Four Years Of Stupid
The Billings Gazette reports from Montana. “Michael Grover, from the Federal Reserve Bank of Minneapolis, said Montana has fewer foreclosures and fewer high-cost loans than the national average. But he said more rural areas face pressures because of high-cost loans, which is a surprising new turn. Grover pointed to a map that showed counties like Fergus, Powder River, Judith Basin and Daniels. In those rural counties, more than 30 percent of home loans are high-cost loans.”
“Others already see problems. Sheila Rice, from the Montana Homeownership Network, said the number of people seeking help from her organization because of late home payments has jumped tenfold just this year.”
“‘In Billings alone in 2006, there were 1,200 high-priced loans,’ she said. ‘Statistics show that 15 percent go into foreclosure (eventually).’”
The Missoulian from Montana. “Luke and Jennifer St. Claire and their 13-year-old daughter rented an apartment in July of 2005. But with the birth of their twin boys in March 2006 and a new pregnancy shortly thereafter, the family realized they would need more space and privacy than the apartment could provide.”
“Feeling pressure to find a home quickly, the St. Claires got a subprime loan and moved into a modest home on the south side of Missoula.”
“A year and a half later, that mortgage, as well as rising food, fuel and utility costs, are squeezing the family and making ends harder and harder to meet.”
“According to Jennifer, their mortgage payments are slated to go up by $400 a month in February 2008 - to $1,800. ‘We haven’t a clue where that extra money is going to come from,’ she said. ‘We’re hoping to refinance or sell.’”
The Times News from Idaho. “Some say it was only a matter of time. The affects of a nationwide housing slump and growing credit problems have reached south-central Idaho.”
“Home sales have declined 19 percent in Twin Falls County, according to a report from the Greater Twin Falls Association of Realtors. According to a report of building permits issued by Twin Falls County, building officials approved only 240 permits for single-family homes as of Nov. 30 compared to 535 during the same month last year - a decline of about 55 percent.”
“Real estate brokers and home builders interviewed by the Times-News denied a slump in the housing market, and did not want to answer further questions about the issue.”
“But some brokers did say that much of the decline is due to homeowners in other states, who cannot escape higher mortgage rates in order to buy a more affordable home in Idaho.”
The Idaho Stateman. “Believe it or not, there is still affordable housing to be had in Ada County. Diana Cavigllano, a Realtor in Boise, says there were 83 homes for sale Tuesday in Boise and Meridian with price tags below $150,000.”
“Most of the properties priced below $150,000 are in foreclosure, or have had their prices slashed by owners who have seen their properties languish on the market because of the market downturn, Cavigllano said.”
“A ’shocking number’ of the homes are vacant, which gives the buyer leverage because the owner has moved and is eager to sell to avoid having to pay mortgages, she said.”
“Some of the homes are fixer-uppers. But other are already in livable condition. ‘These homes are just sitting there,’ she said.”
“A five-bedroom, 1-1/2-half bath, 1,482-square-foot home (was) originally priced at $189,900. After 136 days on the market, the owner will now take $147,900. A two-bedroom home on the Boise Bench was cut from $149,000 to $143,900 after just 19 days on the market.”
“Cavigllano said that for the first time in a long while, some new homes are being built and sold for less than $150,000. At the Charter Pointe subdivision, Hubble Home plans to build three homes priced at $149,990. ‘They haven’t been built yet, so you can go out there and start picking out your colors,’ Cavigllano said.”
“Canyon County offers a much larger choice of low-cost homes. Associate broker Shaun Tracy said 582 Canyon County homes are priced at or below $150,000.”
The Mail Tribune from Oregon. “Brenda Potvin sold insurance for the better part of two decades before jumping into the white-hot real estate market three years ago.”
“‘It sounded good at the time,’ says Potvin.”
“Then the real estate market turned cold, and the Medford woman began looking for other options. When the opportunity came to watch her 11-week-old granddaughter while her son was away, she decided it was time to leave real estate.”
“Potvin is one of a rapidly growing number of real estate agents who are deactivating their licenses or letting them expire during the market lull. The number of local real estate agents surged during a four-year period beginning in 2002, growing by nearly 50 percent before cresting in mid-2006.”
“‘I was one of the lucky ones, because I was still doing good business,’ Potvin says. ‘I know agents didn’t make a penny this year.’”
“Leo Ford worked the local real estate market for 11 years, until recently when he moved to Maui. He says the rapid appreciation that drew so many agents into the market masked reality.”
“‘I called it four years of stupid, because sellers and buyers drove prices so high,’ he says. ‘I saw it coming and so did the other long-timers. We expected this to happen and prepared. The newbies were having a ball signing papers and making 20 to 30 grand in a couple of months. Right now, the best thing is for an agent to stay out unless they’ve been around long enough to get repeat business.’”
The Bend Bulletin from Oregon. “The Central Oregon Business Index stumbled in the third quarter of 2007. The index’s quarterly year-over-year declines illustrate that the region’s economy is quickly cooling after riding the wave of the red-hot housing market of 2005 to 2006, said Tim Duy, adjunct assistant professor of economics at the University of Oregon and the study’s author.”
“Additionally, that market may remain weak even after it hits bottom, Duy said. ‘The housing market is just a mess,’ Duy said. ‘I’ve been saying for a while that these are the two toughest quarters — the fourth quarter 2007 and the first quarter of 2008 — we have to get through without any other major negative shock (to the market).’”
“‘Talking to mortgage brokers, their business is fundamentally changed because of the lack of access to capital — they just can’t make the types of mortgages they’ve made before and I think the financing just is not going to be there next year,’ Duy said. ‘There’s no housing ATM anymore.’”
“The housing market is falling faster and faster, Duy said. Housing units sold in the region fell again to a monthly average of 225 homes, compared with 305 in the third quarter of 2006. September was especially bad with 153 homes sold compared with 214 in September 2006, Duy said, reflecting the national tightening of credit in the home mortgage market.”
“Residential building permits for new construction, however, have dropped sharply, Duy said, to a monthly average of 82 permits. In the first quarter of 2007, the index tracked 199 new building permits in Deschutes County. The third quarter of 2005 saw a monthly average of 391 permits.”
“Woodhill Homes in Bend is one business shackled to housing. The builder this year has logged 75 percent fewer closings and new-home starts compared with the boom years of 2005 and 2006, said owner Jay Campbell.”
“‘We’ve in turn focused on the market but also on the business and ways in which we can do things better and improve our systems,’ he said. ‘All that said, and you’ll probably hear this from every builder: There has never been a better time to buy a house.’”
Marketplace reports from Oregon. “With home prices dropping all over the country, how do you choose the right time to buy? Ethan Lindsey walks us through his home buying experience in Bend, Oregon. He’s a reporter for Oregon Public Broadcasting in Bend. That city tripled its population over the last 15 years. Home prices rose in tandem.”
“Kent Chapple owns a coffee shop in town and a home as well. He says homebuyers here read their property prices like the stock pages.”
“Kent Chapple: I do pay attention to it but I knew that it was overvalued. And all my neighbors were all excited about how our houses had increased in value. But it was kind of funny to me, because where you gonna move to, right? Everything has increased. So, if my house is worth more but I can’t afford to buy a new house, then what difference does it make, you know?”
“Realtor Becky Breeze doesn’t have a bad word to say about Bend. To her, the home prices mean the market is bright. But, even she sees some dark clouds on the horizon.”
“Breeze: The only problem is that so many agents went into the business and so many mortgage brokers went into the business during that little upside period that there’s not enough to support that many people. We wish some our houses would sell faster, absolutely.”
“At several open houses, the seller started to haggle with me the moment I walked in the door. In the past few months, I’ve walked through 30 or so homes in my price range. Of those, fewer than five have sold.”
“Dawn Dwyer is a realtor in town. Dwyer says that in 2005, many of the homes I’ve looked at would have been swamped with multiple offers on the day they were listed and furious bidding wars broke out over these homes.”
“My experience has been the opposite. In my hunt, I fell in love with a two-bedroom bungalow. When I first saw the house, it had been on the market for more than a month. I finally got it for $20,000 less than the price on the sign out front.”
“Dwyer: It’s the true story of what it’s like to be in a buyer’s market and what it’s like to be in a seller’s. In that fast a time, a few years, to see that much of a difference, it’s amazing. Yeah, you’re really lucky.”
“As a whole, the city probably isn’t so happy. Real estate is the third-largest employer in Bend. It pays the salaries of 15 percent of working residents. That scares some economists who say if the housing market goes, so could the local economy.”
“That scares me, too. Maybe this isn’t the time to be buying that first home.”
The Columbian from Washington. “Who could blame the average Clark County homeowner for being confused about the local housing market? With reports rolling in nearly every day from news organizations, industry groups and national economic agencies, it’s darn difficult to make sense of the numbers.”
“There are two things to remember is evaluating all this: Clark County is a unique housing market separate from Portland. What is going on here is different than what’s happening across the river or elsewhere in the region or nation.”
“News about this market is more timely than most national and regional reports. So while you might read that Portland-Vancouver housing prices have shown little decline through the third quarter ending Sept. 30, we know that in October, the median price of homes sold in Clark County was down 7.5 percent from 2006 as sellers began to adjust prices to unload property.”
“Metrowide, there’s an 8.4-month inventory of new and preowned homes for sale as compared with a much larger 11.4-month supply in Clark County, according to RMLS.”
“Because our market is unique, The Columbian business news section tends to play down national housing news or at least run a ‘local angle.’ Bottom line: A psychological standoff continues in Clark County between buyers who think house prices should be dropping on weaker sales and sellers who are convinced their homes are not overvalued. If mortgage rates drop, buying should pick up, say the experts.”
“Have we got it all straight?”
I think the Idaho Statesman story is a press release from RE agents. what BS that a few homes priced between 100k to 150k points to affordable housing. These places are most likely dumps that used to sell for $50k to $75k.
BTW, the readers comments section for the story turned into a rent vs. buy argument.
Brother is in Sun Valley and he said it’s dead except the uber rich and even they are cheaping out. He does high end finish construction work and said it’s bad there.
According to the MLS, only 6 homes have sold in Blaine County (Sun Valley) for the entire year
“Believe it or not, there is still affordable housing to be had in Ada County. Diana Cavigllano, a Realtor in Boise, says there were 83 homes for sale Tuesday in Boise and Meridian with price tags below $150,000.”
Methinks that 90% of all homes in Ada County should be priced below $150k. A silly little thing called incomes led me to this conclusion.
Any word on Micron? Last I heard, they can’t hold out any more and were starting to offload jobs to SE Asia, in spite of recently breaking ground on a nano-fab.
Aside from potatoes and wood, Micron is about the only other entity holding that economy together.
The Mail Tribune from Oregon. “Brenda Potvin sold insurance for the better part of two decades before jumping into the white-hot real estate market three years ago.”
“‘It sounded good at the time,’ says Potvin.”
“Then the real estate market turned cold, and the Medford woman began looking for other options. When the opportunity came to watch her 11-week-old granddaughter while her son was away, she decided it was time to leave real estate.”
Something smells funny here, about the “opportunity to watch the 11-week-old”. If her son is poor enough, can he quailify for some taxpayer-funded program to pay for “daycare” that Grandma can provide?
I just love how people will ditch a job with a track record to make a quick killing in some white hot bubble. Then the bubble pops and they are left with nothing.
“I just love how people will ditch a job with a track record to make a quick killing in some white hot bubble.”
That is just one of many, many little signs that a reasonable person must notice. I work for a Sacramento area software company and was surprised in late 2004 when one of our developers quit to become a realtor. To his credit, he came back a year later. Sure, our company doesn’t pay that great, but it’s pretty steady. Had another co-worker in mid 2004 who bought a house in Empire Ranch in Folsom brag about how he “made” $50,000 6 mos. since buying his house. Another dead giveaway was I noticed how often my neighbors turned the conversation toward house prices and this or that recent sale for X dollars.
The crowd is always wrong. It doesn’t get much simpler than that.
Heh. The reason I never ask for a big raise at work. The ones paid the most are the first laid off!
AP
Five-Year Mortgage Rate Freeze Looms
Wednesday December 5, 3:40 pm ET
By Martin Crutsinger and Alan Zibel, Associated Press Writers
Bush Mortgage Plan Will Freeze Certain Subprime Interest Rates for 5 Years
WASHINGTON (AP) — The Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures, congressional aides said Wednesday.
http://biz.yahoo.com/ap/071205/mortgage_crisis.html
Yeah, yeah. And they were going to rebuild New Orleans, too. Has the water truck ever showed up?
Ben, sometimes I feel like it’s just you and I who worry not over all this BS.
Count me in on the “not worrying about the reset freeze” crowd.
Ditto Bob,
All together now one, two three…it’s TOO large to fix!
Not enough time, resources or money!
It’s not magic. Not enough time, resources or money!
Leigh
opps…to
Add me to the list. Just grandstanding.
Comment from earlier thread.
MISSION ACCOMPLISHED!
Ben - what I want to know is if it is ok with the ppl holding these MBSs - like foreign investors, etc. Weren’t they baqnking on higher returns? Now what with that? It is one thing if BoA says ok, it’s another if the true holder is someone in China…
Am I off base?
Then I read today that they’re going to try to pass something that will keep the investors, the actual owners of these notes, from taking any legal action against what amounts to the destruction of their investment . Oh yeah, that ought to work out real good. The only thing this stupidity has been good for is the complete revealing of an impotent govt.
That’s part of what I don’t get. Investors put up money. Investment companies and banks lost that money. In some cases, the banks WERE the investors.
Unless the money was invested fraudulently, why should I, as an investor, expect a bailout? I shouldn’t and that’s why it won’t come.
200 + years of contract law is at risk.
WHY DO ANYTHING YOU ARE SUPPOSED TO DO IF NOT HELD TO IT?
Like paying your bills, taxes, mortgage, etc.
Makes me want to say wtf am I paying this for?
This may go over well for the bleeding hearts, but once investors realize their paper is only good for toilets, kiss the housing market goodbye for 50 years.
You will need 50% down and AT LEAST 1-2 years worth of emergency funds inthe bank and more than 2 years taxes and paystubs.
No question, by freezing the rates and trying to prop up this market and keep howndebtorsm just that, they will, as usual, incur unintended consequences. In this case, the values of homes will sink, since the rquirements will be astronomical for most everyone, escept the uber-rich and they won’t be buying 600K Faux Chateaux Garage-Majal McMansions.
Im a bleeding heart and I am against bailouts, and that Hilary monster for that matter. Intelligent bleeding heart’s realize that the path to affordable housing is reverting to historic rent/income/mortgage ratios as quickly as possible. Also we are not talking about a discriminated against group. Last time I looked gamblers were not on the list of bleeding hearts cherished categories (note even if it is their primary house, taking out a loan you cant repay because you hope for appreciation is a gamble).
If you don’t like Hillary you must be FUMING about Bush, and the rest of the Republican party that came up with this sucker.
Absolutely FUMING.
Today I got a serious inquiry about a new mortgage loan. The first since maybe April. It looks good. However, if the government is going to pass a law making deeds of trust worthless, I am certainly not going to make this loan or any other. And I will be very loud about why I am not doing it.
To look like they’re doing something, the bush admin is throwing away 200 years of contract law, as Hoz noted, and assuring us of banana republic status when it comes to issuing financial instruments. I’m an American and I don’t trust us.
When we scorch global investors, who’s going to fund the billions we need everyday from overseas just to keep functioning? Have they thought this through at all?
We aren’t turning Japanese, we are morphing into Argentina.
200 years of contract law went out the window in 1933 when they nullified gold clauses and again in 1971 when they prevented foreigners from redeeming gold. Our government has been consistently violating contract law for the big banks for years.
More importantly, are these FB’s getting a write off on the lost interest, or is it getting tacked onto their principal?
Anyone with a non-sub prime ARM must be really pissed they had decent credit now.
I’m not pissed. I’m just more determined to keep my credit decent. And to buy things that I can afford.
I suspect more of them were banking on collecing the pre-payment when the FB re-financed. This whole mess seems to be predicated on perpetual re-financing; more fees to the brokers, collection of pre-payment penalties, semi-annual cash-out to the FB. Nobody really expected home-moaners to be in these loans long term.
“With sales and prices once again rising, the expectation is that homeowners will be able to renegotiate their current adjustable rate mortgages into a more affordable fixed-rate plan.”
Do these officials seriously think this action is going to cause a reversal of the price declines occuring all over this country??
It sounds like it’s just more of the same sales pitch that got the FBs in trouble in the first place!
Lunacy.
So you are saying this isn’t a bailout? First, it was “there won’t be a bailout”. Now it’s “the bailout won’t do anything.”
When exactly is a bailout a bailout? If it looks like a duck, walks like a duck…
The bottom line is people that acted recklessly are now being rewarded and we are all being hurt because of it. The IRS won’t be sending a tax bill, and don’t worry about that teaser rate reset.
This is outrageous. Whether it works or not is a separate issue.
‘So you are saying this isn’t a bailout? First, it was “there won’t be a bailout”. Now it’s “the bailout won’t do anything.’
Who is being made whole? And at whose expense? And have they really done one single thing?
You may be outraged, but I find much more serious things in the world happening that loan modification fairy tails.
Bailouts don’t have to make anyone whole. But they act to prop up, minimize downside, and generally stop market forces from working correctly, at least for a while. By freezing the interest rate for 5 years they will be thousands upon thousands of homes that will have artificially low interest rates, given to people that don’t qualify or deserve them. This means anyone looking to buy a home is going to face higher mortgage rates, and prices will be even more sticky on the way down as foreclosures are pushed into the future. This means WE pay. It is OUR expense.
There are many more serious things in the world. I agree. I imagine Iraq must really piss you off, as that is about as serious as it gets. Of course, I can multi-task. I can be outraged by more than one thing at a time.
Clearly bailing out speculators meets my standard for outrage.
This is going to be interesting. I had a guy call me today because he can’t afford his reset payment, which goes into effect the first week of January. [Loan will adjust from $2,800 to $4,000.]
I told him about the gov’t development & advised him to keep after his loan servicer, but in the meantime we are going to run numbers to see if he can refinance. I expect fees and a couple surprises to come from loan servicers regarding this teaser freeze.
If the gov’t program applies to his loan, that would be his best option, because he isn’t even thinking about leaving his keys on the table. He’s not a flipper or a greedhead, just caught a couple bad breaks, as well as made a couple mistakes.
‘He’s not a flipper or a greedhead, just caught a couple bad breaks, as well as made a couple mistakes.’
Depending on the market, if he finds himself way underwater, he may walk even at 1%.
Underwater? Why pay on a house going “down” in value? Think 2 or 3 years from now the price/value will go up? Of course many got into these toxie loans because good old common sense was lacking and greed took it’s place. Better luck next time for the debt slaves who know know other way but to keep sending in those checks too “help” lenders and the Wall St gang with their leaders Paulson, Bush, etc.
Think 2 or 3 years from now the price/value will go up?
That’s what the geniuses who hammered out this plan are counting on:
“With sales and prices once again rising, the expectation is that homeowners will be able to renegotiate their current adjustable rate mortgages into a more affordable fixed-rate plan.”
(See above…)
just caught a couple bad breaks, as well as made a couple mistakes.
married or happy?
This ought to sit real well with other subprimes, prime ARMS, fixed rate folks and particularly HBBs who were waiting and being responsible.
Well, think about it. Does this make you want to run out and buy a depreciating house? Does it make anyone want to make a loan to risky borrowers? Cork, meet bottle.
So Ben, how long until the MSM and people figure out this was a bad idea?
Like the housin bubble, not until it blows up in their face.
I think this is going to meet HUGE International resistance.
There is this country called China that has their retirement savings invested in their stock market and US debt instruments.
I think we will see a US dollar collapse or a stock market crash if this goes through.
Yep. It’s like we’ve got this house of cards and these guys decide to turn on a fan.
i agree with you ben, that deal is not going to put equity back in their homes. also i would like to know if the deal goes south if they miss a payment during that period? it kinda sounds like the credit card deals you get in the mail.
“Does it make anyone want to make a loan to risky borrowers?” — I would add, “Does it make anyone want to make a loan to ANY borrowers?” No, not if the government can step in and invalidate the contract at any time.
I guess I can take down that cool mortgage reset chart I printed out from this blog. Won’t be useful anymore.
http://www.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticleP
opup.aspx?SiteName=Investor&ArticleId=NS20071203081122TheBigPicture
This is the site my coworker reads daily. He is still BULLish.
link fix?
http://www.briefing.com/GeneralContent/Investor/Active/ArticlePopup/ArticlePopup.aspx?SiteName=Investor&ArticleId=NS20071126084940TheBigPicture
The “teaser-freezer” plan is a bogus PR stunt. As there will be no law,no lender or servicer is required to do anything. If a lender wants to modify troubled debt it is free to do so. So a lender will be free to advertise that it subscribes to the Treasury workout plan. Big deal, it’s like joining the BBB and adverising “Member BBB.” A mortgage lender can either restructure troubled-debt or resort to its legal rights and foreclose. What’s in the lender’s best interest will be the course that will be taken. This “plan” tells me that home lenders are scared to death about foreclosures and REO.
This is a show to calm stock market investors in general, and financial institution investors in particular.
“Potvin is one of a rapidly growing number of real estate agents who are deactivating their licenses or letting them expire during the market lull.”
Here on Long Island the deadline for real estate agents to pay their dues is Dec. 28. Dues are $395. I am predicting at least a 10% falloff in agents, from 21 thousand and change.
Think higher
Orlando-35% or 3,500 did not renew affiliation with board.
‘We’re hoping to refinance or sell.’ I know you can sell a baby but how do you refi one ?
“A five-bedroom, 1-1/2-half bath, 1,482-square-foot home (was) originally priced at $189,900. After 136 days on the market, the owner will now take $147,900.
How the H@ll do you get five bedrooms into 1482sqft ? When did closets convert to bedrooms ?
That sounds like a very old home. Things like master bathrooms and walk-in closets are relatively recent developments in the world of middle-class housing. Go into any home built before World War II. None have bedroom closets much bigger than the width of a doorway, and many will have only one bathroom.
One of the problems with gigantic closets is people feel the need to fill them up with more clothes than they will ever wear.
Amen, bro. I’d say I wear about 20% of what actually hangs in my closet. Last month it finally pissed me off so I went for a full on purge of what i don’t wear. Now you can hear echoes in our closet.
T shirts, shorts, and flip flop shoes, do you need more room, Oh, one coat/sweater.
Hmmmm… I just took a look at my closets this morning. They’re lean, mean, and ready for more items. But, being me, I’m too cheap to buy anything else until I…
…Use it up, wear it out, make it do, or do without.
We keep finding great stuff at the thrift stores. I hate paying full price unless It’s for something extra special.
I don’t know… just took a new job that requires the “business” look. I’m wearing the white collared shirts that had been with me for 9 years - dry cleaned, hung up and never worn.
Funny thing is that I’d moved about 6 times in meantime.
Still have 3 suits that are the same thing - break them out about once a year for a wedding or funeral.
That’s because people didn’t have to have huge homes and didn’t have to have huge closets to hold the over abundance of stuff they bought on credit. Ex inlaws raised 3 boys in 2 bd, 1 bath, 900 sq ft with big yard. In those days (post WWII) bedrooms were for sleeping. Kids were outside a lot more or in LR with parents. Life was lived much more simply.
Kids were outside a lot more or in LR with parents. Life was lived much more simply.
ahh the memories. Watching mom and sis shake it to elvis and sticking blackcat fire-crackers under my Armymen.
Memory Lane here we go - Watching Ed Sullivan, Laugh In, Smothers Brothers. Us teaching the old folks and their friends how to do the twist. Brothers playing with war toys.
smoking cigarettes and watching Cptn Kangarroo, don’t tell meeee. I’ve nothing to dooo
TVs were expensive so famlies could only afford one, thus everyone watched the same program. Radios were also expensive as were record players and records, thus everyone listened to the same music.
It’s when TVs and radios and records became cheap that the family members began to go their seperate ways and the family unit began to splinter. Price reductions allowed each member to have their own TV, their own radios, their own recorded music. The entertainment industry then began to target the different audiences with different programming.
Combo - not in my house, nor in my adult house. Kids did not have TVs in their rooms because there was no way for parents to monitor how much or what they watched. Same with computer - was in LR where kids knew we could see exactly what they were doing.
When I was in first grade, my mom and I used to put Beatles records on the console stereo (remember those) and dance up a storm. We had to do this when my father was out, because he hated rock and roll music.
I should also mention that I have no TVs at the Arizona Slim Ranch. And my parents still own one, only one, and that’s all they need.
Patridge Family, Creature Features, Lost in Space, Crushed velvet
When I was a kid, my summer activities consisted of killing empty pop bottles (except in the South we called them drink bottles) with my .22, and making homemade rifles by dropping cherry bombs down iron pipes.
Once a week, circa 1966…
I could stay up to watch Lost In Space.
OMG! Creature Features! LOL! Yeah….those WERE the days. We were all outside playing after homework and dinner, too. When the streetlights came on we either had to be home or at least playing outside in front so our folks knew where we were.
BayQT~
Loved Creature Features with Bob Wilkins (smoking that cigar). Remember Captain Satellite? Also watched Lost in Space. Watched the Big Valley with my Grandparents.
ok - so we are all of a certain age!!!
‘They haven’t been built yet, so you can go out there and start picking out your colors,’ Cavigllano said.”
Do you guys have any other colors than “In the Red” ?
“A five-bedroom, 1-1/2-half bath, 1,482-square-foot home (was) originally priced at $189,900. After 136 days on the market, the owner will now take $147,900. A two-bedroom home on the Boise Bench was cut from $149,000 to $143,900 after just 19 days on the market.”
First… Did I read correctly? Five bedrooms and only one tub?!? I hope that “half bath” has a decent shower…
Second, I assume everyone else noticed that the five bedroom is now going for LESS than the FB thought their 2 bedroom was worth (which would be ok with one and a half baths…). I’m not thinking either are done dropping their prices.
Got popcorn?
Neil
I think Boise has a better job market than it used to, but I would still assume that $140k is on the high side taking local incomes into consideration.
Job market is not really better. Albertsons sold to Supervalu in Mineapolis and jobs are slowly moving out of town. Micron has let go 1100 people since summer and their future is uncertain. HP, the other big employer in the area, is always a crapshoot for jobs. Unemployment has been very low due to service jobs and construction.
While the people in Cali may think Idaho housing looks cheap, it is still over priced when the average wage is $17 an hour.
HP, the other big employer in the area, is always a crapshoot for jobs.
While HP hasn’t been having mass layoffs as of late, it has been doing most of its hiring offshore.
Micron has let go 1100 people since summer
Ouch… While RAM has bounced of its lowest prices, Micron has some tough times ahead.
That’s one thing I absolutely will not chintz on–bathrooms.
Five children, mom, dad, grams. 1 bathroom. Very witchy teenaged Leigh.
Hi Leigh,
All the houses I grew up in had only one bathroom. I also came from a large family. Five children (4 girls, 1 boy), mom, dad and sometimes relatives came to stay for a while.
The term “functionally obsolete” comes to mind….
It’s becoming obvious: these strapped homeowners are better off losing their homes.
It’s a typical story: family decides to buy an expensive house. They really can’t afford it, but they fear they will lose out on big profits if they don’t buy.
Monthly payment is too big to begin with. Soon, monthly payment jumps to a much bigger amount. Family scrambles, tries desperately to swim against the tide for some time. At some point, the family decides it isn’t worth it. Decides to give the house back to the bank. The family can only feel relief after trying to pull off something so unrealistic which is burning through every penny they make.
In my opinion, the final straw is when the family realizes their “Money Pit” has gone down in value. THAT, more than anything, is what’s going to crater the real estate market.
And it’s coming.
Guess what else is coming, the leaky roof, the dead furnace and the leaking water heater. Don’t forget foggy windows and peeling paint and a sprung garage door.
I’ve been in my house only 7 years and have had all of the above. It works out to about $250 per month and we have a small house.
that sucks. who was your builder? sounds like shit construction (no offense)
And it’s coming.
Oh yes… why pay *that* much more than rent if you do not have to.
Got popcorn?
Neil
“According to Jennifer, their mortgage payments are slated to go up by $400 a month in February 2008 - to $1,800. ‘We haven’t a clue where that extra money is going to come from,’ she said. ‘We’re hoping to refinance or sell.’”
Well it looks like the “Teaser Freezer” is going to help you out…
“…that mortgage, as well as rising food, fuel and utility costs, are squeezing the family and making ends harder and harder to meet.”
Or maybe not.
“Luke and Jennifer St. Claire and their 13-year-old daughter rented an apartment in July of 2005. But with the birth of their twin boys in March 2006 and a new pregnancy shortly thereafter, the family realized they would need more space and privacy than the apartment could provide.
“Feeling pressure to find a home quickly, the St. Claires got a subprime loan and moved into a modest home on the south side of Missoula.”
They could have rented a bigger apartment or a house but then their friends and family would have called them losers.
How about not having 3 more children. I guess the idea of not having children you can’t afford has gone out the window with personal responsibility and other old fashioned attributes. They act like it just happened to them - like the stork just showed up with these 3 extra kids. And to fix their irresponsibility, they decide to go buy a house they can’t afford - good job!
FWIW, contraception fails about 3% of the time.
But I agree that buying a house you can’t afford is just plain dumb, especially if you need an ARM to qualify. Of course, like so many others, they saw prices sailing into the stratosphere and panicked that they “would be priced out forever”. And for the younger set that was the only market they ever knew: one where prices just went up and up. Of course now they will meet that market’s “evil twin”, where prices go down and down.
You said it before I did but that seems to be a sacred cow these days.
Cue Sammy Schaudenfraude and his “Idiocracy” video. Still laughing at that one.
Just the fact that they OOPS had twins and then OOPs had another shortly thereafter should disqualify them for a loan. Maybe my crazy dad was right - people should have to pass a psych exam before they are allowed to breed. Then again, this is the same man that said he believe in abortion rights if they made it retroactive.
Crazy, that sounds like MY father! Now I’m beginning to doubt that I’m an only child.
Yeah, and you said it before I did too. No-o-o fa-a-a-air!
I leave it to you to carry on the mantle - I have to go for daily swim.
I wouldn’t be too harsh on a couple for wanting three kids. The problem here is that they needed to choose the three kids or the over-valued house. Like was said, rent a house or a bigger apartment and they are likely okay.
Loan - i don’t begrudge people having children - I begrudge them already having a 13 year old, then having twins, then another that came shortly thereafter when they were living in an apartment that only suited them and the one kid. And, as they proved with their move into a house that was beyond their means with a toxic loan, they don’t get the award for logic and responsibility.
My parents made it out of the apartment just a few weeks before I arrived. (I was the motivation for their building a house.)
Every sperm is sacred baby.
Every sperm is sacred.
Every sperm is great.
If a sperm is wasted,
God gets quite irate.
-Monty Sperm
http://video.google.com/videoplay?docid=9002085385040727366
Our local radio station is doing a christmas drive for families in need and they talked about this one single mother in emergency housing with her 5 kids - ages 3,4,5,6,7 who is escaping a meth addict husband (not the father of her kids)!
And all I could think of for my donation — I’ll take her over to Planned Parenthood!
Damn, but I AM getting to be a bitter renter! I blame it all on the subprime bailout!
I would refuse to donate to such charity. or i would pay for forced sterilization and adoption services for the children.
Is that the “culture” in Missoula? I saw this attitude in spades when I lived in San Diego, but no so much here in Loveland.
What? The attitude that those extra kids “just showed up with the stork” doesn’t exist in Loveland??? What kinda love are you folks makin’ there?
http://www.clipstr.com/videos/IdiocracyIntroScene/
In a normal market the family would have still been in a trailer park, but those places are getting hard to find. Everyone has to have affordable sustainable stickbuilt housing close to town subsidized by the taxpayers of course. None of those fugly trailers, even if that is the only thing some people afford or take care of.
/rant
I would laugh at that clip….BUT it is just too true and I find people like that repugnant, not funny.
I would categorize it as non-fiction.
I don’t know.
It just seems like all of America thought it was criminal to rent instead of “own”, these past few years. I know some of my friends think I’m still renting because I rolled snake-eyes one time too many in Atlantic City.
And since this thread is about Montana, I recall Ben posted about six months ago that Bitterroot MT was supposed to be Boomer Retirement Ground Zero. I wonder what house prices in Bitterroot are doing nowadays.
Going up, but still cheaper than Missoula. Hamilton has a big biotech outfit that pays good wages but brings in more specialists from out of state.
They fought off a huge new development by finally passing some zoning to prevent it.
Sales are declining here but no deflation yet. But I’m hopin.
“They could have rented a bigger apartment or a house but then their friends and family would have called them losers.”
…
Is that the “culture” in Missoula?
No, not more than anywhere else. They showed up at my Church right after Katrina, and I thought they’d come up from NOLO. But they’e from MD, and they had just gotten in their car and drove across country, got here and liked it and decided to stay. Whee! I came up here with the clothes on my back in 1975 but I had a JOB waiting for me.
He’s a bricklayer and there’s not a lot of masonry in this part of the country. There was a big Sportsmans Warehouse that went up about that time, maybe he worked on that. And actually I saw FOUR kids in the photo.
No one here would have called them losers for renting and right now there are plenty of 3/2 and 4/2 renting 1200-1300. Newer places, too, in new developments. Pretty sure being rented out by FBs.
Their place is FSBO for 225k.
“They could have rented a bigger apartment or a house but then their friends and family would have called them losers.”
…
Is that the “culture” in Missoula?
No, not more than anywhere else. They showed up at my Church right after Katrina, and I thought they’d come up from NOLO. But they’e from Maryland, and they had just gotten in their car and drirven across country, got here and liked it and decided to stay. Whee! I came up here with the clothes on my back in 1975 but I had a JOB waiting for me.
He’s a bricklayer and there’s not a lot of masonry in this part of the country. There was a big Sportsmans Warehouse that went up about that time, maybe he worked on that. And actually I saw FOUR kids in the photo.
No one here would have called them losers for renting and right now there are plenty of 3/2 and 4/2 renting 1200-1300. Newer places, too, in new developments. Pretty sure being rented out by FBs.
Their place is FSBO for 225k.
Oh lord..sorry bout that
Is there culture in Missoula? I always heard Missoula’s culture was like a bowl of granola, full of fruits, flakes and nuts.
Oops, should have been more clear. I meant the attitude that if you rent that you are a “loser”.
“the family realized they would need more space and privacy than the apartment could provide.”
how in the world do these people think they will get privacy having 3 children!?!!?? what do they need privacy for!!??? pay attention to your CHILDREN!!!!
They need more privacy for whenever they are making the next child. A lot of townhouse and apartment walls are pretty thin.
Stock Market up 2% today. Typical manipulation by Da Boyz who steal going up - then steal going down. Something they will do again soon. We’ve had several weeks of nice big chunks of change being ripped off on the way down - then a plan to rip off nice big chunks as they manipulate the market up (via the various shills like their puppet analysts and anchors on shows the The CNBC Comedy Business Show) and then steal and plunder as they take it down again.
Todays reason for the rally? Two pieces of news (financial propaganda hype) delivered straight to your door via several CNBC Comedy Business Show shills. One was was that Intel has been upgraded by an analyst (lol). The second was that the sub-prime crisis looks like it’s over because of government intervention. Hillary Clinton has promised to help the FB’s. The Idiot In The White House says something needs to be done - At tax payer expense of course.
Frankly, even though I class myself as a liberal democrat and I’m all for having a woman run the country for a change because the male of the species has fu*ked everything up for long enough, I’m getting increasingly turned off by the notion that Hillary Clinton is the right woman. That leaves Barak Obama and he hasn’t got a prayer of becoming President. Anyone doesn’t agree - the betting window is open. Not many choices.
Back to the FB bail-out subject and the Financial Gangsters Of Wall Street. Today they skimmed 2%. Now they will either drive it a little higher or take it back down quickly before taking it up and skimming again. To keep you guessing, we might get the “Christmas Rally” theme/propaganda which will take it higher than expected. The, “Under Which Walnut Shell Is The Pea”, is their traditional modus operandi.
Here are some of the reasons for the (eventual) drop which, again, will be delivered to your door via the usual suspects mentioned above.
1. It will only help very few FB’s.
2. Lawyers of those holding the CDO’s will tie the proposals up in knots for several years.
3. The banks don’t like it.
4. The politicians (going into the final year before the election) are getting feedback that if they support the bail-out with tax dollars, they will lose loyal voters.
Add more if you can.
does anyone really think we need to keep the chain going in the white house? Bush sr., Clinton, Clinton, Bush jr., Bush jr. now Clinton again????? whats wrong with this picture? we need someone else to fix the problems in this country.
Where were you when it was Bush Sr., Clinton? Seems odd to bring up this point only after a Dem’s turn is here.
I’m just saying!
I agree that today’s gain was totally stupid.
Along the lines of (3) (”the banks don’t like it”), I would like to add that if the govt invalidates existing mortgage contracts (they don’t have to be MINE), I will absolutely refuse to make any new mortgage contracts. Hope a lot of other lenders can do the same. Immediate destruction of the credit system. However weak it WAS, it will now be killed.
“Bush Mortgage Plan Will Freeze Certain Subprime Interest Rates for 5 Years ”
What if you freeze the rates for the loans where payments don’t even cover the interest. The difference gets added to principle. What after five years instead of owing 500,000, you owe 600,000.
The FB’s will worry about that later….at least they won’t “lose their house”!
Besides, the government told them values will go up over the next five years so they’ll just sell then…right?….who’s with me….
Simple, in five years the housing market will be roaring up again so they can just refinance.
WOW! Put the burden on the consumer. More debt is good.
This whole thing does not make sense….
I really hate the plan. This just gives them all more time to dig a bigger debt hole. Postponement of pain. Even though they talk of following a certain criteria of FBs, how do they determine that these folks will have a better grip on their finances for the next 5 years? If this thing comes to fruition, there should also be another door to choose from. The one that will allow them to give up the keys and take the hit….which may be much less painful in the long run. If the candidates are counselled properly, they may realize that that is the best solution.
BayQT~
Bush announcing the 5 year freeze plan tomorrow - let’s all celebrate! The sooner this latest bunch of junk plan gets out and picked apart, the sooner people can stop living on false hope and blown smoke.
I’m old enough to remember price freezes under Nixon and WIN buttons under Ford, neither of those worked either.
The freeze will screw the mortgage backed investor. This will further undermine the securitization process which is the back bone of the industry. Who in their right mind would buy mortgage backed securities when at any moment the government can change the terms of your paper? It’s bad enough paper isn’t being bought now, this will only make it worse.
And, as I posted numerous times above, nobody who plans to KEEP a note is going to write any new notes under these circumstances. I have never securitized, don’t need to securitize, but neither am I going to lend if the gov tells me I can’t get a legally binding promise to repay principal and a legally binding promise to pay interest. What scheet.
I really enjoy Idaho and Montana stories… those “frontier” asshats losing it all.
Heh, the St. Claires were fresh in from Maryland…
In Bozeman, back in 2003, a survey showed that 60% of the population had lived there less than 5 years.
“60% of the population had lived there less than 5 years.”
That sounds true of just about everywhere. Hallucinating nomads.
Places with very mobile populations tend to attract a lot of flakes. And have a soul-sucking lack of community — Phoenix, Vegas, outer-suburban Austin come to mind.
It used to said that a third of Bozeman’s population turned over every year. That hasn’t been the case the last few years.
Back in the $700 Club, the Demon-itized Zone.
I’m thinking this rate freeze is to try to save Freddie and Fannie. They are both going insolvant very quickly.
Notice how fast the “raise the loan limits” talk went away?
So much for the $1m ceiling on GSE loan guarantees.
It is strange… There is talk of a $650k limit… but the $1M and $850k ceiling discussions is over. With how fast everything else is falling apart, declining housing markets, and increasing downpayment requirements… makes it tough to run an economy dependent on house turnover and MEW.
Got popcorn?
Neil
The Tan Man wrote an op-ed in the WSJ today:
————–
Calling Fannie and Freddie
By Angelo R. Mozilo
Word Count: 780
Congress is now preparing to conduct what may be the most sweeping overhaul of the nation’s mortgage-finance system since Countrywide Financial Corp. was founded nearly 40 years ago.
Not all of the reforms coming down the pike take aim at keeping homeowners in their homes. Legislation that has already passed the House, and which has been pushed by Financial Services Committee Chairman Barney Frank, would not address problems faced by current borrowers, but rather could forestall the kind of market excess that led to our current mess.
That’s a worthy goal. But there is a more pressing need the Senate …
“They could have rented a bigger apartment or a house but then their friends and family would have called them losers.”
…
Is that the “culture” in Missoula?
It was right after Katrina they showed up at my Church, and I thought they’d come up from NOLO. But they’e from MD, and they had just gotten in their car and drove across country, got here and liked it and decided to stay. Whee! I came up here with the clothes on my back in 1975 but I had a JOB waiting for me.
He’s a bricklayer and there’s not a lot of masonry in this part of the country. There was a big Sportsmans Warehouse that went up about that time, maybe he worked on that.
No one here would have called them losers for renting and right now there are plenty of 3/2 and 4/2 renting 1200-1300. Newer places, too, in new developments. Pretty sure being rented out by FBs.
The St Claires’ place is FSBO for 225k.
Clearly, just because you can’t SEE a post doesn’t mean it’s not there!
That’s OK now we know how much they’re attempting to get for the house.
So they get an “F” for family planning and an “F-” for correctly pricing their house for quick sale.
Next!
Tooooooooo funny–happened to me the other day
This just in from Tucson: The newspaper-grinch’s ad revenue is down, and since much of that ad revenue comes from real estate (or used to), it’s time to lay off 11 longtime employees. Details at:
http://borderreporter.com/?p=338
BTW, the grinch in question, the Arizona Daily Star, was quite the cheerleader during the real estate boom. Just like a lot of other papers…
Hopefully they fired the real estate “reporters” since they are worthless!
Alas, Christie Smythe (the Star’s RE reporter) was not among them.
Clinton: Wall St. should back mortgage reforms
By William L. Watts, MarketWatch
Last update: 4:00 p.m. EST Dec. 5, 2007
WASHINGTON (MarketWatch) — Wall Street shares the blame for the subprime mortgage crisis and should get behind voluntary proposals to shield working families from a rising tide of foreclosures or face the prospect of a legislative crackdown, Democratic presidential frontrunner Sen. Hillary Clinton said Wednesday.
In a speech delivered at the Nasdaq Market Site in New York, Clinton said Wall Street firms that participated in repackaging subprime loans share the blame for the crisis with lenders, brokers, regulators, Bush administration officials and some borrowers.
“Some people might say Wall Street only helped to distribute risk. Well, I believe Wall Street shifted risk away from people who knew what was going on to people who did not,” said Clinton, a senator from New York.
http://www.marketwatch.com/news/story/clinton-tells-wall-st-back/story.aspx?guid=%7B15365C04%2DF3C1%2D449B%2D9E43%2D60E88B5ADEF6%7D
I have to grudgingly give her credit for providing a different diagnosis than all the other talking heads are providing.
Nonetheless, she offers a similar remedy. ‘Tis a puzzlement!
I wonder if she similarly chastised all of her ChiCom buddies who were among the primary investors in all of this MBS junk?
“Voluntary proposals” are certainly a different kettle of fish than what was described in some of the posts higher up on this thread. I am not volunteering to change any of my mortgage notes or trust deeds, so I guess I’m safe.
“Our normal expectations about reality are created by a social consensus. We are taught how to see and understand the world. the trick of socialization is to convince us that the descriptions we agree upon define the limits of the real world. What we call reality is only one way of seeing the world, a way that is supported by social consensus.”
Carlos Castaneda
testing
You get an A-plus!
If you lied on your loan docs or the broker lied for you or you just flat out can’t afford the house you are in. Should you still be able to qualify for this bailout?
Of course. This is Amerika.
I just read some comments on the WSJ blog regarding the bailout. One poster maintains it should be called “The Lawyers Full Employment Act of 2007″ because they are going to be kept busy!!!
This is the first time I would be happy for lawyers to make some bucks. LOL
How many of these stated income folks really want a gevernment type reopening their files? Hmmmmmmmmmmmm?
With all the fraud here EVERYBODY is upside down on paper and most in reality.
Step right up and lose some more.
As in, the IRS?
No files will be opened as long as they keep making their payments. The Fed’s know exactly what is in those files and they don’t want to go anywhere near them.
Here’s another hiccup. The bailout is only meant for the owner occupied home, right? So that does nothing for the folks who screwed themselves by buying several homes/condos and said they were owner-occupied. On top of that, when they go to get the bailout for their owner-occupied home, won’t the other properties surface, too, as they shuffle the paperwork?
Yeah, dime, I think Pandora’s box is gonna open wide.
BayQT~
“Breeze: The only problem is that so many agents went into the business and so many mortgage brokers went into the business during that little upside period that there’s not enough to support that many people. We wish some our houses would sell faster, absolutely.”
Yep, that’s the ONLY problem, Becky. Care to give some thought as to WHY there were so many agents, Becky?
This story is so idiotic. Instead of wood, Bend now sells outdoor gear and clothes to California-bred baby-boomers. Perfect.
It’s like a lose-lose the FB’s getting a pass, for awhile…
For starters, it’s never going to happen. It’s just political shadow boxing, the squirmy beast has no intention of following through. Just check out his follow through record.
Secondly, this will prompt a run on the greenback, whether that was the original intention or not, it doesn’t matter.
The world will look with further askance at us, soon.
Sadly, I think you are right. A run on the dollar will wake every one up when their new Toyota, plasma TV, favorite french wine, Chinese crap at Walmart, etc just doubled in price.
This bailout is a joke, dead on arrival. Maybe Wall Street will make up the difference for the monthly payment between the promised rate increase, and the frozen rate. Would be perfect to stick all of Wall Street with this, before their end of the year bonuses.
If we are going to use this logic that “good people” got unlucky, and now the government should help them out, what about people with medical problems? You know, the people that are forced to file for BK every year because an unexpected illness nails them and they cannot keep their home? Shouldn’t we bail out these people too?
What makes real estate a special class of victims? The list of reasons people should be bailed out is a long one. What about everyone else?
I lost my job, and cannot pay my car payment. Can I get a bailout? It’s critical to my family’s survival. We need transportation. What about my credit card interest rate that skyrockets due to one missed payment? I missed the payment because I lost my car and couldn’t get to work.
Do I get a bailout too?
http://tinyurl.com/32ywtz
Craiglist fun. This house has been one the market since May, starting at $215k, dropping slowly to $190k, then tried to rent out the main floor (for way over market), and now is on craig’s list in addition to MLS.
The kicker: “Home appraised at 179,000. Owners VERY motivated to sell. Divorce.”
Very motivated to sell, but have been asking for way over appraisal since May. Now we are supposed to think it is a deal because they finally dropped down to the “appraisal price” which is no longer valid since the market completely tanked late summer. This will be a $140k house before all is said and done, given a rental value of ~$1100/mo. Actually, as an investor I wouldn’t even pay that much given the likely maintenance costs with a 45 year old home.
140K? That driveway looks lousy, the kitchen is tiny with an old sink, and the bedroom is a small box. Looks like 70-75k max to me, and that within the year.
This is one of the “college built” houses from the 1950’s and early 1960’s. They were built as fast and cheap as possible to house faculty and staff when the college expanded rapidly after WWII. Think one step up from army barracks.
But with 120 x monthly rent (probably a reliable $1100/mo), you could perhaps break even at $130k purchase. Perhaps a serious investor (who knows how much upkeep this will require) would probably offer $100k or less.
2,000sq ft? Maybe including the basement and garage. That kitchen, living room and bedroom are tiny.
““A five-bedroom, 1-1/2-half bath, 1,482-square-foot home (was) originally priced at $189,900. After 136 days on the market, the owner will now take $147,900.”
Five bedrooms in a 1482 SF house? Four of them must be cubicles.
http://www.cnbc.com/id/15840232?video=604127957
Hillary (aka Sen. Clinton) has a plan too!
Because our market is unique, The Columbian business news section tends to play down national housing news or at least run a ‘local angle.’ Bottom line: A psychological standoff continues in Clark County between buyers who think house prices should be dropping on weaker sales and sellers who are convinced their homes are not overvalued. If mortgage rates drop, buying should pick up, say the experts.”
Like hell! I was born and raised in Vancouver and my brother still lives there. Wages and salaries do not support the high prices in the area. I was up just this last year and it is a joke. I see prices falling big time in the spring as capital is universal and will be tight all over. No loans means lower prices to qualify!!!!!
The Billing Gazette article show how worthless the news media is in the state of Montana. Mister Reporter has get his information from some expert from out of state, speaking at a conference. The conference put on by the mortgage industry. How about going to the Clerk and Recorders Office and take a look at mortgages on file. It is only a short walk from the offices of the Billings Gazette. There you might find out just how many mortgages are adjustable-rate. How about an article using that information.