Fire Sales By Troubled Borrowers In California
The Sacramento Bee reports from California. “Scared by growing numbers of bank-owned houses and for-sale signs in their neighborhoods, a handful of local cities are launching moves to help homeowners threatened with foreclosure. Their initiatives so far are limited to offering advice. Nobody’s opening up the checkbook to bail out homeowners.”
“Citrus Heights, which since the first of the year has seen 270 foreclosures, has struck a deal with a nonprofit credit counseling agency based in Sacramento. The group is mailing letters to city residents who have received default notices.”
“‘We don’t know how far this is going to go,’ says Jim Lynch, community enhancement manager in Citrus Heights. ‘We’ve had housing setbacks over my 35 years, but I’ve never seen this many bank-owned properties and so many foreclosures.’”
“Folsom has seen 90 foreclosures since the start of the year, according to a Fair Oaks Web site. Sacramento, with 1,740 foreclosures since Jan. 1, has ramped up code enforcement efforts to deal with vacant housing.”
“More than 6,500 homeowners have lost houses this year to foreclosure in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, according to DataQuick.”
“Reed Flory, Rancho Cordova’s housing services administrator, said the city is especially concerned about its new Sunrise Douglas subdivisions. Filled with residences by local private homebuilders and big national firms, Sunrise Douglas is expected to eventually have at least 15,000 homes.”
“Yet many of the homes there came onto the market in 2005 and 2006. Those were peak buying years for borrowers now facing adjustable-rate mortgage resets and falling home values.”
“Rancho Cordova City Councilman Ken Cooley recently counted 79 homes for sale in Anatolia and fears some may be ‘fire sales’ by troubled borrowers.”
“‘I think if Anatolia has a high incidence of problems related to this kind of lending activity, that can be devastating to that neighborhood,’ he said.”
From CBS 13. “Cleanup or pay up. That’s what one local city is saying. With a record number of foreclosures, Manteca is looking at slapping homeowners who neglect their property with hefty fines.”
“San Joaquin and Stanislaus County has its share of vacant properties. And with that, homes that are empty, lawns that are dead, targets for squatters.”
“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
“If they don’t act, the city would contract to have the work done and leave the bill with the homeowner or bill.”
The Contra Costa Times. “The financial failure of Cal State 9 credit union stunned some members and left others surprised the company had become the latest firm to be engulfed by the widening mortgage morass.”
“Nothing underscores the unexpected catastrophe at the Concord-based credit union better than the recent trend for failed real estate loans on the credit union’s books. During the past two years, the number of delinquent adjustable-rate real estate loans skyrocketed, according to data supplied by a federal agency.”
“In June 2005, Cal State 9 reported that its delinquent adjustable realty loans totaled zero dollars. In June 2006, that number had risen to $4.6 million. In June 2007, the most recent period available, those loan delinquencies had soared to $25.8 million.”
“By Friday, conditions at Cal State 9 had deteriorated to the point that state regulators forced the credit union into conservatorship. The regulators handed control of Cal State 9 to the National Credit Union Administration.”
“State regulators are attempting to determine how many credit unions and other financial institutions have offered “nontraditional mortgages” in recent years, said Alana Golden, a spokeswoman for the state Department of Financial Institutions.”
“Jackie Wong, until recently the credit union’s CEO, was no longer with the organization Monday. ‘In this environment, it is not uncommon for borrowers to become delinquent and, like others, we have seen our loan delinquencies increase as a result of the decline in the housing market,’ Wong said via e-mail.”
“The last California credit union to be closed was in 2000, Golden said. And it does appear that 2007 has produced a spike in the number of credit unions taken over by federal officials through a conservatorship.”
“‘It’s pretty sad that so many people and so many companies are being affected by this housing problem,’ said Sheila Skead, a Pleasant Hill resident who was conducting business Monday at a Cal State 9 branch in her home town. ‘The whole state is being affected.’”
The Press Democrat. “Bill Hewitt’s furniture isn’t finished, but his business is. The owner of Bare Woods is closing his Santa Rosa furniture store after 31 years, citing the sluggish housing market, cheap competition from Asia and changing tastes.”
“When he realized earlier this year that the housing slump was only getting worse, Hewitt realized he had to take action.”
“‘We haven’t been profitable in three years,’ said Hewitt recently from his quiet, cavernous warehouse and showroom. ‘I want to go out with my head held high.’”
“Sonoma County’s furniture industry is in turmoil. The housing downturn and subprime mortgage meltdown are delivering a one-two punch to many furniture retailers already reeling from competition from cheaper imports that are improving in quality.”
“Fewer home sales mean fewer people are looking to decorate new spaces. Many of those who are staying put are facing a credit crunch as either their mortgage payments increase or sliding home values make it more difficult for them to tap evaporating equity.”
“The slump that last year sank R.S. Basso in Sebastopol, and Colburn’s Wood Furniture and Greenwood Home Furnishings in Santa Rosa has deepened, as home sales have dropped to their lowest level since 1991.”
“Many that haven’t closed are struggling desperately. ‘Business is very, very slow right now. I don’t know what’s going on,’ said Ben Nejad, owner of Piner Furniture.”
The Napa Valley Register. “Napa County Assessor John Tuteur has lowered 2007-08 property assessments on about 200 Napa County homes that are worth less today than their owners paid for them.”
“So far declining assessments are limited, affecting mostly people who bought new homes within the past two years, Tuteur said.”
“Lowered assessments have been applied to houses at Sheveland Ranch in south Napa, townhomes at Valley Oak Villas in Napa’s Westwood neighborhood, condominiums at Newport North in Napa’s River Park and houses at Vintage Ranch in American Canyon, Tuteur said.”
“At Vintage Ranch, one owner who paid $765,000 had his assessment lowered to $688,000, reflecting the current market price, Tuteur said.A buyer at Sheveland Ranch had his assessment lowered from $621,000 to $559,000.”
“At Newport condominiums, a unit purchased for $362,000 was dropped to $329,000, Tuteur said.”
“In addition to the 200 lowered assessments applied to the current tax rolls, another 40 to 50 reductions have been approved for 2008-09, Tuteur said. These reductions came about after homeowners contacted his office to ask for an assessment review, he said.”
“His office will do a more widespread review of property values in April to see if additional homeowners qualify for lowered assessments, Tuteur said.”
“Many Bay Area counties have reduced assessments on significantly more properties than Napa County. Solano cut assessments on about 700 out of 109,000 residential properties. Contra Costa lowered assessments on 22,500 properties, Santa Clara on 18,000.”
“The situation today is not nearly as bad as in 1997 when his office lowered assessments on 5,700 properties, representing 12 percent of all parcels, Tuteur said. In the 1990s ‘we had some properties off as much as 25 percent. We haven’t seen that yet,’ Tuteur said.”
“The assessor’s office is taking a cautious approach, Tuteur said. ‘We don’t want to get ahead of the curve. We don’t want to predict the market going down.’”
‘Marin and San Francisco counties led the state in the number of jobs lost to interstate migration from 1992 to 2004, according to a study released Monday. Both counties suffered about a 4 percent job loss during that period, according to the Public Policy Institute of California, a nonprofit public research organization based in San Francisco. The losses stand in stark contrast to what was occurring throughout most of the state.’
‘The study reports that job loss from interstate relocation tends to occur in better-paying industries. Former Marin supervisor Cynthia Murray, chief executive of the North Bay Leadership Council, called that the ’scary part’ of the study.’
‘The study supplies no definitive answers as to what caused the migrations. The study’s creators, who included Kolko, speculate that high commercial and residential real estate costs may have been the major drivers. The fact that the majority of the moves occurred over short distances, between adjacent counties, supports this hypothesis.’
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“he study’s creators, who included Kolko, speculate that high commercial and residential real estate costs may have been the major drivers.”
Bingo! It takes time but high home prices invariably lead to population losses and job losses. People need to study California’s job losses in early 1990s to foresee where the state’ economy and its revenues are headed.
Jas
Thank for that Ben. I’ll see if I can get a copy of the whole release. Isn’t this USC release season? I thought we had our estimates last year in Oct.
btw Ben, thanks for whatever you have done - my posts are now going through in record time. Anything under 3 hrs per post is a win for me.
You know what they could do to deal with all this falling state revenue?
Repeal Prop 13.
how about chopping some chair warmers ?
Good luck with that…
Good luck with either.
It doesn’t work like that. There have already been several efficiency campaigns that went through the entire government. The only way to actually cut the mess is to agree to less services, and since we have decided to imprision an unusually large percentage of our population we have to pay the bill for that. Drug testing and no tolerance seems like a good idea until you have to pay for many thousands of nonviolent offenders at more than $30k per year each. Prison is the biggest boondoggle, but there are plenty of others. How about less water on top of the steep reductions already in the works? More road closures? What don’t you want that the state pays for?
“There have already been several efficiency campaigns that went through the entire government.”
That may be one of the funniest things I have ever read.
It’s very serious stuff, not just humor. Politicians and analysts went all over this. Speier’s commission was the most recent, but there have been others. The numbers are all available through the Legislative Analyst’s Office. People say there is pork, but when you look hard you find nothing but duct tape and plastic and promises to jail as many people as we need at $10k a year, oops make that $20k a year, oops a few hundred thousand more at $30k a year, and so on. We pay more for prisons than schools and that is not an efficiency thing, it is what we have decided to invest in.
Hi Mole,
Have not visited CA in more than a decade.
I agree–the war on drugs is a failure.
What to do? Jails are full to the brim of non-violent narcotic substance abusers.
I do not know the answer–the war on drugs is not working.
Jailing is not working. (I don’t use, so my opinion is worthless). Admittedly, baseless.
FWIW, incarceration is not the answer. This I do know.
What I do not know: How to solve this massive epidemic?
Sigh,
Leigh
You are severely mistaken. Jails are not full to the brim with non-violent drug offenders. The stats quoted do not take into account drug dealers, traffickers, gang members, and organized crime figures who are arrested for drugs. Most drug users are sent to local county jails and not given long sentences.
Many people also add ALL non-violent offenders to the number of people in prison for drugs. These include car thieves, burglars, white collar criminals, fraudsters and other scammers. Why should those people be set free? If there is no threat of incarceration for non-violent crimes, what will stop people from committing those crimes? Should someone be able to break into houses on a nightly basis and not have any fear of being incarcerated?
Let California release all non-violent offenders first. We’ll see what happens to their crime rates. We’ll see how many more burglaries and thefts occur as the 400,000 gang members are given the green light to commit any crime they wish, as long as there is no violence involved.
They really should legalize possession of drugs and have mandatory sentences if you sell drugs. Sort of the Al Capone theory.
If people could grow their own why would they try and smuggle stuff in from mexhiko or kolumbeeah
Most of the time, a person who’s in jail for “possession” is there because he agreed to plead guilty to that charge in exchange for the DA dropping more serious ones, like possession with intent to sell, weapons charges, burglary, etc.
I’m not sure there’s much in the way of fiscal savings to be found in “legalizing possession.” Without that plea-bargain tool, whatever savings we’d get from not warehousing ordinary users would most likely be more than outweighed by the cost of having to take a lot more dealers to trial.
Thomas –
I have not seen any data on that claim. I’ve been reading too much “Reason” probably. Do you have a link to those data? I think that high burglary rates w.r.t. drugs are due to the artificially inflated prices because of prohibition, but I am willing to read the evidence. TIA.
MrBubble
If it cost $30K to house someone in prison then there’s lots of fat to cut. Let the prisoners fix the roads.
Bingo. Especially the “non-violent” types.
I think you’ll have a lot of road builders pissed off that there good paying jobs are going to prisoners.
It is a mistake to make some kind of incentive about keeping prisoners. The government is already too motivated to put people in jail.
Or do what those of us who aren’t privileged with mandatory taxing power - reduce spending. That’s an amazing idea, isn’t it, especially considering how much spending has increased versus inflation, population growth, etc.
Politicians are like the REIC - they think their revenues only go up, never down.
I’d like lower spending, smaller government, no ’safe-harboring’, and a small budget surpluse with, eventually, money in the bank so the state doesn’t have to crap its pants every time somebody forgets to pay their taxes.
Reduce spending? No way in CA, which is a state dominated by big government Democrats and the big RINO sitting in the Governor’s chair.
Fat chance that will happen sfbubblebuyer. The legislature wouldn’t touch that with a “13″ foot pole.
Dear Future Buyer:
Are you coming to the HBB party (below)?
In a state dominated by equity-rich, tax-subsidized Boomers & Silent Gens –not to mention all the holding companies that pay less in property taxes than you do? Get real.
I know it won’t happen. But it WOULD raise revenue!
Great idea. Let’s fine the FBs and banks for unkept lawns and swimming pools. When you collect, let me know. What a retard of an idea. But it can make up for the loss of revenue. How about this? Cut the salary and benefits of every gov employee 1-2%. Now we’ll have a surplus.
“Cut the salary and benefits of every gov employee 1-2%. Now we’ll have a surplus.”
Hmm, do you really hope to get your wish? Then, after you can’t hire enough police and firefighters, and the poor start going Rodney King on you, we can watch the plundering horde slowly advancing on your neighborhood. And when I say ‘watching’, I mean via TV. You can have the ring-side live action…
Screw the police and firefighters. They’ve got the sheeple brainwashed. No where else can they make 125k with a GED and retire at 50 yrs with 95% of their highest yr. Give me a break. Get rid of the ACLU and arm yourself. Bring on the RKbangers. Wait til I get another 150 rds of ball ammo or better yet wad cutters. God I love this blog.
Yes - repeal it for residential properties except for ‘homestead’. Once you buy, there is no reason to be forced out due to taxes regardless of the current property value. However, plug the intergenerational transfer loophole, and for all of the residences that are really converted income properties. Recover the tax savings (only from gains, if any - from the owner/seller,) upon sale.
plug the intergenerational transfer loophole..
i’m going to guess that you do not plan on inheriting much of anything..
Two-part solution:
1. Restrict prop 13 to PRIMARY RESIDENCES ONLY; and
2. Cut expenditures.
You might get a restriction to only primary residence through if it’s introduced at the right time by the right person. There is a whole lot of pent up hate coming out against the speculators and it give them a way to lash out without resorting to a rooftop and an AK47.
Hey Missy!
What’s wrong with an AK?
Leigh
P.S. not a sniper on a rooftop shooting live ones!!
I don’t do moderns munition. If I was on the roof, I’d using a harpers or a converted Spencer.
True story!
During the RK riots when I occupied a loft in downtown LA, I rolled a bagillion cartridges for my Sharps replica and spent the morning trying to find a lost container of balls for a wheelock. I had a small cannon (not mine, belonged to a friend) aimed at the front door. Yes, I’m a geek.
I like geeks!
Dang, get out of there!
That’s just not fun!
It’s tough to top a cannon. Those would have been pretty fricking surprised rioters.
good lord.. I’d be careful what I wished for.. you know what they say about a little bit of knowledge..
Proposition 13 is not just about property tax.
It also includes a provision that requires a two-thirds vote of the Legislature to increase any state taxes.. including income tax rates.
Please do not feed the Beast.
Why is it people only want to raise taxes and never cut spending or even slow down? At what point do they stop raising taxes?
We’ve all heard it said before, but four months of our earnings end up going to the government every year, and we are still $9 trillion in debt. Don’t tell me there is absolutely no waste in government spending. We all know that is bullcr@p. The GAO discovered $17 billion missing from the federal government in 2003. How much is missing from the state and local government coffers each year? We have the government renting waste baskets for $40/mo. We have $100 nails and $600 hammers. Yeah, there’s no waste at all.
I don’t buy that argument. Property values are still much higher than 2000. Due to rising property values (and even though they are going down, they are still very high), the government was recieving more money than EVER from property taxes.
Now they cry that they dont’ have enough. I ask, “what have you been doing with all this new property tax monies that the state NEVER had before in it’s wildest dreams? Of course, they spent it, without planning for a leveling of the market.
I get so tired of people blame Prop 13 (which I think it is a good and fair thing condsidering our local governments penchant for wanting more and more more) when it’s really representatives who spend everything without PLANNING. There is no reason they should be at a loss right now. They have no one but themselves to blame.
“Their initiatives so far are limited to offering advice.”
What a crack up! That’s what got me going about our local “initiative” too. A proposal to spend 400K of taxpayer money to open up a hotline for FB’s. That’ll do it!!
Almost every time I try to advise a potential FB, I get that “I don’t need your advice” attitude. I have a feeling the state advisors will get more of the same.
Of course, because all a FB wants to hear is BS reassurance that home prices will start going back up next week, month, or Spring. Their whole world is dependant upon home appreciation.
Be happy that the FB is getting reassurance. This reassurance will give the FB hope that things will turn around for him. This hope will give him incentive to keep making his payments.
The FB is doomed, but before his doom is finalized all the liquidity he can get needs to be put into the system to help keep the System afloat. This liquidity will allow the System to correct slowly and thus prevent a crash which would freeze up the economy.
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“The situation today is not nearly as bad as in 1997 when his office lowered assessments on 5,700 properties, representing 12 percent of all parcels, Tuteur said. In the 1990s ‘we had some properties off as much as 25 percent. We haven’t seen that yet,’ Tuteur said.”
That was 7 years into the bubble burst. When we hit 7 years into this bust we will have properties off 75%+. Municipal bankruptcies will be rampant.
Jas
Agreed. We are just looking over the cornice of this mountains downslope.
Key word in that quote - “YET”
Exactly. Yet is a powerful word.
So which county will go bankrupt first? I’m thinking Broward in Florida. State? Oh… that’s a tough one, but I think it will happen.
We’re in for a wild ride!
Got popcorn?
Neil
ahem, did you forget about SD? We’re broke already!
“ahem, did you forget about SD? We’re broke already!”
Does this make us Number 1?
No they wont
They will raise business taxes, pass ordinances, raise utility costs, ticket more often, and audit the hell out of people
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Yes, that will lead to more job losses, less revenue base,… Real smart moves indeed.
What is that saying about beating a dead horse?
Jas
What it will lead to is less of a burden on government as people leave the state.
Actually, that all depends on what kind of people are leaving the state. If it drives out net tax revenue-positive residents, while leaving behind the welfare kings & queens, not such a good thing.
CA FTB already beefed up their fraud and audit staff in 01-02 when they had so many people evading CA taxes during the dot.com bust. The IRS had it’s staff reduced repeatedly so they only focus the low hanging fruit and ingore the big stuff, Tx’s experience to the contrary.
FTB could teach the IRS how to run a shop!
“That was 7 years into the bubble burst. When we hit 7 years into this bust we will have properties off 75%+. Municipal bankruptcies will be rampant.”
Already the no of foreclosures/defaults in 2007 surpasses the peak foreclosure year of 1996, the 6th year of the last RE bubble cycle. We are only in the 2nd year of this current downturn. This bubble will be far worse than the last RE downturn. With calls to cut the CA budget by 10% and a looming fiscal crisis next year look for sharp increases in property crimes, auto thefts,auto accident scams, out of control gang activity, increased muggings,domestic violence, militant left-wing activist nut jobs marching in the streets of LA dwtn, crazed Fb’er drivers burning rubber on the streets, and even a few riots here and there, to liven things up in LA.
My house is riot-proofed with iron grating, floodlamps all around the perimeter, two guns, two guard dogs, and one mean streetwise SOB with experience dealing with ghetto punks. I know the true nature of the inner LA s*itburbs as i have worked in them and have survived , battlescarred and totally cynical about what the police and gov’t will do to protect me in event of a riot(nothing).
Look for ‘ hot times’ in the City of Angels !
Yikes!!!!! Dude you sound like a bad mofo. I would hate to be anyone rioting around your place.
How someone from LA can be for guncontrol after watching the LAPD pull out during the RK riots is beyond me. My dad and I were cheering the Koreans on as they stood on top of their stores, armed and ready to shoot the f%^ckers if necessary. At least that is what it looked like to us up north.
The PD will not protect you during major civil disturbance. Accept it, arm yourself (safely, get trigger locks etc.), but be prepared.
Sometimes you just can’t bargain.
Who wants to come to the HBB party in Redwood City on November 17th? It will be at Chevy’s at 2907 El Camino Real at 6 PM.
I will let my friends in Bay area know about it. Is the date and place confirmed?
Yes. Once I find out how many people are coming, I will reserve a table under the name “Ben Jones”.
Thanks..I have emailed at least 5 of my friends in Bay area.
Anyone know what happened to Jen Bones…? I thought he/she had a wicked sense of humor.
Hey Hondje!
I lurked for a long time and actually thought she was Mrs. Jones! (Smart one).
Where are you Jen?
Big V , I can confirm that there will be at least 2 of my friends coming for Nov 17 party. BTW Nov 17 is also my birthday.
You guys are nuts. I hope your not hanging a banner. You’re gonna be fresh meat for FB’s pushed to the edge of criminal insanity. If I were you, I’d pack a Joshua tree for protection.
LOL !! LOL !!
That was a concern of mine when I hosted a dinner in the South Bay. I opted to draw an “open house” sign on a board. Thankfully I was able to grab the seats I hoped to!
Someone please show up early to help Big V hold the tables.
Have a great time! (Wish I could be there.)
Got popcorn?
Neil
A Joshua Tree should be the table decoration! hehehehehehe I wish I lived closer so I could attend.
I may be game. 6 is a little early for me to get there, but I’ll give it the old college try*!
* meaning I’ll probably get drunk and sleep through it.
It’s OK to come a bit late. My hubbie and I fully intend to be drunk as well. I’ve heard they make a pretty juicy margarita at Chevy’s. I just hope I can stay sober enough on Friday night not to have a hangover by Saturday night.
will try to make it, I certainly have cause to celebrate as I was able to sell my place (in Mendocino Co.) just in time this May, thanks to this blog I knew the pop was imminent, “discounted” the house about $7K, had it sold in a week….
Gotta love it, people in Mendocino and Humboldt counties really think they are getting a great deal when the price is lowered by $5K-$10K. I’m seeing that up in Eureka too, if the price cut is merely a few thousand, it sells almost instantly. This has to be the capital for GFs in the whole state. A surprising number of people keep buying and really see RE as they key to retiring rich.
Hey Bluto! My parents live in Ukiah, CA. Tried to get them to sell last year, and the year before, and the year before…..
They purchased a home on 1 acre for $150K in 1996 and insist it’s now worth 375K.
This is in a community where the median income is 26K to 29K!
The part of town they live in is nothing fancy either. Some chicken shacks. Double wides. Cars on blocks. Some grape vines. A few nice houses built inbetween.
You can always be nice and say your house will be worth $375K again, the day after both of you pass on….which is what 20 years down the road.
houses did roughly triple in Ukiah at the peak (summer 2005), bought my place there in ‘97, got about 2.7 X purchase price this year, but no complaints, got out by the skin of my teeth…..from what I hear nothing is moving now…..
Dang, now I really want to go just to be escorted to “Ben Jones’” table.
I can’t wait to buy a cheap home in Napa in 5 years. It’ll be great!
Was that a subtle attempt at sarcasm? Funny :-/
“In June 2005, Cal State 9 reported that its delinquent adjustable realty loans totaled zero dollars. In June 2006 that figure had risen to $4.6 million.”
In November 2007, az_lender reports that her delinquent realty loans total zero dollars. Whistling past the graveyard. Hopeful points: no ARMs, no I/O, no neg-am, no California.
“‘It’s pretty sad that so many people and so many companies are being affected by this housing problem,’ said Sheila Skead
Sheila, Sheila, Sheila. You’ve got it all wrong. Turn on CNBC and you’ll feel all better, ’cause they’re telling us it’s all contained.
“It’s pretty sad that this asset bubble gave people the false hope that everyone could quit their jobs for a six figure salary schlepping bogus loans to people who couldn’t afford to pay them,” said sleepless_near_seattle.
Watched CNBC for a few hours today. Oil is at 96.00+(the market can absorb it). Foreclosures are on the rise, but the market as a whole is fine because only 8% of the population has a problem making payments. It’s only affecting speculators in Cal,FL,AZ.
Blah..Blah..blah…Oh, and by the way, Neuman Homes in Chicago files for bankruptcy today. And the Dow is still going up as we speak. See, we told you this is just a blip. Make Maria B. happy, go Christmas shopping early and often, because traders tell her, there is no recession looming, only RE DOOM blogs trying to frighten the consumer. I love to be reassured by Wall St., the last of the Snake-Oil salesmen.
It’s here in the SE. Crime has gone up dramatically.
I want to put some money to work with you. Seriously. Or maybe take over your operation when you retire. Old folks and trailer parks?
“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
Yup, that will encourage banks to wait for top dollar for their REOs. Detroit tried some similar “punish the owner” measures. It just lead to a longer lead time on the “to be razed” list. People with a lot of extra cash don’t abandon their houses.
In many cases, the bank IS the owner who will be paying the fine. They’ll be wanting to get it off their books ASAP.
In the CV, these ordinances are aimed at the big servicing houses which accounts for the (65-70%?) of our vacant inventory. When they couple these with eminant domain statutes for large outstanding balances, we’ll see some big movement.
“Rancho Cordova City Councilman Ken Cooley recently counted 79 homes for sale in Anatolia and fears some may be ‘fire sales’ by troubled borrowers.”
“‘I think if Anatolia has a high incidence of problems related to this kind of lending activity, that can be devastating to that neighborhood,’ he said.”
Hey, what you call “devastating”, I call beneficial.
A house in Anatolia (11890 Delavan Circle) sold at auction 9/30/07 for $525,000. It was purchased 9/14/06 for $805,000. All of Anatolia is probably upside down.
My wife and I considered buying a home in Anatolia in 2005 (eventually we relocated to Albuquerque). We were on approximately 10 different waiting lists for the various subdivisions. On the days when new lots were released for sale, it was a madhouse. One by one, the lucky “winners” were escorted into the prefab sales office, where they signed up to buy $500,000 + houses that weren’t even built yet. Eventually the whole experienced disgusted me. Caused me to really question what the hell type of communities we were actually creating.
I think i want to stay away from HOA’s which seem to be what all new communities have.
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“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
This will only precipitate more fire sales. Except for HBBers few expected things to deteriorate so fast.
Jas
“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
This will only precipitate more fire sales”
I must pester my home city of long beach to enforce the codes on abandoned foreclosed properties. I live on the margin of a dump section and the foreclosures are piling up thick and fast. If this will force banks to dump their POS’s at firesales prices ASAP then i am 100% behind these abandoned housing ordinances. Still not seeing a whole lot of deep price reductions here in LB for auctions and REOs’. A tiny few here and there but it has not resulted in siginficant price cuts among the few sales I’ve seen on last month zillow sales. The few idiot buyers still paid at close to peak-they must be completely devoid of internet/computer skills or are pulled by the nose by their agents.
The reo’s are piling up fast but the banks will not lower prices very deeply( see only 10% average declines in REO prices so far) as long as the mass of folks are dump sheeple without a clue as to the ongoing RE meltdown which will go thermonuclear in 2008.
“The reo’s are piling up fast but the banks will not lower prices very deeply( see only 10% average declines in REO prices so far) as long as the mass of folks are dumb sheeple without a clue as to the ongoing RE meltdown which will go thermonuclear in 2008.”
I love the use of the word “thermonuclear” in this sentence.
–
“Nobody’s opening up the checkbook to bail out homeowners.”
Next year being the election year will keep Washington out of it for the most part. Whatever is done will be minimal just to pretend that our govt. cares (for whom?!).
Jas
Just like it took forever for the idiot masses to realize there was a housing bubble, it will likewise take forever for people to figure out that no one really gives a sh*t at about sinking homeowners. Sorry FB’s, bail-outs are reserved for the Merrill’s, Citi’s, and Bear Stearn’s of the world. You can listen to all their pretty talk about saving your sorry butts, but in the end you’ll still be screwed!
but in the end you’ll still be screwed!
Does mean getting screwing in the end?
Well, hopefully the majority voice will be heard. I assume someone posted this yesterday, but it’s fun to read these responses to a story on whether we, the responsible, are justified in not wanting any bailout. Some of the comments in support of a bailout render me speechless:
http://cnnmoneytalkback.blogs.cnnmoney.cnn.com/2007/11/05/are-you-a-chump/
Hi Sleep,
The tone of the post(s) suggests many still do NOT understand the enormity of the situation;
They will not be prepared the depression.
Few recognize we’re in a recession.
Yet, I still, against reason, hope.
Leigh
The four stages of any mania:
1. Ambivalence (around 1997)
2. Greed (2002 through 2006)
3. Uncertainty (today)
4. Fear (late summer 2008 is my guess)
The fear will run through 2009 and 2010. In other words, the largest price drops are dead ahead. This is where the maximum pain starts.
RE: Fear (late summer 2008 is my guess)
There will be fear as soon as the $4.00 to $5.00 per gallon gasoline shows up.
Here in Mazzland the local news always puts on the whiners and snivelers everytime it goes over $3.00.
$150.00 to full up the ‘ole Chevy Suburban & 3/4 Ton Pick Me Up?
Wal-Mart Nation will come unglued.
Here in the sprawling desert metropolis $3.20 gas didn’t seem to dent the Saturday morning mall traffic, but at $5 we might start to see a little less random cruising. Many of the 3/4 ton pickups are already off the road due to the housing construction “slowdown” (really almost a full stop). But to a lot of people $150 a tank is still not a big deal. At least you can be pretty sure that those folks are fully insured.
I beg to differ. To someone driving to commute long distances or in their employment will definitely notice a $150 fill up. If not, why are fuel economic vehicles selling so well amidst a car sdales slump? And don’t forget, a lot of those people who treat $150 like its not a big deal for a tank of gas either don’t have a lot of real money or soon won’t have any. More than half of luxury / excessively thirsty vehicles are leased, and usually by people who really can’t afford to buy it in the first place!
Gas prices will be the death nail of the housing bubble in California. People who are already paying $300 to $400 a month in fuel costs will have to pay another 25% or more…where is this money going to come from? Food? Clothing? or maybe in the discretionary stuff like the new TV or Washer/Dryer or car…whatever it is the recession is coming….or should I say the Reaper is on the bus on his way to take the California economy to the grave?
A recent letter to editor in the Valley Times I feel expressed the sentiments of the people here in the Tri-Valley which was to say don’t build anymore house to protect the value of the one already here. In other words let’s make sure our kids have nowhere to live near where they grew up because we’re too f-ing greedy and shortsighted.
1. Ambivalence (around 1997)
2. Greed (2002 through 2006)
3. Uncertainty (today)
4. Fear (late summer 2008 is my guess)
5. You need CAPITULATION for maximum pain
I like to track the real estate emotions on my blog.
http://recomments.blogspot.com/2007/10/real-estate-emotions-october-update.html
Just in case the long link doesn’t work, go to the blog, 2nd to last October article is the latest.
Got popcorn?
Neil
Love the “emotions” chart–dead on
Thanks for the sound advise. It helps with me being patient. I’ll just invite Orville over and enjoy the feast.
This chart is sweet! It maps perfectly to my own estimates that we will see serious pain in 2009 and 2010. That would be a decent place to step into the market.
Until then…get a hobby!
I should be the governor. Army is lowering standards and granting more waivers. All’s ya do is empty California prisoners into Army, hello, along with all the highly paid guards and assorted personnel. When they get out, they can use VA loans to buy houses, zero down. Everybody is happy. You’re welcome.
So the road to prosperity starts by committing a crime?
I like it!
–
Great idea. We should recall the regular army from Iraq and send 250,000 hardened criminals from prisons. All the terror-asses will run for cover. Fight terror with terror!
Jas
Heelllooooo …I just discovered a new source for organ donors. I mean what inmate REALLY needs BOTH kidneys?.
Army and agricultural labor, there are enough prisoners in the penal system to work every farm in California. Make it voluntary and pay them about half of minimum wage.
I’m baffled why no one has come up with that idea. Probably has something to do with the A.C.L.U.
They did. Turns out it’s illegal to pay people less than minimum wage. I guess it messes up the economy.
Are we still going to house the prisoners or will they sleep in the bushes with the migrant farm workers?
We already pay the people working on the farms half of minimum wage. Plus, I have a feeling socialized food would taste… soviet.
Gee, that would taste so much worse than the Giant AgriBusiness Food produced here through the labor illegal immigrants & abroad through the Toxic Chinese Farms.
I thought I read somewhere, that prisoners only made a 1.00 an hour to make furniture or something of that nature. I figured half of minium wage while you are paying a debt to society wouldn’t be so bad since it would be a pay increase for the prisoners and equal to what they are paying illegals already.
$1 per hour + room + boarding + recreational opportunities + cancelled debt to society = sweet deal.
Right, I think it was $0.20 a few years ago. Last year, I saw many prisoners doing brush clearance to mitigate fire risk around SoCal. (The places I saw them haven’t burned yet.) A few years back CA prisoners were making license plates for El Salvador. Some CA prisoners assemble Dell computers. Some work for customer call centers - there was a scandal involving one guy who got the information for some underage girl and showed up at her house when he got out. Not sure if they do the call center thing any more.
Many prisoners really want these jobs - it’s a change of scenery and some of them see it as a way to get skills to get a job when they get out.
LOL! Thank you, catspit for your lovely idea.
All’s ya do is empty California prisoners into Army, hello, along with all the highly paid guards and assorted personnel.
But now they have M16’s?
Re: army
Some petty criminals get the choice of army or prison in their plea agreement. I haven’t been able to find numbers anywhere, I don’t think the army likes to advertise this.
The Press Democrat. “Bill Hewitt’s furniture isn’t finished, but his business is. The owner of Bare Woods is closing his Santa Rosa furniture store after 31 years, citing the sluggish housing market, cheap competition from Asia and changing tastes.”
I was wondering when we would see more of this. In my area, two small independent but relatively nice furniture stores have gone or are going out of business. One was named Utopia and the other West Coast Furniture. I also know some who owns a furniture manufacturor (Cisco Brothers). He’s been doing well (the lives in San Marino) but I wonder if this is affecting him yet. I suspect it is at least a little bit but who knows.
The furniture store I worked for in Montclair (Koopman Bros.) before I got the job I’m at now just shuttered the windows after a 52 year run. Furniture biz really hit the skids just before the peak of this thing…I’m surprised that any mom ‘n pop is still open at all.
“this thing” = HB
Bombay Company is closing its doors too. Hundreds of upscale stores nationwide.
“‘We don’t know how far this is going to go,’ says Jim Lynch, community enhancement manager in Citrus Heights. ‘We’ve had housing setbacks over my 35 years, but I’ve never seen this many bank-owned properties and so many foreclosures.’”
Hey Jimmy boy I was telling people 3-4 years ago that this housing market was going to be the worse ever and all I got were sarcastic remarks.
Burn baby burn!
“‘We don’t know how far this is going to go,’ says Jim Lynch, community enhancement manager in Citrus Heights.
WTF? A “community enhancement manager” Just another in a long line of made up BS jobs that enhance nothing. 50%++ of these type of jobs could be cut nation wide and save a butt load of tax dollars. Of course there would be wild screams of it’s not fair. No way out we have to crash.
Could that be “community ‘male’ enhancement manager” ?
WTF? A “community enhancement manager”
Man… a Fluffer has a more respectable profession. ROTFLMAO.
Got popcorn?
Neil
This is a great example of how people not being involved in government yields poor results. I don’t know how things are structured in Citrus Heights, but Community Enhancement Managers are typically umbrella positions that do things like keeping playgrounds open and street trees trimmed that are hard to pay for and can often be handled by fractional headcount hiring contractors occasionally. Do you really want all the playgrounds and parks closed and trees allowed to grow so they block the roads? Did you realize that kind of thing costs money and may not be optional?
I am going to go out on a limb and guess that you work for the state. Perhaps Cal trans?
definitely a government union guy
Except he kind of has a good point. When I lived in the ‘hood in DC I always thought what we really needed was someone whose job it was to basically keep the neighborhood clean. Make sure the trees are trimmed, fix road damage/sidewalk damage, keep alleys clean, make sure streetlights are fixed etc etc. Unless you have real pull in DC, getting this done was a real pain (although it did get better.) And if you believe in the “broken windows” theor, it makes a difference.
“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
Yikes this is going to motivate banks to stop being greedy and sell fast.
typical listing in my costa mesa hood:
Description
Drastically reduced!Huge rear yard!Entertainers delight! Lovely converted four bedroom home! Very open and bright! Large livingroom with formal diningroom and crystal chandelier. Built-in china cabinet w/marble accents. Sliders open to covered patio, tropical landscaping. New carpet, paint, flooring and furnace. Expereince the ocean breezes,close to shopping!Extra wide cement driveway,2car garage.Outer buildings removed!
ZipRealty Price Track:
Price Reduced: 08/25/07 — $648,765 to $608,765
Price Reduced: 09/26/07 — $608,765 to $574,765
Price Reduced: 10/11/07 — $574,765 to $548,765
Price Reduced: 10/19/07 — $548,765 to $509,765
Wow…just 309k to go
I love those $100.00 price drops in Laguna Beach. When I see those, all I can think of is the refrain: “Hurry! PRICE REDUCED! Won’t last long!”
Yeah, here in Portland I was beginning to think there were two new real estate companies called “Just Reduced” or “New Price” in town.
ROFL so true - PDX is finally starting to crack - once it goes -ve YOY in the realtor stats we can see the same panic here I saw in So Cal just before I moved.
“converted four bedroom home”
???
“Outer buildings removed”
???
Costa Mesa was traditionally the Land of Architectural Anarchy, a real embarassment to Neeewwwport Beach across the Eucalyptus Curtain. A lot of 1950s crackerboxes were, um, “enhanced” in the seventies with workshops, storage sheds, etc. in their once-spacious backyards. Some of those lots looked like miniature shantytowns, Soweto-on-the-Back-Bay-style.
“Outer buildings removed” means they tore down the dead retiree hobbyist’s “improvements,” which generally would increase the property’s value, if it weren’t already plummeting so fast the other way.
“typical listing in my costa mesa hood”
CM is if anything a commercial /business/shopping beehive. It has a varied mix of housing-sf units mixed with multi’s all over this mixed housing burg astride the 55 fwy. Some nice areas but also a growing seedy apt section in SW corner with a growing hispanic presence. It is in fact the Apartment /condoized region of south OC, or one of them. The beach is close but not close-a baffling paradox but getting to the OC beaches from CM involves mind-numbing traffic-clogged route down the 55 fwy/superior ave/newport ave to get to the beaches in Newport beach/balboa pennisula.
Actually the neighboring burg of huntington beach has better beach access and is a bit more laid back than CM, though CM is the more lively burg, with shops and eateries galore .
Nice city but SFH’s should be around $350-400,000 tops for the best houses, in line with CM Median household Income of around $100.000.
Yo, how much can roomie and I afford if we make around 150k between us? at this rate they will be down to 300ish sooner than i expected…
“roomie”? That’s a disaster waiting to happen. If you really must do this, wait until the most respected prognosticators on this blog have called a bottom. That way when you split up and must sell the house you at least won’t be bankrupted.
It’s going to be awkward when it happens, agreeing with Realtors that “now is a good time to buy”. Luckily we don’t have to think about that for a long while.
Do you have a down payment?
You can afford 2.5X income mortgage with a NICE standard of living.
3.0X will require a cut, but its livable.
4.0X is starvation and if anything goes wrong… you lose the house.
I know people who pulled off the 4.0X bit… but the first decade sucks.
Got popcorn?
Neil
the real trick is to swing a 10 year mortgage. A 30 year loan is a rip-off to begin with (and they call it a conventional mortgage). If you’re 20 years old, a 30 year loan makes sense.
Is there such a thing as a 10-year? All you read about is 30, 15, and occasionally 20-year loans. Of course, even better is an all-cash offer, if you can swing it.
I agree with the 2.5-3X income rule-of-thumb, but this has been basically impossible for CA since the 1970s. Of course, one of the reasons it IS impossible here nowadays, is because people ignore common sense like this.
“At Vintage Ranch, one owner who paid $765,000 had his assessment lowered to $688,000, reflecting the current market price, Tuteur said.A buyer at Sheveland Ranch had his assessment lowered from $621,000 to $559,000.”
Better reassess again like now and take $100K off the so called first reassessment. Next year be another $100K
Watch for the new realtors gimmicks. They plaster ‘REDUCED’ across the sign and they think people now are gong to fall for it. Yeah $695,999 ro “REDUCED” $679,999. nope!
happening already. “HUGE REDUCTION” = -50k on a million dollar box.
Or 250k off a 1.8 million dollar, slightly bigger box… not even close yet for me, but suckers are still biting… :-p
“‘It’s pretty sad that so many people and so many companies are being affected by this housing problem,’ said Sheila Skead, a Pleasant Hill resident who was conducting business Monday at a Cal State 9 branch in her home town. ‘The whole state is being affected.’”
Sheila call up Leslie Appleshill and cry to her.
Home sales maybe off 30-40-50% but still 50% idiots going to be bagholders from day 1 homeownership
what is deal with conforming/ non-conforming? won’t there be huge rush to buy when things get to 417k and credit tap turns back on?
No. Incomes aren’t high enough for people to qualify for GSE-backed loans @ 417k.
snicker.
So true Big V.
To qualify for a 417k conforming, you actually have to document income and prove you are worth loaning to. Anyone who thinks raising the conforming limit will save this market is nuts.
Now lets talk bond sales. Can Fannie and Freddie sell that many more bonds? Not really. Look at Fitch getting ready to downgrade the bond ratings of mortgage insurers. The result? Costlier mortgage insurance (if its available). Can we say larger down payments?
I’m sticking by my estimate that during the darkest days of this downturn 25% downpayments will be typical. Oh… we’re not even close to the darkest days.
Got popcorn?
Neil
Good point about the bond/insurance thing. Hadn’t even thought of that. That makes 25% down seem a lot more probable.
Let’s do math!
417k @ 10% down = $41,700.00 down payment *gulp*
=$375,300.00 loan @ 6% (yeah, more like 7%, but wishful)
@ 15 and 30 years (principle and interest only, no tax or insurance, or other fees: HOA, PMI, etc)
15 year fixed PI @ 6% = $1,876.54
30 year fixed PI @ 6% = $1,876.50
Down payment @ 10% = $$41,700.00 (good luck with that).
Look to your left, look to your right.
How many can do this? (Some perhaps).
Fun with math
Standard CFHA is :
29% DTI to PITI with more then 40% overall DTI (including student loans or old tax debts).
FIVA - though there is a SIVA but I’ve bothered to look at it as it is a CHFA version of an adjustable. Someone will know more on this then moi’.
Min FICO is 620, out of BK 24 mo., no deliquencies in 24 mo (again someone can confirm)
3% down, 2.5% PMI buydown is encouraged as well as 3 months of reserves.
Those are seriously easy requirements but I agree that the DTI is what is hammering qualifying right now.
Hi Gwynster:
I’m assuming your stats are right. However, those are just for FHA, correct? FHA is very limited, and is supposed to only be for poor people buying cheap houses in depressed hoods. Even with the FHA expansion proposed by Bush, very few people will qualify.
What are the requirements for Fannie and Freddie?
Plus, you actually have to *qualify* for a conforming loan. No SISA / NINJA conforming loans. Also, I believe you at least need a token down payment which, apparently, very few people have…
“Thanks to the city’s new abandoned building ordinance, homeowners, the bank or the individual will get the notice to clean up or pay up. If owners don’t secure the entries of the homes or maintain landscaping or lawns, owners could face civil fines of up to $1,000 per day, up to $100,000.”
Trying to extract a Grandido a day out of the deadbeat population of those that have given up on the American Dream of Manteca, strikes me as silly.
“‘We haven’t been profitable in three years,’ said Hewitt recently from his quiet, cavernous warehouse and showroom. ‘I want to go out with my head held high.’”
They couldn’t even make money in the middle of the heat of the housing bubble, 2004-5…
Wow
“Lowered assessments have been applied to houses at Sheveland Ranch in south Napa…”
If somebody were to turn that into “Sheeple Ranch” it would make for a funny sign…
“Sonoma County’s furniture industry is in turmoil.”
It seems you can multiply that quote by every city in America.
A friend of mine has had a futon store in Encinitas for 22 years. This year its breathtaking to go visit her. No sales no business. She has her nephew swinging a sign on El Camino Blvd. I pretend not to notice its been dead since April.
Most of the furniture stores I see, both high-end and low-end, are having a more serious than usual crunch. SF Bay Area
What, the stagers aren’t buying up the places?
I’m trying to get the wife to go furniture shopping with me this weekend. Can we say “negotiate?”
Got popcorn?
Neil
When you leave and the store owner is weeping you know you got a good deal.
Unfortunately, the antique Chinese furniture store in my neighborhood went OOB, right about the same time the RE office died. It was a cool place with 5,000 year-old pieces, and they would make you something to order if you wanted it. The only places that are still hanging on in my hood are the really low-end ones.
It’s been a while since I’ve posted ABX numbers…but WOW, have they fallen:
07-2, Series 2, Version 2:
AAA: 79.72
AA : 49.00
A : 30.00
BBB : 21.31
BBB-: 19.67
That’s just plain nuts (remember, these started life at 100).
And look at GOLD……….$830 and rising.
Au up 25%, Ag up 35% since Aug. 30
Thank you BB and crew!
Check out the VIX. A few $ well placed on some May ‘08 calls will make for good sleeping as the market tanks in the next few months.
And LOOK………..Australia just raised their rates today to 6.75%.
Saw it on Bloomberg dot com.
Bet the dollar gets hammered even more…. Gold at 900 by Friday??
“That’s just plain nuts (remember, these started life at 100).”
They are getting younger every day
Another 40% off and some of these might be fungible. :>)
(or at least worth some of the risk).
View
Mellow Yellow is set to break out to a Grandido, and beyond…
oil $100 by Friday
water
PHO?
Nice move up today (TUES), override of pres. veto on water bill?
Oil at $98 a barrell.
Goldman’s Employee Pay Will Top Bear’s Market Value
Nov. 6 (Bloomberg) — When Goldman Sachs Group Inc. employees cash their year-end checks, they’ll have enough money to buy Bear Stearns Cos.
Goldman, the biggest and most profitable U.S. securities firm, set aside $16.9 billion to pay salaries, benefits and bonuses in the first nine months of 2007, according to the company’s third-quarter earnings report. The stock market values Bear Stearns Cos., the fifth-biggest firm, at $14.7 billion. Bonuses, the majority of Wall Street compensation, are typically paid after the fiscal year ends this month.
Google has a higher market cap that Merrill, Lehman and MS together.
MBIA, Ambac Losses Will Be `Massive,’ Egan Jones Says
Nov. 6 (Bloomberg) — Bond insurers including MBIA Inc., Ambac Financial Group Inc. and ACA Capital Holdings Inc. face “massive losses” over the next few quarters that could test their ability to raise new capital, Egan-Jones Ratings Co. said.
MBIA may lose $20.2 billion on guarantees and securities holdings, Sean Egan, managing director of Egan-Jones, said on a conference call today. ACA Capital may take losses of at least $10 billion; New York-based Ambac may reach $4.3 billion; mortgage insurers MGIC Investment Corp. and Radian Group Inc. may see losses of $7.25 billion and $7.2 billion, respectively, Egan said.
“There is little doubt that the credit and bond insurers face massive losses over the next few quarters and many will be capital challenged,” Egan said.
Bond insurers have guaranteed billions of dollars of AAA rated collateralized debt obligations backed by low investment- grade rated portions of mortgage bonds. Some of the debt, largely home loans issued in 2006 and early 2007, has been defaulting at record paces. The losses are threatening the AAA ratings of some of the companies’ assurance units.
Hey Kudlow is GM’s $39B “The Greatest Story Never Told”?
CNBC’s Kudlow should be investigated for pumping Wall Street day after day. Every show he calls the US economy under Bush “The Greatest Story Never Told” I think I will puke if I hear him call it the Goldilocks economy one more time. If Kudlow and pals can’t spin the $39 Billion losss as part of the Goldilocks economy the bears will eat his Goldilocks.
Larry Krudload is a worthless hack. Why do you even bother watching him?
Maybe Kud-blow is back on the Hollywood Snow.
He’s been a vapid cheerleader shill for as long as I can remember. Why anyone takes him seriously as an economic commentator is a testament to American culture’s desire for feel-good fairy tales despite all reality.
I AM GORGEOUS INSIDE. Wtf does that mean? I had always wanted to ask this Q. This message is posted below FOR SALE signs in at least 30% of FOR SALE signs.
It means it looks like crap outside
You can’t judge it by it’s hooker heels. You have to dig deeper and actually get to know it.
That they’re desperate?
and have had no foot traffic….
BEN, think it’s time to revisit Money & Metals???
Dollar’s dropping like a rock, PMs are going ballistic…
I second that! I started buying gold , both physical, and exchange traded “gold” and “silver”. I don’t see it as an investment, but simply a hedge against the falling dollar.
I usually don’t buy things that have run-up fast. (For example, no matter how bright I think the future may be for AAPL or GOOG, I wouldn’t touch their stocks because they’re driven by a “fad”, and their P/Es are high). But I convinced myself that putting enough $$$ to cover living expenses for, say, 3 years in gold and silver won’t be a bad idea.
For one thing, who in America has cash anymore? And how else can you buy the stuff? That’s one reason I think it’s less bubbly than it looks.
And if the dollar should strengthen and gold falls, it may be a wash, if used as a hedge or insurance and not an investment