The Slap Heard Round The World
The Erie Times News reports from Pennsylvania. “Month-to-month comparisons between 2006 and 2007 show the number of properties sold has been down seven months and up four months so far this year. Figures show that 376 properties changed hands during November in Erie County. That’s a decrease of 8.5 percent from the 411 sold during November 2006. ‘The housing situation in Erie continues to get worse,’ Realtor Dennis Weed wrote.”
“Like other local real estate agents, Mary Huffman, president of the Greater Erie County Board of Realtors, says the much-publicized problems of the housing market are largely someone else’s problem. But what about September, when the number of properties sold dipped 23 percent from the previous September?”
“‘That’s real estate for you,’ she said. ‘It’s nothing new. There’s no reason to panic.’”
“Much of the decline in total home sales can be explained by the people who are no longer in the market. Toby Froehlich, president of Coldwell Banker Select Realtors, said, ‘We are back to needing three things to buy a house: good credit, a little bit of your own money and some verifiable employment. A year ago, people could buy without those three things.’”
The Baltimore Sun from Maryland. “Squeezed by the sharp downturn in the housing market, one of the nation’s largest homebuilders has sold the bulk of a luxury townhouse development in Baltimore’s Federal Hill to a local developer who immediately cut prices about 20 percent.”
“Lennar Corp. sold 22 homes in the 26-unit Federal Place development off Key Highway to Terra Nova Ventures. Terra Nova principal David F. Tufaro said the deal allowed the new owner to set prices it felt were more in tune with the current market.”
“‘It turns out that Lennar was making a corporate decision, not limited to Baltimore, to reduce their inventory and improve their balance sheet,’ said Tufaro. ‘At the right price, houses will sell. The market has not fully reflected that because sellers have not reduced their prices.’”
“Lennar, one of the nation’s largest builders, had completed the first of the four-story, two-car garage homes in the spring, with some units priced at more than $1 million, said Cynthia B. Conklin, a partner at Yerman, Witman, Gaines & Garceau Realty, which brokered the sale and is handling marketing.”
“None of the homes sold until November, when four that had been priced at $795,000 sold for $695,000 or just above, with closing cost help, she said.”
“Under its new ownership, Federal Place homes start at $695,000, with the average price in the low $700,000 range. The priciest home, used as the model, had been on the market for $1.25 million and is now priced at $995,000.”
“‘They were thinking they were going to get over $1 million for all these houses that came equipped with an elevator, granite, the finest appliances and grills on the deck,’ Conklin said. ‘They were not having great success.’”
“Builders caught in the housing slowdown have had to halt construction or reduce prices. ‘In many cases, it makes sense to sell everything at one time and move on,’ said Robert L. Merbler Jr., another partner at Yerman, Witman, Gaines. ‘I think it’s something you’re going to see more of.’”
From Virginia Business Magazine. “Homebuilder Louis Genuario Jr. saw the warning signs early. By summer 2005, he picked up on one of the first hints that America’s booming residential housing market was starting to wobble like some shaky house of cards.”
“So Genuario prepared for a slowdown. In early 2006, he pruned the company’s staff from 22 to 12 employees. That year he built half as many homes as the 20 constructed in 2004. In 2007, Genuario built even fewer, six homes. ‘This is classic economics,’ says Genuario. ‘This is the market correcting itself.’”
“Genuario is one of the lucky ones; he expects to break even this year. ‘No more than that,’ he says. ‘Simply put, our cash flow has been meager, so we’ve been living off lines of credit and money we put in the bank off previous years’ profits.’”
“For now, new developments are on hold, and Genuario will wait and see what happens to the market before he finalizes plans for 2008.”
“October saw two projects in Virginia slide into lending limbo. Major construction on the 34-story Granby Tower, a luxury condominium project in downtown Norfolk, stopped in September when the developer’s financing fell through.”
“David H. Downs, a real estate professor at Virginia Commonwealth University, refers to the subprime mortgage mess as ‘the slap heard round the world. … It will be felt in the U.S. and the commonwealth of Virginia…We’re far from knowing how long this slap will reverberate.’”
“Like other states, Virginia is seeing an uptick in foreclosure filings. Compared with the number of filings in the third quarter of 2006, Virginia’s rate shot up dramatically — by 489 percent.”
“Mike Toalson, executive VP of the Home Builders Association of Virginia, noted a 38 percent drop in the number of new homes being built in the past two years. ‘In 2005, at the height of the boom, we were producing 49,000 single-family, detached houses across the state,’ he says. ‘In 2006 the number slumped to 37,000. This year, the level of new houses forecast to be produced across the state is 30,000.’”
“Rich Napier, president of Richmond-based Napier Signature Homes and president of the Home Builders Association of Virginia, has felt the pinch. His company, which builds custom homes priced from $1.2 million to $2.5 million as well as spec homes for around $1 million, built seven homes in 2006, about an average number.”
“In 2007, Napier has built only five. He also has two spec houses on the market. ‘If I sold the spec houses and finish up another one, I’d have one of my better years,’ says Napier. ‘But the market doesn’t look good for them to sell. We’ll do well with the five.’”
“Plus, he’s worried about next year. ‘I’ve only signed two contracts to build in 2008.’”
“A Northern Virginia couple had been toying with the idea of buying a second home at Wintergreen Resort in Virginia’s Blue Ridge Mountains. So when a three-bedroom home came on the market for $325,000 this year, they scrambled off the fence. The couple hopes to buy the property for $274,000, the lowest price for a detached home in Wintergreen in the last eight months.”
“‘Since September, we’ve seen a lot of people who have been waiting on the fence for two or three years,’ says Hunter Lynn of Wintergreen Real Estate Co. When home sales were booming several years ago, some people were scared to get in the market, ‘because it was so crazy,’ recalls Lynn. ‘Now they feel more in control.’”
“At Homestead Preserve in Bath County, sales slowed this year, compared with the first year of sales in 2006. Overall, about 150 of the community’s 450 home sites have sold, including 11 this year. ‘It has slowed down,’ says Penny Peery, a marketing official for Homestead Preserve. ‘The problem is just getting people to make the final commitment, because the market is so unsure.’”
“Steve Crandall and other builders remain optimistic that another flurry of building is around the corner. After buyers snap up the deals created by the overbuilding of the last four years, boomers will still be looking for a comfy place to land.”
“‘Buyers are still there,’ says Crandall. It could be two months, he says; it could be six. ‘It’s an evolution.’”
The News & Courier from Virginia. “The contracting world rises early - particularly here in Page County, at least an hour’s drive from construction jobs in Northern Virginia and D.C. metro area.”
“At 5 a.m., Joe Thomas sits inside the store keeping his wife, who works the early shift at Hope Mills, company. In busier times, this and other stores throughout the county did brisk business with the early crowd headed north.”
“But the housing boom’s gone bust and the early crowd’s gone thin; over the next hour, just a handful of construction workers stop in.”
“Thomas, the VP of JLM Construction, is one of the many local contractors who spent much of his career commuting as far as Annapolis, Md. for work. Lately, he’s been getting calls every day from people looking for some sort of construction work.”
“‘They’re gettin’ laid off in the city because there ain’t any work goin’ on, and they want to know if we’re hiring,’ he said.”
“But he isn’t hiring. The opposite, actually - Thomas recently laid off seven of his crew, which was 16 strong just last summer.”
“‘If you’ve got a job, you better be hanging onto it,’ said Vernon Hartless, a 37-year construction veteran. He’s among the few who stop at the store on the way to work. ‘This is the worst it’s been for a long time. The sad part is, I don’t see any improvement.’”
“Last month, the U.S. Department of Commerce released figures showing that nationwide construction of single-family homes has fallen to its lowest rate since October 1991, according to an Associated Press report. While that trend’s regional impact appeared first and most noticeably in Northern Virginia, new development in Page County has been affected as well.”
“‘Right now, we have none,’ said Stanley Town Manager Terry Petit.”
“That’s a dramatic change from two years ago, when plans for 700 housing units in and around Stanley existed on paper, Petit said.”
“In Luray, work is continuing on several large developments that have been in progress for some time. Final plans for a first phase of the 500-home Luray Heights development are expected next month.”
“Still, new inquiries from people interested in local development opportunities have all but vanished, according to Town Planner Ligon Webb. A year ago, the town received four or five such inquiries a week, Webb said.”
“‘This is the worst I’ve seen the construction market,’ said Mike Knight, a co-owner of Knight and Lucas Construction with 25 years experience in the business.”
“Nancy Keyser-Bryant, a real estate agent in Luray and member of the Massanutten Area Association of Realtors, said that times have been tough. ‘Some of the agents are dropping out because they’re not making [money] in real estate,’ she said.”
“Keyser-Bryant began working in real estate in the early 1980s. The market then, with interest rates up to 20 percent, was even worse than it is today, she said. The real estate market is always changing, she added, but this slump is unusual.”
“‘This is the first cycle I’ve seen where interest rates are low and the market is really slow,’ Keyser-Bryant said.”
“‘I think that [affordable housing] is where you need to be in this area in order to keep putting out houses,’ said Doug Rudolph, a Shenandoah contractor and chair of the town planning commission.”
“And therein may lie one of the positive aspects of an otherwise grim story: If demand for expensive houses drops, perhaps there’s an increased incentive to build smaller homes for smaller budgets.”
‘Keyser-Bryant began working in real estate in the early 1980s. The market then, with interest rates up to 20 percent, was even worse than it is today, she said. The real estate market is always changing, she added, but this slump is unusual. ‘This is the first cycle I’ve seen where interest rates are low and the market is really slow,’ Keyser-Bryant said.’
I recall the writer for the Dallas Morning News in late 2005 or early 2006, quoting a Fed insider saying they needed to raise rates so that when the downturn came they would have the ‘bullets’ for rate cuts. Looks like they are out of bullets.
“Looks like they are out of bullets.”
Exactly. I have felt that Bernanke has been shooting blanks for a while.
You should at least admit that Bernanke has a completely different frame of reference. He is basic rates on fifteen year projections that show growth slowing down and staying low. You are interpreting his every move in terms of short term real estate correction fallout. In macroeconomic terms the only rationale for going your way and cranking up the rates would be if one believes that growth will eventually rise back up and make up the difference. Ben Bernanke is saying through the Fed with these interest rate moves that there will be no high interest rate growth party after this.
The real estate market is always changing, she added, but this slump is unusual. ‘This is the first cycle I’ve seen where interest rates are low and the market is really slow,’
Well I was pretty young for the 80’s slump. Even though rates were at 20% weren’t houses still reasonably affordable for the most part? My parents bought a 3/2 1.5 bath home that was still well under $50k.
It’s not unusual at all. Home prices are still too high and people cannot afford them. The past few years gains were driven by fraud. We need to go back to 2002 levels before RE even begins to stabilize.
Erie WTF
like Youngstown is probably ok too
it’s up or out
We bought just outside Youngstown in early 06. Old country club area, 1800 sq ft ranch with full basement, on 2/3 acre for $90K. Original owners kept it maintained - no infrastructure mess to fix - just cosmetic stuff. I’m on life sabbatical in CA but am looking forward to living there. Other half loves life there - says people are really nice, no traffic and everything is at least 35% less than CA including gas. Winter - yeah - heated house to heated garage to heated seats in the car - not much different than desert in the summer.
even in high income areas of midwest homes are cheap -look at Carmel IN
high income and cheap homes
higher morals too
Higher morals? As opposed to places where taking cheap shots on the Internet is considered acceptable? There is a big difference between looking down on people and having the moral high ground. One particular point to raise is that the areas you point at as having low morals have sustained relatively high growth and high rates of job creation because of all the new industries. In this downturn areas with lower rates of job creation are not going to be widely thought of as better off morally because being able to cooperate so as to labor productively together will be what gets us all through this.
The moral high ground is a great place to site your artillery.
Please define higher morals. Does that mean your morals are better than everyone else. Pshaw on your higher morals.
It’s well known that the Midwest has a better work ethic. Friendlier, too.
According to whom? There are people all over the US that works hard and has a good work ethic. Also you will find friendly people in any part of the country.
When anybody claims to have “higher morals” than I do, I feel for me wallet with my right hand and cover my ass with my left.
MrBubble
I didn’t see too many friendly people when I went to Detroit for business.
Oh, no - here we go again with the “high morals” and fabulous work ethics of the backwards midwest…
yeah, yeah, yeah, yadda, yadda, yadda…
What is this higher morals nonsense? IMO consertive religous values are much more dangerous and destructive then open mindedness. Keep your morals to your own damn self.
Youngstown/Pittsburgh/Cleveland winters are about as bad as lower New England’s, better than Chicago’s and scads better than Minneapolis’s. All places with housing bubbles.
I did 16 years in Alaska so winter doesn’t mean much to me. In fact with internet and cell phones winter is much easier now than it used to be.
Youngstown and south are not located in what they call the snowbelt. If they get 12 inches on the lake, we might get 2-3 or a lot of times none. It gets cold, just like up on the lake, but they tend to get 10 degrees colder most days.
I live 25 miles south of Youngstown and an 1800 sq ft ranch that’s not dated inside would sell here for about $125-165. Heating bills here are probably not any worse than cooling bills in other parts of the country, my electric (only utility) is anywhere from low of $125/mo to $215/mo in winter. We have a 2000 sq ft 2-story on 6 acres and our insurance is $538 year, plus prop taxes of $2150 year on appraisal of $225k. I bought gas today and it was $2.68/gal. I think it’s like anywhere else. Wages and costs go up parallel to the area. Even though I know housing is way out of proportion everywhere. Here average wage is $35k. You can still buy a 1500sf house for 3x income. Going north toward Youngstown you can get lots of housing starting in the 60’s on up, depending on condition and area. The closer to Youngtown the cheaper the housing.
Lots of homes on ebay in Youngstown.
Some looked like great homes.. and was wondering why so many on ebay. So cheap. What the area was like.
Now, according to above poster.. Morals are higher there, jobs not so much?
Gosh,living here in CA most of life, thought I had high morals. Now I feel bad, must not. Just cause living in CA.
I never said anything about morals - I only reiterated regarding people being nice - not so much frustration and rushing. The salaries are lower, but housing is much more in line with wages and sweetie and I compare prices on all sorts of things. $2.68 for gas would be a pleasure. As for heating, he said he turns thermostate way down and uses a little heater in den and bedroom most of the time.
‘…We are back to needing three things to buy a house: good credit, a little bit of your own money and some verifiable employment. A year ago, people could buy without those three things.’”
Oh, I’m sorry, I forgot to aks…what’s the listing price?
No they could not buy with those three things, they could get a mortgage but as the foreclosures show they could not actually buy the overpriced real estate.
Erie has tons of 1500sf houses for $50k (fifty thousand) or less.
Erie is also colder than…and gets tons of snow.
Looks like they are out of bullets.
Out of bullets, but they have their “freeze guns.” Let’s see how those babies work in the heat.
Martin the Martian: “Someone stole my Freeze gun…OOOOhhh, that makes me verrrrrrrrrrrrry angry!…ware is that wasscally wabbit”
Yeah, freeze guns. What pisses me off about that is not so much that it is or isn’t a bailout, or even that FBs might get rewarded, it’s just another BS spin device to game the system, rather than letting nature take its course. Figures Paulson would be in the forefront of this. He should know. He and his homeys have been doing this on Wall Street for years.
The “freeze” may help some, temporarily, but unlike charity, when Government helps some, they must hurt others equally if not more so. Afterall, the Government must charge for its services.
The “freeze” may help some, temporarily, but unlike charity, when Government helps some, they must hurt others equally if not more so. Afterall, the Government must charge for its services.
Yeah they’ll think it’s helping until these buyers want to become sellers 2 years down the road and suddenly owe $20-40k more on their house from adding interest not paid onto the back end.
‘In many cases, it makes sense to sell everything at one time and move on,’ said Robert L. Merbler Jr., another partner at Yerman, Witman, Gaines.’
Seems to me like Lennar has been quietly busy for some months now, making deals behind the scenes to jettison a lot of dead weight. I’m no fan of Lennar, but I gotta hand it to them, at least they took action instead of waiting for the market to come back.
Palm- why not upgrade to a lot w an poured slab- bet those are coming available in your area- build to suit
LOL, flat! You just made my day.
Seems to me that Lennar finally figured out there’s a RE bubble. If they did this in 2005 they would be riding high right now. I’m sure their management is filled with Harvard MBAs just like Citi and Merrill. What the hell are they teaching those eggheads these days? Maybe they need to require a course in common sense.
All that tuition, and all they got out of it was groupthink. The logical outcome of higher education should be people challenging assumptions, not parrotting them.
Believe me, executives at builders aren’t much good for anything. Most of them can’t do the jobs of the people below them, and they don’t have the education or knowledge to understand things like market studies, affordability indexes, streamline design for value, etc.
So they just go the quick route and take a one day symposium to learn a bunch of catch phrases like “value engineering” and “return on net investment” and “supply chain reimbursement” so that they can sound like they know what they are doing. And in an up market they usually pull it off as long as they don’t actually get involved in day to day operations.
They were thinking they were going to get over $1 million for all these houses that came equipped with an elevator, granite, the finest appliances and grills on the deck
OMG, can we please STOP with the freakin’ GRANITE already. It’s not THAT expensive. Geeez, a few thousand bucks for countertops, another few thousand for appliances, and all of a sudden a house is worth a million dollars. Now, ceiling fans - THAT’s a different story…..puhlease.
Federal Hill is a cool and gentrifying neighborhood in Baltimore. It’s got some of that funky feel that is missing in Washington — but, it’s still a little rough to support million dollar houses. Maybe I’m off target here - but, like Adams Morgan or outlying parts of Capitol Hill in DC - it’s a neighborhood that is safe for the most part, but you wouldn’t want your wife or girlfriend out walking the dog at 10:00 pm on a weeknight.
I think these are the townhouses in question. They look pretty nice - but, with garages in back, they have zero backyards (hence the rooftop terraces - which I wish more places had). Link to Lennar website off of this now says “this community is unavailable”
http://www.americanhomeguides.com/apps/data/go/ahg/brochure/HPC-19538.html
http://www.examiner.com/a-1089067~Students_beat_woman_on_city_bus__police_say.html
Try selling the “gentrification” of Baltimore to this white woman who was severely beaten by nine black middle school students for having the gall to use public transportation. Jes’ Me Jackson, Al Sharpton, and the usual apologists for thuggery are oddly silent on THIS hate crime, as can be expected.
Testify Mikey - What is with the granite obsession? Let’s not forget the stainless steel.
The granite thing gets me too. Kind of like an idiots bling thing. Not only can it be radioactive, but it’s porous and is next to impossible to clean once stained.
Silestone is a much better product if you have to have stone countertops. Corian is just fine for me though.
Hey Devil - formica is making a comeback because it’ s cheap and the huge choice of colors.
Forgot to add: Huge kitchens (the heart of the home BS) for with restaurant grade appliances for people that are too busy to cook. It’s all about show.
Yeah, nothing wrong with formica, but I like to upgrade the kitchen for my wife a little though. Lucky for me she listens to me on construction and financial matters. If we bought a home with granite countertops she’d make the previous owner pay to tear them out.
Huge kitchens (the heart of the home BS) for with restaurant grade appliances for people that are too busy to cook. It’s all about show.
Oh yeah. Visit to a friend in DC revealed a nice kitchen with a stainless steel stove, frig, and very nice pots.
Most of our meals where at home but they were all take out meals from a local grocery store. It was obvious they didn’t cook meals a whole lot because several meals had “timing” problems.
Our kitchen with white formica countertops and plain old GE stove sees a lot more use.
The granite thing gets me too. Kind of like an idiots bling thing. Not only can it be radioactive, but it’s porous and is next to impossible to clean once stained.
Yeah, wouldn’t you love to do radon tests in some of these houses with granite.
Radon does not come from granite countertops.
Granite is not any more radioactive than anything else in your house from trace amounts of uranium and other radioactive isotopes that are naturally occuring.
I personally like the look and feel of granite, but you all are correct its only 8k-12k worth of granite for a big kitchen so it isn’t going to make a 500k house worth 600k. Stainless steel professional looking appliances is a fad that will go out of style eventually. As fads go it is more practical than the 90s when white on white kitchens were popular. The avacodo green and burnt oranges of the 1970s were fads that I hope we never repeat. People may laugh at stainless steel 15 years from now but it could be a lot worse.
Well, when people find out that bleach causes pitting of the stainless steel, they may be a little less enthusiastic. I have enough stainless steel here at work (veterinary clinic); I don’t need it all over the kitchen at home too.
But these were ‘palaces’ built for GFs who could get no-doc 1005 financing. Guess it didn’t work out for Lennar. The current seller is stupid to think they’d go for 700K. Anything above 417K is going to be tough. I can’t wait for the summer 08 to arrive: potential sellers in MA is holding their collective breath, they are turning blue already.
100% (forgot the shift key)
“‘If you’ve got a job, you better be hanging onto it,’ said Vernon Hartless, a 37-year construction veteran. He’s among the few who stop at the store on the way to work. ‘This is the worst it’s been for a long time. The sad part is, I don’t see any improvement.’”
- Yesterday Kudlow guaranteed that employment is strong and the consumer is Spending! NO RECESSION.
75% of the nations GDP is consumer spending - no nation has remained strong that is dependent on the consumer.
What’s funny is they never talk underemployment when going into recession. But that ends up becoming the #1 issue on the initial way down. Someone who needs full income to subsist and pay debt, 120% income to live well (not hard to do in the boom), and is now expected to get by on 60% to 70% of the normal income? (or less!)
Yep… Just how any Porche dealer is doing… quite the change in six months. BMW was smart to come out with the 1 series right now. They’ll sell them by the score to my renting coworkers.
But they’ll hurt trying to sell the 5 series and other model. You know, the ones the Realtors ™ loved to buy.
Anyone have a link on Mercedes sales?
Got popcorn?
Neil
“120% income to live well (not hard to do in the boom), and is now expected to get by on 60% to 70% of the normal income? (or less!)”
You nailed the gist of the problem again, Neil! Touche’
Do they ever talk underemployment? A job is a job is a job, near as I can tell. Bagging groceries? Running complex spreadsheet analysis? Both count as 1 job.
Friend who Was in high end construction was on unemp and job hunting.. Lowes isn’t hiring, HD isn’t.. who else is there for a guy who only knows this biz..52 yrold.
Another friend who is 53 yrs ago got into RivCo gov job and does houses on side. Two different sides to the same coin.
But so many weren’t so pro active. Oh that is why they call it a Lazboy recliner.lol
The consumer is spending my a**! (aimed at Larry K)
Three weeks before Christmas and I haven’t been in a store since last Saturday that didn’t have an echo. BTW, not sure what’s up nationwide but I shop for hours because the stuff I want is sold out. I’m a cherry picker shopper and don’t care about the piles of other stuff that other people are obviously passing on too. Not impressed w/ prices. I think the chains are having a housing bubble style stand-off! Judging by the echo in the stores, they’re losing.
Bush’s bailout plan-to be announced today. WTF. But will not help speculators and the homeowner must live in home. This is total BS for those renters who waited. And BS for those who can afford the resets. This bailout plan is simply to help the banks keep FB in there over priced sh*t boxes. And by the way everyone who bought in 2005 bought on speculation.
the whole thing stinks. i agree with a previous post by someone. what actually does a freeze do on rates? I don’t see how it helps at all. It actually is going to prolong this mess and have it drag out for the next 5-10 years. It is going to keep prices high and out of reach for average joe. 5-10 years we are right back here. It has to discourage this type of lending but as far as i can see it only encourages it. Again, absolute travesty for the housing market and any kind of normalization. Is it about rewarding risk takers or something? -wait-it just hit me-protect wall street…never mind.
Of course it helps the banks. Banks came up with this plan, after all; you think they care about anyone other than themselves?
‘ But will not help speculators and the homeowner must live in home. This is total BS’
- If you are in SoCal you will see that our liberal senators Feinstein and Boxer will RACE to expand this to include all FB’s and especially if you are illegal.
This is not some unilateral Govt declaration.. the deal needs agreement from the lenders, and lenders will not agree to any provisions that costs them money..
Feinstein can squawk as much as she likes and lenders can ignore her..
If it’s contingent on the lenders, just how are they going to figure out who the lenders are. I’d bet 3/4 of homes sold can’t figure out just how many people own parts of the morgage.
Amazing. This bailout is 100% Republican and all you can come up with is a slam on “liberal Democrats”? Maybe you haven’t figured it out yet, but this entire bubble (and bailout) happened during the Republican watch. They controlled every aspect of government from 2001 until 2005, when the bubble grew to massive levels. Bush fired Armando Falcon, Director of the Office of Federal Housing Enterprise Oversight, when he had the balls to suggest that Fannie Mae and Freddie Mac were a house of cards. This happened years ago.
So please, stop blaming Democrats for this, and stop bringing them up. First, your comment is pure speculation. It is a complete distortion. And it shows extreme ignorance. And it completely overlooks the basic facts that this bubble and debacle are 90% Republican created.
Having said that, I admit that Democrats, if given a chance, will screw it up even worse. The difference is I believe Democrats will screw it up trying to help the little guy, while Republicans screw it up “crony capitalism” style. There really is a difference.
Bottom Line: there is PLENTY of blame to go around, but people that live in glass houses should not throw rocks.
Since this agreement shackles FBs more securely to their albatrosses, i think we should call it a bail-in.
FInancial house arrest?
How true. It would make more sense to me if groups like ACORN were advocating for the complete nullification of certain mortgages, not a continuation of the pain.
Joe Momma,
Thank you, thank you, thnak you! I’m sick of the nut jobs bashing the Democrats for what is the natural end result of every Republican President’s economic policy: The screwing of the people of the US for the gain of the obscenely wealthy. That is not an unintended consequence, it is the desired result. For those of you who keep complaining about the “Mexicanization” of the U.S. economy, please remember that economically, Mexico has been practicing what the Republicans preach, for over a hundred years. And people wonder why, after thirty plus years of Republican economic policies we’re heading for the same result. Sheesh! Take a long hard look at how well this country did for the forty years Democrats were in charge (1930 to 1970)then compare it to the forty years that the Republicans have been in charge (1970 to now) and compare the results. I know which one I prefer.
Trying to help the little guy? LOL
More like trying to buy votes. If you think anyone in politics is there to help the little guy, you’ve had too much of your party’s kool-aid, my friend.
Are you kidding. the one is pro Bush. Liberal? not.
And she is on her last go round. Shoot she is in her 70s.
I would say, she doesn’t give a hoot about Ca anymore.
Wait till Hilbilary flies her broom into the White House. As stupid, sad and unconstitutional as this Bush “freeze” plan is “Ol Hil says she will order mortgage holders across the board to comply, and Edwards goes even farther. Way past time to dump this two party system that has a strangle hold on our Country.
just out of curiosity.. how do we dump the two party system?
We hold a banana republic coup and go to a military dictatorship.
The very first step is to allow the 3rd and 4th party candidates into the debates. They are bared… Not invited, so how in the heck does anyone get a chance to see that there are options. BTW these debates are largely paid for by the good old U.S. taxpayer. P.S. Ron Paul is a libertarian but runs as a Repub (just like our S.C. Governor) because that’s the only way he could get elected.
In my experience, people know what they want and need.
As long as their needs are being met and they are getting what they like from the current political system, there is little incentive to change things.
This situation will have to change before the system changes. Some need will have to go unsatisfied. Some 3rd party candidate will have to offer it.
Starve it.
Cut earning and spending to the bare minimum, so you generate minimal tax revenue.
I’m actually excited to file my taxes now…I went from paying them about 50k a year to about 3k…AND I get to play guitar and putter about in the garden all day.
If things go on as they are, we’re headed for a socialist dictatorship (democrat or republican, doesn’t matter), and anything you manage to accumulate will be taken anyhow.
“… I get to play guitar and putter about in the garden all day.”
Man, I envy you.
“WE” get rid of election financing and each and every one of us pays $6.00 per yr. Then even you and I can run for office and maybe win. The Corps will have no hand in our elections ever again. Paying $6.00 per person per year will then allow Each and every American to run for office. NO MORE 2 party system.
That is how.
But we have too much corp money and old Bush type families who don’t want the public to get edumacated(W)
and take back control of our country.
So until WE all get educated on this Minor change, $6.00, we will have to endure all those idiot commercials, debates and newspaper “journalistic” pieces.
Just $6.00.org
You mistakenly think the establishment pols want to fix things. The reason things are so screwed up is because the pols make the rules to favor keeping themselves in power and real people out. The system can only be changed once the cancerous politicians are cut from the national body.
And I think Ron Paul may be the last chance to do that before having to resort to major amputation.
http://www.ronpaul2008.com/
How to dump the Wall Street owned dualopoly? Supporting Ron Paul would be a start.
Oh yes.. Those tax and spend liberals right? Who was it who left good old W with a surplus? That’s right, evil old Bill Clinton.
Do you really believe there was a surplus after Clinton? Seriously?
Yes. I really do. Are you saying there wasn’t???? Don’t you recall Bush saying that “we need to give the money back to the taxpayers” and sending everyone a $300 check in 2001? Good old Republican memory hole strikes again I guess..
Rule number #1 - it’s always Clinton’s fault right?
No, Rule #1 is that with a “progressive” tax rate structure that applies higher rates to the wealthy, your tax revenue can go boom to bust as fast as the tech-driven stock market goes form record gains to record losses. The wealthies 5% of taxpayers are responsible for half of income tax revenue. That may be fair to you, but look at the inherent volatility. That tech bubble burst was what ended the “surpluses”.
LOL. You fell for that Slick Willy trick? LOL
All he did was raid the off-balance sheet social security fund and apply it to the on-balance sheet deficit. Funny trick huh? Unbelievable something like that is not only totally obsfucated, but actually seen as good and noble and people eat it up. That asshole raided YOUR social security fund (down to zero) to apply it to the US credit card balance that came due. That’s like raiding you 401K to pay the credit card bills and cheering it as a win for the team.
LOL
Before you go doing something stupid like being a liberal, do some research and you’ll find constitutionally mandated conservatism to be in your best interests, unless of course you like paying for your ‘free’ handouts. LOL
I really hope you don’t think Bush is a conservative - because people might call you delusional. I guess when Bush said “we need to give the money back to the people” in 2001 he wasn’t talking about the surplus right?
And he didn’t Give back the money, it was from the following years REFUND, it was just paying it ahead of time.
Oh did you forget the congress/senate was REpublican all those years?
You mean the surplus from the income taxes of the dotcom ponzi scheme? That’s like saying the “wealth” created by the housing ponzi scheme was a good thing. Both sides are power hungry and in it for themselves. I can’t believe people still wax nostalgic for the good old dotcom go-go days.
As for Bush, I think pretty much everyone knows what a lousy job he did. It’s like beating a dead horse. I don’t even want to hear about it anymore
I’ll try this one more time Ben.. Or do you only post Democrat bashing posts?
Seems to me that this President was left with a huge surplus by a Democrat - or did that fall down the memory hole. Just because Bill O’Reilly and Rush like to say the Democrats will spend all your money doesn’t mean it’s true.
You are wrong on Bill leaving a surplus. The federal debt grew steadily under Clinton. The “surplus” was created by moving numbers from one collumn to another, similar to how our CPI is kept so low. No basis in reality though.
I must say Bill’s presidency wasn’t as disasterous for our country as George’s though. That’s because at least the Repubs kept him in line back when some freshmen congressmen/women still stood for conservative values. Under Bush everything has gotten rubber stamped by congress regardless of which party has been in control.
The “two party” mantra is just an illusion created by incessant propoganda. They say two different things, but do the same thing as each other when they act. Don’t be fooled…
Jill,
I think the president has very little to do with what happens. The Congress and senate set most of the federal budget. So the surpluss came from a republican senate and congress (and a democrat in the WH). However, it WAS primarily accounting tricks and the tech bubble. High paying jobs and attracting all those invesment dollars was nice.
Also note that a bunch of things went wrong after that. Sept 11, Katrina, Tech bubble burst, housing bubble formed and burst.
So, Clinton and the rest of guys in office more or less got lucky. No more no less. Clinton did nothing (or worse he compromised our national security).
Bush ran up big debts, had a largely unnecessary war and bungled multiple disasters into bigger disasters.
I don’t know which guy was worse. Its a pretty even feild in my accounting. I have Bush as slightly less incompetent than Clinton in so much that he tries to do stuff.
Clinton saw good times and sat back and did nothing with it. Nothing. Nothing for education. Nothing for infastructure. No vision. Nothing. Nothing for healthcare. He pawned that off on his wife, who at least tried to do something.
Anyhow… I’m throwing in my vote for Ron Paul. Hopefully he will force people to take their medicine and not damage our national security.
If we end up with Hillary… ah hell… at least she’ll try.
Totally with you on “I don’t know which guy [or party] was worse”, James. Reading these posts about Reps and Dems just sounds like a Reese’s commercial. “You got your chocolate in my peanut butter! No, you got your peanut butter in my chocolate.” Two sides of the same coin and they’re both coming up losers. There is no vision and little difference between them when viewed in the bigger picture. Just self-interest and pandering.
Still lots of kool-aide drinking here, even if it’s not RE flavored, IMHO.
MrBubble
I agree. Both parties blow, for very different reasons.
Way past time to dump this two party system that has a strangle hold on our Country.
I agree. We’d be better off if everyone ran independent. School boards, some city councils, and judges do it. Maybe if every one wasn’t trying to help their buddy in their party we’d actually have time to make decisions that make sense.
She is just Bush in a dress.
Is “subprime” an official designation? I would think they’ll be a lot of folks with prime or Alt-A ARMS trying to shoehorn their way into the program. Who makes the determination whether someone’s arm is subprime? Do people with I/O loans get to keep putting off principal payments? How is “owner occupied” going to be defined? Can an investor kick out his tennants and move in briefly enough to qualify?
I’m looking forward to seeing how the details play out — and, to what degree the PTB will disclose them. Going to be fun figuring out how folks attempt to game the system on this.
Prime and Alt-A ARMs will be part of the next FB bailout program. So far, there is little taxpayer money going to bail these idiots out except for Fannie/Freddie/FHLA buying up the toxic crap from CountryWide and Citi. That’s a positive so far.
Can an investor kick out his tennants and move in briefly enough to qualify?
The residency timeline should be the same months and days as the loan timeline, which would eliminate anyone moving in now.
That said, this is a crock. I bought my first house in the 20% interest rate 1980’s. My 2nd home was built with 33% down, no debt, perfect credit and we paid it off in 13 1/2 years. This is baloney that these people do not have to work and save as hard as we did. We didn’t eat out, take vacations for years, and actually went down to one car to save to buy a house. I resent these idiots that can’t add or read a contract being able to have a house handed to them. The only consolation to me is that by the end of 5 years they’ll have added 25% onto the principle of the loan and the house will probably be worth 50% of the original sale price. Then they’ll bail and mail in the keys. I’ll still have my house, hopefully, and they’ll be living on the street, poorer than before all this government help.
Contained?
Home Foreclosures Hit Record High in Third Quarter
http://tinyurl.com/3a4hul
The Mortgage Bankers Association in its quarterly snapshot of the mortgage market released Thursday said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record high of 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter.
The percentage of subprime adjustable-rate mortgages that entered the foreclosure process soared to a record of 4.72 percent in the third quarter. That was up from 3.84 percent in the second quarter. Late payments jumped to a record high of 18.81 in the third quarter, up from 16.95 percent in the second quarter.
when was the record ? 1992 1932 ?
BTW if there are 30 million actual NET fed taxpayers what do you figure each one is putting into the bailout ? anyone
Only 30 million carrying the burden for more than 300 million? The rich loop-hole finders as well as ‘earned income tax’ recipeints are having a great laugh at my expense: I am at work since 06:00 AM and can go home not earlier than 5:00 PM. I do that day in and day out (M-F). I think I am a masochist.
Hmmmm….quasi-brain dead, late-to-the game Moody’s is now projecting a general 30% value decline for the bust.
However, cnce they get beyond the previous denial phase and really get into the game future projections ought to just about reconcile with the 50/60% declines estimated years ago, by posters on this blog.
Gonna be nasty.
http://www.reuters.com/article/newsOne/idUSN0544897520071206
Not too long ago they were predicting a 5% total drop before housing bounced back. What do you expect from yokels who gave Aaa ratings to subprime toxic debt?
““he expects to break even this year. ‘No more than that,’ he says. ‘Simply put, our cash flow has been meager, so we’ve been living off lines of credit and money we put in the bank off previous years’ profits.’”
If you’re living off lines of credit and previous earnings… the whole “break even” thing isn’t looking too good.
At least he had the common sense to see what was coming and cut back. Good business sense, less greed.
If Mr. Genuario is anything like my Guido Builder Dad, he’s got plenty stashed away for a rainy day. Methinks Genuario’s description of current cash flow is designed for public consumption only.
That’s an interesting thought.
Rich Dad, Poor Dad, Guido Dad. Which one should I listen to?
Guido Dad will never steer you wrong…and Guidette Mamma made kickazz fettucine that bring-a tear to-a you eye
Perhaps posted already but today’s FT reports that subprime help would only be available to those with less than three percent equity in their “home” and no more than 60 days delinquent. Hard to believe!
Why the
I don’t think the less than 3% equity will be a problem. The less than 60 days delinquent….well that might be a little bit harder to find.
I don’t think much will ever come of this bail-out. I think it is just a Band-Aid and a CYA for the politicians, bankers and Wall Street, so that if the crap really hits the fan, they can at least point to a period in history where they made some attempt at trying to maintain order in the financial house of maxed out credit cards.
“less than three percent equity in their “home”
That makes total sense from a lender’s point of view. They like to foreclose on properties with equity. Properties without equity aren’t worth foreclosing on. I think there was a poster here not long ago who told a story about having a property with significant equity ($400,000, if I recall correctly) and their lender tried to foreclose with a bogus claim of non-payment. Even before the procedure began, a mortgage broker was standing in the front yard evaluating the place for equity stripping.
Believe it or not, there are still some states that allow lenders to keep the equity in foreclosures. Few, but they’re out there.
In most places, the banks are not allowed to keep any equity above and beyond loan principle plus expenses.
Actually happened to me.
Rented out home w/agency. Renters were qualified/background checks everything.Rent 2 mos went to agency, then I was supposed to get the rent. I rented a cheap one bdr/lease. I still paid mtg. Renters put locks on gates, skipped town at christmas. No Notice. So, I was paying 2 mtg/lease and got behind 2 mos. caught up…’96 ish.
Bank so much wanted this house. I fought tooth/nail to keep. They were wrong. 2 yrs ago-05 got a letter in the mail from GOV stating that IF/Maybe I sent in all papers with ‘codes’, maybe I might get the money they “found” from taxes/lender?
Lender was 3rd from original. I was “given” 10 days at christmas time to send this all in and Maybe, (those were the words) I MIGHT get my money back.
FIVE grand. Several mos worth not credited correctly.
Mistake on Bankers part and courts part. I fought court hard and “won” my own house then sold.
Can you imagine how many folks are being in ‘trouble’ with banker/lenders and taxes mistakes from gov?
That was Learning Curve that I will not repeat.
Since then flush with savings. Waiting for housing mkt to get where I want.
I don’t know about delinquincy, but I’d bet most loans that were subprime were 100-125% LTV.
I think you have to be between 100% equity and 97% equity.
Meaning if your house is worth 100k then you need to owe between 97k and 100k or you don’t qualify. If you owe too much, then why help you? If you owe only 95% of what it is worth it still has some equity so why not foreclose? Oh, and you have to be current on your payments and if you are late, no more than 60 days late. Who does this really help?
Who does this really help?
Just a few people. Is that a bad thing?
Toby Froehlich, president of Coldwell Banker Select Realtors, said, ‘We are back to needing three things to buy a house: good credit, a little bit of your own money and some verifiable employment.-
someone call this person and tell him/her its three C’s…they cannot even get the terminology right. its mind boggling.
.. blah blah blah.. said Doug Rudolph, a Shenandoah contractor and chair of the town planning commission.”
eh? A contractor heads the Planning Commission? How cool is that?
Erie, Pennsylvania, huh?
Here’s what $25K will get you in Erie:
http://tinyurl.com/2376dm
Wanna splurge? Here’s what $60k will buy:
http://tinyurl.com/2bwmwz
And these are quite typical.
The housing situation in Erie continues to get worse,’ Realtor Dennis Weed wrote.” Yeah, I think it’s been getting worse for about 50 years.
I wouldn’t want to live on East 12th — too much traffic, and not the best neighborhood, but West 10th isn’t too bad. The problem in Erie is (good) jobs — G.E. is almost gone, Hammermill and Zurn are long gone, and most of the small machine shops are gone. That’s why we live in Louisville, KY.
Yeah in Youngstown, say on Ravenwood you can pick up houses from time to time for $5-10k. However there were 2 murders on that street last night, plus one a few streets over. I’m not familiar with the streets in Erie, but the South and the East side of Youngstown have some very, very bad areas. Drugs, drive-by shootings, and murders constantly. Wouldn’t live there if the house was free. Chances of living until you pay off your mortgage is iffy.
Hey Ghost - I don’t know how to describe where our house is. It’s one of the Liberty Townships (just recently learned there are 2 of them) and it’s where the Youngstown CC is. We’re definitely outside of the Youngstown proper.
“A Northern Virginia couple had been toying with the idea of buying a second home at Wintergreen Resort in Virginia’s Blue Ridge Mountains.
My sister and her mega husband bought a 2nd house in Wintergreen for cash in ‘05. They love it but they could have saved 500k like this couple if they waited.
http://money.cnn.com/2007/12/06/news/economy/easton_1206.fortune/index.htm?postversion=2007120610
Hank Paulson’s bailout proposal is little more than a political stunt to try and shore up votes for the GOP.
nice spin by CNN.. can they explain why the Dems are also behind it?
It’s all politics. Why do you have to be so defensive? I am an equal opportunity critic.
well.. How do I know what you’re thinking unless you express some point of view..
The headline was deliberate. There is no excuse for “Paulson’s bailout may boost GOP’s prospects”, connecting a bailout (which it isn’t) to the GOP (which it doesn’t).
Let’s be honest, here. The GOP is not about free markets and small government: witness the past seven years of big government by a Republican administration. The GOP is about protecting the interests of corporate fat cats and welcomes government intervention to that end. What’s brilliant with Paulson’s plan is that it is presented as a help-for-the-struggling proposal, when it’s real goal is to prevent the economy (and the fat cats’ jobs, assets and investments) from tanking.
If they really beleived in free markets, they would NEVER have made this proposal.
They’re all about big government and small taxes. Anyone wonder why our national debt goes up so much under Republican rule? The Democrats aren’t much better. Maybe a little. They spend on stupid crap, but at least they don’t put so much of it on the plastic.
“In Luray, work is continuing on several large developments that have been in progress for some time. Final plans for a first phase of the 500-home Luray Heights development are expected next month.”
I saw all this McMansion stuff in the Luray area on a couple of trips earlier this year. Who the heck is buying there? There is virtually no local economy, and no ‘amenities’ I could see, apart from a bunch of caverns…
But they have a Wal-Mart super store!
Some of the building is retirees from NoVA escaping high real estate taxes in Fairfax County. We drove up route 522 recently - that takes you through Front Royal and Winchester — there was an astonishing lot of development for the area but not much current activity.
So Lennar sold a big chunk of inventory to a local builder who put the properties straight back onto the market at a 20% discount.
Mmmm. Is that my “hidden agenda” alarm that just went off? Now let me think…..oh, yes. Could it be that if they (Lenner) wanted out fast and if they reduced prices by 20%, previous buyers would rush out with law suits, screaming they had been mislead and duped and now they were at least 20% + underwater. So, how do you get around the law suits? You get someone to buy the excess inventory off you. If any previous property owners you sold to complain —– “Hey, it was a business decision. Had nothing to do with protecting our butts by avoiding law suits.” Probably perfectly legal of course but if that was the reason - just another devious little trick to add to the long list of deviousness tricks we see in the real estate industry.
I don’t see any trick or deviousness here. Lennar misjudged the market, couldn’t move product and wanted out. And if the new builder is offering 20% discounts the likely got more than a 20% discount from Lennar.
There is no law against a builder lowering the price to whatever they want and I think any lawsuit buy a buyer complaining they paid too much is going to get laughed out of court. Lennar sold off the development because they just came to their senses that they wouldn’t be able to sell the homes without a major loss and lucky for them they found a knife catcher. If they thought they could’ve still made a proffit just by lowering the price and selling to individual buyers they would have.
I’ll try again. At the moment, law suits are coming out of the woodwork like termites in this bust. Every builder, every mortgage company and even realtors are getting the jitters that they might be the target of law suits. There are a lot of pissed off people out there and the numbers are growing.
Litigation is already underway in many places, brought by buyers who say the builders screwed them by promising (via their sales staff) that, “Prices will not go down.” As we are seeing, not only are they going down - they are falling off a cliff. Many of those who bought off these big builders are thousands of dollars (in some cases hundreds of thousands) underwater and they are not happy campers. Then, suddenly, they see that Lennar (to take them as an example) decides to drop prices by 20%, 30%, 40% - whatever. So, that house they bought for $600,000 which, you would told, would never go down in price, is now being offered at $400,000 (assuming Lennar didn’t dump en-masse at a big discount). Hey, if someone can collect thousands of $ by saying the coffee that McDonalds sold them was too hot and scalded them - just think what a few smart lawyers can do if they win a class action judgement against a big builder like Lenner or DH Horton, Ryland, Beazer, etc.
What makes me think that the directors of these companies asked THEIR lawyers how they can swerve and miss the collision if they cut prices by 20%, 30%, 40%? I would think the answer might be -”Sell what you don’t want to another builder. If he sells them at a discount that’s his business.” Do you actually think that Lennar or any of these builders are dumb enough NOT to sell at a 20% discount themselves to clear inventory if they didn’t think they were going to be deluged with law suits by previous buyers? Why would a good businessman walk away and leave big money on the table - unless he thought their was a problem in the making if he sold the excess inventory himself.
What I’m saying is that Lennar likely sold the remainder of that development at 30-40% off to the other builder because they figured they still wouldn’t have been able to sell at that price to end-user buyers. That and they probably want to conserve money for cash flow by axing as many non-performing developments as possible.
We both agree that builders made a killing on proffit margins during the boom (I know from first hand experience working in the business). And I agree with you that the sales agents likely said things along the lines of what you attributed to them. But unless a disgruntled buyer has it on tape it’s not going to stand in a court of law. No one forced those people to grossly overpay on a box.
Sales agents are a lot like military recruiters. If you believe everything they promise, you’re going to get screwed.
“‘The housing situation in Erie continues to get worse,’ Realtor Dennis Weed wrote.”
Again, a baffling statement. Did we not hear that the markets were returning to normal, over and over from the REIC?
http://www.minyanville.com/articles/CFC-C-LEH-fre-fnm-aig/index/a/15111
Isn’t it great that the solution to all debt messes is to ‘loosen credit’ i.e. allow more debt? What a mess.
if the idea is to loosen credit so the sheeple can continue to spend, why are they tightening up credit cards - why not let people run up more debt? Economy supposedly runs 70% on consumer spending, so why not make it easer for the wage slaves to continue on the spending gravy train?
Because the banks (who also issue the credit cards) are the ones who agree to the plan. They want to do what makes them the most money, and they know better than to extend more unsecured credit to the sheeple.
As I shouldn’t have to expain, banks want credit card borrowers to be as close to their limit as possible, but but so much higher they end up with nothing.
last sentence sb “but not so much higher”
That sounds like it could have been written by our friend Socal Mortgage Guy. Wonder where he is these days.
“Lennar Corp. sold 22 homes in the 26-unit Federal Place development off Key Highway to Terra Nova Ventures. Terra Nova principal David F. Tufaro said the deal allowed the new owner to set prices it felt were more in tune with the current market.”
This is why this downturn will last many, many years. Builder sells 4 out of 26 units, and after 22 units sitting without any traffic he unloads to investors. Investors think they are getting a steal, and try to sell at 80% of original builder’s prices. They might sell 3 or 4 in a year, but the prices will continue to spiral downward to the point that they can no longer sell at a profit. So they unwind out of these things to some group funded by some hedge fund (because by this time no bank will dare loan on these falling bricks). The new owners will sell a few, but they will get stuck with most unsold. So they sell 18 units to some other hedge fund, which in turn (after a year or so) will sell 14 or 15 units to some other hedge fund.
0.8^5=0.328. So after five years, these million dollar babies will be selling for about 1/3 of Lennar’s original asking price.
Got 10% down?
TCM.
I agree with your analysis. Exept, in a declining market, you already need 15% down.
You better believe it will be 25% down in the darkest days of this downturn. However, 25% of 328 is $82k. Funny… that’s about the same as 10% down at $800k… Hmmm… 
So inflation won’t really be restricting the market…
Got popcorn?
Neil
HUD/taxpayers will end up buying the empty houses from the banks
Who would flip houses in Erie? Collectively the whole town is maybe worth $100K. These rusted out cities in PA/OH/MI are ultracheap for a reason, and it ain’t because the locals are nice. Make sure you have a National Guard escort with you when you go to Walmart!
Yeah, I think those sales figures are mostly random fluctuations. Maybe the typical $50k Erie house should should really be a $45k house, but $5k is a rounding error to most of us. Anyway, if you present an all cash offer for $45 or even $40 on a $50k house there I’ll bet you get hit.
I don’t think the crime is that bad in most of the Rust Belt. Maybe there’s some property crime, but most of it is white, there’s not much to steal and even less of a reason to kill someone.
Comment by passthebubbly
“I don’t think the crime is that bad in most of the Rust Belt. Maybe there’s some property crime, but most of it is white, there’s not much to steal and even less of a reason to kill someone. ”
White people don’t commit crime? Do you live in America? Anyplace there are poor people, there’s crime. Get a clue.
Right, I believe no white person has ever committed a crime. Boy, you really got me there.
Well I might not agree with you on crime in the Midwest. Did you see the heist of 7.5 million from AT security on the national news? That happened here in NE Ohio, 2 counties north of us, but the girlfriend lived 10 miles from us in the city my sister lives in. They found the pickup truck abandoned there 4 days after the heist. They’re extraditing them from Beckley WV back to Ohio.
2 banks in our small towns were robbed about a month ago in the same week.
An ederly couple was robbed of $50k by and in home worker. Apparently they had bonds and things in the house, plus she had access to their checkbook.
The number of home invasions has jumped dramatically and the amount of small store robberies and purse snatchings is way up in our tri county area. Plus the number of charities and school and sports associations that have had money embezzled is unbelievable. Signs of a recession, I think.
Little ol lady 86 was mugged at her car in the middle of the day at grocery store by white guy.
La Quinta Walmart/Target lot.
6,000 people longed for 300 wally world jobs…
somewhere in Rustedoubt, a week ago
Oh, a couple more things. I think Rust Belt cities have MORE a sense of community than most places in CA/FL/AZ/whatever pther places have bubbles. The people who are left have lived there for years, and tend to care about their surroundings and who they’re surrounded by. They’re not there for a few years until they find a better job or another house to flip. I should know; I’ve lived in Pittsburgh three times.
Also, this is the one part of the country where multi-unit buildings still cash flow positive.
You’re sure on fire today with your condescending statements about parts of the country you either don’t live in or know nothing about.
Just ’cause it’s cheaper than where you are doesn’t mean it’s a warzone. I have no problem walking around 99% of metro Detroit at night without having to carry a weapon. Get off your high horse and try to get a clue.
First, I don’t go to Walmart so that’s no problem. Please expand your comments to explain why I would need armed guards. Not the experience anyone I know from there is telling me. Have you been to Cleveland, Pittsburgh, or Minneapolis? Sure, they have some bad areas like very other large city. Southcentral LA is no pretty picture, either. Minneapolis is almost always at the top of the list for livable cities.
The top of who’s list? Some magazine editor is supposed to be an expert in livable areas?
As for cities like Detroit, Erie, Cleveland and the rest of the rust belt, there’s a reason why the population is dropping. People usually don’t move away from nice areas. I’ve spent alot of time in Cleveland, and unless you work for one of the universities or hospitals, there’s not much there. The medical students at Case Western tell me that they have excellent truama units due to the high number of shooting and stabbing victims. I’ll take Toronto or Seattle, thanks.
“David H. Downs, a real estate professor at Virginia Commonwealth University, refers to the subprime mortgage mess as ‘the slap heard round the world. … It will be felt in the U.S. and the commonwealth of Virginia…We’re far from knowing how long this slap will reverberate.’”
http://www.youtube.com/watch?v=UNL2mcpF8t0
“Genuario is one of the lucky ones; he expects to break even this year.”
Lucky? I don’t think ‘luck’ saved his ass, I think having a brain and using it did.
LOL
Always safer to say lucky. Then you don’t have parasites looking to see what you are doing. To quote Mr. Warren Buffett, “I could, of course, tell you their names. But then I would have to kill you.”
I lived in Erie until 18 months ago (used to post on HBB from there) and like much of the midwest, there’s a reason housing is so inexpensive. It’s a slowly dying blue collar, rust-belt town with very little opportunity for a decent job or weather. Also has the distinction of having the highest percentage of the minority population living in poverty in the US (with populations over 100k).
The bubble hit there as well, IMO. I scratched my head as middle class houses in the desirable burbs went from $75 sq ft to $100 between 2004-2005 when by everything I was seeing made me believe prices should have been dropping. Very few desirable areas to live in the city + rents unbelievably low + low paying jobs (if you’re lucky) = dirt cheap housing.
They are trying to reinvent themselves as a tourism/gambling town now to try and stay alive. I don’t think the jobs those industries pay are going to lend themselves to propping up housing anytime soon.
What is it with places that thing gambling is the answer? In no place where it has been tried has it worked.
Comment by joeyinCalif
2007-12-06 09:01:48
just out of curiosity.. how do we dump the two party system?
Comment by Devildog
2007-12-06 09:09:29
‘We hold a banana republic coup and go to a military dictatorship.’
I’ll bring the bullets, epaulettes and mirror sunglasses! Come on, let’s DO this! And I want to be Minister of Shoes, Beer and Candy, when it’s all over.
What’s with you and your candy fetish.
A woman who refers to beer has got to be good.
‘A woman who refers to beer has got to be good.’
Then I am the best woman In. The. World. Maybe even in the Universe.
Aw heck, your handle *contains* the name of a beer!
Right! Although it’s not terribly good beer, actually. And Olympia beer isn’t even made here in Olympia, WA, which annoys me.
I believe that any beer brand called ‘Olympia’ should be made here, strictly within city limits, produced by elves or else Eskimos, and also should be, well, ‘Olympian’. You know, ‘Beer of the Gods’ type of beer. Such that one falls to one’s knees and weeps with joy to drink it, and then goes to heaven with Valkyries.
that reminds me of my new political philosophy that i came up with last night.
the bush/paulson plan as blurred the lines between the two parties so much that i am now just going to vote for the party that is least likely to screw with beer.
i
‘i am now just going to vote for the party that is least likely to screw with beer.’
Oh. My. Lordy. You are clearly a freakin’ genius! Except for the lack of capitalizing first person pronouns habit. Other than that–genius.
I remember drinking Oly “Its the water” back in the ’60s. It went well with chocolate.
Hope the storms did not do much damage OG.
Oh. My. Lordy. You are clearly a freakin’ genius! Except for the lack of capitalizing first person pronouns habit. Other than that–genius.
It’s not a “smarts” thing. It’s a self-esteem issue. You know, as in, “i am not worthy of a capital”. You need to back off on the poor souls who can’t pull it together to press the shift key on a regular basis - it’s not their fault.
Candy is GOOD. What’s with you, and your lack of candy fetish?
“So Genuario prepared for a slowdown. In early 2006, he pruned the company’s staff from 22 to 12 employees. That year he built half as many homes as the 20 constructed in 2004. In 2007, Genuario built even fewer, six homes. ‘This is classic economics,’ says Genuario. ‘This is the market correcting itself.’”
So few Genuarios, too many Gambler-Builders…
Yesterday a Gambler-Builder alluded to his construction being like a poker game.
They’re also at a much easier “scale” to pull back easily. I looked at their website — I get the sense they were doing a mix of straight-general-contractor jobs and also building a few infill or subdivided lot spec houses of their own. Not holding a lot of land inventory at any given time — just whatever they needed for the next couple houses. And, unlike a big builder - content to play general contractor just to keep half of their staff together. Pulte or Lennar can’t operate like that — they can just try to dump assets and staff, but otherwise, they can’t adjust the model.
“‘That’s real estate for you,’ she said. ‘It’s nothing new. There’s no reason to panic.’” (Mary Huffman)
The time to panic is when those in charge say “There’s no reason to panic.”
TEST
The genuises in the Bush administration say that only “owner occupied” houses are eligible for their “freeze spray”. Are they actually going to verify that the house is owner occupied, or are they going to let each owner certify their compliance with the same results that got us here in the first place?
Some study showed that most rentals and vacant houses are claimed to be owner occupied.
Well, the Casey Serin brand of specuvestor bozos are going to have a difficult time convincing the bank that they live in 5 or 10 houses simultaneously.
If it’s a blanket amnesty for the FB’s, then nobody will check. The FB’s will self-verify just as they did for the mortgage. We know nobody will lie about their residency.
“You’re sure on fire today with your condescending statements about parts of the country you either don’t live in or know nothing about.
Just ’cause it’s cheaper than where you are doesn’t mean it’s a warzone. I have no problem walking around 99% of metro Detroit at night without having to carry a weapon. Get off your high horse and try to get a clue.”
Wow, the Ox speaks! Uhm, Detroit is not a good place to be in overall. Yeah sure some areas of the Detroit area might be nice, but I’ve been through that area and I wouldn’t want to drive through some parts there even in an Abrams Tank. Erie is smaller but the whole area isn’t a good place to live. If you have tons of cash, yeah you can buy a cheap home. Otherwise, places that have high unemployment, well, people will find other means of employment (drugs and other naughty stuff). Unemployment in the Rust Belt cities is maybe 10% and that’s including the suburbs. The actual big cities themselves are maybe 15 - 25% unemployment depending on where you are. Hey it’s the same thing in upstate NY. Why do you think housing is cheap in Buffalo or Rochester? They have $5000 houses there but there’s a reason why. No real good jobs there.
Ox, lol, that’s a new one!!!
You’ve obviously been through one small area and extrapolated the rest as being the same. Thank you for proving my point that you know nothing about the area. I personally don’t plan on staying here but there are plenty of decent people who are and will and I hope things turn around for them. Every area has issues and I’d bet whatever shithole it is you’re at has the same.
Nice try though……and thanks for playing!!!
“‘They’re gettin’ laid off in the city because there ain’t any work goin’ on, and they want to know if we’re hiring,’ he said…But he isn’t hiring. The opposite, actually - Thomas recently laid off seven of his crew, which was 16 strong just last summer.”
Why can’t builders build affordable houses (I’m talking less than $200K) in areas in MD and VA and still make a small profit? Are we to believe that construction and land prices* are so high that they have to sell houses at $400K or so for a plain starter house just to make a profit? Isn’t obtaining a small profit better than not building any houses at all and having to lay people off?
*By land prices, I mean developers that buy large tracts of land (lets say 200 acres) and subdivide them into hundreds or thousands of lots to result in an average of 1/4 acre for each lot. Each lot costs the developer much less than a single lot for sale that a buyer for a custom house would pay.
They can — but the margins on high-priced property were so much better in the last decade. It was a matter of gospel that you made a lot more money selling 5 x one million dollar houses than 20 x 400k townhouses.
You never see anyone building any smaller or less-affluent properties than the maximum that an area will afford. I can’t imagine when the last development with a significant mix of 3 bdr single family detached houses was built inside the beltway in Washington. It would have to be the early 70’s, honestly.
I understand what you’re saying, but for a developer that already owns land, isn’t selling a relatively cheap house with a smaller profit margin better than not selling large houses that won’t sell and therefore no profit margin at all?
What the heck is a starter home anyway? Didn’t those use to be called apartments? The REIC has brainwashed many people into thinking that we are supposed to move to a larger, more expensive home every few years. All we are doing is paying more commissions to realtors, mortgage brokers and banks. Consumers need to stop playing this game. You don’t need a new cell phone and iPod every year. You don’t need a new car every 3 years. You don’t need a new house every 5 years. We are not rockstars, actors or atheletes, so stop trying to live like them.
“Like other local real estate agents, Mary Huffman, president of the Greater Erie County Board of Realtors, says the much-publicized problems of the housing market are largely someone else’s problem. But what about September, when the number of properties sold dipped 23 percent from the previous September?”
“‘That’s real estate for you,’ she said. ‘It’s nothing new. There’s no reason to panic.’”
It goes to show you that real estate sales people really are as slippery and slimy as lawyers. This women is either unethical or intellectually stunted. I would lean to the first one. If she told me that and i bought a house from her i would probably litigate. Laughable at best, criminal at worst