-family home permits alone (were) pulled from 2003 to 2006. ‘The market is doing the right thing. If you haven’t got people willing to buy and have a bunch of extra houses out there, you don’t want to be building more,’ Gungl said.”
The San Bernardino Sun. “Christian Barron and husband Rodolfo were shocked when they saw the numbers. The $1,800 they owed on their first mortgage payment in September 2004 was 50 percent greater than the $1,200 their real-estate broker had promised them.”
“But even those numbers pale in comparison to the $3,000-a-month bill the couple now is paying. ‘We’re trying to make ends meet, but it’s really hard,’ Christian said.”
“Christian’s husband Rodolfo works full-time in the construction industry to pay the bills. Home sales dropped in September more than 53 percent compared to a year ago in San Bernardino and Riverside counties, according to DataQuick. Needless to say, the couple worry about Rodolfo’s job security.”
“Christian is a stay-at-home wife, but figuring out how to make ends meet is a full-time job in itself, she said. ‘We’re making it right now, but it’s really hard, because we have to borrow money from here and there,’ Barron said.”
“Helen Moore, executive director of Neighborhood Housing Services, said the recent movement to bail out credit-crunched homeowners is focused on giving them resources.”
“‘We make them smart homeowners, versus people getting stuck in the subprime market and getting into debt,’ Moore said. ‘A lot of them are telling me that they didn’t realize they had an adjustable-rate mortgage.’”
The Press Telegram. “With the ranks of the state’s licensed Realtors swelled to record numbers, most industry watchers believe the number of people exiting the industry will start to swell as home sales continue to drop.”
“‘It certainly remains to be seen how many people are going to be able to stick around,’ said Colleen Badagliacco, a Realtor in Santa Clara and president of the California Association of Realtors. ‘In Northern California we haven’t seen a lot of that at this point…but I do think there’s certainly some consolidation within the firms.’”
“When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. The alternative, if a home owner can’t continue making the home payments, is foreclosure.”
“Badagliacco has seen a strong short sale market in her area, and in particular at her firm. ‘Twenty percent of our listings are coming from that market,’ she said, adding, ‘We know those properties are going to sale.’”
The Daily Pilot. “Valerie Torelli is selling about as many homes right now as she did a year ago. It just takes a little longer to close the deal.”
“Torelli, who owns Torelli Realty in Costa Mesa, is one of many Realtors in Orange County facing a rough time in the housing market. Across the county, home sales in September were down 43.7% from the same month a year ago, and Costa Mesa saw an almost identical drop.”
“‘I just have to work longer hours to get the same thing accomplished,’ she said. ‘You have to go through a lot more showings. You can’t just show one or two houses. You have to show a dozen to two dozen at a time.’”
“Costa Mesa and Newport Beach also saw September sales fall from the numbers in July and August…In Costa Mesa, at least, that translates to more ‘for sale’ signs down the block and fewer people visiting the houses.”
“Torelli, however, said that may not entirely be a bad thing. Part of the reason for the high number of foreclosures, she said, was the fact that many people had purchased homes they couldn’t pay off, and her customers this year were quicker to offer a down payment.”
“‘A year ago, you had more of the people who never should have been looking,’ she said. ‘They were buying above their means, and they were allowed to because of the mortgages we had available. Now, people are putting 10% and 20% down.’”
“Carrie Allen, president of the Newport Beach Assn. of Realtors, said houses in affluent neighborhoods were selling as well as ever, and much of the fear regarding home-buying was due to negative media reports.”
“‘The buyers out there, because they keep reading all these negative headlines and reports, are really skeptical,’ she said. ‘They’re wanting to buy but the more they read, they think, ‘We’ll, wait until next month.’”
‘ If you read the newspapers, it looks like all hell is about to break loose when so many mortgages reset at higher interest rates this month. A recent news account cited the couple in Sacramento whose mortgage on a $250,000 house was about to rise from $1,400 a month to about $1,900 when it resets. They were whining about their increased interest and were getting nowhere in their efforts to renegotiate.’
‘Hello? Are they forgetting the concept of marginal tax brackets? Have they forgotten how to increase deductions for W-4 withholding purposes so they don’t continue making an interest-free loan to the government?’
‘ People forget that when something tax deductible increases, like mortgage interest (or 401(k) contributions, for that matter) then we have reduced the far reaches of our taxable income by whatever amount that increase might be. When their mortgage interest increased by $6,000 per year, this couple probably reduced their taxable income from, say $70,000 down to $64,000.’
‘They need the money to meet their new mortgage payment. The easiest solution for most people is to increase their number of dependents used to calculate the correct amount of tax withholding per pay period…Now, they bump their exemptions by two more dependents for withholding purposes. This will reduce their tax withholding by approximately $2,000 per year. What started out as an out-pocket-interest cost of $500 per month has now reduced take-home pay by only $330. Decreasing the withholding tax added $270 per month to take-home pay, and presto, there’s the extra $500 per month they need.’
And meanwhile you are losing only $1500/mo in housing price collapse every month.
I would recommend bolting. Cut and run before it gets worse.
Shuffling the deck chairs on the titanic…
I like the analogy, however this is more like offering free booze down on the lido deck!
Come on folks, get out of the cold, let’s have some fun! Get out of the way of the nice lady in furs please. Crazy rich people getting in those tiny boats…
Got popcorn?
Neil
How many 70k income households do they think bought a 250k house? If a 70k houshold has a 250k house, yes, they can almost certainly adjust to their ARM resetting. I suspect we’re seeing 35-45K households with 250-300k houses.
‘ People forget that when something tax deductible increases, like mortgage interest (or 401(k) contributions, for that matter) then we have reduced the far reaches of our taxable income by whatever amount that increase might be’
And the lower your effective tax bracket the less good those deductions do you. Eventually, you may even run into the AMT, especially in the bubble areas. Good luck once the AMT kicks in. Getting tax advise from morons is expensive.
Hilarious! Yes, claim two additional non-existent kids after buying a house!.
This is being peddled to people who don’t understand the docs they sign when they make the biggest financial blunder (i.e., buying a house hoping to refinance in a couple of years) of their lives. More misery will await them when the tax filing time comes.
Well, that’s the ticket!!! All these morons who have been losing their homes could have simply adjusted their tax withholding and been living them today.
Or maybe let’s do the math a different way…$6K of increased deductions for a couple in that tax bracket (25%), reduces their tax libabilty by $1500.
Decreasing the net withholding by $270 per month (I have to admit I’m not even following the $330 part…) results in the government getting $3240 less per year. So if you followed the advise given - you would the government $1740 at tax time, and especially since you messed with your deductions, it would also probably result in penatlies and interest. Lovely. I wish I could write online articles and give bad tax advice.
And let’s not even discuss the fact that a couple with that much income should be able to swing $500 a month extra…
Given the typos above, it’s a good thing I don’t write online articles.
why don’t you write to the author of the article? I mean, we have to start calling these people on their stupid comments/ideas/advice that are polluting the stupid, credulous masses…please write to the author or call somebody at the newspaper, do something…
See, here’s what has me wondering. I think the guy is under the impression that you can set up your withholding using whatever number of dependents you want — so long as you state the actual number of your dependents on your actual tax return. Can this actually be done?
‘Cause if it is, I think I’m going to magically have two theoretical kids this year, stick the non-withheld funds in a money market account, and hopefully have my tax refund next year amount to about a buck. Why should the government get up to twelve months’ free financing from me?
You are allowed to adjust your deductions to any amount you want as long as you do not under withhold by more than 10% at the end of the year. People often do this. The problem with the above scenario is the people probably are not in a high tax bracket now.
You can certainly claim any number of exemptions you want on the withholding form. There is no requirement that this match the actual number of dependents (with SS#) claimed on your tax return. There is no penalty or interest if you under-withhold by no more than $1000. Even if you do under-withhold, the penalty and interest are not that significant if you only miss by a little bit. Americans working abroad (expatriates) almost always claim 15-20 exemptions on their W4 so that they don’t over-withhold in the face of the foreign earned income exclusion.
Thomas, I think that’s OK. I think they can’t penalize you if the total of your withholding and your estimated-tax payments exceeds the tax you owe for the full year.
However, I am smiling at “Vermonter” saying he/she can’t follow the $330 part. Hey, there is nothing there to follow! The people are advised to reduce their withholding by $270/mo, which probably works, but for the rest of the money the answer is … “Presto!” (Wave a magic wand and the money appears.)
You can put up to 10 on your W-4 for situations such as this - people who have high itemized deductions. However, your imaginary children need social security numbers that will be matched against the Administration’s info and if you owe a big chunk of money at tax time you will probably run into underpayment penalties. The IRS is actually on to things like this.
Yes. It is only prudent to set up your withholding so as not to give Uncle Sam an interest free loan. This is completely legal and reasonable. Back when I had a decent salary and lots of deductions (wife at home, 2 kids, mortgage, property taxes, state taxes etc), I would use one of the available online calculators to figure out how many exemptions to claim so as to owe the Feds a few bucks come April 15. Don’t over do it–you can trigger penalties if under-withheld by a large margin. However, roughly equaling out your income tax liability/withholding is perfectly legit.
Good advice.
Humble me,
Leigh
It’s amazing how complicated they tried to make a simple calculation (provided AMT isn’t involved). Multiply the additional amount by marginal tax rate (including state if applicable and mortgage is deductible) and you get the savings. (OK, it gets a little complicated if you’re close enough to the line that the additional deduction puts you in a lower bracket, but even then you get a good upper bound on savings) Withholding is irrelevant. It just determines whether you pay now or later - and possibly incur a penalty for underwithholding. You don’t get a savings in your income tax and an additional savings in your “withholding tax”.
This seems to be a good way to graduate from delusional financial planning into outright tax fraud.
‘outright tax fraud’
- I think that I read a few years ago that the ‘Montana Militia’ have their own tax code.
Isn’t the difference just about one more hit on the bong?
Neil!!!
Well I never!! (I almost lost a perfectly good drink!)
You! Stop!
Smiles,
Leigh
P.S. Thank you for the tear jerking laughter : )
I heard Bongs are tax deductable.
Yes, but on the bright side it is much easier to convince the bankruptcy judge to discharge all debts if you are only earning 50 cents an hour reconditioning furniture in Terminal Island Federal Correctional Institution…
“tax fraud”
That’s what I thought when I read this article. Is what the guy’s proposing even legal? When you set up your withholding, can you just put down any number of dependents you want?
I understand that the number you put down doesn’t affect your overall tax liability, i.e., you pay the same amount whether you have it withheld, or pay it at the end of the year. So is it or is it not legal to do what the guy’s suggesting?
You can do that as long as you have withheld at least 90% of your ultimate tax bill. If it’s not withheld by your employer, you would have to send the IRS quarterly estimated payments. If total withholding + estimated payments is less than 90%, you get hit with penalties and interest.
I think what the guy was saying is since your deductible expenses (mortgage interest) went up, you can change your withholding to partially compensate. I wonder how many employed people actually know how to calculate the proper withholding amount? 3%? 5%?
Also be aware there is a Safe Harbor rule. If your income dramatically rises one year, you are exempt from the 90% rule as long as you paid more taxes than you paid last year. The following year you must start witholding to 90%.
If somebody is being stressed by an increase in housing expense from $1,400 to $1,900, he’s not likely to be in a tax bracket where the mortgage deduction is going to do him a lot of good. He’s probably already paying almost zero in income tax.
And if you still think you pay too much in taxes get a bigger mortgage and see how that works for you. ATM whaaaa, whats that?
Don’t forget the alternative minimum tax
That 6000 dollar deduction with kids in a high tax state, might look a whole lot smaller after AMT.
AMT rate is 28%, true, it’s lower than the 31 or 33%. But people making
try again.
with AMT, mortgage interest is still deductible. Property tax is not. The high bracket AMT is 28%, but the lower bracket is 25%. Also, 25% is one of the marginal non AMT brackets.
California income tax is ~9% for income over $50k or so.
So. $500 interest becomes $500 * (1-(25+9)%) = $330. tada!
I believe this ongoing maelstrom in Southern California, will be used by the powers that be, as reasoning why our nation’s economy went south…
The blame game end game.
Looks from here (South Coast Plaza office complex) that the winds are dying down this evening (6:00 p.m. local). Here’s hoping.
I believe this ongoing maelstrom in Southern California, will be used by the powers that be, as reasoning why our nation’s economy went south…
The blame game end game.
Let’s see: He heloc’d all their equity out, then the house burned down. Sell it to the insurance company. How many of those houses burning these past few days were underwater? Makes you think. Good idea? hehehehehehe Arson with a public purpose!
Sorry Ben, but I just could not let this go. Your headline “A New Bottom For The Cheerleaders In California”. My filthy mind suddenly thought of heloced cosmetic surgery. I thought “is that kind of surgery available?” I guess all is possible in the OC.
Yes. Bottom ugmentation is nathing new.
“Now, real estate agents and developers are saying the auction’s strong turnout, coupled with the successful sale of all 34 homes, is encouraging. ‘It sets the market pricing,’ said Cindy Foster of Re/Max Executive, adding that the auction made buyers realize $380,000 to $390,000 is the range where housing should be.”
“‘A lot of people have been sitting on the fence, but this shows that prices aren’t going to continue dropping,’ she said.”
I can’t get to her logic. Because there prices are what the houses are selling at now, that shows that prices can no longer drop. What?
That sounds like the same logic students use in my statistics class - if you haven’t rolled a 6 in a while on a die, then a six has a greater chance of showing up on the next roll. Maybe that is why all the unsuccessful students seem to become real estate agents after they fail to make it in their own major. It doesn’t take brains or logic.
Oops. What I meant when I said “Because there prices are …” was “Because these prices are …”
Sorry. I guess I should have taken spelling along with the statistics classes.
So… these things were selling in the 600-700s before, now the CEILING for prices is 400k.
Ouch.
It does set the price………for the next month, or maybe even days. Like the SD article earlier in the thread, these guys are fleecing the flocks with this BS. But you know, if folks don’t have the intelligence to see for themselves how flippin’ ridiculous these comments are, maybe they need a house right now to learn just how stupidity gets rewarded.
By the way, were these the Anderson homes that were going for 500K+?
Statesman,
Yep. You just cant invent that kind of stupid…..”this shows that housing prices aren’t going to fall further”
Simply put, isnt that what she said when the houses went up to $700K……and now ?? She was wrong before and, unlike the probability of a 6 on the die throw, it is good evidence that she is likely to be wrong again.
J
“…adding that the auction made buyers realize $380,000 to $390,000 is the range where housing should be.”
Correction, Miss Cindy Foster of Re/Max Executive. The auction demonstrates that precisely 34 buyers believe $380,000 to $390,000 is the range where housing should be.
Everyone else at the auction knew better.
All that the auction accomplished — was to remove 34 of the most optimistic Mantecans (Mantecers? Mantecites? Mantecards? Mantecapudlians?) out of the demand pool. The rest — as demosntrated by anyone’s unwillingness to pay more — are overwhelmingly likely to offer even less for subsequent offerings.
“…the auction made buyers realize $380,000 to $390,000 is the range where housing should be.”
Er, no. In fact, it made 34 specific buyers believe that this was the proper price range.
Everyone else at the auction disagreed.
All this means is that 34 of the most optimistic Mantecans (Mantecites? Mantegnards?) have just been removed from the buyer pool. How this translates out into some kind of floor in the Manteca housing market still escapes me.
heh - Mateca = Butter in Spanish.
Got popcorn with that Manteca?
hat tip to Neil
“Christian is a stay-at-home wife, but figuring out how to make ends meet is a full-time job in itself, she said.
Is that a sexy way of saying UNEMPLOYED?? If you have kids, I’ll give you the fact that it is a job in and of itself. But how much effort does it really take to be a wife that she can’t even manage to work part time to keep them afloat?
My wife spends 4-6 hours per week on financial stuff, and that includes finding the best CD rates for our savings. She not only makes ends meet, she overlaps them into a tapestry of financial security.
Anyone can fall on hard times, most of the sob stories, though, are people who are crying from the bottom of a hole they worked hard to dig for themselves. The subprime loan was just the shovel they decided to use.
Climber, it sounds like your wife is a real keeper! Give her an extra hug tonight…
As Dave Ramsey says, the first thing you need to do when you’re at the bottom of a hole is to stop digging!
She bothered me!
“we have to borrow money from here and there”
Why borrow? When you can steal like any self respecting low life. Obviously to lazy to get a job.
It bothers me that she would borrow, jeopardizing friends and family well being, to keep a rat hole of a house.
I’ve always managed to work part time with the kiddos - and in charge of financial planning here at the house, too. A stay at home parent doing their job well does not need to borrow money to make ends meet. They provide “income” by providing tax free savings, which with kids, can go a much longer way than earning income.
For instance, a family may decide that they don’t like the local public schools. Instead of returning to work to pay for private school or moving to an expensive house, the stay at home parent may choose to home school and/or enrich the education come out of the lousy public school. With 2 kids not in private school, you are looking at a savings of $10K after taxes easy.
That type of work in all areas can add up to a middle class lifestyle without most of the taxes and headaches that go with earning a 2nd income.
What it boils down to here is that she is not doing her job of homemaker well. In my opinion, one of the worse things about the low status of “homemaker” is that no one bothers to say “hey, you’re doing a lousy job” because it’s assumed to be easy.
My deepest respect to a woman who manages a house and children with thrift and love.
No disrespect to SAHM’s at all. She is a stay at home WIFE, not mom. Big difference.
If she is spending 40 hours per week trying to figure out their finances (doubtful), they seriously need to invest in Microsoft Money or a good accountant.
Or a smarter wife.
Bless the child who has his mom (and dad!)
That’s right, let’s not forget the stay at home dads! The few, the proud.
-A SAHD
Kudos to SAHDs! It’s a tough job, no matter the gender of the parent.
Agree that having a SAHP often puts the family in a **better** financial position than having both spouses work outside the house.
After taxes (taxed at higher rate for the second earner if filing jointly), commuting expenses (gas, car replacement, maintenance, insurance, etc.), eating out more often, clothing, childcare/school expenses…most couples would find they are far better off with one parent at home. Also, it means you have the potential for extra income in an emergency (if earner loses job, the other can make up for some of it, or can take a p/t or f/t job to get through some tough financial setbacks).
Further arguements as to why you shouldn’t get married or have kids.
This seems to fit with discussion I was having the other day with friend. We are boomer age and we keep wondering why there’s so many people saying they don’t have time to fix meals, clean their house, read a book and on and on. How come we had time to do all that and they don’t? Obviously, there’s only 24 hrs in a day so we usually sacrificed our down time or hobbies. I think people have lost the ability to be honest with themselves. People don’t seem to know the difference between need and want or can’t and won’t.
Hi Crazy,
Family first…all other comes about?
Best,
Leigh
“For Chamberlin, finding a root for his housing optimism is as simple as walking outside. In January, he spoke to potential homebuyers at Del Sur, a master-planned community in North County. The seminar’s title? “Why Buy 2007.” His answer? Sunny weather without being in L.A., 357 golf-friendly days, a strong economy.
And, did you hear the study that homeowners’ kids do better in school and fewer of their teenage daughters get pregnant than do renters’ kids? Don’t listen to the media, with their “amazing, negative bias,” he told the crowd.”
Doh! I guess my son is stupid and will get someone pregnant in a few years.
That is an AWESOME quote! Instead of teaching your kids about sex, buy a house!
Box of condoms : 10 bucks.
Stucco sh!tbox : 400k
condoms are 99% effective.
I buy 100 at a time and throw one away, that way, I’m all set with the remaing 99.
LOLLOLOLOLOL!
“I buy 100 at a time and throw one away, that way, I’m all set with the remaing 99″
Wear 2 at once and you’ll be 1 - (0.01)^2 = 0.9999 safe (assuming condom failure is an independent process). Actually, if you wear 2 you’ll be 100% safe because you’ll loose interest…
loose = lose
Argh! I’m turning into Casey Serin.
You guys are rich tonight! Keep ‘em coming!!
This crap makes me nuts. Economic hardship contributes to inconsistent parenting and the adolescent delinquency. Being up to your eyeballs in debt or simply owning a house doesn’t equal economic soundness. Want your kids to turn out ok? Rent an apt, spend time with your kids, and have savings set aside for their education. Having a mortgage means f@ckall when it comes to family stability. Google the Family Stress Model some day. This study has 4 generations of data.
I agree. I know many who own and just the amount of money they have to pay in taxes, insurance, upkeep, bills, you name it. It’s just not worth owning. The only thing that kept it going was appreciation. Now that deflation in housing has set in, forget about it.
“And, did you hear the study that homeowners’ kids do better in school and fewer of their teenage daughters get pregnant than do renters’ kids?”
Yes but are the flame resistant?
(couldn’t resist)
George Chamberlib ” Its a good time to breathe I mean buy cough,cough”. Stay safe SD bloggers.
“[T]he auction made buyers realize $380,000 to $390,000 is the range where housing should be.” said Cindy Foster of Re/Max Executive.
And of course, Realtors are the people you can trust about where the market is headed! After all, they are really in this for your benefit. It’s like charity work, really!
And the average household income in Manteca is in six figures. So of course houses should cost $400,000 there!
While they claim that ALL of the houses sold….
It is doubtful that all will close escrow!
Excellent point Sobay. Go here for a sample result
http://sacrealstats.blogspot.com/2007/09/july-22-auction-results.html
Max & Agent Bubble followed up on an auction where all 66 houses “sold”. Two months later, 11 sold (18%?), 11 were pending and 32 were back on the multiple listing sites!
The Realtor is wrong. The market bottom was not set. A new top was created along with about 10 new FB’s. In a couple of months, any new buyers will pay less than whatever prices the sale established today. It is the nature of a deflating bubble.
Well observed - funny how Realtors choose to see (or just spin) things. Why is this the new value of homes, when values are rapidly declining? It must always be characterized as a bottom, because if it’s not the bottom, it may not be such a good time to pay Ms. Foster a juicy commission.
Ca Forclosures up 422%:
http://www.centralvalleybusinesstimes.com/stories/001/?ID=6762
Thanks for the report. My parents are in Fresno right now visiting family and my mom remarked she saw several subs in SE Fresno advertising auctions to unload inventory.
While the focus is on the Bay Area and So Cal, I think the worst crash is going to happen in the central valley.
you can bet on that. I lived in Fresno nearly half my life and moved out in 1985. I know quite a lot about how its pricing should be. Prices are about 60% to 70% too high in real estate there.
Oh, oh, amen to that! Households making 30K per year (well, 60K if both members work full-time) should NOT have 400K homes. And believe me, a LOT of people in Fresno are making 30K. Most of my family still lives there.
What’s the builders cost per sq.ft to build semi-custom McMansions (3000+ Sq.ft )in California esp places like Sacramento?. Just trying to figure out how much the builders can cut in this market.
I have heard $75-$85/sf for the construction, plus the lot cost.
Also, Asking prices in Sacramento are dropping 3% a month now. That is $12,000/mon on a $400,000 house (I have a degree in math). See the stats here:
http://www.housingtracker.net/askingprices/California/Sacramento-Arden-Arcade-Roseville/
Construction costs for tract homes are about $40~$50 a sq/ft for low end stuff, $60-$80 for nicer homes and customs can go as high as you want. $125 sq/ft is a decent starting point for a true custom. Variables are permits and land costs which can vary wildly from place to place.
So a 3,000 SF medium nice home at $80/sf would be $240,000 plus the lot ($75,000), the permit ($50,000) and the profit ($0-$50,000). Total is $415,000 ($365,000 if no profit, less if they take a loss?)
Looks like the $300/sqft times in the SF Bay Area are over.
Folks, you had better buy now in California. This month’s slow sales were only due to those horrible wild fires. Did you see how much housing stock they destroyed? This is a once in a lifetime opportunity. Interest rates are at historically low levels!!! Why you’d better buy now before you are priced out forever!
Seriously, my best wishes. Several of my employees won’t make it into work today due to the fires (yea, I suspect one is drinking scotch on his patio, but he earned a day off considering he worked Saturday…). Relatives are driving up from San Diego to stay with another relative. (They were going to stay with friends in Irvine. Friends since evacuated.)
But you know the REIC will explain away October’s low sales by way of the fires, don’t you? Me? I’ll just laugh when they say that and ask why were the sales so abnormally low the first two weeks of October? The fires happened late in the month!
Its fun to make people stew (when they’re trying to screw other people).
My sister in law is still looking to buy. At some point I’ll stand out of the way and watch the sheep get sheared. But for now, I’m still going to convince otherwise. (Let’s just say I think I know all the bearish arguments by now; its her choice to listen or not.)
Got popcorn?
Neil
the San Diego houses with yards full of popcorn were obviously bubble blog readers . . .
(gallows humor / actually the fire victims have my sympathy)
This month’s slow sales were only due to those horrible wild fires. Did you see how much housing stock they destroyed? This is a once in a lifetime opportunity. This month’s slow sales were only due to those horrible wild fires. Did you see how much housing stock they destroyed? This is a once in a lifetime opportunity.
Could be the worst, most heartless post on this blog ever. This is a devistating day for the people of California, and California. 14 fires in SoCal right now. You need a reality check. Your worried about what some Realtor might say at the end of the month?
Oh please - really, the worst, most heartless post on this blog ever. I think not.
Disasters happen all the time, and he’s probably right - the realtors will try to use the fires as an excuse for the slow sales.
rudekarl
No need to comment with a name like that.
Desmo — I guess if you live in the SoCal burn zone, it confers a certain privilege to engage in black humor — kind of like how blacks can refer to themselves with the N word but nobody else can do so.
P’Bear! Happy you’re ok and yours as well!
Good to *see ya* (prayers for California).
Best Always,
Leigh
Desmo,
Its gallows humor; that should have been obvious. Since I was visiting my folks this weekend, I took the time to help prepare their home to accept friends and relatives who are getting out of the hot spots.
Its like an earthquake, its a common event in California so you make fun of it. Heck I was in Irvine the last Laguna fire and had to be evacuated myself.
My heart goes out to those impacted. But that doesn’t mean I lose my sense of humor.
Got popcorn?
Neil
I was actually thinking maybe the fires were started by HB’s to collect ins and reduce inventory. Is this possible?
they’ve recently released that the fire on the north end of Irvine, CA was arson… This might not be too far from the truth!
http://www.ocregister.com/news/fire-firefighters-irvine-1901405-morning-day
At a homeowner rate of about 66% there would be lots of suspects.
If I may, desmo, I don’t get the impression Neil (who lives in So. Cal) is laughing at the tragic events unfolding here, he’s merely stating that the REIC cheerleaders will inevitably use it as an excuse to explain why October sales will (probably) be so low, when in fact it’s due to the general slacking in demand we’ve all seen thanks to the bubble implosion. At least that’s my take on it.
“Could be the worst, most heartless post on this blog ever. This is a devistating day for the people of California” >
My friend, Neil is a respected expert contributor on this blog. Can’t you differentiate between actual heartless and dark humorous satirical commentary.
Even solders on the front lines in any war-pick one-who have to mow down/bayonett their enemies could make sarcastic humorous comments-when a suicide bomber blows himelf up with with his own device it was called ‘own Goal’.
I too symathize with the evacuees who have lost homes and who’s lives will be shattered/disrupted but please lets leaven the crisis with occasional light/or dark satiricism.
What is so heartless this????
People short stocks hoping they will fall, so a couple of thousand burned houses could mean a couple of thousand news sales or rentals.
Desmo - deep calming breath and don’t let the gallows humor get to you. It is funny to know that we will hear that same idea from the realtors in about a month. And he did send his best wishes to the rest of us.
I have to admit I was dreading coming on today because I thought there would be some horrific blame the victim type comments on here. Have been pleasantly surprised and thanks to all for your warm wishes.
Yea but the inventory numbers after 1000 homes burn to the ground are gonna ROCK !
Come on - it’s gallows humor - same reason military guys laugh and joke going downrange.
San Diego real estate is now hottest in the nation !
There ya go - hows that for worst blog comment ever ?
Oh yeah, that definitely tops Neil.
San Diego is hosed..
Desmo,
I agree with the comments about Neils gallows humor. Uncle_Git …smokin..! I too wager the REIC will follow up with some crocodile tears and self-serving pseudocompassion.
Though bile is much easier (and funnier) in the blogosphere, I appreciate (and I am sure many others here too) do appreciate your genuine compassion for all the heartbreak going on down there.
I’m thinking the noise about the low sales and inventory will be drowned out by the noise from homeowners when the insurance companies tell everyone they’re insurance doesn’t cover wind and water damage. Wind damage from the winds carrying the fire and water from the hoses of the firefighters. This is a stretch of my own imagination, but I suspect the insurance companies already have teams of think tanks in place devising methods to prevent partial and or full payouts. Rant off.
“Could be the worst, most heartless post on this blog ever”
oh pwleazeeeeese
a devistating.. i mean a devastating day for California?
you say that as if Santa Ana wind swept fires are an oddity.. and as if drought is uncommon.. as though dry spells are not regularly followed by fires .. 720,000 acres burned in Oct of 2003.. maybe this one will compare?
Our family has also engaged some gallows humor today as we get through this. You all know by now that this event is far worse than 2003, back when we lived down there. My brother’s place up in Ramona was spared today only because the wind changed at the last moment. Not so his neighbors or his daughter’s home and son’s Apt. bldg. All not so lucky, burned to the ground. But al of them are safe. Now we turn to see what happens in Fallbrook/Escondido. My daughter has her car packed, left Vista and is staying in Oceanside tonight.
Relatives are driving up from San Diego to stay with another relative. (They were going to stay with friends in Irvine. Friends since evacuated.)
Blue bubble around you and yours, Neil.
Solemnly,
Leigh
Desmo,
We evacuated this morning, as have other posters on this blog. You’re intention is kind, but most of us are used to the sarcasm of the HBBers. It’s one of the things that sets this blog apart from other bubble blogs, IMHO.
I think Neil’s comment was funny.
I do not intend to offend. This is actually the third southern California fire I’ve been through were I was in the “voluntary evacuation zone.” So its like earthquakes, purely intended as gallows humor.
If you notice, I was concerned for employees who had to be evacuated. My relatives are fine, but for a while their fate is unknown.
So no offense intended. But my bile was from how this will be turned. However, now that two of my police officer friends now have to leave their families to stop looting behind the flame front, so I do realize it can be much worse.
I hope the San Diego fire can be halted soon. Pretty soon the fire chief will have to make the horrible call to bulldoze down homes to stop the firestorm.
Sadly there is no joke in that last sentence. Somehow a fire break must be made by removing flammable material from the fire’s path. May the winds turn before that decision must be made. (But it only works if the winds die down a bit.)
Neil
“‘We make them smart homeowners, versus people getting stuck in the subprime market and getting into debt,’ Moore said. ‘A lot of them are telling me that they didn’t realize they had an adjustable-rate mortgage.’”
Are you paying the mortgage, if not what good are you doing? They are still F’d. If you are keeping ignorant people from buying more power to you. IMHO keeping someone from buying a house is a quixotic chore.
How to make homedebtors smart?
How do you make loanowners smart when you can’t even get most bright eyed seven year olds there in our public schools?
“‘A year ago, you had more of the people who never should have been looking,’ she said. ‘They were buying above their means, and they were allowed to because of the mortgages we had available. Now, people are putting 10% and 20% down.’”
That means buyers went from Dumb to Dumber. I’m not buying right now not because I don’t have the 20% down -I do- but rather because my 20% REAL CASH downpayment would probably be wiped-out by home depreciation in just 4 or 5 months.
“Now, people are putting 10% and 20% down”
Did the government print more money and I missed it? Where did this magical down payment money come from? I’ve been reading this nation is in negative territory in regards to savings.
The smart ones are keeping their cash. As Dan is.
To be honest tho, I now face a dilema, “Where do I park my savings for the next couple of years?”. The greenback is gonna nosedive, I’m afraid.
A small percentage of you are savers, a large percentage of said savers have their savings in greenbacks.
Break away from the herd…
“‘A year ago, you had more of the people who never should have been looking,’ she said. ‘They were buying above their means, and they were allowed to because of the mortgages we had available. Now, people are putting 10% and 20% down.’”
“Carrie Allen, president of the Newport Beach Assn. of Realtors, said houses in affluent neighborhoods were selling as well as ever, and much of the fear regarding home-buying was due to negative media reports.”
“‘The buyers out there, because they keep reading all these negative headlines and reports, are really skeptical,’ she said. ‘They’re wanting to buy but the more they read, they think, ‘We’ll, wait until next month.’”
Perhaps their waiting to save that magical 20% down. Like so many have stated here before…..sheeple without the 20% bought….people with the 20% didnt buy before, and most, arent buying now. Dont make it too hard on your brian, it aint the media luv, it is the back to basic credit requirements vs. high prices.
“Carrie Allen, president of the Newport Beach Assn. of Realtors, said houses in affluent neighborhoods were selling as well as ever, and much of the fear regarding home-buying was due to negative media reports.”
Her entire RE universe is confined to Newport Beach which is an ultra rich tiny coastal enclave. So what if 2-10 homes sold in one month in NB for average 2 million apiece. There wil alway be a miniscule % of mega rich who can afford to pay those prices. Quite a few professional sports stars or former stars such as Dennis Rodman have estates in NB.
Actually we are talking about a tiny toney section of NB such as Balboa island. Most of NB is solid middle -upper middle class, barely above Costa Mesa or Irvine. This lady is myopic.
Note-the really mega rich reside in Newport Coast, a tiny enclave of mega-castles just past Corona Del Mar down the coast hwy and separate from NB.
Dan, it is not difficult to buy foreign Treasury bonds instead of US Treasury bonds. Australia is exceptionally easy to buy from any full-service broker. Brazil is probably better but requires a large investment. For Iceland, you have to shop with various brokers. The default risk in AUS and ISK is negligible, but the currency risk for Brazil is probably less. All these currencies have risen substantially against the USD, but if you believe “the greenback is gonna [continue to] nosedive,” you should get at least SOME of your money into other currencies.
One person I know told me they want to raid their 401k account for a DP. Niiice.
Buddy Capitalism
AIN’T THE WELFARE STATE GREAT?
A good read.
http://online.barrons.com/article/SB119283369555665403.html?mod=googlenews_barrons
Yep, that’s a good read.
I love reading Ableson’s column every week. It’s worth the price of the subscription to “Bear-ons” all by itself
“George Chamberlin remains one of San Diego’s most high-profile bulls. Faced with dropping home prices and skyrocketing foreclosures, Chamberlin and others have barely changed their tune, if they have at all. If any of his words were used to convince people to buy with a loan that proved troublesome, Chamberlin disavows responsibility. ‘I have no idea what’s going to happen with prices,’ he said. ‘Sales are obviously much slower than I thought they would be…I do know that long-term, housing prices can only go up.’”
George come up for air. lol!!!!!!!!
The stock market only goes up in the long term, too, but try consoling people who paid $80 for Cicso in 2000.
does this guy even listen to himself ??
“I have no idea what is happening with prices….but they only go up” That is like the OJ simpson trial where the LAPD was accused of bungling a simple blood sample from the driveway, then being charged with a wide ranging conspiricy agianst OJ.
You cant have it both ways George. Do you, or do you not know where prices are going…..
“Instead? A ‘crash landing,’ Klinge said. ‘Sellers are not doing their homework, or the homework they are doing is listening to the cheerleaders. Literally, nine out of 10 sellers are not selling their homes. That’s not good.’”
Yeah fools keep holding on to those wishing prices. The longer you wait and have to sell the more inventory piles up and then i target the wekaest of you and plunge the comps. oooeeeoooeeeeooooo!
I spent the weekend out in the Sacramento and then Sierra Nevada areas. This whole chunk of the state is a giant disaster zone in regards to housing. Driving up the freeway towards Sacramento was like driving to Disneyland. I kid you not that perhaps one out of every 3 billboards was for some Mcmansion housing development. Then you’d pass the developments themselves, all built very close to the earthen levys keeping back the marsh. These houses are built on top of each other within touching distance. We’re talking THOUSANDS of them, all in a huge swath of land with a row of flags and balloons. They look like a used car parking lot. Many more are being built.
In some of the smaller towns we passed by, it seemed like every other house was for sale. I visited in the early summer. Most of the houses for sale then are still for sale. Some are now for rent with equally desperate looking “for rent” open house signs.
Even some of the really tiny little towns in the mountains was the same way with a humongous amount of houses and ranches for sale. It all seemed strange, as if half the region was wanting to get the heck out of dodge.
Yes- this part of CA is getting absolutely hammered… which makes me wonder when the inevitable effects of this will eventually hit the Bay Area with equal fury. It seems like only a matter of time.
It’s already starting, just getting less press because it’s not as drastic in $ terms. There are several zip codes in the bay area where homes are being sold for 2003-2004 prices. Not as bad as the central valley, but it’s happening.
I think it’ll be much more difficult to get people out of the “we’re special” mentality in the Bay Area. Most people I talk to from here- even some who rent- say that prices will only go down marginally for a number of classic reasons: High tech salaries, foreign investment, limited supply, and desirability. Of course we’ve debunked all of these many times, but still- this sort of obnoxious steadfast belief that the Bay Area is fortified against anything and everything that happens across the nation is pretty strong here. That and many have their life’s financial futures pinned to their home’s values.
To see this all unfurl will be only too refreshing.
I’m not saying the SF Bay Area is bullet proof Jetson_Boy, but take a look at your first paragraph about Sacramento & the Sierra foothills. Does that describe the “inner” Bay Area ( the 415 / 510/ 650 area codes )? Not so much. Will the desirability / limited supply protect it completely? No. Will it be less severe than Sacramento? Probably.
Ah, but do the tech salaries really pay for an $800k+ home in San Jose? Not for nearly as many people as there are homes priced in that range.
Yes, there are your VCs and exec types, but the average house cannot require a $200k income to pay the mortgage in the long run, and without a significant drop in prices, it appears this is exactly what would be required.
Tech salaries (and rents) were higher during the dot-com bubble, and house prices were far lower than they are today. So much for fundamentals.
tech salaries: less than 30 % of jobs in the Bay Area are tech jobs, average income in the bay area is $80K/year
foreign investment: hahahaha, they are not stupid
limited supply: argument makes only sense if set in relation to demand .. population is declining
desirability: ? more people leave than come
Are you referring to the area south of Sac off I-5? I drove through last spring and could not get over how tightly packed the homes were. If you look back on history, there is a reason a lot of the area between Sac and Stockton was never built up- it floods. I remember back in the late eighties when the whole Sac river delta flooded out. These homes will be a mess in the next flood.
San Diego is a warren of canyons, with many newer houses built on the tops of many of them…
Fire loves to climb hills~
And the winds coming off the water can really pick up speed in those steep canyons. The area is made for fires and landslides.
“San Diego is a warren of canyons, with many newer houses built on the tops of many of them”
I noticed that also, that North San Diego has all these longish flattop Mesas between canyons,bottomlands often filled with lakes. Lots of new homes put up in these elevated Mesas.
That said, San Diego appears to be getting hit really hard, though being here in LA i am getting saturated mostly with coverage of Stevenson Ranch(Santa Clarita/Valencia/Majic Mt area in LA County), Foothill Ranch(OC), and lake arrowhead(IE)-which officially reports 128 homes destroyed.
Foothill ranch is an exclusve upscale OC community of new homes abutting the Clevelant Mts/National forest.
They built up to code and at last report-4 PM PST- are
putting up a good fight and not one home has been lost to the flames.
Stevenson Ranch looks like it has a good firebreak zone around it and on TV i saw the flames being confined to the deep lower ravines surrounding this comunity of upscale homes across the 5 fwy from Valencia and next to Magic Mt. This is at 4 pm PST -last report SR was being evacuated so maybe fire could yet jump the resistance barrier and engulf SR.
Lake Arrowhead is getting it bad: 128 homes lost to flames so far. Firefighters could not reach there fast enough and the ruggedness of the terrain plus strong winds have hindered arial firefighting efforts.
Which area? You could been on any of the arteries in and out of town and the sprawl would make you choke. While the billboard coming into town are obnxious, the radio commericals on the alternative rock channels will really make you sick. I can’t believe some of these DJs have sunk so low but in Sacramento, the only left to peddle in housing. Cheap stucco is our cash crop.
Gwynster & aladinsane,
What are you trying to say? It sounds like you are getting joy with peoples houses burning. Sick. You guys have become vultures. Keep it up.
Most San Diego houses shouldn’t have been built, in retrospect.
Slippery land and high fire danger~
My sister may have lost her house, no joy here.
“Cheap stucco is our cash crop.”
I love it! This captures the whole California bubble, AND the GW Bush economy.
“The economist often credited with the soft-landing term, Leslie Appleton-Young at the California Association of Realtors, said it’s unfair to judge her statements in hindsight. ‘There’s no doubt that we knew the market was going to change,’ she said. ‘It just happened with a much greater severity (than we predicted).’”
Leslie shove it! You were wrong period. lol!!!!!!!!!
“Now and then we had a hope that if we lived and were good, God would permit us to be pirates.”
Mark Twain
Of course, the NAR and CAR knew all along. That explains their undying optimism. What’s more, it’s unfair to judge them because untrained monkeys could do a better job.
So what she’s saying is her own forecasts shouldn’t be expected to have any credibility. Fine. I appreciate such candor.
‘There’s no doubt that we knew the market was going to change,’
That’s an outright, bald-faced lie Leslie!
Remember your power-point presentations with the slide that read “NO BUBBLE!” etc.?
Remember when you talked about “Everyone wants to live in California’ and “You’ll be priced out forever”?
You tool.
I’ve been waiting for that Cheerleading article since October 2005…
The point is, LAY should have just kept her mouth shut rather than engage in unadulterated cheerleading for the last two years.
“The economist often credited with the soft-landing term, Leslie Appleton-Young at the California Association of Realtors, said it’s unfair to judge her statements in hindsight. ‘There’s no doubt that we knew the market was going to change,’ she said. ‘It just happened with a much greater severity (than we predicted).’”
This is just wrong for soooo many reasons. Where to start? Hmm, she was probably credited with the term “soft-landing” just after hanging up the phone with Al Gore congratulating him on that fancy internet invention of his.
And that it is now apparently unfair to judge anticipatory statements after the fact. Ok. LAY, We think your next statement is wrong, iladvised, ignorant, inaccurate and will once again justify anyone who believes that you have no credentials, intellegence, abiliby, connection with reality, credence, clearwater or any hope of revival.
“it’s unfair to judge her statements in hindsight”.
I think this blog has always judged in real time which has been a haven for my sanity.
She couldn’t keep her mouth shut, her paycheck depends on her cheerleading. Now, with so many folks screwed to the wall because of NAR and CAR, she seems a tad anxious that she may be held responsible for the deliberate misinformation and flat-out lies she was peddling.
Good. She ought to be anxious. Hustling the unsophisticated into financial disaster is nothing to be proud of, and , if there were any justice, she might be held accountable.
Appleton-Young was in Santa Barbara back in March. She stated, before hundreds of people, that Cali prices would “softly appreciate” in 2007. Now, she’s saying that she never knew what would happen in 2007.
The California Association of Realtors were calling for appreciating prices up to September. Then the roof fell in and they could not longer cover their collective asses. Leslie is the person responsible at the CAR for forecasting at CAR.
I am so happy this blogsite documented all of Leslie’s statements over the last year and a half. She’s got her tit caught in the wringer.
“But even those numbers pale in comparison to the $3,000-a-month bill the couple now is paying. ‘We’re trying to make ends meet, but it’s really hard,’ Christian said.”
Somebody better check her husbands pocket for a Bic lighter.
“Carrie Allen, president of the Newport Beach Assn. of Realtors, said houses in affluent neighborhoods were selling as well as ever, and much of the fear regarding home-buying was due to negative media reports.”
No comment
YES comment! Media, schmedia. It was all due to HBB! Darn us.
Anyone have time warner cable in san diego still with service? Mine went I, I checked their website which states no one is working to respond to any service outage, etc. WTF! Isn’t access to the cable pretty important for those in the oncoming wildfire path!? What do I pay them 100 bucks a month for, so they can cut and run like sissies when the going gets tough?
Switch to DISH TV, you don’t get very many channels but I only pay like 19 bucks a month.
Fires are attacking the hillsides not the cities.
Why can’t we just have a warehouse fire today?
But you’re glad you didn’t fall for the “get your phone service from the cable company” BS.
In LA we can’t get hardly any info on the SD fires - you can go to the SD TV websites and get streaming video.
stick some rabbit ears on the TV .. works just fine for local news.
Did that in L.A. recently - now going on 6 months without a cable bill, and using cellular internet I can take with me when I travel for the same price Time Warner wanted to charge for the cable modem.
I get a new flyer from them every other week because they can’t seem to figure out that I disconnected my service after they jacked my rates through the roof, not because I was moving out, even though I told them so at the time of disconnection. Of course, if 1% of customers disconnected after they increased rates by 20% for the other 99% of subscribers, that’s certainly a trade they’re willing to make, and certainly lining the pockets of the city counsel to keep that contract. Comcast was great, Time Warner is wretched.
radio shack.. a medium sized uhf/vhf antenna on a 8 foot pole with a rotator.. 50 feet of coax.. a signal booster inside… maybe $100-$150 total.
Rotate to point at some metro center .. 5 or more channels in each. If there are no big hills, like Central Calif, it’s possible to get 50 or more total channels of varying clarity from 100 miles in any direction.
cable companies can bite me..
Unfortunately, in San Diego, the terrain is very hilly & you can’t get signals with an antenna — at least in my experience.
I fought getting cable when first moving there from LA in the 90s, but had to give in (got the cheap one, though, until husband insisted on getting the full cable). If anyone in SD is able to get channels without cable, let me know!
A lot of those “cables” are strung on Wooden poles soaked in tar. Not the best combo in a fire. I suspect there will be a lot of people without cable tv near the fire areas.
I’ve been on all day and I have Time Warner. However Time Warner service sucks big time. I have a weak signal and have to reset my modem several times daily. I used to have Cox Internet, cable and digital phone, the service was waaaay better and cheaper too.
Make sure Time Warner credits you for the down time.
“Now, real estate agents and developers are saying the auction’s strong turnout, coupled with the successful sale of all 34 homes, is encouraging.” “‘A lot of people have been sitting on the fence, but this shows that prices aren’t going to continue dropping,’ she said.”
‘A dead cat bounce is a term used by traders to describe a pattern wherein a moderate rise in the price of a stock follows a spectacular fall, with the connotation that the rise does not indicate improving circumstances. It is derived from the notion that “even a dead cat will bounce if it falls from a great height”.
And that’s all I have to say about that…
From my new hilltop perch I can see the Rice fire in Fallbrook and the Palomar mt. smoke. Oh crap maybe thats the San Marcos one. I am taking video and photos. Not sure why.
What becomes of FB’s houses that burn down?
Do they get a pass?
Or misery continues?
I’m afraid that realtors/boosters/manipulators/flippers/etc will use the fires to claim new demand on less supply and create new fictions about why prices will go up in SD.
I heard this argument in the 2003 fires. It worked!
FBs probably started the fires
The misery will continue for them. But those with older homes might be helped– they will get a brand new nifty keeno house that might be easier to sell.
Apparently the fire in irvine was arson related.
There’s 13 total fires in SoCal last I checked. So far 3 are arson related from listening to the news. 1 started on a construction site. Rest assured some FB became a smart guy.
“Apparently the fire in irvine was arson related.”
Little spot flames were started almost simultaneously in three locatione close to each other just off the 241 tollroad in the silverado mts area. It is well confirmed that the Irvine fire was started by Arson. Probably the fire now threatening foothill ranch was also deliberately set by the same individual(S).
If anyone has seen footage of the foothill ranch fire in south OC, one has to admire the quality of the homes built to withstand fires: tiled roofs, all stucco-concrete-paved contruction, iron perimeter fencing,ect. Foothill Ranch is an exclusive OC community of $700,000-million $homes probably on par with those of Coto de Caza, Dove Canyon(RSM?), and Turtle Rock/Shady Canyon(Irvine).
South OC is probably better prepared to resist fires than any community in Scal. The arterial road network alone is so much superior to any other region of Scal that firetrucks/Emergency services can speedlity get to any threatened point anywhere in the foothills. Plus most of S OC only put up last 30 years so everything up to code.
Unfortunately, LA and the IE are not so well prepared and modernized. To many old structures, haphazred ugly sprawl patterns, and a pattern of each community on its own guarantee a repeat pattern of out of control fires every 3-5 yrs and massive loss of properties.
The massive buckwheat fire is getting short thrift on the TV -all attention seems focused on stevenosn ranch/Valencia area. Ditto for piru/filmore blaze and the San Diego fires(the witch fire?), which looks to be bigger than the 2003 SD Cedar? fire which was the largest in CA history. Have heard reports of 500 homes burned down in SD county.
My sympathies to all evacuees and those who have lost their homes. One can rebuild but never replace years, decades of building up that house, adding fixtures and furnishings, pics, plants, collectibles, memories, ect. Especially tragic for older boomers,retired folks who have held their mountain properties for most of their life.
I was thinking HBs started the fires. They are the ones with the most to gain by a shrinkage of inventory.
If the insurance payments were current (which may be a big *if*), and the house was on its way to foreclosure (and there isn’t some government disaster-relief measure that stays foreclosure proceedings after the fires burn down someone’s house), I believe the lender has first claim on the insurance proceeds.
If one had proper insurance and was upside down, as in effed…
Could they just walk away from their burned down house and not rebuild?
And then the real fun begins, when the insurer says that the house at the time of the fire was worth $200k less than owed, and the loanowner gets foreclosed on a property they can’t even live in anyway.
Insurance is based upon a pre-determined “value” that is usually related to the “cost to rebuild”. Considering that it was the land that went through the roof and many insurance policies were probably several years out-dated most individuals are probably underinsured.
Exactly - given the building slowdown, you should be able to get work done cheaper today than at any time during the past 5 years, and I’m guessing the cost to rebuild a lot of these places is considerably less than the mortgage. Thus the foreclosed burned out lot - the bank ends up with whatever cash the insurer will cough up. Of course, the bank’s lawyers may be more effective in dealing with an insurance company than the loanowner might be…
Good point. The insurance will only cover replacement cost. People that rode the equity up probably didn’t want to spring for the added cost and are way under insured. They may not have near enough to rebuild. Maybe enough to pay off mortgage. Same with renters.. I bet many had no coverage.
First lender has first dibs, second lender has second dibs…. etc.
Gascap, I have Cox and it keeps going out but its on now.
OT — This week, Santa Barbara Housing Bubble Blog features two median-priced Santa Barbara beauties. Take your pick, or buy both — one for you and one for the mist(e)ress. Difficult as it may be to imagine, the latter home has yet to appear among the pages of Architectural Digest. (But check next month’s gatefold, as all the publicity this week is sure to turn heads among AD staffers.) Also in this week’s post: Santa Barbara’s inventory climbs to 14.6 months, at least according to the Santa Barbara MLS. But what’s in a number?
Most humbly yours,
Saint Barbara
Has anyone else noticed that so many of these sob story homeowners have 4+ kids and I’m not talking about the illegals. What’s with people having so many kids and not being financially prepared to provide for them? People that can’t afford an additional $400/month on the reset? How do they expect to put 4 through college and prepare for their own retirement and that’s beyond he diapers, food, medical, clothes……
I was talking with my sister the other day about family size. A family I know is working on kid number 3 even though they are maxed out financially and have serious day care woes. She said that 3 kids is the new 2 kids - that is ideal/fashionable family size. Her theory was that people just don’t want to admit they really can’t afford to have the number of children that they want to have.
I don’t know if you are old enough to remember zero population growth - 2 kids/couple. I was stunned after 9/11 reading all the portraits of grief in NYT at how many of these folks had 4+ kids. I think it’s all part of the going back to the 50s trend. Funny how when it was poor people having multiple kids it was irresponsible and those women should get off their butts and go to work. Now, it’s the chic thing for nouveau riche to have boatloads of kids (and nannys) and they should stay home to raise their kids.
“I don’t know if you are old enough to remember zero population growth”
Wow, that’s a blast from the past. I had forgotten all about it until you mentioned it. It is an idea whose time has come…again.
How did we end up going backwards from everything that had started? There was some good stuff starting and then poof - it was all gone and we’ve been moving backwards since. Whole Earth catalogue and conservation movement, zero population growth, remember the ERA, back to basics (living off the land), etc. Some say that it all turned around when Reagan was elected and we went into the greed is good 80s.
“I think it’s all part of the going back to the 50s trend.”
And I think you might be right. Sadly for them, the 1950s were not what they think they were - they also are never coming back. These people have got to stop watching so much TV.
Secondly, you are fair to point out that now that yuppies are cranking them out with renewed vigor - its all okay - but working folks best keep their numbers down. OT - judging from how the local yuppie kids behave - there’s much trouble ahead.
As I recall, replacement rate is 2.3 kids per woman. So having 2 kids is a shrinking population, 3 is slightly growing.
Nature abhors a vacuum, so don’t bother trying to be responsible and think it will matter, as you’ll simply be rewarded with Mehi-cans.
I totally disagree with these comments. Come to my neighborhood you wont find any kids. Only one person at a 15 person company has kids. I dont see this at all
Yeah, I can understand being overwhelmed by something like a $1500-2000/month increase. But $400 is pretty light. I’m willing to bet that plenty of households will spend $400 more on gas in 2008 than they did in 2007. If they can’t roll with punches, this economy is toast.
We raised 4 kids in a 1930’s house. Two bedrooms originally. We converted the dining room into a bedroom. It wasn’t easy and the kids weren’t crazy about it. But we did it.
and the kids weren’t crazy about it
Unless they’re paying for part of the mortgage, who cares what they think about it?
LOL! As a sometimes too indulgent parent, I loved that.
Previously, I was disappointed with FBs and Home owners until my manager opened up today..
Renting townhome he bought 4 yrs ago with negative income and paying current mortgage an ARM…
Single income… Pulled out everything from 401k and negative savings….
Another colleague already up into $50K CC debt.. with $500 HELOC… Still his wife wont allow him to sell the condo…
its gonna be epic
OCinvestor,
this is so much like the folks who refused to believe the market in March of 2000, and kept riding that sucker down until they lost everything.
You colleague should cut and run–find a good bk attorney, and walk from the condo. Maybe he should lose the wife as well, she seems determined to sink them both.
There are more FBs around me. Now I am very concerned to talk about housing….The same colleague told me this afternoon to start looking to buy as homes are lil bit cheap now before they go back up again.
I asked my manager why kept both houses, price atleast one house 10-20% below comparable and sell… He said it wont work out and he will hold them until next cycle and sell for “atleast” double the price . I asked how long, he replied 10 years!
So your colleague was really just using his wife as an exuse then. If he turns out to be wrong, he can just blame it on her. I love these FB.
We won’t even go in to your manager’s stupidity. That one’s just obvious.
A five-percent down payment (plenty of skin in the game; no moral hazard here) buys Daddy a $6,812 monthly payment ($7,387 with a PMI assist) on a 6.8% 30-year fixed-rate jumbo mortgage loan. (Daddy eschews those morally hazardous adjustables as well.) After footing the property-tax and insurance bills, Daddy’s in it up to nearly $9,000 per month — in other words, to his eyeballs — not to mention those unmentionable, nagging ledger-sheet entries: utilities, upkeep, and repairs. (This hot little Mesa number might turn out to be high-maintenance.)
Brutal.
“2007 is on pace to be the first year that housing starts in Redding drop below 200 since 1981, when 174 were issued.”
My parents were one of the 174 in 1981. They bought 10 acres and built a modest house. They sold 7 years later and barely broke even. It just goes to show that even if you buy at the bottom you aren’t guaranteed to make money.
Or maybe to show that the volume bottom and the price bottom aren’t always simultaneous.
Did I hear a quarter million evacuated? We’re getting into Katrina or 9/11 territory, and we don’t even have an earthquake.
It’s just brutal, and there really is “no” place to go, for the majority of San Diegans…
That’s what I’m reading on my ISP’s news site. AT LEAST a quarter million. I hope there is no major loss of life. It really sucks to be displaced by a fire, I know from experience, although the fire was limited to the building. However, I can see a similar event happening in FLA during the “dry” season. We don’t have Santa Ana winds, but fires can spread fast here during the spring. Heck, we didn’t even have fire in our area but were just about choked out by the fires in Georgia.
“Heck, we didn’t even have fire in our area but were just about choked out by the fires in Georgia.”
I meant, choked out by the smoke coming down on the wind from Georgia during the spring fires.
300,000 last I heard.
BTW, Palmetto…hat tip to you for encouraging us to get renter’s insurance. I had always intended to “get around to it,” but didn’t really get motivated until your post. We’re one of the 300K, and I finally got the insurance a few months ago, largely inspired by you.
I owe you one!
Buy tax-deferred investments like crazy (series I bonds income tax is deferred for 30 years). That way at least you won’t be subsidizing the dummies who habitually build houses in harm’s way.
Interestingly, the northeast as far as I know does not get the big earthquakes, hurricanes, tornadoes. Nore does my primary home - Phoenix.
As a general rule, tornadoes don’t affect the Northeast. However, when I was up there during the winter, my sis took me for a drive through Greenwich, Ct., back country. There was a whole swath of woods and part of a house that was mowed down by a tornado. Unusual. As to earthquakes, no big ones, but a very minor one actually left a long, jagged crack in the driveway of my family’s home about 10 years ago.
As to hurricanes, the Northeast has had a couple of big hurricanes in the past. One of my childhood memories was driving out to the Hamptons on Long Island and seeing the roof of a house that had been blown by a hurricane into Shinnecock Bay (I think that’s the name of the bay, correct me if I’m wrong). Also there was a very destructive hurricane in the first half of the 20th century that hit Rhode Island. In recent years, hurricanes seem to have stayed south of the Mason Dixon line.
Palmetto,
you’re right, it is Shinnecock Bay. Also, there have been brutal Nor’easters that have torn up Long Island and NE…and don’t forget the flooding that drowned NE last year, as well as Albany/Binghampton. Manhattan itself has a major geological fault line, and there was an earthquake here about 10 or 12 years ago, by Cali standards, though, barely a tremor.
We are living in a Police State.
Yes. But there’s never been a better time to buy or sell a house. The tranny hooker trying to get high on the smoke of houses burning surely wouldn’t lie to me…
Oh wait, that’s Leslie Appleton-Young! Never mind.
“Did I hear a quarter million evacuated? We’re getting into Katrina or 9/11 territory, and we don’t even have an earthquake. ”
That is almost 10% of the entire population of SD county(3 million?). That is a huge number of evacuees.
I don’t thik they will have the same levels of lawlessness, looting, victim-fingerpointing, disorganization as Katrina. Folks in North SD county seem to be well-organized and law-abiding, and i have not heard reports of widespread looting, lawlessness. roaming gangs in N SD.
In contrast there hace been reports of looting and lawlessness in the IE area and in lake arrowhead fires.
I heard from AM 640 radio that one person who had his truck fully loaded with valuables from his evacuated home in Ontario got his truck stolen! The Ie is full of nasty gangbangin homeys displaced from LA inner shitzones, welfare section 8’s, and opportunistic illegal alien gang elements looking for chances to loot. Remember the LA 92 riots. Who was committing all the looting and trashing of businesses?
Another black mark on the IE,especally SanBerdoo county which is the most lawless county in Scal hands down.
‘I have no idea what’s going to happen with prices,’ he said. ‘Sales are obviously much slower than I thought they would be…I do know that long-term, housing prices can only go up.’
Prediction: In constant 2005 dollars, house prices will never again reach 2005 levels in our lifetimes.
I don’t know about that in terms of the entire country. On the coast, probably not. But I’m willing to be that the areas that didn’t see tremendous runup (Rust Belt, Buffalo, etc) will be in demand toward the latter half of this century. As global warming erodes our coast lines, raises temperatures, and as potable water decreases out in the Sun Belt, areas in the country that can sustain life at affordable levels will be very much in demand. It might be another 50 years (so just the likely end of my lifetime), but I’m willing to be that Michigan (not Detroit itself, but other areas) or Buffalo will see real appreciation over the prices of the past five years.
Yeah, I was referring to California. I don’t know the markets in the rest of the country. I’m actually not sure why places like the Rust Belt don’t have declining prices to go with their declining populations. Perhaps even constant prices there are indicative of a bubble.
I grew up in the suburbs of Buffalo, and really like the place. I’d be happy to retire in some of the small fishing towns along the Thousand Islands. And, the housing stock is underpriced. But, upstate NY taxes are killer, as is the state income tax, and utilities, even with Niagara Mohawk just up the river at the Falls, are very expensive. I have no idea why, but Con Ed here in Manhattan is cheaper than electricity upstate. It the taxes that stand in the way of upstate’s recovery.
If such a reverse migration were to occur, I wonder how long a time span it will require. Sure, recent dramas like the SE drought and CA fires would make it easier for one to think it will be sooner than later. Still, will the Rustbelt be able to attract jobs back in the meantime? As we now know, many jobs that left the Rustbelt made only temporary stops in the Sunbelt before leaving altogether for Mexico and points beyond. Have we lost too many jobs as a nation to ever reinvigorate the Rustbelt - should it come to that? There’s also the somewhat reasonable possibility that Great Lakes’ water will be pipelined out someday - perhaps under “federal” dictate? (It can’t exactly be ruled out.)
“There’s also the somewhat reasonable possibility that Great Lakes’ water will be pipelined out”
Sorry, won’t happen. The Great Lakes have an international agreement involving the states and provinces on the lakes forbidding any diversion of water. It would be an international fight, and the Canadians would not back down. The Lakes themselves are low on water, no one really knows why. Besides, the infrastructure required to move water that far south, over mountains and deserts would require the kind of money and engineering this country no longer has.
Agree with your prediction about 2005 dollars. Why would our grandchildren AGAIN pay twice as much to rent as to buy? Won’t we, and even the FBs, tell them not to?
Egad, of course I meant “twice as much to buy as to rent”
The economist often credited with the soft-landing term, Leslie Appleton-Young at the California Association of Realtors, said it’s unfair to judge her statements in hindsight. ‘There’s no doubt that we knew the market was going to change,’ she said. ‘It just happened with a much greater severity (than we predicted).’
An excellent reason to stop quoting this thoroughly discredited shill, and talk instead to someone with a track record of not being dead wrong.
Exactly. Decades back a snake-oil salesperson like Appleton-Young woukd have been tarred & feathered and run out of town on a rail.
In case any of you SD folk can help
http://sandiego.craigslist.org/com/456724169.html
and this is the SD I remember. I think this guy was my next door neighbor in OB
http://sandiego.craigslist.org/com/456703515.html
We had a crew leave from work of vets, handlers, and hauling equipment to help with livestock evacs and care. I’d have gone with the equine group if the office could have lived without me.
That second ad is very clever - I wonder if I can score some free 420 by offering my place as a refuge. Granted I’m in San Francisco, not easily accessible from San Diego at present because of the little truck incident last week.
Im not so sure going forward its about making money on houses, its the housing phenom thats crushing the life out of the economy, pulling the pants down, so to speak, of the debt is wealth paradigm. Southern California burns while the banks are in trouble. Splash in some really big insurance going broke, its a whole new ballgame.
What the f*rick is happening in SoCal?
Another great point. It will be interesting to see how the market responds to this. I might have to short a few insurance companies.
Why does it seem like Realtors were strictly JV cheerleaders?
I was out filming black fire smoke from all angles and my automatic sprinklers came on.
Thank you water bill.
Love that George Chamberlin. Here’s a letter I wrote to the editor based on this opinion piece.
http://www.nctimes.com/articles/2007/08/12/business/chamberlin/16_00_348_11_07.txt
For some reason the North County Times never published it - can’t imagine why.
Dear Editor:
I read Mr. Chamberlin’s recent column with a great deal of interest as I am one of those who has been predicting a housing correction since 2004. However, I am not celebrating the avalanche of bad news, the growing number of foreclosures, and the massive destruction of wealth we are currently undergoing. I cannot rejoice because too many of my friends and clients either overbought or “freed the equity” in their homes without truly understanding that this debt would have to be repaid even if their homes did not continue to appreciate. Instead I watch this as I would a terrible accident I see coming but cannot prevent.
At the end of 2003 I knew that based upon fundamentals the market was overheated and housing prices were too high. Then in 2004 I watched in amazement and disgust as traditional lending standards were thrown out the window and “creative financing” became widely available, allowing almost anyone to purchase a home for any amount. Did I see a problem with lending half a million dollars to a person with poor credit, no down payment and a $50,000 income? Absolutely. Did I believe we were going through a paradigm shift that meant average Americans could now afford a home at ten times their income instead of a traditional three to four times? Absolutely not.
I’ll admit, in some respects Mr. Chamberlin is correct. I want to see a housing correction. I want young couples starting families to be able to buy starter homes that are three to four times their income instead of 9 to 12 times. I want people to be in fixed loans that become easier and easier to pay over time as their income increases instead of adjustable rate loans that manage to swallow all income gains and never pay off a dime in principal. I want people to have to maintain good credit, save for a downpayment, and actually earn their homes instead of having them handed to them through cheap and easy money. I want people to have manageable debt and not be enslaved to pay for a house they lost years ago because they made the mistake of refinancing it.
I am sorry for the people who are about to lose their homes. Many good people are going to suffer and the system set them up for failure. But the simple fact is that they bought homes they could not afford. At a time when a borrower could get a fixed loan for 5.5%, they bought houses they could afford only through adjustable loans. And lenders not only allowed this, they promoted it, encouraging people to ignore traditional wisdom, to buy “toys” they could not otherwise afford, and to refinance short-term consumer debt into long-term collateralized debt. Now these loans are failing in record numbers and investors are no longer providing the cheap and easy financing – thus the Ponzi scheme begins to unravel.
Mr. Chamberlin can blame the housing bears for the current contraction in price and liquidity, but it is a false argument. As an “investment professional” he should be well aware that any asset that has years of 20% plus appreciation is a very risky investment and has a very high downside potential.
Sincerely,
Me
Let me begin by passing along my congratulations to the many people who are celebrating the current situation in the housing market. In concert with much of the national and local media, they have been able to artificially construct something that has never —- I repeat, never —- been done before: drive down housing prices at a time when unemployment is low, the economy is booming and consumer confidence is approaching record highs.
I’m genuinely flattered, but surely a little detail like the median house price throughout the entire state being driven to over half a million dollars, when a scant few years previously it had barely cracked $200k, had something to do with it? That too has never - I repeat, never - been done before. And, after adjusting for inflation, it will probably never be done again.
Well said, SD RE Bear!!!!
let assume that you bought one of those $350K home at the auction, and you work in the SF Bay area. That mean that you need to make at least $90K a year.
I hope whoever bought the house, also figure the cost of insurance, gas for commuting, and tax.
I believe we havent seen the bottom yet for Mantecca. More like $250K to $270K, but not $300K+ range
Nah…just living in beautiful Manteca is worth every penny in gas spent driving 3+ hours a day and paying 40+% of your wages to your mortgage, taxes and insurance. Where else are you going to get to breath Haywards smog so cheaply?
It’s a great time to buy in San Diego….there’s a fire sale going on there….literally.
Actually I don’t mean to make lite peoples troubles who are now losing their homes, but what do you think this means to insurance rates in the state when companies have to start paying out inflated settlements because of the bubble prices? Will people get settlement offers which are significantly less than they owe on their house because insurance companies will want to pay at post peak prices? You bet your sweet bippy they will!
Yet more food for thought when people are already gorged on all of this credit trouble news.
And what’s all this talk about Manteca? Who really gives a damn about Manteca anyway…..ever since they took out the waterslides Manteca is just another speedbump on highway 99 downwind of Stockton.
I guess I picked a bad week to quit amphetamines..
Any word from Get Stucco/Prof Bear? I heard that fire had reached parts of Rancho B, still trying to confirm?
Bear and a few other are in the evacuation zones. I’m not sure what happened with the Irvine fire but we have many people from there as well. Last I heard the Irvine blaze was suspected arson.
Despite my black humor comments, I’m hoping everyone is ok.
Professor Bear is MIA tonight, he lives in ground zero for the Witch Fire, Rancho Bernardo. I’m sure he’ll be back online soon, double-extolling the virtues of renting.
Take care, P. Bear.
Brad,
I sincerely appreciate the expression of concern. But no worries — other than breathing soot-laden air, my loved ones and I are safe and out of harms’ way. Better yet, a neighbor let us know (after bravely sneaking in to check) that so far our home (and theirs) has dodged the inferno. All is well on a personal level given a disaster of historic proportions.
Woot! I was hoping you and the Misses were ok.
That’s good to hear…
All I can say is…woohoo!
PB, I’m so glad to hear you and your love ones are safe.
You guys will love this! This is what my realtor told me a few weeks ago (no kidding):
“Ok here it’s the deal. I’m haven’t over studied the
market and financial options. I only make decisions
based on logic and predictable results.
One of your questions was about the average buyers’
income for a 400k house. Their income has to be about
65 to 69k and great FICO score.
In regards of house prices, my predictions are as good
as any one else. I don’t know and nobody does. They
may drop some more, but there’s nothing certain.
I believe owning real estate is one of the best
investments anyone can make. Not only you own, right
off interest and property taxes, get the appreciation
(you are guaranteed to get your money back in 10
years), no rent increases, no one
has keys to your place, and opens a world of financial
opportunities. In addition, you use the home and then
sell for more money.
The bottom line is not the price but the mortgage
payment. People need to make sure they are
comfortable with it and understand how their loans
work. Interest rates are very low right now and the
odds of going down are less than going up.
ARM, IO, Negative amortization, reverse mortgage are
all creative ways of financing. All of them are
appropriate for different kind of needs. I’m mostly
using 30 or 40yr loans with the first 10yrs of IO at a
fixed rate and the rest of the loan is obviously
principal and interest factored in. I feel pretty
comfortable offering this loan to buyers with a 100%
financing. The thinking behind it is for buyers to be
comfortable making their monthly mortgage payment at
the beginning and in 10yrs with inflation,
appreciation, an other factors involved, they will be
in a better financial situation to make a higher
monthly payment. Also I make sure it is a fixed rate
so they have peace of mind. If they choose to refi,
that it is a different story. I explain all the
benefits and consequences, for instance home equity
loans, line of credit, etc.
You probably don’t want to hear this, but it is an
awesome time to buy. When you hear about the market
being “bad”, they mean “bad” for the sellers. The
inventory right now is so great that you can choose
from many options. The buyers are calling the shots as
far as pricing and closing costs. Interest rates are
still pretty low. I don’t know what else can be
better for buyers right now. A big problem in this
market is finding qualified buyers, meaning people
with great FICO scores, reserves, and good income.
That’s why sales are lower. We have to work with
strict lending requirements.
Also, February is the best month to buy in regards of
impound property taxes.
The main goal is for people to stop wasting their
money in rent…. that’s just common sense. Everyone
who rents is buying a house, it is just someone else’s
house.
Besides, the government helps out first time home
buyers by giving them a break on income taxes. The
government figures out that average Joe Blow will not
have any savings by retirement time and it will cost
them more money that someone who has a least his/her
house to fall back. We have to realize that average
people overspend and don’t plan ahead.
With all this said, I can’t emphasize anymore that it
is a great time to buy right now.
Nobody can predict the market….trust me on this one.
But some things are just obvious.”
There is your red meat. Have at it.
“I’m haven’t over studied the market and financial options. I only make decisions based on logic and predictable results”
How can you predict results if you haven’t studied the data in depth? The rest is just too easy to pick apart.
Hi Chik.
I sooooooooooooo agree!! I’m in the market!! As soon as hubby and I find our slice of heaven (08?, but hecks, who does know?) we’ll buy!
Oh, did I mention no mortgage! I love being me! Yipee!
Leigh
P.S. Thanks for the pick me up!
er…sacasm off (hey, I forgot!)
That is a very impressive butchery of the English language, if nothing else.
(you are guaranteed to get your money back in 10 years)
Even if this guarantee were true, consider what it means. Let’s say you bought at the peak in 2005, and let’s further say that prices do manage to make it back to 2005 prices by 2015. Great, so the capital gain is neither positive nor negative, and you’ve spent ten years paying at least double what it would have cost you to rent the same place. Oh boy, where do I sign up?
I knew that you could “write” off the mortgage interest, but I’ve never heard of the ability to “right” it off. Is that a new IRS methodology.
I believe most realtors when they say that now is a good time to buy. They don’t any better. Of course the key is realizing that nearly all don’t know what the hell they are talking about. Just like you wouldn’t expect to get good advice from a gas station attendant on oil futures, don’t expect to get any insights from a realtor. If they had anything of value to add to the discussion, then they’d be in another line of work.
My parents just got evacuated. Even the tile roofs are going up for some reason. Thank god everybody switched from shake-shingle(wood) after the last fire or it’d really be bad out there.
None of their phones are working unfortunately. Some info on the big fire (Witch fire).
I’m gathering a bunch of news here. Sixty stories so far today and they’re pouring in. Site’s not really ready for the public yet but it generally works.
BIL neighbor’s house was on fire when he evacuated (4am), may have lost his house, he doesn’t know. Santa Ana winds push those fires like a monster on a rampage, can’t even out drive them in some cases. Extreme radiant heat coming in through glass windows can make even a concrete tile roof/stucco siding/steel frame house go up in flames, as the stuff inside (drapes, furniture, carpets, etc.) catch fire.
My consolation is that most people are still alive. Stuff is just stuff in the long run.
We just got the bright idea to call his house and see if his answering machine is still picking up…it does! Well, one more house still standing. Thank goodness for the little things. Hope GS/PB is all right.
My best to you and yours.
Sincerely,
Leigh
Major Fires in California
250,000 evacuated
Time to call up the National Guard. Oh wait they’re out of state for the next decade.
Plan B - Fire up the printing press, get those unemployed construction workers back to work with a Massive infusion of new cash.
You know, if it weren’t for a few people actually looking to buy overpriced real estate right now, there’d be no dumb people.
Years ago I used to build my own houses and do all the work and you could build a nice home for not a bad price but today with government taking over the building business and forcing you to buy permits and use licensed workers and driving prices ever higher actually owning a home free and clear is becoming a distant dream for average folks ,,