An Assumption That Proved To Be False
The Star Exponent reports from Virginia. “The bleeding continues. In the past six weeks - from Nov. 1 through Dec. 12 - 46 homes went into foreclosure in Culpeper, according to the commissioner of the revenue’s office. For the most part, the town foreclosures occurred in the newer housing developments. Marcus Bulmer, with Piedmont Homes of Lakeview, like other real estate professionals, attributed the high rate of foreclosures to the ‘criminal’ and ‘unethical’ lending practices of national lenders attached to national builders in which people were approved for loans that they couldn’t realistically afford.”
“‘Rather than how much do you make it was how much home do want?’ said Bulmer. ‘There was always a new program. It became almost cliché.’”
“‘It was a panic pace,’ he said of the boom of a couple years back, ‘and nobody ever stopped to reflect on what they were doing,’ including the new homeowner. ‘These are people in their 20s or early 30s and it was a very emotional time for them. They heard what they wanted to hear - it was their own fault.’”
The Capital News from Maryland. “Robert Worcester remembers a time when he rarely saw a Pennsylvania license plate on Interstate 83 near his Baltimore County home. And if he did, ‘you could just assume it was someone driving through,’ said Mr. Worcester, a Baltimore native.”
“No more. Mr. Worcester, president of Maryland Business for Responsive Government, said ‘it’s at least 50/50 now’ between Pennsylvania and Maryland license plates on I-83 at rush hour. He added that, while rush hour used to be a breeze, now ‘you can expect to go around three to five miles per hour’ at some spots.”
“Mark Goldstein, an economist for the Maryland Department of Planning, said it was likely that many Marylanders are keeping jobs here and migrating across state lines to take advantage of cheaper real estate prices in Pennsylvania and West Virginia. Real estate agents in neighboring states say Marylanders are crossing the border in their housing search.”
“Jerry Pilgrim, a real estate agent just across the Maryland border in York County, Pa., estimates that 80 percent of his clients are Maryland residents, who can find a 4,000-square foot house in Pennsylvania for the cost of a town house in some Maryland counties.”
“‘I’ve got people commuting all the way down to the D.C. area, some as far as Reston,’ Va., Mr. Pilgrim said.”
“He said sales to Marylanders have slowed recently, but not because of problems in Pennsylvania. ‘We’re having to deal with renters because owners are not able to sell their houses,’ Mr. Pilgrim said.”
The Times Leader from Pennsylvania. “A group of Dakota Woods residents attended Tuesday’s board of supervisors meeting to ask for help in getting their townhouse subdivision completed. The developers have abandoned the site, residents said, leaving 30 homes left to be built and numerous infrastructure deficiencies.”
“The residents stopped paying the maintenance fees to the developers because the money wasn’t being used towards maintaining the development. For the past several months, the residents have pooled their money to have the roads plowed, they told the supervisors.”
“One resident, Rod Azar, who’s owned his unit for a year, said developers ‘over-built’ and spent too much on the first units.”
“‘They didn’t have enough cash flow,’ he said, adding that the balance of the loan that the investors took out to finance the project well exceeds the value of the property.”
“Township solicitor Tom Brennan said that since Dakota Woods is a private subdivision, the township couldn’t take over the roads and maintain them. Brennan…advised the residents to consult with an attorney who specializes in real estate.”
The News Journal from Delaware. “Last month, Dilsheimer Communities launched its latest pitch to boost sales: Buy one of its homes, and the builder will cover the first year’s mortgage payments. It has attracted only a little interest, said Thomas Dilsheimer, VP of the Bala Cynwyd, Pa.-based company, which is developing LakeShore Village beside Garrisons Lake near Cheswold.”
“And it hasn’t been nearly enough to offset other factors dragging down the slowest market for new houses in decades. ‘The market is depressed, and there are too few buyers with too many houses to choose from,’ Dilsheimer said. ‘It’s pretty severe.’”
“Two to three years ago, he couldn’t build houses fast enough.”
“‘It was too hot,’ he said. ‘If a buyer walked in the door and didn’t buy, he knew the next guy in the door would.’”
“The evidence of the market’s depression is stark. The number of building permits issued in Delaware this year is down 40 percent from the peak in 2004, according to figures from the U.S. Commerce Department.”
“‘Many buyers who would be in the market are on the sidelines because they can’t sell their existing homes,’ Dilsheimer said.”
“Benchmark Builders president Steve Bomberger said the current slump is a healthy correction, albeit a painful one.”
“‘If you ask me about the good old days of ‘04 and ‘05 when we were selling houses like pencils on the street corner, I was uncomfortable with it from the beginning,’ Bomberger said. ‘It was unsustainable. You can’t manage a company at that pace.’”
“Delaware has a glut of existing homes on the market. So far this year, there have been fewer than 50 home sales for every 100 homes on the market, according to data from the region’s MLS. By contrast, there were about 75 home sales for every 100 homes listed in 2003.”
“Some builders have promoted their homes like car dealers shouting about huge blowout sales, especially for houses they’ve already built. Sandy Greene, a broker with Seacoast Realty in Bethany Beach, said some have held weekend sales with $100,000 discounts on $400,000 homes, just to clear out their inventory.”
“‘The big-name developers came down and went full tilt on everything they did, and then the market stopped,’ said Tim Rhodes, a broker in Bethany Beach. ‘Now they’re all in the same position of having lots of product and looking for ways to market it.’”
“Most incentives have been on builders’ most expensive homes, since those are the ones experiencing the slowest sales.”
“Rebecca Seweryn, an economist who studies Delaware for Moody’s Economy.com, said builders’ incentives obscure the actual price of a house. ‘It makes it harder to gauge the real value of these homes,’ she said.”
“Dilsheimer said builders have to offer incentives to counter the drumbeat of bad economic news that buyers are hearing. ‘When people read day after day how the market is down, they put their hands in their pockets and are much less willing to spend,’ he said.”
The Montclair Times from New Jersey. “Although they had yet to uproot the ‘for sale’ sign from their front lawn, Megan Hencinsky and her husband decided Monday to pull their Grove Street house off the market after it had not sold for four months.”
“When they first put it up for sale in August, they asked for $619,000 for their 1954 colonial, but gradually they rolled back the price to $529,000, slashing the figure multiple times along the way.”
“‘I can’t even tell you how many times,’ said Hencinsky.”
“According to the National Association of Realtors, existing home sales are expected to hit 5.67 million by the end of the year, the fifth-highest number on record, but a decline from the 2006 total: 6.48 million sales. That year marked the twilight of an eight- to 10-year boom in the market.”
“Anthony Wizner said he saw the slump approaching in 2005, as inexperienced investors began speculating on land and residential property across the nation, but especially in ‘hot’ markets such as Las Vegas, Nev., and Florida.”
“Their goal was short-term: Buy, flip and make fast, easy money. ‘Everybody wants a quick buck,’ said Wizner, who owns A.B.A. Home Remodelers in Clifton.”
“Wizner watched as sellers in Montclair and the surrounding area put more than half-million-dollar homes on the market and, within 24 hours, received offers for $100,000 above the asking price. Never in his life had he seen so many people lining up to, in effect, drive up the cost of a house.”
“Adriana O’Toole, broker/owner of Montclair Realty, said that during the housing bubble, buyers could purchase a house and pour money into overhauling it, yet still make a profit, since over time ‘the market caught up to them.’”
“Investors gambled on residential housing that had not even been built yet. Buyers put money down to get their names on a 1 1/2-year waiting list for a new home, and eventually flip the prospective dwelling to the next person down the list for a profit, said Drew Fishman, president of the New Jersey Association of Realtors.”
“Wizner, the contractor, had seen these circumstances before and knew what came next. ‘It was pretty wild back then,’ said Wizner. ‘I knew the party was about ready to end here.’”
“Amid the craze, financial institutions made it possible for borrowers to buy property without a down payment.”
“In addition, banks failed to adequately scrutinize the credit risk being presented by mortgage applicants, partly to save on the cost of digging into credit histories, but also since they were caught up in the general ’speculative mindset,’ said Phillip LeBel, an economics professor at Montclair State University.”
“Lenders rationalized that even if they foreclosed on chancy customers’ mortgages, they could sell the houses and still make money — an assumption that proved to be false once the slump struck, LeBel said.”
“In this market, Realtors ‘have to counsel our sellers on how to best maximize their equity,’ said broker Bernard McNichol. They might recall what neighboring properties sold for and have difficulty accepting that their home won’t be purchased for that price today, he said.”
“Also, people need to take more of a long-term view of home ownership, McNichol said. They should think of their houses as places to live and enjoy their lives, rather than considering them short-term investments and wondering how much the properties appreciated over the course of the year, a consideration that can be ‘angst-ridden.’”
From Newsday in New York. “During the second half of this year, Long Island’s economy has progressed along two distinct tracks: Even as fundamentals like employment, job growth and occupancy rates in commercial buildings indicate stability, the housing market has fallen into a tailspin, dragging every related industry down with it.”
“As home prices and sales have dropped, new home construction has fallen off and foreclosures have risen dramatically. And local mortgage lenders, including American Home Mortgage in Melville and Delta Financial Corp. in Woodbury which have both filed for bankruptcy, have laid off thousands of employees since August.”
“Underperforming mortgages granted to high-risk borrowers spread through the financial services sector, bringing down not only subprime lenders but also institutions that had invested in their mortgages.”
“Between October 2006 and October 2007, Long Island lost 2,300 financial services jobs, according to Pearl Kamer, chief economist for the Long Island Association.”
“In August alone, more than 10,255 workers in New York State were laid off, according to job placement firm Challenger Gray & Christmas. The report only includes publicly announced job cuts, so the real numbers are higher.”
“Most experts say there’s no end in sight. In a recent research note, industry analyst Paul Miller wrote that as consumers take out fewer mortgages in the next year, the industry will have to eliminate another 130,000 jobs ‘to bring production levels in equilibrium with employment.’”
“According to Challenger Gray CEO John Challenger, ‘Nobody knows what the extent is going to be. .. ‘This situation is unprecedented.’”
“He compared Long Island’s situation to that of the auto industry in Detroit: Nobody wants to leave, but the industry is struggling and there is a glut of qualified people struggling for every open position.”
“The bleeding continues”
Tell me when the morgue comes to pick up the body and then maybe I will consider buying.
Moody’s has been on their.
That Pennsylvania to Baltimore commute madness continues, apparently. I only had the pleasure of taking I-83 once, on a business trip, and it was hell. Bad as I-270 in MD or the old Wilson Bridge. But I bet the house sale madness is NOT continuing. I’ve got a friend up in PA who commutes down to his job in Montgomery County, Maryland, and gas prices are killing him. His wife is not liking living way up there, either, in a bland new subdivision where everyone is gone all day (and well into the evening), but they can’t sell — they’d get reamed financially.
As for the West Virginia to DC commuters, that WV market has fallen right on its face. Builders were offering huge discounts from the peak pricing, and I really feel sorry for the fools who went in and bought two years ago. A particular development in Shepherdstown (Maddox Farm) comes to mind, where a friend of mine spotted the same model of house he was about to buy in 2005 now going for $150k less from the builder. Lots of new houses up that way are going begging for buyers. What a mess for the ones who did buy there, though, if they ever need to sell up and move.
‘As for the West Virginia to DC commuters, that WV market has fallen right on its face’.
- This reminds me that all real estate is ‘Local’.
That means that it is time for Larry Yun’s weekly proclamation that ‘while there are several ‘local’ pockets correcting - most communities are doing Fine!’
I’ve worked in a few different mid-sized organizations in the DC area — and every one has had a couple people with insane commutes from Culpeper, the Shenandoah Valley, West Virginia, or far western Maryland (not to mention the just borderline-crazy ones like Annapolis, Stafford, Manassas or Fredrick).
I enjoyed talking to them about their commutes — they had all found ways to cope, and they really thought they had a nice lifestyle, and thought they were getting to live somewhere nice in the trade. I’d often think of them when frustrated with a normal 20 minute commute that had somehow become 45 minutes due to a traffic or weather event — how the hell could they deal with TWICE this on a daily (or 4 days a week — a few of them had wrangled some minor telecommute relief) basis?
I wonder how $3.25 gas - and, commutes that must get a few minutes worse every year - will change the equation? Maybe not much — as much I couldn’t comprehend it, I always was impressed at how much these people were committed to the lifestyle.
I would love to live out near Middleburg or the Plains, if I only had a commute into Reston or something like that. Otherwise, at least Alexandria is pretty close-in.
Ever since I started working from home full time, it’s done miracles for other things in my life. That was only with a 45m commute.
Some of these people really need to read “Your Money or Your Life” and get some grounding or something.
I think it’s business that needs the attitude change. A huge proportion of people can do their jobs from home at least 80% of the time. We don’t need huge office buildings, office campuses and long soul deadening, polluting commutes. Then again, if this actually happened, they might find out that most of middle management is a waste of money and that they are paying people to sit around and look busy instead of actually working.
A friend of mine lives in Temecula, Calif. (aka Trekula) and works in downtown SD. Takes 2 hours each way! I’d kill myself before I’d commute like that: 20 hours a week, 80 hours a month sitting in traffic! She says home prices are dropping like flies in the area.
I was living in Idy and then Palm Desert and commuting to Riverside - and it was killing me. Gave up the commute, gave up the extra $500/month in gas on top of maintenance and extra insurance and now I remember who I used to be. Would rather live in a rented smaller place and give up the commute. No way to have any real family or community life.
My commute in the Bay Area has gotten worse rather recently. I work in Tech and for 4-5 years, things were pretty normal: 40 mile each way, 35-40 minutes max commute time. It was actually sort of pleasant. As of last year, the Tech boom is quietly coming back under the radar and cover of the real estate crash. As a result, my commute doubled.
The problem is that I rent and rent anywhere near Silcon Valley has skyrocketed to levels that would essentially waste my time because frankly, the only reason I’m out here is to save up hoards of cash and rent cheap. So I will have to stay where we currently rent and pray that the rental market that occurred in the dot-com doesn’t return and drive rents to insane levels.
Anyhow, we now get up earlier and leave work earlier. I find that 15 minutes before 5 is almost perfect for some reason because there’s already loads of people who figured that leaving at 4 would beat the traffic… which must have been the idea that everyone else had because I found it to be just as bad as leaving at 5. But at 4:45, things are pretty light. Weird huh?
What do you consider cheap rent in silly valley. I rent a place in Sunnyvale for $2000(3/2 1200sqft)seasoned hood close to Remmington. It took some looking but it’s a good deal for me right now. I’ve seen rents in the area anywhere from $1500 to $2500 so guess it just depends on what you are looking for…
Well, as it stands now, me and my wife rent a 4 bedroom house with a yard, garage, garden, and in a safe neighborhood in the East Bay for $1,800 a month. Sure- there’s loads of apartments and condos that are cheaper in SV, but I kind of got over the whole apartment thing years ago. We currently share the house with one other housemate who is very quite and pleasant. As a result, we pay $1,200 between the both of us, or $600 each. I’ve never paid more than $600 out of my pocket for rent in the Bay Area ever. But it was hard when I first moved here in the Dot-com and had to share a 2 bedroom condo with 5 people… talk about fun.
So for me, cheap means it has to be cheap and for personal preference needs to be a house. I tinker in the garage too. so that too is a biggie. We’ll probably just stay put because the landlord likes the fact that we maintain the yard and property for him and I doubt he will raise the rent.
Re: “But it was hard when I first moved here in the Dot-com and had to share a 2 bedroom condo with 5 people… talk about fun.”
Everybody has horror stories about that time. I know a guy who paid $2700 for a 650sqft apt. which was literally a POS in Mt. View. Granted this was back in 2000 but the place can’t rent for more than 13 to $1400 nowadays and that’s still probably too much. Yeah, I hope we never go back to the insanity that was the tech bubble; but if your right about a new tech bubble forming?…
“Bad as I-270 in MD or the old Wilson Bridge.”
So will the new Wilson Bridge help that much?
The old bridge was total of 6 lanes. The new bridge is/soon will be 12+lanes. In addition they are expanding several of the interchanges on both sides.
It’ll be a big improvement. That corridor is really heavily travelled as both major north south interstate hwy AND a local commute/errand road. Traffic can, on occasion, back up for a dozen miles before the bridge.
It’s still going to be a heavily travelled corridor and a pain in the ass at times, but the Wilson Bridge project was much needed. The old bridge was literally crumbling apart - as well as being undersized.
It’s also a major project that has gone pretty much on time, and without much controversey for something of that scope.
Pennsylvania to Baltimore. I drove that twice too, not during rush hour, and it was so bad that I started getting off 270 and taking dinky route 97 (Georgia Avenue) the rest of the way.
And these people are commuting to RESTON? How are they crossing the Potomac? Point of Rocks — is there an actual bridge there? American Legion Bridge? Going through downtown? These people aren’t living in a house, they’re living in their CAR. Hope they don’t drink much coffee.
Any long drive on I-95 is a nightmare.
The short drives, too.
I like to refer to it more as parking.
I-95 is one of the incarnations of the road to Hades. I am sure if you look hard enough along that infernal pathway of doomed, furious, and helpless souls, screaming along in their own steel prisons, you’ll find an exit that takes you to some lower level of the Abyss.
“95 is the devil’s highway”
coined by polly one long Thanksgiving day drive from MD to LI. Never again.
There is a bridge at point of rocks, 2 lanes.
Yep, one bridge there, and one just up-river at Brunswick, too.
But these all feed into Leesburg, more or less which can be a pain, and you’re still a loooong way from DC.
And there’s White’s Ferry as well.
Most of my MD/PA friends are who come down to Virginia take… yes… I-270 and the I-495 (American Legion) Bridge unless they are coming from Hagerstown. Aiiiiiiieeee! I know a gal who lives west of Frederick and comes down that route to Fort Belvoir. Sheer insanity, just so she can live on a neo-Colonial on a full acre and spend her weekends mowing.
American Legion Bridge going MD to VA is actually not that bad in the morning. 270, just north of there, is bad.
Will somebody please explain this fascination with living in a bland subdivision?
——————————————
His wife is not liking living way up there, either, in a bland new subdivision where everyone is gone all day
Bland of Brothers?
I think it’s for people who have no mind of their own.
Seriously, they get told what to do every step of the way, from what kind of mailbox they can have to what type of electric candles they are to place on their windowsills.
IIRC, as far back as the late 80’s the postal service began requiring those centralized mailboxes that we all love.
At an old townhouse and appartment development that I used to live in, I LOVED it when they changed to the centralized mailboxes. You see they put them right next to the dumpster, so all that junk mail never made it into my door.
And that’s why I don’t live in such a place. Neither do my parents. (You should have heard what my mother had to say about the new neighborhood association. It was asking for 300 bucks a year in dues. To put it politely, my mom said, “No way!”)
Good for your mom, Slim. Before we sold, the home we had was in a non-HOA and we loved it.
I have never understood why ANYONE, who enjoys their freedom and home ownership and independence would tolertate such an org. I understand that they keep the riffraff from going bonkers, but too much abuse is all I seem to hear and read about.
For me…
too many don’ts and not enough dos. too many retired people staring out the window just waiting to bust someone for being parked in the visitor’s spot 1 minute longer than they are allowed.
As for the cluster mailboxes…crimineys! How hard is it to just deliver the mail to each house? Heck, why bother delivering it. Just have everyone come to the post office and we will pick it up. Probably save a ton in carrier wages.
People in Rancho Santa Fe, San Diego’s richest community, HAVE to go pick up their mail at the local p.o. What a pain in the butt that would be. Then again, they probably send their maids to do it.
I grew up in Garret Park, a town that fought the USPD (because it was a department not a service back then) for the privelige of NOT having mail delivery. I contend that you get your mail more quickly, because if like most people you pick up your mail in the evening, you get all the mail that gets to the PO by mid afternoon, instead of only the mail that the delivery guy got before he left for his route in mid-morning.
Will somebody please explain this fascination with living in a bland subdivision?
In case we’ve all forgotten, it has to do with the housing bubble, appreciation of housing, and the commoditization of appreciating assets. The reason condos and tract housing became so popular is because they were they easiest to flip, because they were the easiest to describe and understand. No other reason. Nobody minds a commute when your house is earning you $200/day.
Frankly, if some busybody can tell me what color to paint my front door, I might as well be renting.
I’d mind a commute, quality of life is more important to me. Now I understand why so many people self-medicate.
I live in California, originally from TN where traffic was a rumor. I ‘thought’ California traffic was bad and that my commute was nauseating until I got married and drove from TN to my wife’s parent’s house in NY. We passed through Maryland, DC, Virginia, parts of PA, etc etc. To say the least, you could not PAY ME to live anywhere north of say- upper NC because the traffic there was outright miserable.
I have no idea why people are willing to pay so much, drive as much, and waste their lives as much for the pleasure of living up there with all the snow, traffic, congestion, and overpriced real estate. Sorry I’m sounding really rude here. Just my two cents.
Isn’t it wonderful, this “new Amerikuh” we’ve created, where nobody can afford to live near their jobs - assuming they even hav a job - so they must live an hour or more away in places they probably still can’t afford. And, each day, they get to look forward to absurdly long and sluggish commutes to and from work, all while burning great amounts of gas, which is growing most costly. Such fun - work all day to live in a place that really isn’t yours that you can’t afford anyway. At least their kids are happy since their parents can buy them lots of junk toys in place of the love and attention that they really need - junk toys that are probably covered in lead paint.
There, I think about sums up the new American Dream/Nightmare pretty well. I can’t wait for Maryland to crash - the slow decline just isn’t waking people up yet.
No, most people I work with CAN INDEED afford to live near their jobs. They’d just rather have the plasma TV, the two (or three) really nice cars (racking up mileage), and the much bigger house than they’d have if they lived near work.
I live in the ‘burbs and work in the ‘burbs, but when I worked in the city, I always lived in the city — and pretty much liked it, since the extra rent was offset by lower commuting costs and access to more things to do (besides TV). But that’s just me. I value my free time and access to conveniences; other people obviously value their big yard and big house more.
Yup, people always rationalize affordability, thus the bubble. I lived quite comfortably in a 780sf bungalow and it took 5 minutes on surface streets to get to my downtown job. My coworkers would wail about how housing wasn’t affordable in the city, but that’s only true if they had to have a 5 bedroom bloat house. On the other hand, I can’t “afford” to commute four hours a day!
That’s the thing: You’ve figured out if you can afford the commute (in time and money). Most people do not.
The gal I know who commutes 68 miles each way to Fort Belvoir each day hasn’t done the math. Otherwise, she wouldn’t be burning through a new car every three years and selling it for next to nothing because it’s shot, not to mention the 3 gallons of gas she burns EACH WAY in her oversized car. Yep, $360/month in gasoline alone! Ouch!
There was a study done not long ago (and referred to by people on this blog, I believe) which showed that moving to the suburbs is usually false economy for those wanting to save money.
It’s not just the money and time, it’s the mental state of mind being stuck in traffic. Whenever I have to drive to LA, which depending on the traffic gods can take anywhere from 2 hours and beyond, I’m completely wrung out. I feel claustrophobic and want to jump out of my skin. How can you tackle such a commute everyday, and THEN go to work?
http://www.theregister.co.uk/2006/04/13/cisco_commute/
Is working at Cisco worth a 7-hour commute?
What a maroon.
“According to the National Association of Realtors, existing home sales are expected to hit 5.67 million by the end of the year, the fifth-highest number on record, but a decline from the 2006 total: 6.48 million sales.”
So everything that has happened since August has happened in the year with the fifth highest sales on record. So what will happen if 2008 sees the fifth lowest home sales on record?
If another year is required before price capitulation, that is likely to happen. And no home sales, no home remodeling by new owners, no furniture buys, etc.
I wonder how many of those sales include foreclosures. I guess it depends on where they get their numbers or whether their trustworthy. NOT.
Over the past few weeks, rumors of financial strife and internal chaos have swirled around Boston-based, nationally renowned jewelers Alpha Omega. Now we hear that owner Raman Handa has quickly and secretly fled the country, taking with him his entire family — including son Amit and daughter Nidhi, both visible faces for the company — and leaving behind 4 stores, what must be millions of dollars worth of inventory, confused employees, and even the family dog.
Apologies for not putting this in the bits bucket, but I thought it was worthwhile enough not to be buried under 105 posts.
Wonder what the real story is here…
Sounds like he’s learned from the hedge funds: Loot, loot, and loot some more, and then flee the country before you’re caught!
RE: Will somebody please explain this fascination with living in a bland subdivision?
This is why you have so many people who fascinate themselves with news such as whether or not Britney Spears has her underpants on or off on any given day.
Uh, would you keep up with things please. I hear her sister is pregnant now. At least that is what the homepage of my web browser keeps broadcasting to me every day lately.
I’ll bet the taxes are over $10K per year.
and Grove Street is noisy as hell…
Seeking to move out of Essex County due to the property taxes, the Hencinskys have welcomed a number of buyers into their single-family home on Grove Street these past months who seemed to adore it. Some would return two or three times, but no viable offers followed.
“It’s completely renovated, but we’re on Grove Street, and that’s a turnoff to some people,” said Megan Hencin-sky.
Bear Stearns Posts 4Q Losss Amid Bigger-Than-Expected Mortgage Loss
http://tinyurl.com/2qoeud
Bear Stearns Cos., the No. 5 U.S. investment bank, said Thursday a bigger-than-expected writedown in its mortgage portfolio caused the first quarterly loss in the company’s 84-year history.
Bear Stearns also said members of its executive committee, including Chief Executive James Cayne, will not receive bonuses for 2007.
The bleeding continues. I wonder how many have already spent the bonuses they are not getting?
How can we expect J6P to be financially responsible when even the masters of the universe are losing money…
I think that there is another play happening here, and I am not quite sure who is benefiting. Chicom, Arabs, Uncle Al?
Who benefits in the end of all this?
The POLS benefit by all this. Financially struggling people are easier to control than financially independent people. Financially struggling people will swallow this tune hook, line, and sinker. “Hi, I am from the government and I am here to help you.”
You’re probably right, but I’m not so sure. You’re spot on with the welfare class mentality, but there’s a strengthening undercurrent of “poor” people who correctly blame the government for their impoverishment and want them the heck out of their lives. While this segment is currently diminutive, I wonder if the coming fiasco will serve to strengthen it and propel citizens into action to break the shackels of government and put it back where it belongs - under the people.
While this segment is currently diminutive, I wonder if the coming fiasco will serve to strengthen it and propel citizens into action to break the shackels of government and put it back where it belongs - under the people.
I’m reasonably “Liberal” (for example, I favor Universal Health Care, if done right), but I have the very Conservative view that the biggest problem with our Democracy can be expressed in this chart:
http://www.ntu.org/main/page.php?PageID=6
See how the top 5% of wage earners pay the majority of the taxes, and the bottom 50% of wage earners pay less than 3%. (Incidentally the average tax load on the bottom 3% is only about 6%)
Until *EVERONE* starts paying taxes, the politicians basically have to appeal to these “lucky ducks” (the non-taxpaying class) in order to get elected. This leads to a lot of bad laws, like the tax holiday for forgiven debt, “windfall profits” taxes, etc.
3500 years ago, Jewish scholars hit upon the right idea with the tithing rule (which actually comes from a commandment from God). *Everyone*, from wealthy landowners to beggars shall give to charity (usually thought to be about 10%). If you make $1000/year you should pay $100.
This way, *everyone* understands what the burden is, and thinks about their obligation (and how it’s spent) the same way.
Just as people are starting to flow out of the most-F****d states now (like Florida), the top 5%–and certainly the top 1%–is most able to simply pack up and leave the US!
(The other danger is that the most productive 1% can afford to simply stop working for a few years, hoping that the economy will stabilize. That will really send our nation in a tailspin!)
Politicians don’t care about the top 5% that pays the bulk of the taxes. They care about the bottom 50% that pays nothing, and a TINY FRACTION of billiionaires at the very top.
On a completely practical level, I don’t understand why if the top 5% has almost all the income and wealth, they shouldn’t pay almost all of the taxes–what is everyone else supposed to use to pay taxes–the thin air in their empty pockets? Why does a flat tax=equitable, but a flat income=communistic evil?
I’m also amused by your conflation of “having the most money” with “being the most productive,” as if Paris Hilton and the Wal-Mart heirs are really “producing” much of anything other than jobs for Louis Vuitton sales clerks.
And the assertion that “politicians don’t care about the top 5%” is plain, flat out false–that 5% finances their campaigns, lavish lobbying, and literally writes virtually all the legislation that they pass. They are the ONLY ones that they care about. You are letting ideology blind you.
ummm…the tax bailout for FBs affects very few people in the top 5% and almost nobody in the top 1%.
Unfair things like mortgage interest deduction has a mild effect of the top 5% and nobody in the top 1% (because it phases out over $150K).
Those $300 checks that George W. sent to everyone when he was first elected were meant to make the bottom 50% happy, not the top 5%.
If you look at that chart
http://www.ntu.org/main/page.php?PageID=6
you’ll see that the tax burden for the top 5% and top 1% has INCREASED over the past few years, not decreased.
It isn’t so much the tax burden, IMHO, as it is the inflation. Inflation is the tax that destroys the middle class and which keeps the poor properly under their masters’ heel. And inflation has no real drawback to the super-rich, so they can use it to inflate away debts and so forth.
ummm…the tax bailout for FBs affects very few people in the top 5% and almost nobody in the top 1%.
Oh on contraire, the top 5% of wage earners are invested in the non-regulated hedge funds and own bank stocks I betcha. If the subprime tentacles were not reaching into and affecting the top 5% of wage earners then there would be no federal legislation. the govt could care less about the FB’s. It’s the SYSTEM that they are trying to protect because the SYSTEM gives them power.
“the tax burden for the top 5% and top 1% has INCREASED over the past few years, not decreased.”
And so has their share of gross income and wealth. Again–if people are making a disproportinate amount of all the money and holding a disproportionate amount of all the wealth, why shouldn’t they pay a disproportionate amount of taxes? Are they not drawing a disproportionate benefit from the structure of our system? I don’t understand people who claim to believe in markets when it comes to doling out benefits, but not when it comes to doling out responsibilities.
“See how the top 5% of wage earners pay the majority of the taxes, and the bottom 50% of wage earners pay less than 3%. (Incidentally the average tax load on the bottom 3% is only about 6%)”
Oh get a grip.
(1) The total incomes of the top 1% have as much income as the bottom 20%.
There is a point where a certain minimum amount of money is needed for survival - basic shelter, food etc. Anything more than that is income that is excess to survival costs.
The tax code is designed to tax that ‘above survival level’ income.
Those in the top 5% have incomes starting at $157,000. Don’t think they need that much for a basic apartment at $400 -600 and a $125 a month per person for food and driving a used beater-car that cost $1000 or less -and those are minimal survival costs.
Those in the upper brackets have benefited more from the society, culture and infrastructure - they pay more. Doubt Bill Gates would be a billionaire if he had been born in the Sudan. Nor would all the paper-pushers making $150,000, 250,000 or more a year be doing those jobs and getting paid that kind of money if they had been born in Cyprus or a remote village on the Nile or an island in Indonesia. Want to benefit from the society? Then pay for it.
A flat tax is NOT equitable. It hits the lower income brackets harder in terms of derpiving them of resources for basic needs.
(2) Someone in the lower 20% making $20,000 a year pays far more than 3% in total taxes. 7.65% for FICA/FUTA, another $1100 or so in Federal Income Tax which is around 5.66% of their gross plus their state income taxes (and most state have them) which here would be $775 on that income and another 3.88%. Total tax bill for someone getting by on $20,000 is $3400 or 17% of their gross income. Doesn’t leave a lot for food, shelter etc.
The poster above is right that the nonsense about ‘those with the most money are the most productive.’ Yeah - that Hilton is real useful. Ditto Jacqueline Mars (heiress to the Mars Candy fortune and never does anything except spend money.)
I did say that the government wanted to protect the tiny fraction—the top 1% of the 1% on the top.
However, at least anecdotally, most of the people I knew who invested in hedge funds were just barely into the 5% range…mostly professional “strivers” like doctors, dentists, etc, who are notorious for being suckers (like the “rare coin” craze of the 80s)
(And I told friends they were NUTS for investing in these things. Every single person I spoke to who talked about them couldn’t tell me excatly how their money was being invested.)
You missed his point. The polititians appeal to the majority for their votes to get into office but bed down with the rich who pay their way. Also, there is a problem with proportionality when the top 5% pay 50% of income taxes (which is half the federal take) but do not control 50% of the wealth or income. They simply count for more as a group in Washington than the rest of us, given that they pay for so much of it.
Wealthy folks spur on the economic growth that creates jobs and they provide the commerce to pay business and corporate taxes, as well as personal income taxes. So they make polititians look good. But they are put at odds with “the people” come election time by pols who promise to protect “us” from “them”. Yet who continues to funnel money into campaigns and lobbying efforts but the corporate fat cats? Of course, they understand the politican is only stumping for votes when he derides the rich. Once we, the people, give the politician our votes, what good are we if we pay only a small fraction of the tax bill? Who actually buys the things we want our legislators to give us, that get the polititians into office for life?
You can’t talk about the influence of money in political campaigns and remain oblivious to the influence of tax collectin/sources on political decisions in general. Whatever protects or increases revenue is to priority, and aside from the ocasional tax increase it is primarily a growing economy that brings in the cash that pols need to spend to remain in power. Consider a senario where 10% of the bottom 95% of earners lose their jobs, a calamitous event, income tax collection loss is 10% of 50%, or 5%. However, if the upper 5% lose big in the stock market (or SIV’s), and report a modest 20% loss of income, hardly worth crying over, then the loss of revenue to washington is 20% of 50%, or 10%. A middle class person may lose everything by losing a job, while the wealthy may hold onto everything though income is drastically down. Such is the peril of a progressive tax system.
“See how the top 5% of wage earners pay the majority of the taxes, and the bottom 50% of wage earners pay less than 3%.”
When the tax burden for the poor lessened under Bush I began to worry. This has clearly been an effort to get the ignorant masses behind the establishment pols (”make those rich bast@rds pay all the taxes, as long as I don’t have to pay you guys in Washington can do whatever you want”).
What this has done is more firmly cement the status quo in place and prevent needed change. And anyone who thinks the rich are really paying those taxes are deluding themselves. Yes, high wage earners are paying through the nose, but I don’t classify them as rich, merely high midle class.
No, the truely rich pay little to no taxes - either they earn they money in non-taxible investments, or they pass on the tax costs right back to the poor in the cost of the products they sell.
I’m going to stop right now because I feel a colossal rant about to erupt…
The reason the top 5% pay most of the country taxes is because they earn most of the country’s salary - their actual % taxload is way smaller than the % taxload the middle class suffer.
The reason the poor have a lighter tax load is imposing any more won’t let them earn a living wage - and it’s them the rich exploit to make their billions - so we have to keep them happy.
I’m in favor of a flat % tax for everyone as a % of income.
Comment by shuzilla
2007-12-20 10:48:47
Also, there is a problem with proportionality when the top 5% pay 50% of income taxes (which is half the federal take) but do not control 50% of the wealth or income
YES THEY DO CONTROL MORE THAN 50% OF THE WEALTH
Based upon net worth and financial wealth distribution,
The top 1% control 33% of the net worth and 40% of the finanical wealth
The top 5 - 1.00001% control 26% of the net worth and 28% of the financial wealth.
Top 1% + top 5-1.00001% = 59% of the net worth and 68% of the financial wealth.
Uncle Git - forget the flat tax. It is REGRESSIVE and so is a national VAT or sales tax. Those with less income would pay more of what money they need to cover basic living expenses and have less left for such things as compared to those in the upper brackets.
The middle and uppermiddle class pay the highest marginal tax rate. The top 0.5% pay very low taxes, as they have the time and money to hire accountants. Most of their income comes from investments. They can offshore resources.
I work with physicians. One day they were sitting around talking about how great the tax cut on dividends was.
I pointed out that AMT more than offset any gain from the dividend tax break. If they had 500,000 in dividend paying stock they saved a few thousand dollars. Meanwhile AMT took 15-20,000 from most of them.
The people who benefit from dividend and capital gains tax breaks are the billionairs and Hedge fund managers. Not the top 5% but the top 0.5%. Their marginal tax rate is less than middle and upper middle income earners.
…and corporate taxes should be zero.
AnnScott, check your numbers. The richest 5 people are part of the richest 5%, so I don’t think you can add them together like you did. Plus, 5 people controling 26% of the wealth is absurd on its face. The wealthiest 5 folks in this county are probably worth 200 billion. If that is 26% of all wealth in America, then total wealth of Americans would be less than one trillion. Yet income tax collections alone are about a trillion. So the total of all personal incomes is probably ten to fifteen trillion dollars. Total wealth is probably near 100 trillion (depending on who the appraiser is).
Reuven’s point is that of all taxpayers (and some rich do not pay taxes), of those who reported income, the folks at the top 5% paid about half of the income tax bill. They may or may not be the richest 5%, just the highest taxed 5%. That makes their financial well being more significant to our government than yours or mine. That’s our system. So it’s a waste of life to get all bent when we see that Washington is going to do something sweet for the rich at the expense of middle class, because in the end it is us who approved the tax collection being concentrated at the highest income levels.
That makes their financial well being more significant to our government than yours or mine.
In fact, it doesn’t! Since the MAJORITY of Americans pay little or no taxes, those are the people the Government has to pander to.
My feeling is that EVERYONE should pay some tax. The tax “burden” of the bottom 50% is only about 6%, after all deductions are factored in. That’s too little. Nobody should pay less than, say 10% taxes.
If we decide that some of our neediest people need help, they should get checks, not tax deductions or EITC. This makes it clear to them that they’re getting a GIFT on behalf of their fellow citizens.
My hidden agenda, of course, is to reduce taxation for EVERYONE. But since the majority of people don’t pay taxes in the US, we’ll never see that because they’re the ones who are likely to have to pay more under a more equitable taxaction scheme.
I disagree, financially struggling people are like cornered rats, liable to lash out randomly, instead of calmly going home to watch American Idol.
Ladies & Gentlemen:
In the main ring, in a re-match of a bout earlier this year… (C.L. k/o’d B.S., 1st round)
In the Black Corner, weighing in at almost nothing…
Chicken Little
In the Red Corner, with the weight of the world upon it…
Bear Stearns
Let’s get it on!
Funny, did Morgan Stanley or somebody have the first loss in 70+ years? Why, it’s as if we’re seeing thing not seen since the days of the Great Depression…. oh, wait… that’s not good…
This guy can call lenders every unsavory name in the book, but in the end, no one forced any of those people to sign on the dotted line.
You are wrong. It is the same as people complaining that the bank is at fault cuz of my 100k credit card debt. It is the banks fault. They should not have given me such a high credit limit…the bank should be penalized Cuz I bought too much crap. Its not my fault….I am not responsible…..I am a victim of those sneaky credit card statements….I never read the terms of the credit card…… I am not responsible ……for anything! It is the governments job to take care of me….make my financial decisions like what my spending limit is…how much I cam borrow, what my debt to income is. The govt should give me a feeding tube, a catheter and put me in front of my TV so I have no responsibilty. Oh yeah while they are at it tell them to raise, educate and establish work ethic and morals in my kids and wake me when it is done. Vomit. Sarcasm off–for now.
Let’s not forget, though, that the “lenders” were not using their own money. That is the criminal part. It’s no big deal to lend your own money to a deadbeat, it’s quite another issue when you are using money entrusted to you by someone else.
Not necessarily - that’s why the ’someone else’ who owned the money that was loaned was compensated with interest - for the risk involved in loaning their money.
If you don’t want to lose your money - don’t loan it out. Keep it in your mattress.
If you want to earn interest - keep your yap shut if/when your money disappears.
“Dilsheimer said builders have to offer incentives to counter the drumbeat of bad economic news that buyers are hearing. ‘When people read day after day how the market is down, they put their hands in their pockets and are much less willing to spend,’ he said.”
With so much good housing news to focus on, the media only tells the bad stories!
In quote after quote these guys are shamelessly and pathetically admitting that this my-tee economy that the decider tells us has such strong underpinnings…is entirely dependent on people buying crap.
Now is the time to listen and record because in their mounting desperation the weak kneed minions of the PTB are spilling the beans…and an awesome sham is being exposed.
Hello, everyone. I read this blog just about every morning. It’s quite fascinating. I’ve not read any thoughts and observations from someone from Chicago. So, I thought I’d add a little comedy.
Besides being the most corrupt city/county in the US, Chicago and Cook county are suffering from a severe case of denial regarding the housing market. We live in an area known as West Ridge, and over the course of the last two years, landlords have been converting their vintage rental buildings into condos (all sporting “granite countertops, stainless steel appliances, gleaming maple cabinets, tile bathrooms,” naturally). We noticed about 18 months ago, that, these little cookie cutter condos were not really moving, but the shoestring developers kept on converting.
As I type, there is a “rehabbed” building with about 30 units that has been sitting there for almost a year now, and not one unit has sold! The developer recently replaced his old marquee with a new one, but kept the “old” asking price. There is another development that sold about 2 units, then auctioned off the rest. The only buyer was some entity that is now trying to rent them out. Can you imagine how the suckers who bought into that development feel?
There is another “development” that is trying to lure buyers with “6 months of mortgage payments paid by the seller”. These guys will not let go of the fact that their units will not be sold at the prices they had hoped.
Another dent in their plans is the fact that Cook County/City of Chicago’s property taxes on “gut rehabs” is astronomical. Add on assessments and well, no one wants to pay that kind of money OR no one can afford to pay that kind of money.
We are currently renting for $ 760 per month. We’ve been looking at condos in the North Shore area. However, I believe we’re just going to sit on this a bit longer….maybe forever.
How are you renting for $760 in Chicago? You can’t get that within 50 miles of the Washington Monument. Do you wear flak jackets to bed? (Maybe $1760?)
“Do you wear flak jackets to bed?”
LOL. I love the smell of napalm in the morning…
Nope, no flak jackets here. The area we are in is near Loyola University and the lake. However (isn’t there always a “however”), West Ridge and East Rogers Park are slowly turning into Thugopolis. Once upon a time, this area was a quite, peaceful middle-class neighborhood, but, since the razing of Cabrini Green, several of the slumlords signed up for the Section 8 housing plan. So, now we’re having a bit of trouble with gangs and drugs. Which is not good, but does have some entertainment value at times.
This why we are looking to move to the North Shore area. But, rents in Chicago are still relatively reasonable in most areas. However, I suspect that will change before too long.
I fully expect Thugopolis will rise up in many places as the government tries to “solve” the housing problem by making excess inventory into Section 8; this will allow the destruction of everyone’s quality of life - a bold new world for all.
Greetings and salutations, Grey. There’s a number of Chicagoans posting here. About every other day or so Ben posts about the Midwest and that usually contains some nuggets about Chicago - usually in the early afternoons.
As you can tell from my moniker I am just to the southeast of you a bit. My observations have been very similar to yours, and you appear to have good grasp on the severity of the condo situation here. You’re exactly right about the taxes on these newly constructed and converted condos. I too share the view that high taxes and assessments will crash this market cold. Many projects by me are dead in the water and prices are slowly starting to come down.
Chicago was a great city (born & raised) for workers and was very affordable…but this bubble is just attracting a bunch of goobers who clog our streets and run up our taxes/cost of living.
Rents are indeed cheap in Chicago if what our (grown & independent) offspring is paying is any indication. And said offspring hasn’t had a rent increase in almost five years. I think the landlord recognizes the value of quiet, responsible, reliable tenants.
Rents aren’t too bad in the city especially when you consider you don’t need a car and all its attendant hassles. I think the best values are in the closer in neighborhoods, in fact. The gold coast and lincoln park aren’t a whole lot more expensive than rogers park anymore, and you’re much closer to stuff.
I agree. I live in the Gold Coast and for the first few years assumed rents in other parts of the city were much lower.Not really.For the 5 minute commute it offers me , the Gold coast is a great deal.Also I dont need a car which saves me hundreds of dollars in any case.
Good to know there are other Chicagoans on the group.Maybe we should arrange a HBB get together in the new year.
More Chicagoans, yay! We need more Midwest bubble news.
Yes, rents are very reasonable. A guy in my building is trying to rent three units - good location, decent area - no takers and the rents are about $50-$100 lower than I would have guessed.
No way will those who bought condos over say $200k be able to carry them with rent here, no way. A friend recently sold a condo he had bought for $95k. His carrying costs were just north of $1,100 - top rent for the unit would have been $750. Even at that low price level it was a gator.
…recognizes the value of quiet, responsible, reliable tenants. –Smart landlords do. Some of these FBs trying to hang on however…
I officially hate it here now. I want to leave.
It being winter doesn’t help, does it?
Even living by the lake it is dreary. This is home for me, but quite honestly - why people come here and plop down hundreds upon hundreds of thousands for some condo is beyond me. All things considered, this is just another place - no better or no worse than anywhere else - unless of course one paid bubble prices.
It’s a decent place to have a career; the job base is good. It ain’t Manhattan, though, and everywhere else has better weather (summer here sucks too). It’s been hard for me to get attached to this place, and I think the only thing I’d miss is my barber.
Besides being the most corrupt city/county in the US, Chicago
Guess you have never been to Philly?
After 12 years of living here, nothing about city, county or state politics surprises me anymore. I think people who grow up here just accept it.
Rogers Park has been thugopolis as long as I’ve lived here.
I have visited Philly many times, but never lived there. I guess there is some small comfort in knowing we’re not the only ones living with corrupt officials.
What a sad, sad country.
Grey, you really are gray. You need some happy. I recommend a nice meal and a solid glass of the most promising red wine you can get your hands on.
RE: What a sad, sad country.
We are Wal-Mart Nation!
Sorry to say, but Louisiana has to be the most corrupt place in the US. The Daley machine, etc. has nothing on what history has shed light on in LA.
I’ve lived in South Louisiana for 15 years, except for the two years I spent working in the US House of Reps and then briefly in the White House.
I’m here to tell you that at least we in LA admit the “crooked” past of our leaders. The things I’ve been personally asked to do, by Members from BOTH parties makes LA’s corruption look Busch League.
FYI- the Great Depression was a blessing for LA. We had already been in a Depression for 30 years following the Great Flood of 1898. Happened again in 1927, but nothing much was lost since little had been rebuilt since 1898 (Katrina anyone?). So, if you were Huey P. Long in the 1930’s and the Fed Gov’t decided to start throwing around aid (finally), what would you have done?
This fact still floors me: In 1928, Louisiana had roughly 300 miles of paved roads, only 60 miles of which were maintained by the state. By 1932, the state had 5,000 miles of new paved and gravel roads. Four years later, there were 9,700 miles of new roads and 111 bridges, doubling the size of the state’s highway system…. That’s 9,400 miles of new roads in 6 years. Today, our “honest” leaders would be lucky to add an extra lane to 10 miles of Interstate in that same period.
…oops, 9,400 miles of paved road in 8 years.
If you want to know if there is life after death, come to Chicago (the city not the SMSA) and watch the dead rise, walk and vote.
Reporting from Oak Park–weird with the housing market. All the expensive condos/townhouses have collapsed in price, but the detached family house stuff is still flying high. Probably because all of it is in “historical districts”. The older refurbished condos don’t seem to be selling, although I don’t know whether that’s so much the price as the lack of parking…Rents here still high. One reason why I bought my present place–apt. complex was going for new improved interiors with new improved prices and I thought “screw this, I can get a mortgage for the same amount.” Which I did, 40% down,
Acquaintance of mine bought a gut-rehab at auction earlier this year; a place in Logan Square (have no idea where that is). Her winning bid was about half the ask, and the sellers tried to weasel out of it. She ended up getting the place, after lawyers were involved.
I’ve seen pics, and the inside bears no resemblance to any historical exterior that the building might have; may as well be a frame apartment anywhere in the US.
I live in Chicago and I pay $850 for a 2/1 apartment Old Irving. Great established neighborhood, street parking, near all forms of transportation…I love it here. My fiancee and I have dreams of someday owning a SFH somewhere on the NW side of Chicago - but there’s no way we’re going to buy in this crazy market. Nice SFH’s in Old Irving start at $600k and go up from there. Dilapidated bungalows are on the market for $450k and up. These dumps haven’t been updated in 30 years and they want $450k. What a joke. Albeit a cruel joke.
Every few weeks I read the Sunday Trib and ‘research’
the recent home sales posted for the Irving Park area. By research I mean review the property online, and do some googling of the buyers and sellings. Its amazing what people are still doing. I’ve notice 2 distinct patterns. The first is the single young people buying into the condo conversion or new construction…usually selling for $250k or more….80/20 or 80/15 loans. I don’t konw the terms but when a single guy with a foreign sounding name and no google history buys new construction for $300k I assume the loans aren’t the best of terms
The other group is the more established professionals buying the SFHs that start at $600k. What amazes me is that these people wil put down 10% or may 15% and finance the rest. They take out two mortgages for a combined 85% of the property price. These are upstanding folk in their 30’s or 40’s with consulting jobs, accountants, authors, insurance industry types…..They feel confident enough to take on $500k and more sized mortgages. That’s absolutely insane. How can I compete against this? This happens everyday in my neighborhood. They’re still willing to catch a falling knife with that type of leverage. Of course, property sales have slowed waaaaaaaaaaaaaaaaaaay down in the last year or so but the SFH’s that do sell are all like the above. Never do I see something sell with like 20% or more down. It’s insane.
Anyway, the fiancee and I make a decent buck….$125k or so before the student loans (gross a little more than $100k after including prepayments) and we decided a long time ago to wait this mortgage mess out. We know that we make about as much money in our professional jobs as these other goofs out there buying $650k houses with 15% down….but it must be killing them to afford those crazy mortgages. And they’re still selling…
Of topic though, there was an enormous McMansion built on spec, on Keeler Ave, right near Irving Park Road….It sat for a year or so until two Realtors ™ bought it in June 2007. For $1.7 million. Yeah, that’s the correct number. They moved in shortly afterwards.
Now goto the MLSNI and type in 60641 as the zip code…the most expensive house for sell in my zip code is $2.4 million….Yeah, you guessed it. The exact same McMansion the two Realtors ™ bought as a flip in JUNE 2007!! They’ve held the house for 6 months and they’re asking a $700k premium! What’s even funnier is that the house is about $1,000,000 more expensive than ANY OTHER HOME IN MY ZIP CODE!!! What a fricking joke! WHEN WILL THIS CRUEL JOKE END? PLEASE MAKE IT STOP!! I WANT A HOUSE I CAN AFFORD!!
“In August alone, more than 10,255 workers in New York State were laid off,”
I’m not great at math so I need a blackboard to do complicated problems. So lets get out the blackboard and multiply this story times every busy city in America.
Doing business in New York too costly
12/11/2007 7:16 PM
By: Web Staff
ALBANY, N.Y. — “The cost of running a business in New York is higher than almost every other state in the nation.
That’s according to a new study from the state Business Council. The report compared wages, electricity costs, commercial rent, and tax burdens.
The Business Council is lobbying the Legislature to change the tide by reducing taxes and spending.
Taxes, electricty costs cited in study
The cost of running a business in New York is higher than almost every other state in the nation.
Governor Eliot Spitzer says next year’s budget proposal won’t actually raise taxes, but will increase fees and close tax loopholes - to help compensate for the $4 billion deficit.
Those steps could end up costing businesses even more.”
*******
And in turn hurt CNY housing values even more. I couldn’t find the link but it was reported on the local cable news that Syracuse was particularly hard hit w/job losses in 2007.
And another shoe drops.
As far as commuting goes, I bought in Baltimore city, settled in June 2005 after talking the seller down to 109,000 from 160,000. I saw the handwriting on the wall as did he but prices in DC were still insane. I commute to downtown DC using the MARC train and it usually isn’t too terrible because at least I’m not stuck in traffic. It gives me time to read the news. Driving to DC though would be completely out of the question.
The Baltimore market is tanking as well but it didn’t soar as high so hopefully it won’t fall as far.
Mike B wrote…”it didn’t soar as high so hopefully it won’t fall as far”
I disagree completely. From 1997 to 2006, the Howard County townhouse I used to own grew from $130k to $395k. There is plenty of room for a hefty fall.
Agreed. Around 2001 to 2003 at the latest, one could get small, post-War ranchers for about $100K in many places. Now, those same places are slowing coming down off their high of $250K or over. Sorry, but my wages haven’t more than doubled in a under 5 years - how about anyone elses? We have a LONG way to fall, IMHO.
‘Around 2001 to 2003 at the latest, one could get small, post-War ranchers for about $100K in many places. Now, those same places are slowing coming down off their high of $250K or over.’
Think about that statement. The market drove the prices up from 100K to 250K. I heard a radio commentator this morning lament on how house prices were going for less than their market value. WTF?
I used to commute from Laurel to the Pentagon via MARC and METRO. It was pretty pricey, but I did get alot of reading done.
“Mark Goldstein, an economist for the Maryland Department of Planning, said it was likely that many Marylanders are keeping jobs here and migrating across state lines to take advantage of cheaper real estate prices in Pennsylvania and West Virginia. Real estate agents in neighboring states say Marylanders are crossing the border in their housing search.”
Well, that, and that MD is becoming a socialist hell hole complete with high taxes, high crime, poor schools and “gun control.” Many people see PA as the promised land (and it was - until Rendell came into office)…
Oh, oh - we’re also going to be a “super green state” soon, so our blessed leaders will probably be telling us how many compact flourescent lightbulbs we’re each allowed to have, how many miles we can drive a day, etc. Such fun! I thought we were supposed to defeat communism, not copy it! Duh!
The only places in MD I’ve seen are BWI and Annapolis. Daughter is in college there. Have done commute back and forth to BWI at various times and days and haven’t seen it nearly as bad as any commute in SoCal anytime of day, any day of the week. Are there stats that say that all the schools in the entire state are terrible? I had heard there are some outstanding schools there. Love historic district of Annapolis, but I wouldn’t want to commute much of anywhere. Still pretty expensive there, also and when I was there in November, they’re still building piles of condos.
Hey, Edgewater John. We like that area, too. I always get a chuckle while perusing the realty sites for property in that area…you know, the high-rises that are asking for $500 per month in assessments!
It’s like “Oh, $ 500 in assessments alone? Sign me up for that rip-off, please!”
Amazing. Now that the bubble has burst (but not finished deflating by a looooong way) it’s interesting to read and watch those who say, “I had nothing to do with it.” First up, Mr. Magoo (who should be arrested and charged with deception and fraud.) It wasn’t his fault. Next, the realtorwhores. It wasn’t their fault. Next, the mortgage brokers. It wasn’t their fault. Next, the banks. It wasn’t their fault. Next. The Financial Gangsters Of Wall Street. It wasn’t their fault. In fact, one of Wall Street’s Godfather’s said he is not going to take a bonus this year because he’s so upset. What a wonderful gesture……but don’t get too carried away with adoration, investors. He’ll make up for it next year and if he loses his CEO position, he’ll walk off with more money than everyone on this board COMBINED will make in 2 or 3 lifetimes.
Like every inmate in prison will tell you: I’m innocent.
Exactly. And the problem is that the really guilty parties will walk scott free because they have the right gov officials in their pocket. I’m sure some small fry will go to jail - the big boys never would have pulled this crap if they didn’t have their fall guys in place in case things went south.
The only way to change this Orwellian cycle is to get rid of the top crooks and their pol stooges for good. Of course how to actually accomplish that in a lasting way has stumped the middle class for millenia…
If a group of credible, non-looney, well-organized and well-trained militia men and women approached my husband and me and said “We’re going to take back this city/state/country from the criminals who run it and give it back to the people”, my husband and I would have only two questions:
“Where are our guns and where do we sign up?”
I know I sound looney at times and this will be one of them. I know I also believe that the time for retaking the country by violence has passed. They have the better weapons. My rifle just won’t stop a tank. Sorry to say. Also, too many lazy apathetic, I got mine, fat-a$$, drunk on entertainment, sheeple in this country to make effective change.
With that said, however, I posted already some things we can do. I also believe that while a major revolution will never occur, I do think that violence will be the spark that finally wakes up people in this country. No, not like Ruby Ridge or Wac(k)o. Someone is going to go after the wrong person/family in just the wrong place at the wrong time and that will light the match.
One that I think of, but w/o the violence is the guy in Nevada who paid is employees with gold. I will have to get the link, but basically he paid in gold coins and the goobermint said he hadn’t paid the proper taxes. Well, what was funny is that the goobermint wanted it both ways. Sure, the coin says it is only a dollar, but we want to treat it as an $800 coin for tax purposes. Well, the jury saw right through that double standard and acquitted the guy. I think he is still up for other charges.
Here is the link.
http://www.lvrj.com/news/9893062.html
Anyway, I know I have been rambling and ranting, but I have to believe as bad as the sheeple can be, that TPTB are going to push the wrong person at the wrong time and it will be the catalyst that finally wakes up this country. I have to buy that or what we are saying is that there is no hope. Things will just continue down this blatantly corrupt path until it is everyone for themselves.
FYI: These coins have a $50 face value, not $1. He escaped criminal charges and fines, but ultimately all parties involved had to pay taxes on the FMV of the coins.
Here’s a photo of the coin next to a Kruggerrand:
http://farm3.static.flickr.com/2083/1849025204_a71437be83_b.jpg
Krugerrands (from South Africa) have no face value. In theory, the “US Buffalo $50 gold coin” is legal tender in the US.
(They sell for a numismatic premium over Kruggerrands. The cheapest way to buy one oz of gold is a Kruggerrand.)
So, have revenue laws closed the loopholes on any possible barter us clever citizens could devise? That paper money and credit as an asset model thing looks suspect to a run of some sort. Perhaps the government is worried about people waking up and realizing they could institute a new currency if a quorum was reached. Imagine that, soldiers paid in gold and school teachers paid in food and gold and local town politicians paid with scrap waste metal.
“Where are our guns and where do we sign up?”
It’s a militia - you supply YOUR OWN guns. That’s the definition of a militia.
If you live in Chicago I’d presume that YOUR guns have been destroyed by your benefactors in city hall.
Yes, my dear, Chicago will not allow us to legally have guns, therefore, my fantasy militia would have to supply us with their legally obtained guns they have trafficked into the area.
Unless we move back to Tennessee. I think guns are pretty much standard issue there. Hehehehe.
Just to be clear where I stand (and I’m well armed already), we’re still living in a democracy (the republic crumbled long ago), the “people” don’t need violence to “take back” anything, all they have to do is learn to read and vote. If they can’t handle the current system how will they handle starting from scratch?
Oh, you can vote all right…but will it really count? Or with voter fraud become rampant. Oh, wait. It is.
WILL voter fraud become rampant…
sorry about the typo.
“America is at that awkward stage. It’s too late to work within the system, but too early to shoot the bastards.”
- Claire Wolfe, 101 Things to Do ‘Til the Revolution
Actually, if you want all this garbage to stop then stop buying into the system.
First, stop investing. I know that is hard, esp. for those that make a genuine living at it. However, if you stop giving these swindlers your 401(k) money then they will dry up.
Second, take your money out of the bank and lock it up in the safe at home.
Third, pay cash for EVERYTHING!
Fourth, and this is the biggie…stop shopping, except for necessities like food.
Fifth, live as close to work as possible.
Sixth, stop voting. Period!
Seventh, trash the Fed Res Board and the income tax as it is. Set up a 3-tier income system for individuals/families and companies. Set the tax rates based on straight income of say 75K, 500K, and anything over a million. I am amazed that in this country people even have to pay taxes when the make
50K a year and support a family of 6. Not my situation, so I don’t have a vested interest. Taxes should also be paid as you go, so after Dec. 31st, it is all done.
Eighth, force local, state, and fed goobermint to live within their means.
And lastly…
Become more community focused instead of global. Heck, it would be great to free the slave labor in China, but there is no way I can do it, esp. if I have problems in my own backyard that need attention first. Besides, larger is not always better. Heck, isn’t that we debate on this board regarding the federal government.
There are more, but I don’t want to hog the bandwith.
In short, my point is that if all the pols believe they can starve the beast, how about we starve them first. Remove yourself as mush as possible from the system. Play by their rules little as possible. The less ineraction, the better.
Starve them because they are already starving us.
Finally - someone with some common sense!
Dude, Afgani’s had crappy weapons but drove the Russians out, tanks and all. Iraqi’s are holding their own against the military so don’t use inferior weapons as an excuse to bail.
> Sixth, stop voting. Period!
But in Chicago, if you don’t vote someone else will do it for you.
Really, something less drastic would work
1. No more “TAX DEDUCTIONS”. Having the government try to “encourage” anything like home ownership with tax deductions always leads to inflated prices. (An aside! CA had tax credits for solar electric systems. I was able to buy my system cheaper in NV even w/o the tax break! Why? Because the CA dealers simply jacked up the prices).
2. No more “government backed” mortgages (or quasi-government backed).
3. Require any bank that gets any sort of Federal insurance, etc, not to issue mortgages w/o 20% down and a loan to income ration of no more than 3:1
(You’ll never see #1 and #3! Why? Because it will cause house prices to fall. And for most of America that’s all the “wealth” they have.)
But we don’t need a militia. We need a congress with BALLS.
“According to Challenger Gray CEO John Challenger, ‘Nobody knows what the extent is going to be. .. ‘This situation is unprecedented.’”
Go for throttle, unprecedented up
“Mark Goldstein, an economist for the Maryland Department of Planning,
will get a raise
As an observer of this mess, I love watching it unfold and watch the key players reactions. In a panic situation, such as a ship sinking like the “Titanic”, the rats who scurried around in the dark, sense that they could die and start turning on each other and biting other rats. The latest being Barclays. This particular “rat” is turning on a brother “rat”. Namely, Bears Sterns, and suing them. I wish I could look back and see how many times the CEO’s of these scumbag corporations played golf together, told each other what, “A wonderful wife you have,” even took business “vacation” trips together and sent cases of expensive wine or imported food to each other.
This is very O.T but a wonderful true example: About 40 years ago, I was involved in making a movie. The director had made friends with the producer. While the production crew were beavering away getting the production going, these 2 characters were going to lunch, dinner, spending time at the golf course together, etc. They took a trip to Paris (I was based in London) with their wives. At that time, the producer was the favorite of a Hollywood studio boss. From the director, all I heard was, “I have to tell you, Mike, Jack (talking about the producer) is such a wonderful person. It’s very rare you come upon someone you can have complete faith in.” From Jack (the producer), “I can see nothing but good coming out of this production. What a great team Ray (the director) we are. It’s almost like kismet that we got this deal done so quickly.”
Okay. With me so far?
Then, 2 weeks into pre-production, the studio head gets fired. Panic stations! Production collapsing fast! To cut a long story short, the whole deal fell apart. Everyone was terminated on the spot. So, the morning after the final blow came, I go to the empty production office and find the director clearing out his stuff. “Roy,” I said, “How are things going?” As he shoved papers into his briefcase, he turned and shook his head. “Not good. Called Hollywood. Couldn’t save it. It’s gone. Over. Time to move on.” I nodded and replied, “How’s Jack taking it.” He replied, “Who?” I said, “Jack. Y’know, Jack XXXX. The producer.” The director slammed his briefcase shut, turned and said, “Oh, fu*k him and the horse he rode in on. I’ve got my own problems.”
To this day, when I think of that episode, I start laughing. Especially at times like this when the multi-million dollar bonus CEO’s are all turning on each other. You gotta love human nature.
“We can chart our future clearly and wisely only when we know the path which has led to the present.”
Adlai E. Stevenson, Jr.
Supporter: You have the vote of all thinking people, Mr. Stevenson!
Mr. Stevenson: Yes ma’am, but I need a majority.
During a real estate mania in which borrowers are bidding up prices or double-escrowing purchase transactions ,it becomes even more important to challenge the appraisals . Market value is not based on short term speculative home purchases from liar borrowers that plan to flip to a greater fool .This sort of mad hatter buying was what drove up the prices and the appraisers ,lenders ,and builders ,did not screen these home purchases that were fraudulent on the loan applications for most part .
These frenzied investors should of been made to put 20 to 30% down and now they leave behind thousands of vacant homes going downhill .The builders created unstable developments in which these gamblers will end up not paying their homeowners fees or taxes ,leaving the real owner-occupied owners living in developments that are insolvent or never completed . How many agencies were closing their eyes ?
As far as I’m concerned ,the Builders and their “Special Lenders ‘ were the most fraudulent of the groups ,and I don’t see why they are getting a pass with all their fraudulent lending and marketing to investors . According to the planning department applications ,these builders were suppose to be meeting local needs of the community .Do I see any Senate investigations of the builders and their “special lenders “? No ,its all about poor victim borrowers that took on toxic loans . They all knew what they were doing and what the objective was .Flip Flip Flip ……I am insulted by bail-out talks without investigations on this fraudulent madness that builders reeked upon communities . And don’t tell me that builders and their special lenders were just going with the market . Fraud in lending is not just going with the market,and fraud its obtaining a unfair fraudulent advantage for the purpose of undeserved profits .These builder market makers can go to hell along with their greedy buyers .These greedy creeps have now made their fraud my problem ,as the market spinners try to make this a” National Housing Crisis” worthy of grants and bail-outs and the trashing of the dollar .
LMAO…Yup, It’s all “W’s” fault.
C’mon Raine’s, you can scapegoat better than that.
Blamin’ George is so passe.
Luv to see your legal bill when this is all over.
http://www.boston.com/business/globe/articles/2007/12/20/ex_ceo_blames_bush_for_scandal_at_fannie_mae
Plenty of blame to go around in this mess. Raines and Mr. Magoo and a lot of other people should be charged with criminal acts. However, I must agree with you about Bush (and I cannot stand the man and put the “mute” on when he appears on tv). He isn’t to blame. Actually, he’s too dumb to know what day it is but he’s simply following his own political agenda, dismantle any programs (many created by FDR who he hates) that might ease the burden of the working and middle class. He and his neo-con cohorts are determined to decimate the middle class and create 2 classes. The ultra rich like the CEO’s and Financial Gangsters Of Wall Street - and those who cannot collect $30 billion in bonus payouts or run corporations which suck money out of tax payers (like Cheney’s old company Haliburton) with no bid contracts. That means 99% of us. These no-bid government contractors can charge, and do charge, $10 for a gallon of gas. Another one is Bechtel. The company involved in the Boston freeway debacle. Grossly over budget. Paid for by the tax payer. In fact, we have to give him credit. His political agenda of crushing and destroying America’s middle class has been very successful during the course of his tenure.
Of course, if anyone is making over $500,000 a year, you are entitled to support Bush and his pals. If you’re NOT making over $500,000 a year and you support Bush and obviously have no conscience about the plight of others, you get a ticket to go straight into the idiot column.
RE: Another one is Bechtel. The company involved in the Boston freeway debacle. Grossly over budget. Paid for by the tax payer. In fact, we have to give him credit. His political agenda of crushing and destroying America’s middle class has been very successful during the course of his tenure.
It was the entrenched Beantown Democrats ala Billy Bulger & Co., with their legion of big time lawyers, suck-up’s, and cronies who scored from the Big Dig, not just Bechtel.
LMAO…and the thing leaks like a sieve.
Zero longevity to this POS.
We’re a long ways from the Hoover Dam and Brooklyn Bridge.
It’s hilarous watching ‘lil Bush pander to the middle-class with his foot shuffling “hecks” and “good folks” and ol’ time religion. What part of WASPy Kennebunkport, Maine don’t people get? Driving around on his faux ranch in Crawford, clearing brush??!!: All hat and no cattle. Vicente Fox said lil’ Bush was afraid of horses.
Raines sure looks like a crook to me, cooking the books in order to get a nice big bonus.
But as for the bubble it’s self; I don’t think you can totally acquit Bush from this problem. Remember his $400,000,000 downpayment fund? Don’t you think that his “ownership” vision put pressure on the GSE regulators to relax lending standards?
http://tinyurl.com/2duzgu
the deception continues.
There are 3 kind of lies. “Lies, Damm Lies and statisitcs ” Mark Twain
I went Christmas shopping two nights ago at the new Culpeper, VA Target. It was so quiet you could hear a pin drop. I found some good games and sports stuff I wanted for the kids cheaper than at Amazon.
I couldn’t stop grinning, though. On the way in a lady and her daughter came out and she wrinkled her nose and said “it smells like cow manure out here” and sure enough — it does!