There Is A Large Loss And Bubble Collapse In California
The Union Tribune reports from California. “All six Southern California housing markets suffered year-over-year price drops last month for the first time in 12 years, DataQuick reported Wednesday. The overall median was down 8 percent to $444,000 from $482,750 in October 2006, the San Diego-based company reported. Declines ranged from a high of minus 15.1 percent in Riverside to a low of minus 3.8 percent in Los Angeles, which was the last county to go negative in the current cycle.”
“DataQuick analyst Andrew LePage said it was the first time the counties all reported a drop in monthly prices since November 1995, when all of Southern California was in recession.”
The Voice of San Diego. “The Union-Tribune today reported the new numbers from DataQuick, but made an error placing the numbers in context. The story claimed that the all-home median price (a measure we have recently shifted away from) reached its lowest point since April 2003.”
“Actually, the all-home median price logged by DataQuick for last month was $460,000. That marked the lowest level since April 2004, when the median was $445,000. That’s quite a difference from April 2003, when the median was $352,000.”
“I checked the numbers with Andrew LePage, DataQuick analyst, a few minutes ago. The month’s sales rate was, as the paper reported, the lowest October in DataQuick’s record.”
“LePage said jumbos represented 35.7 percent of the mortgage market through July, but last month were down to 21.9 percent. Purchases of jumbo-loan homes fell 62.3 percent over the past year, twice the decline of the general market.”
“Among builders, said Alan Nevin, chief economist for the California Building Industry Association, a relatively low inventory of completed, unsold homes is prompting some companies to map plans to open new projects in the new year. Thirty-six new projects opened for sale in the third quarter that ended Sept. 30, an ‘astounding’ number, considering the noncommittal market mood, Nevin said.”
“Cliff Helbock at Prudential California Realty in Escondido said that…two auctions last weekend yielded no takers.”
“Norm Miller, director of real estate academic programs at the University of San Diego, advised homeowners who have seen their equities melt by 20 percent to 30 percent to think objectively about where San Diego’s market has taken them.”
“‘I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”
The LA Times. “As prices continue to slide, said DataQuick President Marshall Prentice, ‘a lot of potential buyers seem to be waiting this one out.’”
“‘It’s hard to buy a home when you think it might lose value, especially when you have to borrow money to do it,’ he said.”
The Press Telegram. “NAR Chief Economist Lawrence Yun and Long Beach Realtor Richard ‘Dick’ Gaylord, who was installed on Monday as NAR president, were pelted with questions by members of the media attending the conference about the state of the housing market and whether Realtors should take the blame for the downturn and the subprime lending fallout.”
“Yun also got hammered about whether there was ever a housing bubble that has now burst. He stopped short of answering, but said there may have been a bubble in the real estate industry itself, which swelled as the housing market heated - there is now one licensed real estate agent for every 50 Californians, for example.”
“‘Certainly for people in the industry … it’s clearly a bubble for them,’ Yun said. He also said it’s clear there was a bubble in the lending industry. ‘There is a large loss and bubble collapse in that area,’ he said.”
“Gaylord also insisted that despite the turbulence in the market, it’s still a good time to buy. ‘I’ve been in this business 30 years and I’ve never known a down market,’ he said. He added, ‘I’m not troubled terribly by today’s market.’”
The Daily Press. “In Victorville, 1,366 homes are in pre-foreclosure, indicating the owner has received a notice of default. There are 314 homes on the auction block and 659 owned by the bank as of Monday, according to RealtyTrac.”
“By contrast, 442 homes were listed for sale in Victorville, 46 by owner, 303 by realty company and 93 as new homes.”
The Press Enterprise. “Home prices continued to plummet in October in Inland Southern California, and the median price of a home sold in Riverside County now more than $60,000 less than it was a year ago.”
“The median price of a Riverside County home was $350,000 last month, 15.1 percent less than October 2006, according to DataQuick. In San Bernardino County, the median price fell to $330,000, a 9.6 percent decline.”
The County Sun. “If you know 43 homeowners in the area there’s a fair chance one of them just lost their house to foreclosure. Realty Trac said there is one foreclosure for every 43 households in San Bernardino and Riverside counties, according to third-quarter 2007 data.”
“That puts the region at No. 3 nationwide for home foreclosures. Stockton was at the top of the list, followed by Detroit.”
“The two-county area saw more than 31,661 foreclosure filings on 20,664 between20,664 properties between July and September.”
From Turn to 23 in Bakersfield. “If you’ve driven by city hall around 10am recently you may have seen a crowd gathered for foreclosure auctions. It’s that use to happen maybe once a week is now happening almost everyday.”
“Most people were there to get a deal but only about a dozen properties were actually available to be bid on and just one property near South High School was sold to a third party buyer.”
“For $75,000, the loan that sent the property into foreclosure was for $188,000. It’s an example of how lenders are losing big bucks on loans at the same time people are losing their homes.”
Inside Bay Area. “Everyone knew it was bad in San Joaquin County, but you don’t realize how bad it really is until you lead the country.”
“With an average of one for every 31 households, the Stockton metropolitan area topped the country in the rate of households filing for foreclosure in the third quarter of this year. More than 7,100 foreclosure filings on 4,409 properties were reported between July 1 and Oct. 31 in San Joaquin County, a 30 percent increase over the previous quarter, according to RealtyTrac.”
“The company listed more than 1,200 foreclosures in theTracy area, 1,253 in Manteca, 1,371 in Lathrop and 293 in Mountain House.”
“Grace Alvarez, a Realtor in Tracy, said the current buyers market is a difficult one. She said many are only looking to buy foreclosures or short sales, paying the bank less than whats owed on the loan.”
“‘Most of the clients Ive been working with are just waiting for prices to drop,’ Alvarez said. ‘Were so saturated with homes, its unbelievable. Were continually having to drop prices every two or three days to keep up with the Joneses.’”
The Associated Press. “Dave Webb said most of the properties being auctioned by his firm in inland areas of California are investment properties that ended up being repossessed by lenders after the market tanked. ‘What I’m selling this week — 700 homes in the Stockton-Oakland area — these properties were probably foreclosed a good year-and-a-half ago,’ Webb said.”
The Reporter. “Plans for an auction of homes Sunday in Vacaville has perturbed several residents of a local upscale housing development, who are concerned about the potential effect on their property values.”
“Pleasant Hill-based developer DeNova Homes is auctioning 18 of the houses in its Meadow Woods subdivision.”
“Some residents who already live in the community are not pleased. ‘We expect anywhere between a $200,000 to a $300,000 decrease in our property values overnight,’ said Meadow Woods resident Brian McLean.”
“The house McLean and his wife have lived in since April was listed at $786,000, while his neighbor Larry St John’s home was listed at $899,000 when he moved to Meadow Woods in March.”
“In contrast, the minimum selling prices in the auction range from $450,000 to $650,000 and the previous pricing on these homes ranged from $718,000 to $939,900.”
“In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction. The response from DeNova President Dave Sanson was brief. ‘I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter,’ he wrote.”
“In a conversation Tuesday, Sanson said, ‘we’re all stuck in the same situation together; we’re all impacted by the downturn in the real estate market.’ He firmly believes, he said, that an auction is ‘the best way to preserve all of our property values.”
“‘The beauty of an auction,’ he said, ‘is that it brings all the buyers into one room and you can find what the true values of the property really are.’”
“St. John said he paid a $899,000 listing price on March 1 for his home; a simliar model will have an opening bid of $550,000 at Sundays auction.”
“‘Now were looking at losing $300,000,’ St. John said, saying the auction unfairly makes homeowners lose equity on top of the falling housing market. St. John said he hopes to prevent the auction, or at least start a dialogue with DeNova.”
“‘Basically, were screwed,’ he said. ‘Its not that were jealous, but the additional consequences could mean somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.’”
The Mercury News. “While the national forecast for home sales remains relatively flat for the coming year, the chief economist for the country’s largest real estate trade group told reporters Tuesday that San Francisco and Silicon Valley are in stronger shape than many parts of California.”
“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said, adding that he includes Silicon Valley in that description.”
“San Jose mortgage broker Mike Donohoe, a past president of the Santa Clara County Association of Realtors who was in Las Vegas for the conference, said he’s heard ‘mixed reaction’ among his fellow participants about next year’s market. Those with the rosiest outlooks say things will bounce back in spring, he said. ‘I’m also hearing from others who say they don’t see it.’”
‘Among builders, said Alan Nevin, chief economist for the California Building Industry Association, a relatively low inventory of completed, unsold homes is prompting some companies to map plans to open new projects in the new year. Thirty-six new projects opened for sale in the third quarter that ended Sept. 30, an ‘astounding’ number, considering the noncommittal market mood, Nevin said.’
This is what I mean when I say that prices must drop or the builders will still have an incentive to build. It is simple supply and demand. And the fact that they will stage auctions so soon after recent sales shows this in another way.
Median home price in San Diego was $350k a little over four years ago. Yesterday we heard about an NGO helping a low income family buy an 800 sq ft house in a San Diego ‘hood priced at $350k.
My thought is that with few homes selling, the comps can still be quite high. Comps don’t take into account how many similar homes are listed for the same price and NOT selling (obviously worth less). A builder/developer/lender looks at comps and thinks, YES, I can make money at that price point. And they can, if they actually sell a house.
This is why prices are going to swing way past the long term mean, income ratios, equivalent rent value, etc… at the bottom.
Only $411.17 a square foot? (yes, that is dripping sarcasm).
Good night Irene!
Leigh
Don’t you love the fact that these bleeding heart agencies are out there “helping” low income families to mire themselves in debt while paying a huge premium for the pride of ownership, at the very time anyone with financial smarts is watching the bubble collapse from the safety of the sidelines?
Actually I emailed that Gabe del Rio guy, and it seems that the family received $150k in grants and incentives. So they only paid $200k for a $100k house. It will probably be several years before they are under water.
I’m not opposed to a little wealth transfer, but I’d prefer that it was transferred to the poor rather than to a stupid lender trying to unload a piece of junk for three times its value.
Prof. Bear, see earlier threadt today, I believe Bits Bucket. We discussed the DEBT SLAVES! I am so disgusted with this country regarding this issue. Banksters are to blame as are people unwilling to wait and those that just play into the whole mess.
And we continue to see stories about how the savings rate is negative. And no one give me any junk about assets. Those are not cash until you are paid for them. Your house isn’t worth a cool mil until the check clears.
What you forget Groundhog is that someone, probably taxpayers, are on the hook for those grants. So, essentially the builder or whoever got the check. The buyers got a double your luck home (200K for what you say is really 100K), and someone got stuck for 150K in grants. Nice deal.
Why not just take the house and mark to market?
“I’m not opposed to a little wealth transfer, but I’d prefer that it was transferred to the poor rather than to a stupid lender trying to unload a piece of junk for three times its value.”
This got me thinking. Who was it that said Lennar was up to something regarding mothballing projects? Think they are going to beginning a public works phase in excghange for tax writedowns?
hmmm- someone pass me some tinfoil, I think I’m low.
P’Bear,
“Helping” low income families…
Now there is a misnomer! Pride of ownership. Weeeee.
No ill to you, P’Bear. These…er…entiled ones are making my head explode. My flavor is usually more upbeat.
Humble apologies for the…grrrr…anger (not aimed at you).
Respectfully,
Leigh
er… entitled.
(editor is off today, and yesterday, and the day before).
Dang, it’s hard to get good day help;)
Dan, apparently my wry disgust was not apparent. I agree completely that it is a complete waste of taxpayer money to help a low income home that is grossly overpriced… particularly when renting is so much cheaper than buying.
That is the main point I made with Gabe: helping low income families get into homes makes some sense if renting is much more expensive than buying and families are trapped on the bottom rung. But when renting is much cheaper than buying, why the heck should ANYONE be helping ANYONE buy? Just rent, stupid!
But Groundhog…to rent, they would actually have to prove they can pay the rent!
San Diego builder McMillian is still opening “new models” next January 2008 with houses in dead areas like Bakerfield, Imperial county, Fresno, with Chula Vista of unsold houses. McMillian is toast, bankrupt but they don’t know it yet.
i don’t think they need incentive..
I think builders become builders because they have an uncontrolablle urge to build stuff. Some have the compulsion to tear things down and then build new stuff. Some tear things down and reassemble the debris into stuff.. There are all types.. not.
Builders build, because lenders lend….that’s what my dad always says….
–
“DataQuick analyst Andrew LePage said it was the first time the counties all reported a drop in monthly prices since November 1995, when all of Southern California was in recession.”
Bingo! Whole of CA is in a recession.
The Small Business index confirms that the US is already in a recession.
Jas
I was listening to 740 AM KCBS in the Bay Area. They mentioned state government will cut back 10 % because of slow down. I expect that will add fuel to the fire.
Talking of fires, with a slowdown next fire can be contained in 2 days with so many idle Real Estate Agents, who don’t want to see houses go up in flames.
Depending on the agency, that 10% can absorbed pretty quickly. I used to think UC would be fine since we get so little of our income stream from CA taxes anymore. But the Regents started banging the 33% wage hikes for themselves. ugh…
Are they that stupid?
Remember Gwynster, different campuses have different realities. UCR hasn’t diversified from state funds as much as other campuses. Our sales/service, ICR, and endowments aren’t near anyone’s.
Yeah captain, but you have the same sham going on there. Let’s talk about the inflated meal and travel allowances or the special home loan programs for upper admin and faculty. The you can add all the extra retirement money they get. But you can bet when it’s time to talk raises for staff that really do the majority of the work, they’ll cry poor again. They’ve started down the road of sucking up to donors and begathons like all the other campuses. At least they finally foisted off the worthless drama queen chancellor on Purdue. Truly the example of the Peter Principle.
LOL wow! Wanna share what you think/why you think it about France?
It’s very sad what happened to staff during the last state budget cycle–no raises for most people for 4 or 5 years. That was the suck.
As far as the “extra” retirement money–I’m not sure why that matters; it certainly doesn’t come from the taxpayers for the time being. We fund our own pensions, and thanks to excellent management of the fund we’re over funded and haven’t had to make any contributions for 16 years.
I agree there could be some fat trimmed in the meal/travel arena. Come on, $64 for dinners out per person?
As far as the Mortgage Origination Program deals go, they aren’t that great. It’s about like a sign-on bonus at many good jobs.
The Small Business index confirms that the US is already in a recession.
Yep. As does sales tax revenue. Somehow income tax revenue isn’t saying recession… yet.
And the banks still haven’t come clean on losses from six months ago. Banks are 30% of corporate profits. If their profits are cut in half? Recession on that alone. What are bank profits doing at 30% of corporate profits? Ugh…
Got popcorn?
Neil
I’m becoming more and more convinced that the U.S. is about to attempt a “Japan in the Nineties” slow fade — with the owners of clearly depreciated assets desperately trying to avoid a realization of their losses.
Blast from the past… check out the losses from last downturn..
Orange went down 58 percent
http://www.dqnews.com/AA1995OFA06.shtm
Mar-May Loss Loss
County All Sales# Pct. 95 Pct. 94
All California 63,259 32.2 pct. 35.3 pct.
San Francisco 1,026 16.2 pct. 24.0 pct.
Alameda 2,828 27.0 pct. 24.4 pct.
Contra Costa 2,486 32.4 pct. 34.5 pct.
Santa Clara 3,650 22.0 pct. 28.9 pct.
San Mateo 1,353 19.8 pct. 30.0 pct.
Marin 526 13.5 pct. 15.3 pct.
Solano 769 31.1 pct. 35.6 pct.
Sonoma 1,099 26.7 pct. 26.2 pct.
Napa 209 9.5 pct. 22.3 pct.
Bay Area Total 13,946 25.0 pct. 28.5 pct
Los Angeles 18,217 31.8 pct. 38.2 pct.
Orange County 5,705 45.3 pct. 49.9 pct.
San Diego 5,803 42.6 pct. 44.9 pct.
Riverside 4,208 35.6 pct. 32.1 pct.
San Bernardino 4,266 35.5 pct. 30.8 pct.
Ventura 1,945 38.0 pct. 58.4 pct.
So.Calif. Total 40,144 37.0 pct. 40.9 pct.
Southern Cal medians at 2005 levels!!!
http://www.dqnews.com/RRSCA1107.shtm
‘Indicators of market distress continue to move in different directions. Foreclosure activity is at record levels, financing with adjustable-rate mortgages and with multiple mortgages have dropped sharply. Down payment sizes and flipping rates are stable, non-owner occupied buying activity is edging up, DataQuick reported.’
Meanwhile, Califoria facing a budget shortfall of 10 billion dollars because of weaker housing and slowing economy.
This does not correlate that April-July 2005 was the peak.
Ben posted this one yesterday. I wonder where the difference lies?
The Union Tribune reports from California. “San Diego County home prices fell to a 3 1/2-year low in October, while sales activity rose from September in spite of last month’s wildfires, DataQuick reported Tuesday. The overall median for October stood at $460,000, down $10,000 from September and 6.1 percent lower than October 2006’s $490,000. The latest figure represented an 11.1 percent decline from the peak of $517,500, reached in November 2005.”
Oh, Southland vs. San Diego. I see. I guess San Diego peaked in November, 2005. I wonder when “Southland” peaked.
LA county peaked only last month.
LA county peaked only last month.
TIMBER!!!
When the big kid goes down, it brings everyone down. This will be a long downturn, but not always a slow downturn.
Got popcorn?
Neil
It seems unlikely that LA County peaked only last month. I think Ben’s post says this was the first month that LA County showed a YOY decline. If it had gone up for 11 months in a row, it would be unlikely that the 12th month erased all 11 gains. My guess is, LA county peaked about 6 months ago.
Wait a second. You mean they have a way of calculating the price change “when adjusting for shifts in mix”? If so, then why didn’t they calculate this number 6 months ago, when the mix was shifted toward the “higher-end” (read: moderate) houses?
I still think these guys are setting themselves up for a huge lawsuit.
If the Realtors didn’t have their conference in Vegas, would anyone come?
I have been to several conferences in Vegas….my favorite part is to see the midget Elvis impersonators that walk around and hobnob with the folks.
I also like the car rentals that have Dodge Vipers and a sign for Viagra to go!
i went to vegas last weekend, and boy do they have a mess of empty homes!!!! and still building!!! it used to be that i would look forward to reading the billboards on the way there, but now i can say i hate it! almost everyone (on the way there and on the way back) is now an ad for new homes (sickening) i cant wait for those builders to run out of advertising money!!!
“NAR Chief Economist Lawrence Yun and Long Beach Realtor Richard ‘Dick’ Gaylord, who was installed on Monday as NAR president, were pelted with questions by members of the media attending the conference about the state of the housing market and whether Realtors should take the blame for the downturn and the subprime lending fallout.”
This article definitely has an Onion flavor to it…
“NAR Chief Economist Lawrence Yun and Long Beach Realtor Richard ‘Dick’ Gaylord, who was installed on Monday as NAR president”
That conference, NAR, L. Yun and R. Gaylord are pure spinners and that entire article and their take on the RE market is pure staged agi-prop. Hitler & Geobbels believed in the big lie: we have a ton of them spewing from that NAR bogus conference. here’s the biggest fabrication:
“The median new home price will fall 1.6 percent to $242,500 in 2007, then rise 0.4 percent to $243,600 in 2008, according to Yun’s forecast.”
What is bad is that the our local doogie poop scooper, the LB Press telegram, ran this on their front page as a big bold headline. The vast majority of stupid sheeple in LB who read this piece of crap 2nd grade level paper will take it as gospel from the NAR that RE will only go down ‘only’ 1.6% in 2007 but go up again by .4% in 2008.
it amazes me that someone would elevate some insignificant sales prick to the level of a Geobbels..
Gaylord says he has never known a down market in 30 years. He must not have been in Southern California between 1990 and 1996.
Here are a few examples when it was not a good time to buy in Long Beach, CA
1310 E. Ocean Blvd. #407 Sold $980,000 on 03/05,
Pending Sale Last list price $629,900
1531 E. Ocean #4 Sold $773,000 on 04/05
Pending Sale last list price $549,900
3671 Country Club Drive J Sold $472,000 11/17/05
Pending Sale last list price $360,900
Nice Haircuts!
Great name. His parents must have hated him.
I had to write a letter to a Nina D. Cupps today. I’m still laughing thinking about it. Who would do this to their child or wife?
I wonder if he has ever milked a cat…
…oh, wait. Different Gaylord…
GE gets hit- was discussed on this BB before
Wow! They aren’t going to kick in a lousy .04 to hold $1 nav! I should have bought more puts!
http://www.reuters.com/article/marketsNews/idUKWEN259920071114?rpc=44
Wow, is this the first MM fund to break the buck?? If there are more, there’s going to be a whole lot of very, very angry people. I think I read there are $2T in MM funds, and growing very rapidly. This is getting scary.
It’s not a true MM fund so it doesn’t have to keep the $1 NAV.
That small print gets ‘em everytime.
Uh oh. Maybe I better call ML in the morning and get my remaining MM assets into Australian govt bonds.
Came across this from the credit board site:
“I’m a bit torn about what we can do at this point.
Our ARM is up at the end of Dec. Countrywide thinks we make too much money to modify. We can afford our current loan, but there’s just no way when it goes up $800 per month.
My husband wants to buy another home then let our current one foreclose. We are pre-approved under the assumption that we would rent our current home (the companies are unaware that there is an ARM that is due to adjust soon).
Ethically, I don’t think this is right. But our current home has decreased in value 100k and this might be our only chance to get into another home with a 30 year fixed. We are in San Diego, so we could buy a 4 bedroom for what our 3 bedroom was worth.
Our only other option is to foreclose and rent. Which I’m all for, but my husband hates feeling like we wasted the last three years of home ownership just to end up not being owners.
Does anyone have experience with this type of situation? Can the new lender do anything when our first home forecloses? We would need a rental agreement, which would be “fake”. We know someone who would feign interest only to pull out after we closed.”
giving the lender a fake rental agreement might buy these idiots a pair of orange jumpsuits
How did that short sale work out…?
Still nothing. I’m going to call if I don’t get an answer by Friday.
don’t call!
it’s a stare down.. whoever flinches first loses..
I think you pissed them off by explaining why the market is screwed. Next time, just give ‘em a number.
No, I think the problem is the FB has not missed a payment yet. I think that is going to be the sticking point.
no payments missed…slim chances
I hope the FBI is reading this blog to pick up pointers on how the mortgage fraud works.
Lord knows they haven’t done a damn thing about it yet.
they’ve run a couple stings. At least one was over a year in the making before the trap was sprung.
They posed as borrowers .. what was it.. something to do with phoney appraisals. It was blogged here maybe a week ago.
i wouldn’t expect to hear about it because this kinda stuff loses it’s value if it becomes public.
for all anyone knows for sure, there could be an FBI mole in any deal.
my answer to them would be “yes, avoiding foreclosure is definiltely worth the risk of ending up in prison for mortgage fraud”
Your right, ethically, it isn’t right. Somebody somewhere gets stuck holding the bag: in this case yours.
This lady’s husband is a good example of the following:
When it come to these kind of losers, you can take the junkie out of the house, but you can’t take the house out of the junkie…
I would go back to Countrywide and argue with them that the current loan is not affordable ,especially when it adjusts again .Plead the case a little better with Countrywide or maybe wait for the big government backed bail out loans for people who are borderline on qualifying .
Buying another house with the fraudulent intend to let your other house go and come up with a fake rental agreement could get you in big trouble . Sometimes its better to take your mistakes like a man rather than trying to make someone else pay for your mistakes .If you have the option of holding the house long term ,eventually the house will go up in value ,even if it take many many years . Maybe down the road better financing might be available to you . Not only do you not want to ruin your credit rating ,but you don’t want to end up in jail either . You don’t know how much these lenders might want to go after parties that they can prove fraud with in the future and it’s already on the record that you attempted to get a loan re-write .
Wiz-
You know the rental agreement is the least path of resistance. You’re going to see that more and more.
mrincomescream …I than think that whenever a lender see a renter agreement on a prior house ,they than should tell the borrowers that they don’t accept rental agreements anymore because we they get to much fraud in that area ,and they have to qualify including the debt from the mortage payment from m the old house .
This couple wants to qualify for a fixed rate on the new house and they must have funds to buy the new house ,so what they are doing sucks .
I know a jerk that was making offers on houses ,while one of his houses was going into foreclosure . What’s wrong with these people .
I’m confused. If you go into foreclosure, then your credit has already been hit, because by then you are already at least 3 months behind, yes? So when the new loan companies see that, how can they offer a loan for another house?
I just finished a short sale with Countrywide. Just being able to show them you won’t be able to keep making the payments isn’t enough. It’s not until you fall behind in the payments that they will actually consider a modification. It may have to do with being able to make the case to investors on the need for the modification.
I also had a real estate attorney suggest buying a second home, then foreclosing on the first. I decided to pursue a short sale first, a foreclosure if that failed. I’m still not big on fraud, even though I now belatedly realize how much I overpaid due to widespread fraud. This has to stop somewhere. I have little confidence that most of those involved in fraudulent activities will ever be punished.
Hi SDGreg,
If this happened to you, my sincerest condolences. May you and yours recover.
Fraud is widespread, and unfortunately, there are many victims.
I wish the answer was simple, but it isn’t. I wish I could say we are not flaming, but I’d lie. I wish I never heard the term “Irrational exuberance”, but I have.
Would-a-could-a-should-ave.
Dang,
Do the best you can do~~ok?
Leigh
First of all the rental agreement thing is as acceptable as anything else..you can go get one in office depot and they will take it…too many people are going down the same path..and all these stupid lenders care about is the “credit score.” They don’t even take into account that the “credit score” is used against them when a borrower is intending to go bad..they know the game…seen it to many times..especially if they get legal help…
“Our only other option is to foreclose and rent. Which I’m all for, but my husband hates feeling like we wasted the last three years of home ownership just to end up not being owners.”
This dude needs to be taken out behind the proverbial shed and beaten with a sack of rocks.
This dude needs to be taken out behind the proverbial shed and beaten with a sack of rocks.
LOL!!!! but i think a sack of door knobs might do the trick.
How about lockboxes ?
We surely typed in unison:)
nnv, what happened to your JT ? I thought that was the treatment for all evils.
Our only other option is to foreclose and rent. Which I’m all for, but my husband hates feeling like we wasted the last three years of home ownership just to end up not being owners.
Lock him in the closet and let him out once a week for some sunshine!!!
Get out the ol’ cast iron frying pan and swipe him good! (as my grams would say).
Tell him to sleep with both eyes open!!
Get a grip woman–there are worse things in life than renting!
Ew…give me a link to this site and I’ll blast her butt back into reality!
I’m testy today;)
Leigh
Umm Leigh, it was the husband that had the problem with renting not the wife. She was all for it.
Regardless, they both deserve the Joshua tree. She shouldn’t even have to ask if what her husband is doing is wrong.
Oh, here’s your JT. I should’ve read further before questioning your change of punishments.
Hi SanFranciscoBayAreaGal!!
Get a grip woman–there are worse things in life than renting!
Umm Leigh, it was the husband that had the problem with renting not the wife. She was all for it…
Hence, lock him in the closet, hit him with cast iron skillet, an firmly plant foot in butt (better sleep with both eyes open)!
P.S. I love my hubby, and must use every tactic available to get HIS want to buy under control…thank heavens he NEEDS my signature!! (But he is SO cute, and it’s hard to say no to the love of my life, even if it is in his best interest)!
I do wish her the best. Communication is the only way to save a relationship, especially when mates are at odds.
Communication is love IMO.
I do not know this couple. Nor do I judge them.
Sigh,
Leigh
Why did she put quotes around the word “fake”? Does she think it would not really be fake, but just kinda like fake the way some people might call it fake, but not real people?
We all know they’re going to go with the fake rental agreement. It really is their best option, and there’s no way they’re gonna get caught. Besides, the bank deserves it for having given them such a stupid loan in the first place.
CAVEAT LENDOR!
I’m willing to bet this couple has a household income north of $100k, purchase price of the home at least $450k plus, and their loan is not considered ’sub-prime’ under the current definition.
Isn’t a 3 year ARM under the umbrella of ‘alt-A’?
Inquiring minds would like to have the link to that credit board site, Starve. I’m curious, as well. Do you have it handy?
BayQT~
Found it.
http://creditboards.com/forums/index.php?showtopic=297772
BayQT~
depending on where(does not apply in Florida where homestead protects the property) she lives the only thing the lender can do is if the property sell for less than the morgage balance they can lean the new property with the balance that is left. However, you cannot do that in Florida if the new property is homesteaded. See even the state works against the lender..
this woman’s post says everything about what’s wrong with our country today. unbelieveable!
no wonder we’re so screwed!
RIght ….And the fact that a bunch of stressed , greedy borrowers want to play this greedy fraud game just ends up costing everybody . The banks lose more money and they end up charging all consumers more ,or we (the taxpayers )end up paying for it in higher taxes .Right now were all paying for all this corruption/fraud with inflation because BB had to lower the rates because of the folly of the lenders and their fraudulent borrowers .Its just like when insurance companies have major losses ,they pass the cost on to the consumer in the long run. When our society gets alot of crime ,than it costs alot of money to clean up the mess ,which again comes out of everyones pocket in the form of increased need for more police force ,you name it .
If this couple in the thread is a example of the bulk of the victim borrowers out there , than I say they are the victimizers .
The net result of all this fraud is everybody will pay more for money to make up for the jerks that want to cheat the system .This jerk couple doesn’t realize that the first bank might come after them because they would have equity in the new house . It’s no different than holding up a liquor store and housing crime has alot more money involved .
How about giving this woman some constructive advice - who knows the names of the best family law attorneys and shrinks in SD! This woman needs to figure out why she would even want to stay with this fraudulent loser and then a good attorney to get her out with as much as possible.
california is a no-recourse state, which means if your house is foreclosed the lender cant come after your other assets or income. HOWEVER, if you refinanced or arent owner occupied this protection is not available.
So if you ever refinanced your first house, you wont be able to allow foreclosure and get a second house. The lenders can come after you and your new house.
Take advantage and get into another home…I would actually look at foreclosures…where you can bargain with the bank directly and still feel like you got a good deal compared to the properties in the area for sale by seller…this way when the old house forecloses on you still have another property to use for tax deductions and to have your payment build equity over time(make sure it is a home you can be happy in for at least 5-7 years)…if you do rent realize that with a foreclosure on your credit it will be some time before you will be able to purchase again…I understand how you feel about it..I have a friend who just did the same thing because there current home was worth less than what they paid for it in 05. The new home(bought directly from the bank for $75K less than the lowest priced for sale home in the community. Even if prices dropped another 20% in their community they would still be fine.) is significantly less than what they paid for the 05 home and their payments are now fixed. They said at least they can breathe again..
–
“‘It’s hard to buy a home when you think it might lose value, especially when you have to borrow money to do it,’ he said.”
And even more especially if you have to pay cash, or hard-earned hard-saved money. It makes no sense to buy a home no matter where the money is coming from.
Jas
–
“…but said there may have been a bubble in the real estate industry itself, which swelled as the housing market heated - there is now one licensed real estate agent for every 50 Californians, for example.”
That is the best validation of the bubble, Mr. Yoooooooooon.
Jas
“‘Certainly for people in the industry … it’s clearly a bubble for them,’ Yun said. He also said it’s clear there was a bubble in the lending industry. ‘There is a large loss and bubble collapse in that area,’ he said.”
The supporting cast has not circled the unemployment lines, and we have the buyers just where we want them…
Baghdad Larry
“‘Most of the clients Ive been working with are just waiting for prices to drop,’ Alvarez said. ‘Were so saturated with homes, its unbelievable. Were continually having to drop prices every two or three days to keep up with the Joneses.’”
Still trying to keep up the Joneses!!! hahahahahahahaha
–
Just imagine this happening nationwide. And it will, so save your imagination for more worthy concerns.
Jas
Keeping up with the Jones WON’T be hard anymore you poor FB’s. They are BROKE and will be going into Foreclosure WITH YOU
I just realized that Ben is a Jones. It must be neat when everyone is always trying to keep up with you.
Hey, keep it up, Ben!
–
‘I’ve been in this business 30 years and I’ve never known a down market’
Lying must be second nature to you in that case.
Jas
That comment really jumped out at me as well. I know these guys are in sales, but that statement is really over the top. I have family members who have worked in the real estate industry for a number of years. If there is one thing that is not true it’s that there has never been “a down market” in the past 30 years.
Why don’t some of these reporters follow up with some hard questions? Many of these articles come across like NAR press releases.
My Realtor was talking about up and down markets when I was in the market for my last house. I told her that I thought no Realtors ever saw down markets and she just laughed. She said that technically the prices never declined during her 25 year career, but sometimes inflation would kick up and house prices wouldn’t so it was the same cow pattie different shape.
Hi Jaz,
I mean, really think about that statement…30 years?
Smells like liar liar pants on fire?
Apologies for the child room–but seriously–30 years in the business and NO down?
Slap me stupid and call me silly!
P.S. The London bridge is for sale?
Gawd,
Leigh
Disclaimer: I’m a bit (much) ramped! Heavens!
Leigh - step away from the caffeine and no one will get hurt.
Next year NAR will be holding their convention in a friggin TELEPHONE BOOTH for all I care.
Location..location..location is becoming
Pain..pain..pain EVERYWHERE
“‘Basically, were screwed,’ he said. ‘Its not that were jealous, but the additional consequences could mean somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.’
caps on:
MOST OF THOSE WHO USED A TWO-YEAR LOAN COULD NOT AFFORD THEIR HOUSES IN THE FIRST PLACE.
caps off.
“Its not that were jealous, but …”
The correct way to complete this sentence is ?
It’s not that we’re jealous, we’re just bitter renters, of course, silly!! (not us).
It’s not that we’re jealous, we’re just bitter FBs?
It’s not that we’re jealous—–fill in the blank. (not us).
Looking forward to meeting you Hoz, hubby is too!
Hope you win my friend. (New Galarus sp?)
Best Always,
Leigh
“‘Basically, were screwed,’ he said. ‘Its not that were jealous, but the additional consequences could mean somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.’”
From Monty Python:
Suicide Squad Leader: We are the Judean People’s Front crack suicide squad! Suicide squad, attack!
[they all stab themselves]
Suicide Squad Leader: That showed ‘em, huh?
Splitter!
No No not the Judean People’s Front, People’s Front of Judea.
I know this thread is dead but could not help my self.
Who might that someone be Mr.St.John? Did you see him in the mirror.
wow, its amazing how much concern he has for those “2 year” loan families, and not the fact that the families in the community may one day afford a home of their own when prices dip down to affortability. He really is not worried about anyone but himself, and just looking to get he’s 50K……….maybe to help him to some type of a refi……….
i think he is throwing that out there to try to grab attention from Ben Bernanke, in hopes he might come to their rescue!!!
Another blazing idiot that thinks he should get a rebate now that his foolish speculating has turned south. I think a lot of people bought houses expecting to make money - not to buy a home.
“In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction”.
hahaha… TOO F’ING BAD!!
These are the same people who were expecting 20% appreciation yoy and would not even flinch when taking the hard-earned $$$ from any other family. Do you think that they would give a rebate to the buyer of their house if it depreciated 50% after they sold it? Nope. They would be high-fiv’ing each other, laughing that someone else caught their falling knife…
“The response from DeNova President Dave Sanson was brief. ‘I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter,’ he wrote.”
Man I would love a crack at one of these letters. Here’s a better way to put it:
“The response from DeNova President Dave Sanson was brief. ‘I appreciate the opportunity to keep the lines of communication open, but regret that we will not be able to agree to the request in the letter. What we can do is provide you with a complementary jar of Vaseline that you’ll find in the box that contained this letter. We hear that if you apply it liberally it eases the pain and shock you’ll soon experience.”
Damn Ex - I just spit rice all over my laptop! Too funny.
please, oh, please we need someone to make us whole again.
Okay, where’s my magic wand, ting, ting!
Okay, you’re now A$$ whole!
And a reamed one at that!
From the article: “The [auction] begins at noon Sunday at the Vacaville Opera House. ”
hahahahaha
Maybe Mr. FB St John can attend dressed as Pagliacci the SAD CLOWN.
Wait … “Vacaville Opera House”?
You do know that vacaville is spanish for cow town and it lives up to it’s name.
I’m not buyin’ until the fat lady sings!!
“”St. John said he hopes to prevent the auction, or at least start a dialogue with DeNova.” “”
I realize after your buying well past the peak that I may have to explain this twice Mr. St. John. But it’s not hard to keep yourself from “losing” 300,000 as the auction opens. Opening prices aren’t important. All you have to do is bid your “market price” of $899,000
It’s obvious to anyone with a working brain that SF Bay Area fully participated in the housing bubble. OK, it may not be as bad as San Diego or the Inland Empire, but it’ll still be bad.
However, it is true that SF and SJ are “different.” They were already super-saturated with dot com money when the national bubble hit. Home and rental prices within commuting distance spiked hard in 1999-2000, and were coming down by 2002-2003.
It should take longer for that money to disappear because there are still lots of high-end jobs and the market is periodically refreshed with start up companies (e.g., Google, alternative energy, etc.) The prices will certainly melt without the easy money loans of 2003-2007, but not that quickly.
GOOGle money can vaporize pretty quickly once it starts to vaporize…
http://www.marketwatch.com/tools/quotes/intchart.asp?symb=GOOG&sid=1795093&dist=TQP_chart_date&freq=1&time=1mo
I think the tech/beta thesis may be in jeopardy now. It’s almost too late to make your year running them up now unless you go straight vertical for 10 days and Cisco’s earnings kind of brought the whole tech thing into doubt.
Hi John:
I realize that you’re a newcomer to the blog, but we have SO been over this whole “Bay Area is diffrent” thing. Case in point: I don’t care what perception you may have about Silicon Valley incomes. Truth is, the median household income in San Jose was only $76,300 in 2005 (link: http://www.coecon.com/PRESS/Index07-WSJ.pdf), but the median house price was $760,000 in January 2006 (link: http://realtytimes.com/rtcpages/20060110_siliconvalley.htm). That means house prices were about 10x median income at the peak of the bubble. It is clear to me (as it would be to any banker), that such multiples are unsustainable, and the mere fact that people make more $$ here than they would in Minnesota is really irrelevant.
Hi John:
I realize that you’re a newcomer to the blog, but we have SO been over this whole “Bay Area is diffrent” thing. Case in point: I don’t care what perception you may have about Silicon Valley incomes. Truth is, the median household income in San Jose was only $76,300 in 2005 (link: http://www.coecon.com/PRESS/Index07-WSJ.pdf), but the median house price was $760,000 in January 2006 (link: http://realtytimes.com/rtcpages/20060110_siliconvalley.htm). That means house prices were about 10x median income at the peak of the bubble. It is clear to me (as it would be to any banker), that such multiples are unsustainable, and the mere fact that people make more $$ here than they would in Minnesota is really irrelevant
Very true Big V… we also do get the big declines as well.
Not to mention general business is poor with high employee costs and high competition forcing business to move operations to other cheaper states. Why pay a worker 100K in Bay Area when you can move your operations to Minnesota and pay less thus insuring a competitive edge. We already see Seagate in Minnesota has more employees then in their high costing Santa Cruz headquarters.
Funny thing is that all the white Seagate employees work in Minnesota, and all the Chinese ones work in San Jose. Weird, huh?
I hope this isn’t a triple post. I took the links out because I think they may be killing my post:
Hi John:
I realize that you’re a newcomer to the blog, but we have SO been over this whole “Bay Area is diffrent” thing. Case in point: I don’t care what perception you may have about Silicon Valley incomes. Truth is, the median household income in Silicon Valley (not San Jose) was only $76,300 in 2005 (Wall Street Journal), but the median house price was $760,000 in January 2006 (Realty Times). That means house prices were about 10x median income at the peak of the bubble. It is clear to me (as it would be to any banker), that such multiples are unsustainable, and the mere fact that people make more $$ here than they would in Minnesota is really irrelevant.
Fortunately Big V’s dashed hopes aren’t as expensive as those of the typical FB.
“‘Most of the clients Ive been working with are just waiting for prices to drop,’ Alvarez said. ‘Were so saturated with homes, its unbelievable. Were continually having to drop prices every two or three days to keep up with the Joneses.’”
Joneses Kool-Aid stand.
Nice. Wonder how property values are holding up in Guyana.
too funny - pretty bad that Alvarez did not realize he was being funny.
Interesting take on the KUWTJ phenomenon. I wonder if the “keeping up with the Joneses” will morph into a concept where you try to act poorer than your neighbor?
“Oh my god, did you see the Joneses? They don’t have any shoes! That’s it honey, we’re going to have to chop off our feet now.”
I think wise(r) people have tried to Blend In With The Joneses for, well, ever
“The house McLean and his wife have lived in since April was listed at $786,000, while his neighbor Larry St John’s home was listed at $899,000 when he moved to Meadow Woods in March.”
Sounds like McLean wants to undercut his neighbor, but doesn’t like it when someone else does it to him…
Hey, be lucky your builder is trying to unload the inventory. From what I’ve read here, if he defaults, you could end up with a McLien on that McMansion, McDude.
“‘The beauty of an auction,’ he said, ‘is that it brings all the buyers into one room and you can find what the true values of the property really are.’”
Is this where the veil of denial gets lifted?
Only if it’s a real auction - if they don’t really sell the properties for the highest bid, or if they use shill bidders or other deceptive tactics, the market is still nonfunctional.
They have no chance of finding the true value unless they decide not to have reserve pricing. We know these asshats don’t have the balls to throw a real auction.
“I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”
Not if they pulled the “equity” out to buy Escalades, Land Rovers, Vacations, and 2nd homes….and a lot of them did…that’s why they are not happy.
I venture to guess it’s not even worth $700,000 anymore. Probably more like $550,000. Still a good profit if you didn’t extract the equity.
“‘Basically, were screwed,’ he said. ‘Its not that were jealous, but the additional consequences could mean somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.’”
- Hey Larry, no one should have bought in your area with a ‘2 year’ loan to adjustment. What an assbite.
“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said.”
Hmmm. Let’s see….I’m going to go with the ‘not’.
LOL
Yun is a lun.
Here’s another gem: ““‘I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”
What a professional response. Now let’s see these people SELL at $700K. If nobody is buying, then what is your house worth?
He is a Yunatic.
You’re great.
The only thing I can say about San Francisco is that alot of the purchases were going to be owner-occupied because the speculators/locust could not afford that area and the supply was low .Doesn’t mean that borrowers didn’t go on time bomb loans however .Anyway ,I view San Francisco as moving a little slower downward in prices than other areas ,(no I don’t live in San Francisco or anywhere near it ).
I don’t know, Housing Wizard. I’ve heard an awful lot of San Franciso folk talk about how they bought a rental as an investment. Case in point: All my landlords since I’ve been in the Bay Area. They all bought during the boom. Of course they couldn’t afford it, but they all lied to the bank and got neg-am loans, so the rent could actually pay the “mortgage” (only the minimum payment, though). That’s just it. No one could afford it. Not owner-occupiers, not investors, but they all just did it anyway thanks to the good ‘ole local banker (I mean crook).
Come on over to the Mercury News Comments sections and see me called a bitter renter.
http://www.mercurynews.com/business/ci_7457826?nclick_check=1
Mo Money I was just in the comments section and when all else fails pull the bitter renter card but you played chess with them and countered every move great Well Done !! What suprises me now is when I first came to Ben’s blog we talked about housing only on this blog. But now it is spreading to newspapers that when a RE shill trys to slip in a it’s a great time to buy story people are there to call them out and say “site your sources !!” I raise my drink and toast everyone on this board to a job well done.
Well done Mo nice counter back at the bitter renter card.
I voted for ya.
Me also. Then I couldn’t find the article on their site, only by following your link. They are hiding their head in shame!
–
“Some residents who already live in the community are not pleased. ‘We expect anywhere between a $200,000 to a $300,000 decrease in our property values overnight,’ said Meadow Woods resident Brian McLean.”
Welcome to the real world.
Jas
But the bad part is that a borrower would need a refinance after only owning a house for 2 years and need to do so .Didn’t anybody tell these buyers that if you have a tight money market money might not be available . When your buying a house you better be able to live with the loan going in and this was the greatest mistake of the bubble borrowing . Of course if it wasn’t for the crazy teaser rate low down bubble borrowing the prices would not of inflated like they did .
Nobody of his neighbors egged St. John’s house when he raised their property tax valuations?
Dear BRAIN McLean…
“The COMPS Giveth and the COMPS taketh away…Amen”
–
“In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction.”
Do these people live in the real world?
Jas
How much you want to bet that these self-entitled azzhats sit around bitching about “welfare cases” without the slightest hint of irony?
How much you want to bet that these self-entitled azzhats sit around bitching about “welfare cases” without the slightest hint of irony?
Brilliant.
Naw, they live on a planet called Entitled. The builder’s reply was polite and restrained, but he could have helped these folks by explaining that since he never asked for a cut of the profits when one of his houses was sold by an owner during the run-up, he feels no need to share in any losses during a downturn. Call it an introduction to market capitalism.
“In their letter, Meadow Woods neighbors asked for $50,000 per residence to help offset the disparity caused by the auction.”
Do these people live in the real world?
Jas
Dahling Jas,
Err…no.
I know this is a rhetorical question, but, dahling, the answer is NO.
Love the fact that you said, “It’s the debt, “Stupid”! (You win)!
Apoligies for the doubt. I may have a different view, but you are on target with deflation. (IMO).
Deflation, genius!
Best,
Leigh
P.S. Thank you for the education
“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said, adding that he includes Silicon Valley in that description.”
Not.
–
OK, we are all being brainwashed by the HBB — we all seem to have similar reactions!
Jas
Mine was “vomit”, so I’m still free.
What a laugh… im sure he denies that Bay Area never had a downturn before…
http://www.dqnews.com/AA1995OFA06.shtm
Darth Yun… the new Dark Lord of the Sith
I live in the Bay Area, and my observation is that prices are going down, but mostly that things are just not selling. There are many properties that I see for MONTHS on the market. These properties are usually less than perfect, either in location, size, etc. In the past, these houses would have sold for above asking price. Now, they aren’t selling, but sellers won’t budge in price, unless they are desperate. One house near me, in a working class neighborhood, was put on the market about 6 months ago for $700,000. The asking price in now $570,000. It is not a mansion, but a cute, arts and crafts house that needs updating. It is also a 3 bedroom, which formerly you would never find in the Bay Area for under $700,000, no matter what its state of disrepair or its location.
So, I think that the houses for the rich probably won’t come down to affordable prices for the masses, but the starter homes will probably get closer to the correct prices for true starter homes! A 2 bedroom “starter home” for $650,000 is ridiculous, especially one that needs tons of work and is in a bad location, but that is what you would find in the Bay Area in the past few years, if you were lucky to find a bargain.
About SF - there is definitely problems in the market…a few props in the Marina are not moving - one next door - on the market for about $850k 2 bd condo…on market for 2 months at least….you would need 20% + down = $170k, plus the jumbo ($417k) and pray you could get the second for $263k….then later you need about $600/month for HOA….but that’s adjustable as well….there are lots of properties up for sale in the ghettos - Bayview & Hunters Point - that are still obscenely high. Those condos/homes will be vacant in no time and then the gangs are really going to take over…
As an ex-Californian (Cupertino) I’m back to squat on the CA thread
Maybe it isn’t different here in the South Pacific?
“Big housing downturn predicted by economist”
http://www.nzherald.co.nz/section/8/story.cfm?c_id=8&objectid=10476116
Good luck on selling this NZ$ 3.68 million ugly house:
http://www.realestate.co.nz/651307?min_price=2000000
And it isn’t different in the UK either.
“Frost falls on UK property market”
http://www.nzherald.co.nz/section/8/story.cfm?c_id=8&objectid=10475885
Bwahahahahahaha!
Aside from the high price of real estate, how are you liking living in NZ?
New Zealand is a great country. Everyone wants to live there, in fact, which is why home prices have appreciated like crazy the past 6 years. Haven’t you heard?
I was in NZ in 1956 (young Brit merchant seaman). Wellington and Auckland. Cruised the fiords. Incredible country. I always figured I would end up there but my eventual profession (not a seaman!) took me to Los Angeles instead. I understand NZ brought in tight immigration rules which has stopped them from becoming a middle east toilet like the UK (especially London) which looks more like Baghdad or Karachi these days.
@ Mike
Re: Immigration
The idea of tight NZ immigration might be a memory of an earlier era or even Australia’s former “white only” policy. Now the government opens the immigration floodgates wide whenever the property market softens.
The central business district of Auckland is heavily Chinese and Korean. In fact, only Chinese girls shop at the high end Customs House boutiques - no one else can afford designer goods.
South Auckland is heavily populated with poor immigrant Pacific Islanders, methamphentamine gangs, and people on various government benefits, including Somalis. In the better suburbs you find the South Asians.
It is estimated that children of mainly european ancestry will be a minority nationwide within another generation. The future of NZ is to become more like Fiji. Business will be dominated by mainland Asians and Australian corporations, but various Maori/Pakeha/Islander nativist political movements will try to preserve their slice of the economic pie.
@aladinsane
How do I like living in NZ? Not so much. It is basically a third world socialist country with French Rivera prices and dreadful weather much of the year.
Gasoline costs over $6 a gallon, a movie is $15 and a lipstick is $20. The government taxes any unrealized gains on your retirement account every year whether you sell your investments or not. Top taxrate is 39%. But then there is also a goods and services tax of 12.5% on everything. Plus duties on anything imported. Bare dirt building sections go for $250-400K. The low wages make up for it - not.
Health care is free to permanent residents who have been here for more than two years, and I qualify for that. But the health care infrastructure and personnel are at a 1950s Alabama level at best. The hospitals are actually so filthy that epidemics of diarrhea within the hospitals are common. You really don’t want to have a serious illness here.
Silicon Valley basically has nine months of mostly fine weather. In NZ, there are only four months where the weather is mostly nice. The roads are narrow and rough, and the drivers are very aggressive and unskilled. Don’t even think of riding a bicycle.
So I am pretty unhappy. I would move back to the SF Bay Area in a heartbeat, except the concerns that motivated me to leave (the end of constitutional government in the US) still exist. So I hope against hope that the republic will be restored some day.
It is easier to appreciate all the good things in America when you have experienced a woeful alternative.
sounds like a FREE-er healthcare country
bored of the rings
“‘I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”
I couldn’t have said it any better myself.
Nor do I have sympathy for somebody who bought at 200K, saw their value go to 900K, but along the way went to the MEW piggybank so many times they owe 900K, and now it’s worth 700K. Nor do I think they should be able to walk and have their debt forgiven. Nope, no sympathy at all.
–
“…somebody who got in on a two-year loan may not be able to refinance and (may) lose their home.”
Look at the bright side, somebody who got 100% financing can llive for free for 6-9 months and then rent a home next door for 1/3rd of the total payments. This cloud has a very bright silver lining.
Jas
that is hilarious…
the soccer ball talks!
What about bankruptcy laws? I believe the laws have been changed since the last housing market downturn. Anyone know how the new laws will actually effect those that have their house forclosed? Can’t these people now be gone after for the amount owed? Won’t the BK and forclosure negatively effect their credit score? won’t the credit risk cause landlords to charge them a steaper rent, due to the higher risk they carry?
“St. John said he paid a $899,000 listing price on March 1 for his home; a simliar model will have an opening bid of $550,000 at Sundays auction.”
“‘Now were looking at losing $300,000,’ St. John said”
St.John is a prime example of mass thinking: If I buy a new house the resale price can never go below what I paid for it. Well Mr. St.John I bought my first house in Bakersfield in Feb. 1973 for $31K and it orginally sold in Jan of 1959 for $31K.
…and it originally sold in Jan of 1959 for $31K.
Man that must have been a very nice place. Isn’t that about what it cost to build the Hoover dam?
Stats for Scal six counties Oct dataquick:
All Home Sales No Sold
Oct-06 No Sold
Oct-07 Percent
Change Median
Oct-06 Median
Oct-07 Percent
Change
Los Angeles 8,451 4,368 -48.3% $520,000 $500,000 -3.8%
Orange 2,929 1,700 -42.0% $625,000 $573,750 -8.2%
Riverside 4,408 2,463 -44.1% $412,136 $350,000 -15.1%
San Bernardino 3,547 1,603 -54.8% $365,000 $330,000 -9.6%
San Diego 3,449 2,327 -32.5% $490,000 $460,000 -6.1%
Ventura 961 538 -44.0% $590,000 $535,000 -9.3%
SoCal 23,745 12,999 -45.3% $482,750 $444,000 -8.0%
The Low end market in LA will fall hard. Too many subprimes and fraudulent appraisals. The foreclosures are running rampant in the LA hoods like rioters on a torching spree during the 92 riots. I have within a block walk of my hood 4 empty beauties. When the banks get tired of holding on to these albatrosses and have real firesales then the LA Market will nosedive. -3.8% yoy is just a tiny nibble- by next year 80% of LA zips will plunge into the abyss.
“Gaylord also insisted that despite the turbulence in the market, it’s still a good time to buy. ‘I’ve been in this business 30 years and I’ve never known a down market,’ he said. He added, ‘I’m not troubled terribly by today’s market.’”
Shut yo’ mouth and open your eyes, and you’ll be in for a big surprise!
“Orange 2,929 1,700 -42.0% $625,000 $573,750 -8.2%“
–
“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said, adding that he includes Silicon Valley in that description.”
When Yun gives me a choice between believe it or not, my choice, obviously, is not.
Jas
Wow! LA County median FINALLY heads into negative territory.
Looks like I have a wager to collect from some friends. So much for it being different there.
Just make sure SD_suntaxed they are really really good friends or have a few Bubbas with you when collect your bet.
That’s the thing. Two of them are spending 50%+ of their income on just the mortgage payment. Their small savings are gone because of some emergencies that came up, the credit cards are maxed and they’ve already tapped a home equity loan. I don’t think there’s going to be much to collect.
Instead, maybe I’ll just make them write 100 times…
“Real estate always goes up, except when it’s going down.”
Whoo Hoo…….major lead story on ABC news about foreclosures and auctions. 500 homes in Monterey stopped builder files BK……
Well its finally getting coverage…but not much on solutions
Same story was on NBC Nightly News. And they said we’d see all these foreclosures over the next TEN years as mortgages continue to re-set. Interesting, too, that I hadn’t seen much in the way of foreclosure activity, just a house or two here and there, in my small part of Tampa Bay area and then today, BANG! 41 houses come up.
Banks have been holding REO’s for a year now, and are finally under pressure to unload. It’s a race for the exits now.
The solution is as easy as falling off a cliff..
“‘Now were looking at losing $300,000,’ St. John said, saying the auction unfairly makes homeowners lose equity on top of the falling housing market. St. John said he hopes to prevent the auction, or at least start a dialogue with DeNova.”
WOW this story makes me cry. I consider myself menacing looking, If you want I can stand at the door, fold my arms across my chest and give the bidders dirty looks.
St. John said he hopes to prevent the auction,…
Sounds illegal.
I know that many people in SF make a lot of money - but when a fixer-upper SFH in an ok neighborhood costs more than half a million..that’s a bubble.
SF is screwed if prices don’t come WAY down. We already have the lowest % of households with children compared to all the other US cities, the school district is closing schools every year, teachers (like myself and my partner), cops, firefighters, nurses, and service workers of all kinds are leaving in droves (just read an article about how the city’s restaurants are struggling because there are not enough sous chefs due to high cost of living).
The “for sale” signs are starting to crop up everywhere in the city. Things are selling, but slowly.
I don’t buy the “they are not making any more land” line, either. The amount of building that has gone on in the city in the last 10 years is phenomenal. There is an entire section of the city that didn’t exist AT ALL as a neighborhood (down by the ball park) and the building going on down by third street, formerly an industrial patch of land, is acres and acres of space that will turn into condos. We may be short on SFH, but there is land to be developed in SF proper and they’re building on it.
How low it will go is still a mystery, and we are saving and hoping.
I read a lot of CA bashing on this blog, but despite the high cost of living I’m still sold on San Francisco:
1. It’s beautiful
2. the weather is good
3. If you are queer there’s really no other place to be and feel safe
4. If you are queer and raising kids this is one of the few places where your kids aren’t in the absolute minority
5. If you are a surfer there is plenty of waves all year round, except now due to the oil spill
6. If you grew up on the east coast you can be far away from your family of origin
Here’s to hoping for a massive hosuing bust in San Francisco.
I would imagine if you get established there, it would be hard to leave. It’s getting established that’s the hard part.
Yes, once you get used to the weather, the diversity and the large number of jobs available in hi-tech (outside of a recession), it is hard to live elsewhere. I lasted less than 1.5 yrs in Portland (which, by the way, is still among the best areas to live in this country). PDX is a great city, but the winter weather and the single company (INTC) feel of the western suburbs was too much. For career in hi-tech, this is the place to be.
(formerly PDXrenter)
sfrenter, the area down by the Giants ballpark is called South Beach. Give it time sfrenter, it will happen. SF is not different.
Or Mission Bay - another neighborhood by the ballpark.
Yes, there are thousands of new housing units in this city and more on the way.
SF as a place to live is fine, if you can ignore the City politics and put up with the arrogance of the residents, including the prevalent “I’ve got mine, so **ck you” attitude.
Yes.. but all these factors have been in SF before .. yet prices
declined before. So these are not factors at all.
Good one. I’ve been forgetting to use that one. Thanks for reminding me.
B..b..but TULIP PRICES CAN’T FALL..Everyone NEEDS Tulips
And beanie babies.
And stock in a company that loses tens of millions of dollars a year selling pet food over the internet.
Let’s not forget all those comic books from the 90’s.
–
Mizuho Financial of Japan said, “Sub-prime porblem in the US will cost it lot of money.”
Someone has finally come up with the right amount. That wasn’t so hard.
Jas
How dumb are these guys? Both Yun and Dick could have entered their new positions claiming that, in fact, the market had been a runaway train and it would be wise for sellers to recognize the facts, pricing their homes accordingly to sell them.
Instead, we get the same old crap….”I’ve been selling homes for 30 years and this market doesn’t scare me”. Guess that means that Dick isn’t selling his home anytime soon.
“Actually, the all-home median price logged by DataQuick for last month was $460,000. That marked the lowest level since April 2004, when the median was $445,000. That’s quite a difference from April 2003, when the median was $352,000.”
We’re getting there…
“… the chief economist for the country’s largest real estate trade group told reporters Tuesday that …”
Is there some reason why I continue to have the Mercury news delivered on Sundays?
Just read SIEPR
“… B. Douglas Bernheim and Jonathan Meer studied sales, including many repeat sales, among the 800 homes on the campus near Palo Alto from 1980 to 2005. In a study published by the Stanford Institute for Economic Policy Research, they reported “no evidence that the use of a broker significantly affects either the selling price or the initial asking price.”
They found that homes sold by brokers did sell more quickly.
While Bernheim and Meer acknowledged that broker services include market information, screening of prospective buyers and assistance in negotiations, they described the median sales commission of $34,000 as “a steep price to pay for the value rendered.”…
Wonder why the only place I could scan this was in Canada? How much did the NAR pay to keep this quiet?
Edmonton Journal
http://tinyurl.com/2fh4qp
Good find. thx.
Here’s the full paper BTW:
http://siepr.stanford.edu/papers/pdf/06-41.pdf
You are on aye roll
“‘The beauty of an auction,’ he said, ‘is that it brings all the buyers into one room and you can find what the true values of the property really are.’”
I bet that would work for SIV-held assets as well as houses…
LOL .
With ALL of these “Woe is Me” poor Fb’s tragic stories popping up and floating around, we’ll definitely have to FLUSH the RE toilet more often.
Bwahahahha
“Actually, the all-home median price logged by DataQuick for last month was $460,000. That marked the lowest level since April 2004, when the median was $445,000. That’s quite a difference from April 2003, when the median was $352,000.”
No big deal; I predict that April 2003 number will be achieved again within the next 18 months.
Compared to Detroit, where turmoil in the auto industry and the greater economy has sparked much of that city’s housing trouble, the declines here come not as a sign of general economic weakness but as a more natural return from the market heyday of recent years, said Maureen Maitland, vice president with Standard & Poor’s. The region fits into the national slumping housing market, Maitland said.
“There’s essentially a nationwide trend and San Diego is a part of this trend,” she said. “There’s nothing about San Diego in particular that makes its growth rate any worse than any other” metro area.
What the hell, I thought that San Diego was the “special”est place in the whole world! I love that they’re now reduced to comparing themselves with Detroit.
They don’t know or won’t say what’s really happening, so they toss out another bogus explanation. San Diego is not Detroit. However, the differences allowed prices here to bubble much higher before falling. People here still have no idea how much prices could fall or have fallen already. Even though there are homes I could buy in Detroit for less than I pay in rent in San Diego in a year, I could never see myself moving to Detroit. Lots of other places possibly, but not Detroit.
“‘It’s hard to buy a home when you think it might lose value, especially when you have to borrow money to do it,’ he said.”
I would think it’s even harder to do so if you’re putting your OWN money on the line.
I would see kind a tripartite answer to that. If NONE of the money is yours, then you don’t give a zheet. If 4/5 of the money isn’t yours, that’s perhaps the worst, because much of your big down payment is quickly toasted. If ALL of the money is yours, you can tolerate some downturn. This last consideration leads me to think I’ll buy sooner (2009?) rather than later (2014?) because I don’t need the “bottom,” I just need a reasonable ratio for price/rent.
What I’m selling this week — 700 homes in the Stockton-Oakland area — these properties were probably foreclosed a good year-and-a-half ago
Stockton-Oakland area?? Those two cities are nowhere near each other. I may as well say that I live in the San Francisco-Los Angeles area.
I live in the San Diego-Los Angeles-Santa Barbara area myself…
“‘I would characterize San Francisco as not really participating in the housing boom, believe it or not,’ Yun said, adding that he includes Silicon Valley in that description.”
No, of course it didn’t participate. It was perfectly normal that house prices would triple over the past 7 years even as the population shrank, unemployment rose, rents dropped, and median incomes declined.
“It was perfectly normal that house prices would triple over the past 7 years even as the population shrank, unemployment rose, rents dropped, and median incomes declined.”
*******
Thought of as normal?
“Many thanks Alan Greenspan and the ‘Do Nothing’ Fed!!”
right on
“Norm Miller, director of real estate academic programs at the University of San Diego, advised homeowners who have seen their equities melt by 20 percent to 30 percent to think objectively about where San Diego’s market has taken them.”
“‘I have no sympathy with somebody who bought at $200,000, saw their value go to $900,000 and now it’s worth $700,000,’ he said. ‘Boo hoo! They’re still way ahead of the rest of the country. They’re so much better off.’”
Somehow, the suggestion to guarantee GSE-securitized loans valued up to $1m seems out of touch, against the backdrop of falling housing market values in wealthy coastal communities. Who would such a guarantee benefit, aside from the superrich (like CEOs of investment banks, and other folks who live in $1m homes)?
“LePage said jumbos represented 35.7 percent of the mortgage market through July, but last month were down to 21.9 percent. Purchases of jumbo-loan homes fell 62.3 percent over the past year, twice the decline of the general market.”
Another reason to not need a guarantee on GSE-securitized loans up to $1m: The Jumbo loan share of the market is shrinking. Pretty soon, it may be negligible…
Novastar - Symbol NFI, REAAAALLLY bad news after the close…..this one is history. 598 million dollar loss, 64.05 loss per share. May be delisted from NYSE. Stock down 39% after hours.
“DataQuick analyst Andrew LePage said it was the first time the counties all reported a drop in monthly prices since November 1995, when all of Southern California was in recession.”
Such a weird coincidence that is!
Ahhh, another one Tousa - Symbol TOA, after a $617 million loss, considers bankruptcy protection. Tousa was the nations 13th largest homebuilder according to BuilderOnline.
“Gaylord also insisted that despite the turbulence in the market, it’s still a good time to buy. ‘I’ve been in this business 30 years and I’ve never known a down market,’ he said. He added, ‘I’m not troubled terribly by today’s market.’”
What a P O S lying sc-umbag.
‘I’m not troubled terribly by today’s market.’”
I would like to see him tell that to homebuilders and mortgage brokers and see their reaction.
Were continually having to drop prices every two or three days to keep up with the Joneses.
Shouldn’t this be they are trying to keep down with the Joneses?
I think it would be fun if Ben set hosted a housing bubble radio talk show on Blogtalkradio.com
The Merc. article has since disappeared off their site, or at least its no longer obvious. After all the comments added to it, I think they realized it was a BS article.
I sincerely hope that the government doesn’t step in with a mass-bailout, although I am less and less sure that is even possible. A bailout can only work when borrowers can qualify for a new mortgage, and that is in many cases not possible under sane lending standards.
I am a college professor in Hawaii. We moved back here in 2004 after I finished graduate school in Santa Barbara. Compared to there, Hawaii housing prices in 2004 looked sane, but we still couldn’t qualify for a 30 year fixed on an average priced condo. We were offered all kinds of sketchy mortgages, with realtors saying things like, “talk to my broker, she’s an absolute magician. You can afford this house easily.” Since we obviously couldn’t, we rented, and still do. I get a housing subsidy from the university where I teach that keeps our rent quite reasonable, and translates into about $12,000 in annual income. They even pay the taxes on it. Obviously I am in no hurry to buy until things return to normal in the housing market.
My job is essentially recession-proof, but I don’t want to see people suffer. On the other hand, how do we get through this without major economic pain. I don’t see it.
On another note, the surf season is here and the waves are cranking, and I live on a three acre parcel at the base of a beautiful mountain valley in a $1,300 per month three bedroom home. Bummer!
To some extent I agree with this… Santa Clara county has not cratered yet like Southern CA and central valley.
Yet.
I estimate we are 9 months to 1 year behind other areas, due to 1) desirable location, built-out communities, google millionaries, etc.
That said. I attended an auction on the steps of the San Jose courthouse last week. A regular there showed that only 100 or so of 2300 homes put for auction this year were sold at auction. The rest likely went REO.
So, no one is buying these foreclosed homes, and the price shelf is getting tenuous.
When prices start cratering, watch foreclosures ramp up. Then the fun will begin.