It’s ‘Price Reduced,’ ‘Price Reduced’ In California
The Mercury News reports from California. “The wave of foreclosures sweeping Santa Clara County has hit its Latino residents the hardest. The epicenter of the foreclosure crisis is San Jose’s East Side. ‘It was great giving people their American dream,’ said Dolores Marquez, a long-time East Side resident. ‘But God, how they hooked them in and snatched it away.’”
“‘There are tons of houses on my block that haven’t sold,’ said Veronica Frausto, a county social worker and single mother who bought her house for $612,000 in 2005. ‘They have signs up, and it’s affecting the value of my home as well. It’s ‘price reduced,’ ‘price reduced.’”
“That has trapped people like Frausto, who is unable to refinance her no-down-payment loan because of the drop in home prices. She is renting rooms and working with her lender to try to avoid foreclosure.”
“Girlie Bass…is trying to get her lender to take back the ‘fixer-upper’ on Aetna Way in San Jose she bought for a borrowed $615,000 in 2004. ‘I just want them to release me from the mortgage. Take the house. I don’t care if I get a dime out of it,’ said Bass. She said her loan payment is now $6,497 a month, far outstripping her and her husband’s ability to pay.”
“‘Most of what I’ve seen is the client cannot afford the home due to the fact they probably should never have been put into that loan to begin with,” said according to Marlene Santiago, Neighborhood Housing Services Silicon Valley’s bilingual foreclosure counselor.”
The Modesto Bee. “Another foreclosure record was set in November as 1,336 properties were offered to the highest bidder on the courthouse steps in Modesto, Merced and Stockton.”
“Now here’s the real surprise: Only 17 of them sold, despite lenders offering deeply discounted prices.”
“More times than not, no one bids. That’s because foreclosed homes typically have unpaid mortgage debt far in excess of their current value. When no bidder is willing to pay off that debt, lenders usually get stuck owning the homes.”
“That happened 411 times in Stanislaus County last month, sticking lenders with more than $139 million in unpaid mortgages, according to ForeclosureRadar.”
“Two weeks ago, Dave Rhodes of Oakdale bid $1 over the starting price for a 1,356-square-foot home in Modesto. He was the only bidder and bought the house for $163,181, even though the lender had been owed about $264,000. ‘I’m not a big spender. I’m a bottom feeder,’ said Rhodes.”
“Competitive bidding is rare, however, even with discounted starting prices. Example: An Oakdale home on Ranger Street sold new in 2006 for $610,000. It went into default with an outstanding loan balance of $530,892. Last month at the foreclosure auction, the starting price was $395,000. No one bid.”
“Also last month, a Manteca home on South Sonora Avenue that had an outstanding loan balance of $487,956 was offered for a starting bid of $331,500. No one bid.”
“And in Merced, a home on West 22nd Street with an outstanding mortgage of $279,785 was offered at $153,000. No one bid.”
“In San Joaquin County last month, for instance, 664 foreclosed homes went to auction, but only eight were sold to bidders. Lenders took back 656 houses with unpaid debts of more than $245 million. In Merced County last month, 253 homes went to auction, with only one receiving bids and being sold. Lenders took back the rest with unpaid debts of nearly $88.4 million.”
“Statewide, 12,282 properties went to foreclosure auctions, but only 321 were sold to bidders. Lenders took back the rest, which had unpaid debts of nearly $4.8 billion.”
“Alliance Title Co. went out of business, laid off all its employees and closed its doors Thursday. At least 30 employees in Stanislaus County, plus hundreds more elsewhere in the state, lost their jobs with less than one day’s notice.”
“Escrow transactions dropped dramatically the last two years. In August 2006, Alliance processed 715 transactions in Stanislaus County, but that declined to 348 in August 2007.”
“Other Northern San Joaquin Valley title companies also have seen transactions decline, offices close and employees laid off.”
“‘The industry as a whole is just awful right now,’ said Suzanne Robinson, office manager for First American Title, in Modesto. ‘There’s just not enough business to sustain all the title companies here.’”
The Record Searchlight. “An employee who answered the phone earlier Thursday said Alliance is closing all 230 of its offices in California. The company’s Web site, which shut down Thursday, said Alliance does business in 34 counties in California.”
“Bob Martin of Summit Mortgage in Red Bluff said the chilled housing market had everything to do with Alliance Title’s demise.”
“‘More people are losing their homes….We are in the worst real estate market in 20 years,’ Martin said. ‘A title company has to sell title insurance policies to stay alive. It’s the lack of business; it’s a dead market.’”
The Orange County Register. “From Anaheim offices, Peter Ganahl runs eight lumber yards around this region that bear his family’s name. And he’s lucky that the harsh housing market debacle has only made a minor dent in his business. His 2007 sales will be off maybe 8 percent.”
“Ganahl knows he could be supplying big builders, who’ve largely stopped construction. But he also knows his niche of supplying smaller contractors won’t be immune from a slump. ‘We just live a little further out on the curve,’ he says of a construction downturn that he describes as ‘just shocking.’”
“In the summer of ‘06, Ganahl saw it coming. Not at his own cash registers. But in talk in his industry of how demand for lumber from big builders seemingly slumped overnight. ‘It was like a door was shut,’ Ganahl says.”
The Sun Post. “Three developers that sued the city in August over fees on new housing projects will ask the City Council next week to extend their homebuilding reservations in Manteca an extra two years.”
“In the face of falling home prices and a glut of unsold homes in the city, developers hope to delay their subdivision plans to avoid putting more homes into an already oversupplied market.”
“All three developers are asking for an extra two years to use the building reservations they purchased in 2005, 2006 and 2007, as well as those that are promised to them in 2008 and 2009.”
The Press Enterprise. “Plummeting home construction and declining growth in global trade that feeds the cargo industry likely will drive Inland Southern California into a recession next year, the first in decades, said two economists who closely watch Riverside and San Bernardino counties.”
“‘My instinct is that we could well end up with negative job growth next year for the first time in my 43 years of studying this economy,’ said Redlands-based economist John Husing.”
“Acknowledging that he usually is ‘the eternal optimist,’ Husing said he sees disturbing signs that 2008 could be the first year that the Inland region lags behind the state and nation in job growth since at least 1983 — the earliest year for which comparative data is available.”
“Residential construction in Riverside and San Bernardino counties soared from 21,990 homes in 2000 to a peak of 52,696 in 2004, then fell to an estimated 20,300 homes in 2007, according to the Construction Research Industry Board.”
“He expects year-end numbers from the State Board of Equalization to show that Inland retail sales declined in 2007, which would be the first time that happened since 1991. The region’s retail will continue to weaken in 2008, he said.”
“‘Evidence is scattered, but the picture it is beginning to form is sort of a nightmare scenario,’ Husing said.”
The San Gabriel Valley Tribune. “Despite the nationwide housing woes, homes in the city’s new development are selling, albeit slowly. The Rosedale community has sold 75 of the 95 homes available, said Byron de Arakal, spokesman for Azusa Land Partners, the project developer. Fifty families have moved in so far.”
“The community, which will have 1,250 homes when complete, opened to new residents in April.”
“But some aren’t the conventional single-family dwellers. Many home buyers are finding new ways to purchase in a regional market where the average price approaches a half-million dollars. Living with parents or other family members is conventional in some cultures, experts say, but some new homeowners are finding that such an arrangement works for them financially as well.”
“‘Some cultures are accustomed to families teaming up to obtain their goals,’ said broker Tom Adams. Adams said that as home prices have climbed, he has noticed an increase in prospective buyers putting additional family members on house titles to help them qualify for a loan.”
“Joy Rodpai-Parham said her home cost more than $600,000. She said the couple almost purchased a home in Rancho Cucamonga for $400,000 before showing her mother the four-bedroom Rosedale home.”
“‘We’ve all lived in Azusa for 15 years or so,’ she said. ‘My mom didn’t want us moving all the way out there, so she said, ‘Hey, we’ll help each other out.’”
“Even with all the adults in the house working, the Parhams said they still have to watch their spending. ‘We’re watching our expenses,’ Joshua Parham said. ‘Weekends are not as high class as we might like.’”
“You’ve got to work really hard for this,’ Rodpai-Parham said. ‘It just feels like I’m able to have a nice place for (my daughter) to live in.’”
The Recordnet. “Existing home sales in San Joaquin County rose last month from October, making it the second consecutive monthly increase in a season when sales usually fall off. The median sales price also slid last month to $310,000, down 20 percent from $388,000 a year ago.”
“The majority of sales and pending sales reportedly are foreclosure houses, more than 2,000 of which have piled into the residential market since just the beginning of the year. Brokers and agents said that those foreclosures are clogging up the market and most of the demand for traditional resale homes as would-be buyers watch prices slide.”
“‘I still think September was the bottom of the sales market,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton.”
“Meanwhile, the latest monthly report by the Construction Industry Research Board indicated that a total of 94 building permits were issued last month throughout San Joaquin County. That was the first month that building permits totaled beneath the 100 mark this decade. The previous low was 105 in October.”
“‘Nobody’s buying now, clearly,’ said Greg Paquin, president of the Gregory Group in Folsom.”
“Central Valley builders are increasingly slowing or shutting down projects in the slow market, hoping to ride out the slowdown with a few sales, he said. The new-home market probably won’t turn up until 2009, Paquin said.”
“Builders will continue reducing prices until people start buying, he said. ‘There will come a point when builders will be saying, ‘We’re getting enough interest at this point that we’re not going to drop prices any more,’ he said.”
‘Evidence is scattered, but the picture it is beginning to form is sort of a nightmare scenario,’ Husing said.’
Maybe for you, Mr ‘Center-of-the-Universe,’ but not for people who buy homes to live in them.
This guy Husing is a class A Jackass.
The main reason for the coming disaster in the Inland Empire is demographics. It has probably the largest illegal population in the state. The motto ‘Houses for Everyone’ was born in the I.E.
Their main claim to fame is ‘warehousing,.
Another “center of the universe” area is the Fashion Valley Mall in San Diego. I live just down the street. Now, I know this is anecdotal evidence but last night at prime time shopping, movies, eating time - 7:30pm - me and my girlfriend walked down there with our little dachshund.
I was literally dumfounded. There were a decent amount of cars but the mall was DEAD. I mean DEAD. People were walking around but very few had packages. And, there are a ton of new “high end” type stores that I am not even sure what they sell which didn’t have a soul in them.
This is 10 days before Christmas! We are headed for some really, really rough sledding people when the well to do in SD stop shopping.
Huh. Still, that’s a Friday night. Now if you see the same thing today or tomorrow, that would be very interesting.
That’s how it was at Fashion Island in Newport Beach during the early nineties. They even had a banner hanging from Neimans saying, “Shop the Legend” - can you imagine - Nieman Marcus having to hand a banner! :/
There is a Neiman Marcus in SD at Fashion Valley - my thinking is that previous waves of shoppers were doing so off of a heloc.
btw, lenders are cutting off available credit lines off of previously granted helocs where there are unspent funds….to the shock of the homedebtors, I think. A clause in the contract allows them to do this.
~Misstrial
That is so true. I remember Fashion Island around 1996. It took me a little time to even realize it was a mall. There were so few cars parked around it, I just thought it was a business park.
Ptolemy believed the earth was the center of the universe. These REICster idiots are like modern day Ptolemies, only they believe that they are the center of the universe. They are in for a rude awakening that they will probably construe as a nightmare. It won’t be a nightmare for the rest of us.
I hope that you’re not implying that Ptolemy was idiot. Besides that one issue that may be construed from your wording, the analogy is apt most definitely.
I don’t know what my problem is exactly, I just have a thing for the works of the ancients I guess.
“Girlie Bass…is trying to get her lender to take back the ‘fixer-upper’ on Aetna Way in San Jose she bought for a borrowed $615,000 in 2004. ‘I just want them to release me from the mortgage. Take the house. I don’t care if I get a dime out of it,’ said Bass. She said her loan payment is now $6,497 a month, far outstripping her and her husband’s ability to pay.”
???? What planet are these people from? Just take it back and oh, keep the change? Ummm….it doesn’t work that way, lady. We may not have debtor’s prisons anymore, but you will be basically walking around with an ankle braclet of debt for the next decade. Enjoy.
Can this Bass be Trout slapped?
All I can say is this is the new paradigm of thinking in this country. People of all age, ethnicity, creed, race, sex, religion, color, etc. DO NOT want to take responsibility anymore and when they have to…they still want to pawn it off on someone else.
Sheesh. Is it me or does it seem like more and more people behave like children in this country?
Time for this person to (WO)MAN UP!
There are so many politicians and organizations that live to facilitate bad behavior that it can be no wonder why so many never grow up. Fifty years ago shame would have kept many of these stories. When you outlaw the concept of shame, this is what you get.
Everyone has a right to be a winner, to be THE winner, no matter the game. Can’t play musical chairs or pick teams or hand out valentine’s day cards in school any more; someone might feel left out! No more ’student of the month’! Bring everyone to the least common denominator — in this case, a temporary shelter you get to think you ‘own’, then foreclosure, then blame it on everyone who didn’t play by your rules. It seems that this housing thing is the newest social trademark, a cultural right of passage, much like having a DUI on your record is for the young folks. 10, 15 years from now these people will be sitting around at Thanksgiving talking about who lost the most, who lost the biggest house, who took the most advantage of the system! Where were you when you could have been part of the biggest scam ever!!!!
Yesterday’s shamed are todays victims.
“10, 15 years from now these people will be sitting around at Thanksgiving talking about who lost the most, who lost the biggest house, who took the most advantage of the system! Where were you when you could have been part of the biggest scam ever!!!!”
I don’t know, nkl - this economy may not be able to service these deadbeats 10 or 15 years down the road. I think a lot of them will be dead, in jail, or otherwise de-commissioned from active life.
I remember having conversations like this in the late ’90s, on platforms at conferences with people who had foolishly invested in what was then called “new media”. I thought I had lost a lot of money (since I had lost everything), until this guy from a company called Rocket Science proclaimed that he had lost $20M.
“10, 15 years from now these people will be sitting around at Thanksgiving talking about who lost the most, who lost the biggest house, who took the most advantage of the system! Where were you when you could have been part of the biggest scam ever!!!!”
‘It was great giving people their American dream,’ said Dolores Marquez, a long-time East Side resident.”
See, that’s the whole explanation. Just “give them the Dream”.
No work, no effort, no responsibility involved. Just an EZ loan and no work, no savings, no job, no assets, no identification needed. Ain’t it great.
Mas unfortunado for you, game over.
Now remove yourself from the premises and go away.
Part two of the “Dream”.
Ain’t this fun.
The thing about dreams is: eventually you wake up.
A.D., late 2007
OCDan,
I’m beginning to come across as old here, but I take notice of every act of irresponsibility and cheating. Like the Mitchell report on steroids in MLB. I’m not shocked about it, but I would like to see the recordbooks changed. I would like to see some of the drugged players’ names and memorabilia removed from the hall of fame.
I think the bright side is that in a few years technology and economics will force people to be much more honest. For instance, lie detector tests have been proven faulty (Aldrich Ames passed lie detector tests three times). There is better technology being developed to detect lies. I can see it being in the layman’s hands in ten years or so. You will be able to detect lies from your spouse, your mistress, your employees, etc. They will be able to detect your lies.
One of my favorite tidbits that Objectivist scholars have written about is honesty. They claim it is easier to be honest than it is to tell a lie. They say that when you lie to someone, that person owns your reality. It’s true. Don’t give anyone else your reality. At the same time, there is no need to broadcast every personal detail to the world. Context matters. It is not inconsistent to keep your privacy and be as honest as possible. The result is you have a healthier mind being and knowing yourself.
I’ve been stewing over this one for awhile now. 615K for a fixer-upper in a marginal section of San Jose in 2004? And now you just want to take a punishment-free hike? If ever there was a deserving trout-slappee, this is it.
Calling East San Jose “marginal” is an understatement.
Drive by (photo) shooting of the day
That’s not even a house - I think I could dismantle it with my bare hands.
One more comment: FL, AZ, NV and others had/have the absurdly overpriced condos and tract housing. But when it comes to bidding up existing (pre-bubble) garbage SFH, CA definitely wins the silliness contest. East San Jose, North Park San Diego, whereever - the prices are just laughable.
Yours for the lovely price of $500/sq. foot!
Yowsa!
Nearly half a million bucks for that hunk of junk! Holy smokes, what have Californians gotten themselves into??
Some people are stupid, morons, imbeciles, borderline retarded (and I include those of ‘average’ intelligence in that group)…
They will never be able to make a rational decision.
Combine that lack of intelligence with greed and you can’t even tell these cretins what to do - they won’t listen.
They refuse to come to terms with reality - that they are stupid, their lives are crap, they are peasants who will never own anything worth owning. Instead, they grabbed at the brass ring of easy financing and guaranteed riches.
And now - those who are intelligent and prudent - get to spend the next few years listening to their sob stories, the incessant whining and wimpering, the fingerpointing - as the stupid and worthless seek to blame everyone and everything but the true culprit - themselves.
We call it the arrogance of ignorance. Don’t tell me anything - I know what I want to know.
ATC or are they crazy, viewed an OH today in “my” gated area and the 2/2 was bought in 04 and the RE agent said they were selling for 40k less than they paid.
The HOA???? hold your hats.. $490.00 per mo.
The RE agent said the 3/2 across the street was bought by the guys ( i mentioned before)who had 7 props and they “had bad times” and it will probably go into foreclosure.
The RE agent is going to email me the info/411 on all props.
I predict..karnac the magnificent..that after the Desert “season” is over, we will see lots more.
I saw the listings for Marrakash when I was at my Aunt’s house - lot’s of the listing prices are heading down, but still way overpriced. Their HOAs are going up another $40/month. Not only do they have really high HOAs (over $500/mo), but they are required to spend at least $200/month at the clubhouse for either meals or golf. Still seeing tons of rentals all over El Paseo area - never have seen that before even in early 90s. Saw that the new Agua hotel was having a job fair - they wanted high end concierge position to work at $10.50/hr. Although it looks like the River parking lots are filled on the weekends.
Let’s just call it $500/month for easy math’s sake. You live there for the full 360 months and the “rent” is $180K. Geez, you could have bought a gorgeous home for that pre-bubble in So. Cal!
Yikes. renting is looking better and better everyday!
Aslo those who are intelligent and prudent will now get the opportunity to buy the stupids assets for pennies on the dollar.
Real estate: The Great Wealth Redistribution Machine.
And now - those who are intelligent and prudent - get to spend the next few years listening to their sob stories…
- You left out the proposed bailouts for FB! That I get sick of, not the sob stories.
The bailouts aren’t for the FB’s - those bailouts are for the banks under the guise of ‘helping’ FB’s. Which is why we have to listen to their g’damn whining - no whining sob stories from worthless losers - no bailout for the banks. BofA/Citi/JPM CEO’s wimpering doesn’t have the same effect.
The press - beholden to their masters, the banks, will play it up for all it’s worth.
‘I just want them to release me from the mortgage. Take the house. I don’t care if I get a dime out of it,’ said Bass.
Isn’t that the craziest thing ever? I’ve been paying on my VA townhouse for over 8 years and have remained in the black all this time. I’ve also been paying extra towards the principal to pay it off within the next 10 years. But, hey….can I say that I am tired of playing landlord and want to take my toys and go home? How about we make this year the last payment year on my mortgage and we call it even? How about that? How about being responsible for the contract that you signed?
These people are stupid.
BayQT~
No, actually the people who gave the social worker the loan are stupid and DESERVE to lose every freaking penny they gave her. Let’s place blame where blame is do. Who in their right freaking mind would give a social worker over a half million dollar home loan? I hope these retards in the mortage industry go bankrupt on their childen starve to death. That will cull the herd from the greed and stupidity that is rampant in the mortgage industry. I hope every last one of them go bankrupt, lose their jobs and then THEY will have to go begging because THEY cant pay their mortgages. They thought it was a big joke to give someone they KNEW couldn’t afford the payments on a half million dollar home the money. Well, suck it morons! She cant pay and YOU’RE left holding the bag with an ovepriced house you cant sell. All these forcolsures and credit crunches are hurting the ENTIRE national economy, but the retard Consevatives on this board cant add two plus two and think the damage and fall out are limited exclusively to “dumb” homeowners. For God’s sake take Econ 101 and realize that when 200 million bad home loands are handed out like candy to people who can’t afford them — the massive fall out will effect everyone. Even the math-callenged Conservatives here who don’t grasp that it WILL cost them money in the end too. Freaking neocon morons. Is there anything they can’t screw up?
Have done 3 non-recourse repo’s in 14 years. Lost a little money on two of them, made a little money on the third. Last of these was 2003. Since then, my lending criterion has had to be, would I be satisfied taking back these properties if I had anyone saying Just Take My House. The answer is, I would take any of them, but would hope not to take any bunch of them simultaneously.
So far so good. My annual interest statement to the clientele, which I sent out last week, was headed by the salutation “Dear Superprime Borrower,” followed by some black humor about the mortgage situation in the external world, and a thanks to these couple of dozen borrowers for not being troublesome.
A Do Over?
What is this? Has housing just become like my oft-spent youth of wiffleball games? I remember that term being thrown around so much when we played 30 years ago, it was amazing we even played a complete game.
Housing Mulligan?
“‘Nobody’s buying now, clearly,’ said Greg Paquin, president of the Gregory Group in Folsom.”
ROTFL. Oh, there are always buyers. I don’t think we’ll see sales below 3.0 million per year. We just won’t see sales of 7.0 million for a long time in a year. There are always knife catchers. You just need to get prices down to stimulate the market.
I love how the REIC folks won’t ever consider a supply/demand chart. Draw your lines… now draw parallel lines showing reduced buyer demand (shifts down to a lower transaction rate at the same price). Now draw a line parallel to the supply curve that shows that sellers are desperate to get out of their mortgages. Notice something? It pushes us to a slow transaction rate at much lower prices!
My favorite bit is how the REIC types are using FUD on how tough loans are going to be in the near future. Ok… draw the buyers curve down even lower. We have an even slower transaction rate at a lower price!
But in real estate this is slow. I admit it took me a year to read through everything to really understand this. There will be a good time to buy ahead. But that is in 2010 to 2012. So let’s sit back and relax; we’ll agree to look at the data again in two years and see what are bottom predictions are then. But since real estate markets flatten out for 18 to 30 months… no rush to get back in the market.
But I do have a rush to meet fellow housing bloggers for lunch. See ya!
Got popcorn?
Neil
Stockton was the claimed setting for the Mudville 9…
“Another foreclosure record was set in November as 1,336 properties were offered to the highest bidder on the courthouse steps in Modesto, Merced and Stockton.”
“Now here’s the real surprise: Only 17 of them sold, despite lenders offering deeply discounted prices.”
Oh, somewhere in this favored land the sun is shining bright;
The band is playing somewhere, and somewhere hearts are light,
And somewhere men are laughing, and somewhere children shout;
But there is no joy in Mudville—mighty Casey has struck out.
Mark to Manteca
“Also last month, a Manteca home on South Sonora Avenue that had an outstanding loan balance of $487,956 was offered for a starting bid of $331,500. No one bid.”
Remember the lady that operated the Waggin Tail doggie restaurant in San Luis Obispo. She ‘rode into town with such high hopes’. Now, she has run out of town with her head between her Waggin Tail. What a useless business idea. Fido is fine eating Alpo at a fraction of the cost. By golly Gomer, I am going to go and get me here a home equity loan so I can buy Rover a lifetime supply of gourmet dog biscuits. And I will make a bunch of candles myself so I can eventually burn the house down when I can’t pay the payment anymore.
“The wave of foreclosures sweeping Santa Clara County has hit its Latino residents the hardest.”
If God were to send a press release to the papers stating the world was ending in two days the headlines would read “GOD TO END WORLD TOMORROW. The poor and minorities hit hardest.”
Just like Hurricane Katrina targeting only black people. That was amazing how that storm did that. It just shows that the true racism in this country often comes from those most loudly proclaiming to be against racism.
What could the Northern Alliance do against the forces of the tally ban, as far as virtually no real estate transactions happening?
“Bob Martin of Summit Mortgage in Red Bluff said the chilled housing market had everything to do with Alliance Title’s demise.”
“Builders will continue reducing prices until people start buying, he said. ‘There will come a point when builders will be saying, ‘We’re getting enough interest at this point that we’re not going to drop prices any more,’ he said.”
True enough. But those prices still have a way to drop, and they will end up far below what recent FBs paid. So the 64 dollar question is, how many FBs will try to keep their homes and how many will simply walk away.
Can the ABX go negative?
“Statewide, 12,282 properties went to foreclosure auctions, but only 321 were sold to bidders. Lenders took back the rest, which had unpaid debts of nearly $4.8 billion.”
Yeah, we’ve reached bottom. Only the bottom of the first inning. Good grief, we have another 4 years of resets coming and then HELOCs, and God only knows what on other loans that will reet after 5 years and such.
This state is going to implode on this debt!
There’s a poster on this blog from Long Beach who monitors cargo activity on the piers. His last post mentioned that cargo was way down. With inflation in China running at 11% a month, and the devalued dollar, I’m guessing the need for Chinese junk at new, much higher prices, is going to slow markedly. And if transshipment and trucking is the 3 leg of the IE after housing and construction, then Mr. Husing, I believe the ouija board says “recession–big time, sucker”.
the devalued dollar, I’m guessing the need for Chinese junk at new, much higher prices
Actually the Chinese have only start a slight adjustment of their currency against the US Dollar. It is not yet freely traded, it is allowed to slide a little every day.
The USA goverment officials have been pushing the Chinese to move their currency up for years.
The real problem here: the Chinese are selling things to the USA like crazy… but they really don’t want to BUY anything from the USA. So they keep accumulating US dollars and really don’t know what to do with them. Trade imbalance…
“She said her loan payment is now $6,497 a month, far outstripping her and her husband’s ability to pay.”
Good lord. I actually felt a chill when I read that. I can’t imagine having such a payment and I get no sense that these people are “rich”.
“She said her loan payment is now $6,497 a month, far outstripping her and her husband’s ability to pay.”
Let’s play a game and re-word that statement.
“She said her loan payment is now $6,497 a month, making it clearly obvious that neither she nor her husband exercised common sense when signing up for such an outlandish obligation in order to obtain shelter.”
Yeah…that’s the ticket. [sarcasm off]
BayQT~
Come on. That’s only $77,964 a year in mortgage payments. No problem for all those E. SJ folks pulling down $300k a year.
She is a nurse, he drives a bus or van for the regional area transport. Let’s say she is an RN with a specialty. She would be making what? $80,000, $90,000? He would be in the $40,000 -60,000 range. Total income max maybe $120,000 - 150,000?
A few pennies shy of $78,000 a year just for the mortgage….
The link story used the phrase ‘fixer upper.’ Now my definition of ‘fixer upper’ is serious work - roof and foundation okay but anything else could need real attention. Maybe a ‘fixer upper’ meant it needed the interior walls painted.
In either event, who were they going to sell it to? They need over $650k just to pay the realtor and loan
I can’t even begin imagining to committing to that kindof mortgage - it needed an income over $275,000 to ba able to carry it comfortably. That is
Sorry to popped of and some how sent…
To be able to carry that takes an income that is ABOVE the break point which puts a household in the top 1.5% in income in the US.
The 1.5% mark starts at $250,000. Only 1,674,261 households in the US could afford that mortgage - and these realtor-fraudsters and lying mortgage lenders were selling those kind of properties to households that didn’t even come close.
The buyer is stupid beyond believe to even think they could afford it. The realtor & lender are beyond despicable for encouraging it.
“The realtor & lender are beyond despicable for encouraging it.”
Reading the article, it sure sounds to me like there was rampant affinity fraud going on in that area. I wonder if anyone will go to jail?
This is why no one on this board should be buying right. The lies, fraud, and thievery still continues. Until the REIC admits that most households can only afford 3-4x income, which means 150-300K for the majority of middle class America, I would be skeptical of jumping into this mess right now.
Of course, we all know better here, esp. since I am not even looking to buy right now.
Just sayin’ I still can’t believe there are dolts still buying these McCrapansions.
“Until the REIC admits that most households can only afford 3-4x income…”
Too high; most families can’t afford more than 2.5x, IMHO.
Why is it so hard to believe OCDAN?
You could live a lifetime and make a life career out of servicing idiots in this country..particularly LA and California. There are SO MANY idiots here that one could truly make a business out of accomodating them.
I generally hold all parties associated with the housing bubble in very low regard. However, I do have a shred of compassion for the dumb buyers with families who truly thought they could improve the life for their families. Not the flippers, not the ones who sucked $400K out through a HELOC, etc.
I don’t fail sorry enough to bail them out. They need to be taught a painful lesson to help generations of others learn and one shouldn’t be rewarded for stupidity. I don’t condone their behavior, but I understand it. But I would probably toss them a crumb of some sort and then take that crumb out of the hides of the lenders and realtors who were targeting them (on top of the beating that they’re already going to take.)
I could bamboozle dumb, desperate, etc. people out of their money if I wanted to. It’s not hard. And I could make it perfectly legal too by hiding the risks and commitments. And then I could make myself feel better by talking about how the burden was on them to figure out that I was screwing them over. I didn’t point a gun to their heads to sign the bad deal.
The reason I don’t is because I have a conscience, and I don’t believe I should financially devastate families and shackle them for years just because I can get away with it and make some money.
According to my calculations, using onlineconversion.com, that comes out to an interest rate of 12.3% (30 yr, 0 down). At 6% their payment would only have been $3,687.
12.3%!
Paging Mr. Volcker! Paging Mr.Volcker!
Not like this is a bad thing, or anything. Just sayin’.
Words of wisdom from the Land of Delusion & Denial.
Cheeerful news from Portland Oregon.
(we’re exempt around here, see?)
David Nielsen, CEO of Homebuilders Ass’n of Pdx.
“There are some things we’d like for you to know. Housing prices are likely to continue to appreciate in our market, one of only a handful across the country that can make that statement”.
“What really led to the slower sales environment was a combination of investors pulling out of the market, and less stable markets in other parts of the country”.
“The Portland housing market remains one of the top 5 in the nation. Consumers can buy or remodel their homes with confidence”.
When we were young and we screwed up we knew that we might just get the belt. Sometimes there were 2 or 3 of us that were facing the thought of the belt. It always ran through your mind whether you wanted to go first and get it over with or wait and see if somehow your turn might be forgotten. Unfortunately, I cannot remember a single time when the belt forgot about us. I think David Nielsen thinks that the hand that wields the belt will forget about him. I am thinking that the hand will hit him even harder, having practiced on so many other arses.
Thanks for letting me know I should cross Portland off my list of places to look for affordable housing leads. Any other cities out there looking to turn away hopeful transplants?
Hey, David, are YOU going to buy all the excess homes from the Portland area people that bought Mc$H!Tboxes on toxic loans they can no longer afford? Is that how your housing market is going to hold up?
“‘My instinct is that we could well end up with negative job growth next year for the first time in my 43 years of studying this economy,’ said Redlands-based economist John Husing.”
A slapdash excuse for a fiscal barometer, consider his time at the task…
“Statewide, 12,282 properties went to foreclosure auctions, but only 321 were sold to bidders. Lenders took back the rest, which had unpaid debts of nearly $4.8 billion.”
Goodnight, Iren, er, California. Nice knowin’ ‘ya!
I know CA has huge economy and all, but those numbers are still staggering. How long can this keep up? Seeing numbers like that just adds to my ill feelings for 1Q 08. Late 07 efforts at dmage control have been impressive - but they can’t fend this onslaught off for much longer.
Cali is now in Fiscal Emergency–the budget shortfall is now 14billion plus, instead of the 9.8 predicted. A year or so ago, Cali voters approved new bond measures, and posters here predicted disaster, and here it is. So, are they going to raise taxes, and turn the place into a wasteland like NY or cut services. Them seems to be the choices.
““‘I still think September was the bottom of the sales market,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton.””
Ah, Der SturmKommandant of the Stockton Panzer Realtors(TM) Grupe is back in Ben’s blog with another quote! The Russians are at the gates of Berlin, but der tide is about to turn!
All they need are some of the RealtorJugen armed with their Panzerfausts and all will be well!
Thus ends the dreams of a 1,000 year REIC…
The rise and fall of the REIC…
REIC Kampf!
http://bigpicture.typepad.com/comments/2007/12/freddie-mac-spe.html
Chick,
I’m sorry to say it BUT I ain’t surprised one bit. These people think that they are some type of elites and will act accordingly. Even if that item gets widespread coverage in the press, nothing will be done about it.
Well, at least by the graph its clear something big happened in 4Q 07 - and this is all running on holiday fumes right now. Unlike the MSM and most everyone it seems - one’s eyes need to already be on January.
…not only in Miami
MLS #: D1172011
Price Reduced: 03/14/07 — $462,000 to $449,000
Price Reduced: 04/10/07 — $449,000 to $439,000
Price Reduced: 05/10/07 — $439,000 to $429,000
Price Reduced: 06/22/07 — $429,000 to $419,000
Price Reduced: 07/27/07 — $419,000 to $409,000
Price Reduced: 08/28/07 — $409,000 to $389,000
Price Reduced: 10/05/07 — $389,000 to $374,900
Price Reduced: 11/08/07 — $374,900 to $356,500
Price Reduced: 12/08/07 — $356,500 to $298,900
or this one
MLS #: M1087228
Price Reduced: 11/06/06 — $650,000 to $599,000
Price Reduced: 11/13/06 — $599,000 to $575,000
Price Increased: 11/24/06 — $575,000 to $615,000
Price Reduced: 12/15/06 — $615,000 to $595,000
Price Reduced: 04/25/07 — $595,000 to $575,000
Price Reduced: 07/07/07 — $575,000 to $550,000
Price Reduced: 09/18/07 — $550,000 to $535,000
Price Reduced: 10/02/07 — $535,000 to $500,000
Price Reduced: 10/04/07 — $500,000 to $450,000
Price Reduced: 10/26/07 — $450,000 to $399,000
Price Reduced: 11/02/07 — $399,000 to $375,000
Price Reduced: 11/19/07 — $375,000 to $360,000
it finally dawns on people that your average slum property is only worth pennies on the dollar.
Hey Mike,
It’s a nice start, but 360k is still too many pennies for a slum property. Let’s hope the market keep working.
Michael Vick’s house fails to sell at Auction. The person who bought the house from Vick would have made a $250,000 profit but rejected the final bid of $750,000. He said he wants a million or more.
http://sportsillustrated.cnn.com/2007/football/nfl/12/15/vick.house.ap/index.html
That’s Wilbur Ray’s hellhole. So he’s gonna hold out?? Attaboy, Wilbur. Hey, wait for spring, things will be better then. You’ll get your price, you just wait. And this will give you some time to get the blood off the walls.
OK, I’ve been following this, giving the guy kudos for his cleverness (since I’ve always cottoned to the notion that you make money by buying low rather than selling high) - but now I think he’s screwing up.
He got what would appear to be a fair price - approx. appraised value, and well over 100/sq ft even making a generous allowance for value of land and outbuildings (BTW, I couldn’t care less what his profit or lack thereof is - I don’t believe in the idea of selling based on what you paid just because you got a good deal when you bought, and that’s not greed, it’s just rationality), and why did he say he rejected the offer?
Because it would cost more than that to build the same house today!
Look, knucklehead, there are all sorts of things that cost more to produce than they can be sold for - that’s why people stop producing them! Find me one person who wants to reproduce anything similar to this monstrosity of a house in rural SE VA today. I bet you can’t find one. And meanwhile there are many, many that can be bought. That’s what bubbles do - they cause excess production, some of which has to be sold off below replacement value.
There are idle factories all over America that can produce beautiful gloves, hats, shoes, jewelry (OK, I’ve got Christmas on my mind) - do you think they hold out their old inventory in warehouses and refuse to sell it because prices are lower than their replacement cost? I’ve got an apartment full of stuff that I would gladly sell below replacement value!
Wake up, you scored in Step 1 and you just blew Step 2. You’ll never see an offer that good again.
When I worked at Pacific Bell in San Francisco back in 2000, Alliance Title was one of the busiest clients I was coordinating all sorts of data telecom lines for. My contacts (now friends) were gone from there years ago. Seems funny to read about something that was ‘hot’ just 7 short (and a whole world removed) years ago.
know what you mean, have worked in Calif. telecom for years and have long thought that hicap private data line orders would be an excellent economic indicator, have seen the volume quickly rise and fall over the years with booms and busts….
I was just thinking, all of the A$$hats like the idiots in Fullerton that removed $600K in equity through HELOCs and are now whining with their sob stories. They should count themselves fortunate. They presold the house to the bank for top dollar and were able to rent it back cheap for awhile, leaving the bank holding the bag. The fact that they frittered the money away on useless stuff is irrevelant. I vote a big Joshua Tree for those folks and hope it goes a long ways up. Calling ex-NNVmortgage for administrat
‘like the idiots in Fullerton that removed $600K in equity through HELOCs’
I was thinking, imagine if they bought gold with the HELOC and paid back the loan with the gold price growth. Could the government been able to track that?
I was just thinking, all of the A$$hats like the idiots in Fullerton that removed $600K in equity through HELOCs and are now whining with their sob stories. They should count themselves fortunate. They presold the house to the bank for top dollar and were able to rent it back cheap for awhile, leaving the bank holding the bag. The fact that they frittered the money away on useless stuff is irrevelant. I vote a big Joshua Tree for those folks and hope it goes a long ways up. Calling ex-NNVmortgage for administration purposes.
Haha yeah
I live in brea and you ought to check out all the expensive cars in my blue collar neighborhood. I used to walk through it and be amazed, now I am not so amazed anymore
Helecopter Ben and company to the rescue. Now is a good time to close the barn door. Of course, all the animals already escaped and were captured by the waiting wolves. But we will save the one little mouse that stayed in to keep warm.
http://biz.yahoo.com/ap/071215/fed_mortgage_crisis.html
This will just really tighten lending now LOL.
I think I have a solution for the looming economic disaster. 401k equity loans. After all you cant live in your retirement account.
Very interesting today..
Went with hubby to the local Walmart to pick up some household items( Christmas shopping done weeks ago. Hate the mad rush. Love doing 95% of it online). The parking lot was busy as normal for a Saturday…expected to see long lines inside with carts full of gifts..
Surprise, Surprise, next to no lines and EVERYONE was busy buying..HOUSEHOLD ITEMS..I can’t wait to see the retail numbers after Christmas..if they say it was a great season..I know that they are lying!!!
It’s ‘Price Reduced,’ ‘Price Reduced’ In California
Yep, I see a lot of those, but since the For Sale sign is always still out, the price reduction is not enough, obviously.
Dutchtrader - I lived in Brea back in 1989. First place I lived in CA. It was nice back then. I wouldn’t be surprised to see expensive cars with people that can’t afford them. Me, I like my older PAID for car and the $0 monthly car payment. That is the same for CA or NM (or anywhere else).
“It was great giving people their American dream”
God I’m so tired of hearing this. How is a ‘loaner’ part of the American dream? Ownership is part of the American dream. But ownership was never at any point, part of this equation.
“It was great giving people their American dream”
I wouldn’t view a $600k+ mortgage as a gift!
‘It was great giving people their American dream,’ said Dolores Marquez, a long-time East Side resident. ‘But God, how they hooked them in and snatched it away.’”
Welcome to America, suckers!
Kiplinger calling bottom. We are all saved. (please note sarcasm).
http://finance.yahoo.com/real-estate/article/104024/Will-Home-Prices-Hit-Bottom-in-2008-YesBut
Bay Area home buyers in search of affordability discovered Merced first, followed by Bay Area investors, who came in caravans
But I already knew Merced was there. It wasn’t hidden until 2004 (or whenever). I had driven through it and it was on the map. It was a $hithole before 2004. It is still a $hithole today, and will be a $hithole 100 years from now.
>>”“More times than not, no one bids. That’s because foreclosed homes typically have unpaid mortgage debt far in excess of their current value. When no bidder is willing to pay off that debt, lenders usually get stuck owning the homes.””
Not being satisfied with someone even actually buying their white elephant, the lenders also want the new buyer to assume all the past-due mortgage payments?
Just wait. These banksters can only hold these depreciating assets for so long. Remember these fraudsters aren’t in the bidness of landlording vacant properties. They will each sell when the cash cruch hits their doorsteps!
My personal REOs didn’t last long. Since 1993, 3 repos and 1 short sale. The 2 repos that I knew were money-losers, I sold within a month or so. The other, which I believed to be a possible source of additional profit, I held through the summer (off-season in AZ) and made some money in a Labor Day transaction. There was no trustee auction in any of these cases; one way or another I got the borrower to sign the property over to me.
I don’t understand why the banks would be wanting to take possession of 97% of the foreclosed properties. (All but 321 of 12K+) They can’t be dumb enough to expect stronger demand the day after tomorrow.
We went to an open house today. 5+5, 5100sqft. on 1 acre in Palmdale. It is a really nice house, but not 1.1 million worth. That’s the asking. The agent let it slip that they had an offer in for 800K that had not been accepted.
Wifey took quite a while looking at the house itself while I talked to the agent. He acknowledged the falling market but refused to believe that the decline would be ongoing for some time.
I made the point to him that in ‘01 I could have that house built for $105-$110/sqft. and that in a declining market where contractors are feeling pricing pressure we’ll be back there again. He wanted to talk about how affordable my payment could be.
We talked some about the lower end in the area, which is now selling around 200K. He said he’s planning on buying a couple of rentals out of foreclosure in the next few months. I said I wouldn’t buy a rental unless it returned 20% or better. He said it was OK to even lose some money on a rental because of appreciation. I said, good luck with that.
“Joy Rodpai-Parham said her home cost more than $600,000. She said the couple almost purchased a home in Rancho Cucamonga for $400,000 before showing her mother the four-bedroom Rosedale home.”
I live right in between these two locations. Azusa is basically a working-class community with a definite gang presence. Rancho is an up and coming community but a terrible commute, devil winds, and the potential for real racial problems because whites, latinos, and blacks are in even numbers, all working class, essentially uneducated. I would prefer my kids not attend either’s school district. Half a million for the barrio. Baby this can’t end well.
“Baby this can’t end well.”
I agree — this is going to end badly.
I was born and raised in Azusa and you would be out of your mind to spend the amount of money on a Rosedale house or condo (go to their website they won’t show prices, wonder why ?) If you have your heart set on living aginast the San Gabriel mountains where the smog backs up agianst it go buy in Glendora. Don’t forget that on Sat and Sunday’s the Rangers shut off the canyon entrance Hwy 39 because it’s packed full with mexicans, as the sign says when you drive in “Land of Many Uses”.
“Even with all the adults in the house working, the Parhams said they still have to watch their spending. ‘We’re watching our expenses,’ Joshua Parham said. ‘Weekends are not as high class as we might like.’”
—————————————
I don’t know what a “high class” weekend looks like. My discretionary funds go to investing, not spending. And a house is not an investment.
Got camping and hiking and fishing?
Wow, 411 foreclosures in Stanislaus county last month? I walk by the courthouse steps @ least 3Xs a day m-f. I recall even earlier this year seeing auctions going on w/ around 20 people clustered around, but last month, only a couple of people and of course the the person w/ the clipboard, reading hard to believe 411 properties were auctioned.
I suspect that there may be more in the coming months - something to do with the house as an atm and living beyond your means that’s been going on around here for awhile. Or perhaps the bay area commuters (bats) coming face to face w/ $3.40+ per gallon gas and resets on their arms.
It’ll be interesting to see how this plays out in local government when the inevitable tax squeeze happens.
“It’ll be interesting to see how this plays out in local government when the inevitable tax squeeze happens.”
The poor will come first, and the working class will tighten their belts.
“Joy Rodpai-Parham said her home cost more than $600,000. She said the couple almost purchased a home in Rancho Cucamonga for $400,000 before showing her mother the four-bedroom Rosedale home.”
Trust me, you wouldn’t want the terrible schools or environment in either community.
“‘There are tons of houses on my block that haven’t sold,’ said Veronica Frausto, a county social worker and single mother who bought her house for $612,000 in 2005.
I’m sorry…BUT HOW THE F*CK do you give a SOCIAL WORKER a loan to but a $612,000 house? Even my wife and I who make over 6 figures combined would be hard pressed to pay for a house that expensive EVEN WITH 20% down.
I mean seriously….W….T….F.
Whew! Servers back on-line.
Now I know what it feels like to be a crack addict.
Thank you, Ben!
testing