Sales Fell More Steeply Than Usual In California
The Used House Salespeople report from California. “Home sales decreased 36.2 percent in November in California compared with the same period a year ago, while the median price of an existing home fell 11.9 percent, C.A.R. reported today. ‘While it is normal for sales to decline at this time of year, regional sales fell more steeply than usual because of the ongoing liquidity crunch and tighter underwriting standards,’ said C.A.R. President William E. Brown.”
“‘The large decreases in the statewide median price of the past few months have resulted from difficulties in obtaining jumbo loans, particularly in the upper and middle tiers of the market,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘Whether this trend will continue after the liquidity crunch has eased remains to be seen.’”
“C.A.R.’s Unsold Inventory Index for existing, single-family detached homes in November 2007 was 15.3 months, compared with 6.4 months (revised) for the same period a year ago. In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 13.9 percent, or 41 out of 295 cities and communities, showed an increase in their respective median home prices from a year ago.”
The Daily Bulletin. “Depending on your perspective, the California Association of Realtors’ November housing report had a little something for everyone. The bad news, of course, was for homeowners, who saw the value of their property decline, 14.3 percent in the Inland Empire.”
“The good news was for would-be buyers, who saw the median price of a home in the state fall below half a million dollars. The bad news is that it’s tough to get loans, particularly of the jumbo variety.”
“The good news is that there are plenty of homes on the market, unless you’re a seller, in which case that’s just more bad news.” “The San Bernardino-Riverside area median price fell to $344,140, with sales in the region off 43.2 percent from a year ago. The High Desert was even harder hit, with sales down 52.1 percent and the median price of a home down 21percent to $262,650.”
“Todd Tatum of Victorville-based American Housing Group said some new-home builders had been forced to make deep cuts in their asking prices. ‘That’s a bad position for them,’ he said. ‘Especially if you’ve sold the first phase of a development at one price and then you have to cut prices for the second phase.’”
The Daily News. “With the credit crunch eroding the real-estate market, the median price of a home in Los Angeles County and the rest of California plummeted a record 12 percent from a year earlier, a trade association said Friday.”
“In Los Angeles County, the state’s biggest market, the median price of a previously owned house dropped in November to $520,960 from $590,790 a year earlier, the report said. Sales fell 36.5 percent.”
“Robert Kleinhenz, the association’s deputy chief economist, attributed the price declines to potential buyers having trouble obtaining jumbo loans.”
“‘It’s very hard to figure out when that’s going to be resolved because it has to play out globally in financial markets around the world,’ he said of the credit crunch. ‘We’ll probably still see very weak sales here in California because of our reliance on jumbo loans.”
“In the High Desert, which includes the Antelope Valley, sales plunged 52 percent and the median price fell an annual 21 percent to $262,650.
“‘I don’t see much change in this trend. It’s not very good news,” said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘Right now the news is not encouraging. No wonder people are not out shopping.’”
“”In Ventura County, sales fell 55.3 percent and the median price slipped 6.1 percent to $623,510.”
The Ventura County Star. “Donna Bushno doesn’t have to sell her Ventura home, but after 35 years she wants to downsize. ‘It’s time to move on,’ she said.”
“She and her husband put their three-bedroom, two-bathroom house on the market in July for about $569,000. After 30 days, they cut the asking price to $549,500. After five months and no bids, they dropped their Realtor and are now trying to sell the house themselves.”
“While sellers watch their equity shrink, they’re looking for any way to improve their net, said Allen Bertke, an independent broker with Bertke Consulting Services in Ojai. ‘People are really rebelling against the 6 percent commission,’ he said.”
“This means more business for Bertke. The slow market still hurts, he said, noting that his business has dropped about 30 percent.”
“Bertke’s low prices have attracted a growing number of sellers, but he’s had to walk away from many potential clients who are unrealistic. “‘We are fighting the major problem in the market today, which is sellers’ denial of what the real market is,’ he said.”
“He estimated that 90 percent of homes on the market are overpriced, some by as much as 20 percent. ‘It’s taking sellers awhile to understand the new reality,’ he said.”
Inside Bay Area. “The Alameda County-Contra Costa County region lost 1,800 jobs in November, adjusted for seasonal changes. The setback comes on the heels of job losses in September and October.”
“All told, the East Bay has lost jobs for three months in a row. During that period, employers have erased a seasonally adjusted 4,200 jobs, according to the state’s Employment Development Department.”
“‘The job market is very dismal,’ said Robin Gardner, a Fremont resident who said he has been looking for work as an administrative assistant. ‘I average sending out about 50 resumes a day. This past month, I’ve gotten one interview per week, maybe. I won’t be enjoying this Christmas.’”
“Why is this happening? It was only a year ago that the East Bay was the economic leader of the Bay Area. But the residential real estate wreckage has engulfed at least a portion of the region’s economy and job market.”
“‘This has definitely affected the broader job market,’ said Michael Bernick, a Milken Institute Fellow who specializes in employment policy. ‘There have been significant layoffs in mortgage banking” in the East Bay.’”
“‘The numbers clearly indicate that the housing market has gone beyond just impacting construction and financial activities,’ said Jon Haveman, a principal economist with Beacon Economics. ‘The bursting of housing bubbles traditionally lead to recessions in the United States, and this is the housing bubble to beat all housing bubbles. We are not surprised at all that the economy is slowing down dramatically.’”
“Victoria, a San Ramon resident who asked that her last name not be used, said she has had few responses to her job postings on multiple Internet employment boards.”
“Until mid-2006, Victoria worked in an array of jobs in the housing finance and real estate industries. Her most recent stint was at World Savings, whose parent was taken over by Wachovia Corp.”
“‘I’m pretty open to any kind of job,’ Victoria said. ‘Real estate is not a good market any more. A bunch of companies are laying people off. I will definitely consider getting into a new field.’”
From ABC News. “Cesar Dias, who has been in real estate 18 years, is making sure that the foreclosed houses in his hometown of Stockton, Calif. are getting sold, in a quite unusual way. Dias leads the weekly ‘Repo Home Tour,’ where he fills two large, brightly colored buses with prospective buyers looking for houses with big price reductions.”
“There is almost an art to the way he makes the home-buying experience fun.”
“But if you ask Cesar Dias why he conjured up Repo HomeTours three months ago he’ll tell you it’s not about money, or profits, or exploiting the misfortune of others, but about saving neighborhoods in Stockton.”
“Dias believes he is providing a necessary service. ‘We have an abundance of properties,’ said Dias. ‘And banks have to sell, and we have to provide buyers.’”
“There was a housing construction boom partly fed by people who could not afford the expensive houses in San Francisco, 60 miles away. As more and more homes were being built, prices went down and homebuyers were finding homes they could afford, or so they thought.”
“Many homebuyers simply bought to turn a profit; heedless to the bust that would inevitably come as homeowners could no longer afford their mortgage payments.”
“Elissa and Jon Hernandez were on Dias’s tour this week. The Hernandez’s have been renting for years but believe they can finally afford to own a home, thanks to the decreased prices of the foreclosed homes in Stockton.”
“In fact, one of the houses displayed on the tour was a two-story, 2,600-square-foot house that was purchased for $504,000, but now the bank that owns it is only asking $285,000.”
“The Hernandez’s see it as an opportunity as well and refuse to apologize for buying a foreclosed home. ‘We get ourselves into positions and if we can’t get ourselves out, it’s our responsibility to do what we have to do,’ said Jon Hernandez.”
“The Hernandez’s have not committed yet to buying, but it seems like they still have a few things to learn about mortgages. When asked if they were planning to get an adjustable or fixed mortgage, Jon Hernandez admitted that ‘I personally don’t know the difference.’”
“And while the foreclosure tourists are certainly happy to be shopping for a bargain, one wonders what the neighbors think of the colorful road show home-buying circus. It doesn’t bother Stockton resident Don Bailey.”
“‘I don’t care who sells it, you know, just sell it,’ said Bailey.”
The Press Democrat. “There’s a sale on at Windsor Town Green Village, and it’s not the usual holiday season variety. For $11 million, you can buy about a third of downtown, touted in a real estate ad as ‘Windsor’s flagship live/work community acclaimed by the Sierra Club as one of the country’s best smart growth villages.’”
“The New York Times advertisement that began running last week is for property owned by Elvera Bragg, the 87-year-old partner in Town Green Village who is selling 24 commercial properties, along with some of the townhomes. The storefronts and condos also can be purchased individually.”
“Her granddaughter, Sylvia Bragg, said the asking price is ‘a deal.’”
“The Town Green Village has been cited as a shining example of redevelopment in a formerly blighted area of Windsor. It includes a mix of shops and restaurants on the ground floor with townhomes overhead. While the eateries generally have thrived, it’s been a struggle for some businesses, particularly the half-dozen that were run by Elvera Bragg. Right now there are about 10 closed storefronts in the village.”
“Town Manager Matt Mullan said…other cities also are experiencing leaner times. ‘Over the holidays I’ve been in downtown Santa Rosa, Petaluma and Sonoma,’ said Mullan. ‘There’s vacancies in every one of those downtowns.’”
“There are shops at the Town Green that specialize in items such as beads, needlepoint, lingerie, candles, children’s shoes and maps. But residents say it lacks the everyday necessities found on the other side of Highway 101.”
“Orrin Thiessen, the developer who worked with Windsor officials to build the Town Green Village, has acknowledged the Town Green suffered initially from a lack of chain stores to drive up foot traffic. But he said that is changing. Starbucks, for example, is opening in February in a prominent location.”
“Efforts are also under way to attract a grocery store.”
“He said there are about 150 townhomes and residences that are part of the Town Green. Bragg appears to own four of those townhomes that are for sale — with prices ranging from $316,000 to $399,000. Her real estate agents did not return calls seeking comment.”
“Some of the commercial units she is selling still have business tenants, including a cell phone store and candle store.”
“Hal Beck, the executive director of the Windsor Chamber of Commerce, said some of the failures around the Town Green resulted from business owners who did not have strong business plans. He said some of the shops, such as a kitchenware store, were designed more for tourists than locals.”
“‘This is a downtown. If a shop is going to make it, it has to have repeat business. A lot of these shops were not designed for that,’ he said.”
The timing of this CAR release is interesting. They usually report the same day as the NAR. But from the looks of when the press release hit the internet, I’d say it was mid-afternoon, on the Friday before Christmas. Hmm.
Some of you may remember this urban myth project showing up here before:
‘The Press Democrat. “The sluggish economy, a sharp drop in foot traffic and a pull-out by a major investor are all being blamed for the tough times facing the Town Green Village. It’s a setback for a fast-growing project that has literally transformed the face of downtown Windsor in a few short years.”
“Politicians, planners and business groups have hailed the project as a model of smart, mixed-use urban redevelopment. But ‘For Lease’ signs now litter the colorful, historically inspired storefronts, and more may be on the way.”
“‘I have been living this nightmare for 17 months,’ said Kathy Flinn, owner of Creative Wick, a create-your-own candle studio. ‘I’ve got $100,000 invested here. I can’t afford to walk away.’”
“The town, which has invested millions of in redevelopment funds in the area, encouraged rapid growth in an effort to quickly get new residents living there so the new businesses would thrive, said Debra Fudge, Windsor mayor pro-tem.”
“Orrin Thiessen, the developer and general partner of Town Green Village, said he’s built about 200 residential and commercial units in buildings along the Town Green since 2002. The first few years were fantastic, but he acknowledged the slow housing market and a recent decision by a key investor have limited his ability to extend much help to ailing retailers.”
“‘We’ve got a little bit of a double whammy going on right now,’ Thiessen said.”
“The slow housing market has hit his project harder than other developments because of the way the retail and the residential components are intermingled, he said.”
“In 2005, when Flinn was considering opening her business, she scouted out the area and thought it couldn’t miss. But Flinn hasn’t turned a profit in any of the 17 months she’s been in business. She blames a bad location and poor marketing efforts by the developers. She said there is nothing wrong with her core business model, which involves hosting parties where people pay about $12 to make their own candles.”
“The buildings are comprised of street-level shops with residential units upstairs. Neither are selling as well as they were two years ago, Thiessen said. ‘I have the buyers,’ Thiessen said. ‘I have a big list that have already picked out their condominiums, but they have to sell their homes first.’”
Maybe Kathy can team up with the other retard who opened-and closed a dog bisquit bakery in San Luis Obispo the other day. We all love candles and dogs, in fact I light a few for friends and give my furry friends their treats but as far as making money ? Lets all blame Bush, Pelosi and Reid and we’ll feel better.
“Donna Bushno doesn’t have to sell her Ventura home, but after 35 years she wants to downsize. ‘It’s time to move on,’ she said.”
I think ‘Bushno’ is a fantastic name! I’d vote for her…
Actually, in Portland, OR, organic dog food makers and dog bakeries are profitable. Look around for Castor & Pollux.
“The Hernandez’s see it as an opportunity as well and refuse to apologize for buying a foreclosed home. ‘We get ourselves into positions and if we can’t get ourselves out, it’s our responsibility to do what we have to do,’ said Jon Hernandez.”
As Michael Corleone said, “This is business, Sonny. It’s not personal.”
“‘I’m pretty open to any kind of job,’ Victoria said. ‘Real estate is not a good market any more. A bunch of companies are laying people off. I will definitely consider getting into a new field.’”
Porn?
“‘The job market is very dismal,’ said Robin Gardner, a Fremont resident who said he has been looking for work as an administrative assistant.
- Is’nt an ‘administrative assistant’ like a ’sales associate’ at ‘In & Out Burger?’
Not in silicon valley - he’ll make $76k.
and buy 4 houses 100% ltv
I always thought that “Administrative Assistant” was a euphemism for son-in-law in the new car business.
Got 10% down?
Good administrative assistants - I’ll be a troglodyte and call them ’secretaries’ - are worth their weight in gold. Good managers and professional staff will recognize that and respect them accordingly.
A good AA / secretary for a mid to senior level professional can earn upwards of 100K in major markets. I did such work for about 4 years. Made $70K. This was 10 years ago in San Fran. The work can be very interesting as well. Long hours, sometimes, but pleasant working conditions. When you call someone and say you’re calling from Mr. X’s office people (both in and outside the organization) jump through hoops. But you too, jump through hoops. That’s why you’re there. Lot’s of fringe benefits too, having contact with movers and shakers. For example free access to wonderful vacation houses all over the world. Mr. X would say where would you like to vactation ? He always knew someone who had a place there, and would let a responsible friend (me) use for a week.
Hard to get reservations for a hot restaurant or hard get theatre tickets, etc…No problem.
Hey I resent that.
I was an administrative assistant. It’s hard work. I did that type of work for 10 years. When I started having dreams of driving over the people I supported and then putting the car in reverse I knew it was time for a career change.
LMFAO!!!!!!
SFBayGal has it right. I don’t know WTF is going on when people make fun of Administrative Assistants. I am in tech and I tell every techie I know that they should go find a job as an Admin for a year or two. It would teach the typing skills, organizational skills, project skills and general admin skills that will serve them for the rest of their lives. These are qualities that so many American workers are lacking, especially in tech. Maybe people stay away from this job because it’s a job that is looked down upon by clueless people. That seems to be the case this afternoon. I sure hope you are all kidding. If not, I hope I get a chance to compete against you in the business world some day.
Thanks NYCityBoy,
Among the many other skills you listed, I also learned to be a babysitter and diplomat.
Administrative Assistants you have my upmost respect. I would promote you first before I would hire a some one from off the street.
Hey! You’re forgetting personal shopper, personal advisor (particularly if who you work for is single), remembering all their relatives birthdays, planning and organizing vacations, parties, trade shows…
Oh! And watering the plants!
with less admin job, and some jargons - project managers make more money and more pain for the rest..
admin assit. much tougher job than the PM..
I’m in tech as well at a large company. The CEO flew into nowheresville, was driving to some destination, got lost, was at a red light, called his AA while I was standing there, and asked her if he was supposed to go straight, turn left, or turn right. She had mapquest in standby and within a few seconds had him back on track. Worth her weight in gold she was. After a few years she took a management spot elsewhere in the company. That was 4 years ago. She’s now a VP. Don’t see that happen very often and no they were’nt shacking up.
I’ve worked for some very wealthy businessmen in my life. Want to know who ran the businesses? Thier administrative assistants (no, that wasn’t me).
The guys would have these huge, expansive and empty desks, often on personal calls or playing around on their new computers (always had “new” computers, but didn’t know how to operate them).
Outside thier offices, the AAs had multiple phones, each with multiple lines, multiple computers & office machines & they were ALWAYS multi-tasking and holding everything together.
These AAs were the most important people in the organization, IMHO, and if they were absent, all heck would break loose (surprisingly, you’d never know it when the executives were out of town).
A male secretary? That would be a tough sell to most businesses even in a good job market.
Not always, and not necessarily, in the Bay Area.
Porn is not a good business either. I heard that porn movie manufacurers are in slump because many free stuff are availabe on the internet.
yeah actually that’s true, free porn is killing the established (read: older aka vivid) companies
Beyond the hotel cable market, I can’t seee how they’re going to make any money in the future. DVD sales are worse every year.
Bailout for porn industry. I’d like to see those hearings.
bailout for porn? Why not? At least they didn`t borrow money they never intended to pay back.
A “money shot” for the rumpy-pumpy industries? I’d watch that for $0.25/minute…
LMAO!
“… I will definitely consider getting into a new field.’”
And some new positions.
“‘The large decreases in the statewide median price of the past few months have resulted from difficulties in obtaining jumbo loans, particularly in the upper and middle tiers of the market,’ said C.A.R. Chief Economist Leslie Appleton-Young. ‘Whether this trend will continue after the liquidity crunch has eased remains to be seen.’”
Yeah - let’s all pretend that the liquidity crunch is easing anytime soon.
Lesyliar Mc Applecakes gets it wrong again…..as usual
I wonder if she knows Debra Fudge.
I think they took home ec class together….both failed
“He estimated that 90 percent of homes on the market are overpriced, some by as much as 20 percent. ‘It’s taking sellers awhile to understand the new reality,’ he said.”
Nice to hear that from a realtor. Knife-catchers, take note.
I’ll buy when 90% of the homes on the market are undervalued by at least 20%.
I don’t know if he’s a member or not.
these numbers are just brutal. where’s the full release?
The full release is located in the underwear of these Realtors. I doubt you want to see it.
NYCBoy, Excellent humor !!!
LOL
The Ventura County Star. “Donna Bushno doesn’t have to sell her Ventura home, but after 35 years she wants to downsize. ‘It’s time to move on,’ she said.”
“She and her husband put their three-bedroom, two-bathroom house on the market in July for about $569,000. After 30 days, they cut the asking price to $549,500. After five months and no bids, they dropped their Realtor and are now trying to sell the house themselves.”
I call the BS flag on this one. Who downsized from a 3/2? If we can identify this property, I bet we’ll find a MEW trail with debt at 0.94*549,500 or ~$510k or so. Just hand the keys to the bank. You can’t afford the home anymore. After 35 years? You should be equity rich thinking about what little features you want to add for the golden years. Downside? BS.
Got popcorn?
Neil
Median home price down 12% in one year
The best part is that the media’s house prices are also down 12% in one year. How many of the REICster reporters bought into the bulls–t they were reporting? Bwahahaha.
I love this tidbit from the article:
“People are really rebelling against the 6 percent commission,” he said.
Ya think! People rebelled against travel agent commissions. Those who need/benefit from travel agents still use them. (I often use an agent for corporate travel, never for personal. Then again, I have never ‘abandoned’ a personal trip for a higher priority event…)
I think we’ll go towards a fee based system. Right now we’re at where sellers are rebelling. During this downturn, it will be buyers pushing to eliminate it. It will be really tough to pay that Realtor ™ office rent as sales, prices, and commission fractions drop. Cest la vie. Time to adapt. Good ‘value added’ Realtors ™ will survive. The other 800,000 (out of 1.3M)? Bwaa haa ha!
Got popcorn?
Neil
You people who rebel against the 6% commission just don’t seem to understand that when you sign with that agent, you’re getting an expert on the real estate market…
No, that’s not it.
…you’re getting someone who will ethnically, yet tenaciously represent and safeguard your interests in the buying or selling process…
OK, that’s not true either….
You’re getting research you can trust - just ask Suzanne.
OK, bad example, I admit.
You’re getting a plunging neckline! And a ride in a Lexus SUV! And someone who giggles at your jokes! Yeah, yeah, that’s the ticket. Now isn’t that worth every bit of 6%?!!!
Not so much….
What if I already have a Lexus SUV?
What if I already have a plunging neckline?
‘I call the BS flag on this one. Who downsized from a 3/2? If we can identify this property, I bet we’ll find a MEW trail ….’
Nice catch!
There are plenty of Alt A and A paper loans that are buried in the ‘MEW Pile’. A lot of these folks are folding and their not getting the press that they deserve.
These loans are going to be the Gasoline on the Fire.
And they act like victims - like someone done them wrong. They seem to ignore that they already got their money out of there precious home - they refied or HELOCed of however they did it, and got their equity early. In fact, they should be bragging. They were able to ride the bubble up, get a boatload of money tax free for doing nothing, and now they can just walk away and start their new lives - what are they complaining about - oh oops I forgot - they spent all their money already so now they don’t have the home edition of “Tap that ATM,” they have to leave their home, they have no money to start their new lives and their credit is shot. Yeah, that plan worked out real well.
I used to joke that before this was over, the FBs would be camping in tents by the tracks and the river at the Victorville Narrows. It may not be Victorville but the tents are starting to pop up and there will be many, many more to come before this is finished.
http://news.yahoo.com/s/nm/20071221/us_nm/usa_housing_social_dc
Just wait a few months. When the Realt-Whores (TM) move into the Ontario tent city, they will be encouraging the residents to flip campsites. Of course the Realt-Whores (TM) will get 6% commission on the sales, payable in cigarettes.
http://www.youtube.com/watch?v=lTb_BkLbI3o
Tent City? Do I get to be the first person to bring back this quote?
It’s a new paradigm, and everybody who doesn’t buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a 15,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
I’m with you on this one, Neil. I was reading this on my iPhone and thought the same thing. This doesn’t smell right.
Silly me, I was thinking they were just trying to cash out, but I’m sure you’re right, they already did and now they need to find a bagholder.
They lowered the price 20k in a month, then left it at that price for the next 5 months?
Sounds like they can’t afford to go any lower.
Hope they enjoyed the money while it lasted.
I don’t know…there’s more to downsizing than the size of the house. When my parents downsized, it was to move to a place without stairs and yardwork. The move may be prompted by mobility or health issues, which explains the price cuts.
Or maybe not.
“I call the BS flag on this one. Who downsized from a 3/2? ”
Actually it depends upon the sq footage. I have seen 3/2s that had living rooms, dining rooms, breakfast rooms, kitchens with eat-in bar (Good lord! How many places can you sit down to eat at one time?), and family room. That is a lot for 2 people and a lot to take care of as you get older.
It could also have a large yard that takes a LOT of work. (I know about yards - I have nearly 2500 sq feet in just perennial beds.)
It may require a lot of maintence if older. Think painting, roof repairs, windows needing caulked etc, and other repairs on an older home that can get expensive if you can no longer do them yourself and are on a fixed income.
It may have a stairs that they are starting to have trouble managing. After all they have had that house for 35 years. If they bought in their late 30 or this was the home they moved to when they had kids at home years ago, they can easily be at that age. (Hell, I have trouble with stairs in my mid-50s because of an orthopedic injury from sports. We went to a 1 story after my Service Dog just barely managed to save me from going head first down the flight of stairs after I had gotten about 1/4 of the way down.)
So yeah, downsizing would make sense.
How’s that dog doing?
Being a stellar guy at his job. Easy for him to catch me when I get dizzy from chronic pain - the beast is 29 inches at the shoulder and outweighs me by 18-20 lbs. (i’m 5′2 and 98 lbs.) His forelegs are bigger than my wrists and his chest is larger than mine. He blocked my fall on the stairsby pivoting his forequarter in front of me to stop the momentum and into me so I could grab him for balance.
He also wears backpacks to carry up to 20lbs of stufffor me, pulls a sled around the yard to move my 50 lb bags of gardening stuff, drags a huge duffle bag to move the laundry about and drag in the groceries.
Just one of those accomondation one has to make when paying the penalty for thinking was one was immortal and doing dangerous sports in one’s 20s & 30s.
What breed is he?
I told my girl friend I was thinking about downsizing…..but she told me she was happy with me just the way I am.
“‘I have been living this nightmare for 17 months,’ said Kathy Flinn, owner of Creative Wick, a create-your-own candle studio. ‘I’ve got $100,000 invested here. I can’t afford to walk away.’ In 2005, when Flinn was considering opening her business, she scouted out the area and thought it couldn’t miss. But Flinn hasn’t turned a profit in any of the 17 months she’s been in business. She blames a bad location and poor marketing efforts by the developers. She said there is nothing wrong with her core business model, which involves hosting parties where people pay about $12 to make their own candles.”
$100k in a ‘make your own candle for $12′ business.
Yep, nothing wrong with that model.
“Creative Wick” …………
Now that’s funny……..why do I think of something other than candles?
She’d have done better in the business youre thinking of.
You read my mind TX chick.
Maybe “plaster caster” would be a suitable career change for her.
Hanky panky,
Must get our mind out of the gutter and above the belt
Next: Aromatherapy products?
Must be a doctor’s wife.
‘Yep, nothing wrong with that model. ‘
- Had she of opened the ‘Bead’ store she would of been fine. There must be tens of hundreds of ‘Bead’ users for repeat business.
I live near Windsor Green and visit it occasionally….not even a well stocked newstand made it there, and that is very much a repeat business. The restaurants and the lone bar appear to be doing OK, but the retail shops would probably need about 10 x the foot traffic to be viable
What is it with women and this crap they’re always hawking to each other?
It seems like every week my wife is getting invites to some gathering where some housewife is trying to peddle Pampered Chef, scrapbooking, or some pyramid scheme product or bright shiny object that women just can’t live without - none of which is actually NECESSARY, and all of which is OVERPRICED. Maybe Scented Candle Lady’s business demise is sad, but part of an entirely necessary, Darwinian shakeout of entirely unnecessary enterprises.
And tough to be a woman who’s not into it, because we’re always getting invites and I think, oh feh, I’m supposed to go and yak too much and drink too much wine and loosen up and spend too much..last time I ordered some stupid kitchen pottery thing that was arrived cracked…
“Had she of opened the ‘Bead’ store she would of been fine.”
Or even a bee business.
George, Sr.: How do you make money from it?
GOB: I don’t know. Honey. Or just as gifts.
Lucille: Who’d want a bee as a gift?
yay for the Arrested Development reference!
I was thinking the same thing. How can you even spend 100k on that?!? My best guess is that’s including all the money she’s thrown down a rat hole paying rent/employees/utilities for the last 17 months.
Don’t worry, it’s all heloc money that’ll never be reapaid anyhow. She’ll be just fine.
Ho ho ho
Look..Here comes Santa in his sled with 8 tiny raindeer for Christmas.
Ooops!..It’s the Repo-Man with the Sheriff Deputies.
DUCK EVERYBODY
“100k in a ‘make your own candle for $12′ business. ”
When the economy goes kaput all of a sudden all these oddball business ‘ventures” spring up out of the woodwork. Suddenly unemployed /unemployable/aging boomers, or anyone for that matter, launching a small fledging business. The ones I like are dog/poodle/pet grooming businesses, often operated out of vans & wooden cab pickups. Or the on the-edge layed off/underemployed trade worker driving around with a cheap ‘handyman’ sign on a dumpy pickup . Or the 20 year employee in a large corp, who gets layed off, decides to invest in an ice cream wafer cone franchise or other faddish franchise gimmick. Also now see lots of suddenly unemployed imigrant Hispanic contract workers suddenly doing lawn cutting jobs .
“She blames a bad location and poor marketing efforts by the developers.”
Can’t she just launch it herself without help from the ‘developers’ or franchisors(?). Often the franchisors simply sell these concepts and generate fat up-front fees for business concepts which are often ill-thought out or the latest faddish trends which have no chance of flourishing in a tough economic climate ,or as she states may be a lousy location.
Location for business siting is important, as well as the current climate for doing business. Attempting to launch a small fast food startup business at onset of a recession is foolish, unless U can run in the red, live inside your shop , and eat red beans and rice for two years.
The problem with most franchises and small business ideas like the candle or bead shop is that you are essentially buying yourself a low income job with long hours and no benefits.
Funny. My friend’s dad invested in a ice cream franchise. Went belly up
IMO she got too fired up on this business…..so to speak….when the economy goes bad….the first thing people do is eliminate unnecessary items like candles….and instead max out their fire insurance coverage and……hmmmmmmm!
LOL! Looks like this lady has a built-in ‘escape hatch!!!!’
She’s never heard of Mr. Edison and his revolutionary invention.
She blames a bad location and…
And whose fault is that?
Jumbo loans?????????
I’m sure all the big banks and insurance companies will go running back into SIV bonds and CDOs again….
Maybe in 30 years when the next generation forgets about this bubble and it’s different again.
The sad thing is you are 100 % right.
In 30 years the next generation will indeed have forgotten what transpired here. And then a new batch of greedy young FB’s will be ripe again for the picking.
Just like some kind of 30 year locust plague of some sort. And they will be in their mid to late 20’s and think it is different this time.
You buy furniture. You tell yourself, this is the last sofa I will ever need in my life. Buy the sofa, then for a couple years you’re satisfied that no matter what goes wrong, at least you’ve got your sofa issue handled. Then the right set of dishes. Then the perfect bed. The drapes. The rug. Then you’re trapped in your lovely nest, and the things you used to own, now they own you.
All a gun does is focus an explosion in one direction. You have a class of young strong men and women, and they want to give their lives to something. Advertising has these people chasing cars and clothes they don’t need. Generations have been working in jobs they hate, just so they can buy what they don’t really need.
You’re not your job. You’re not how much money you have in the bank. You’re not the car you drive. You’re not the contents of your wallet. You’re not your f..king khakis. You’re the all-singing, all-dancing crap of the world.
We’re the middle children of history…. no purpose or place. We have no Great War, no Great Depression. Our great war is a spiritual war. Our great depression is our lives.
Fight Club
Very Thoreau of you DLB, and yes, yes, yes, we’re at the tail end of a 500 year adolescence and we need either to grow up and move beyond self-indulgence or accept our doom. Too few people are making concrete connections between global warming/meaningless wars/political corruption and our culture’s increasingly manic drive for instant gratifications of the most superficial nature. Ever the optimist, I do sense a slow shift in values. (Case in point: at a recent holiday gift exchange, the hottest item was a valuepak of fluorescent lightbulbs!)
Fight Club
Don’t talk about Fight Club.
“The good news is that there are plenty of homes on the market, unless you’re a seller, in which case that’s just more bad news.”
This is what is called a zero-sum game. On the way up GFs could be convinced it was win win. But, now it is becoming increasingly obvious there will be definite losers. If sellers think it sucks now, just wait until the only buyers left explicitly realize it is a zero-sum game (like me), and want to make damn sure they don’t get screwed. I predict lots of negative energy. . . and low balling.
Let’s not forget, the low FICO, easy to excited/intimidate/FUD buyer cannot qualify… soon. I look at broker outpost and still see enough of the suicide loans to know we have a bit to go there. But we’re on the right path.
Think of how many sellers are now competing for those few jumbo qualified buyers who actually have a 15% (or more) down payment? Now take that a step forward when the requirement is a 25% down payment (due to a declining market and the lack of mortgage insurers).
Don’t worry, the down payment will be the same in nominal dollars. 
As more bad news for sellers. 2009 is the year of the big price drops.
Got popcorn?
Neil
Saw in the WSJ (last week?) that the lenders who have the best rates on jumbos want:
(1) 20% down - minimum, and
(2) cash reserves equal to 3 years of mortgage, taxes and insurance.
20% will be tough for most buyers but the reserve requirement is a real killer!
” Lenders that make the largest loans and offer the best rates to borrowers seeking jumbo mortgages want borrowers to show not only a good credit score but also enough reserves to cover as much as three years of mortgage payments and carrying costs, says Melissa Cohn, a mortgage broker in New York. Borrowers taking out interest-only loans are being qualified based on their ability to make the full payment once the interest-only period ends and not just the lower initial payment, she says.”
http://online.wsj.com/article/SB119733436109620199.html
‘cash reserves equal to 3 years of mortgage, taxes and insurance.’
That would easily be another 20% I would believe. Can you see cooperatives sprouting up more in the future for affordable housing? Not only is money getting harder to come by, but buyers have been borrowed and deflowered from the future. Do tent cities cut it as co-ops?
Man I just heard that 3 years of mortgage requirement on the radio and couldn’t believe it! That’s incredible!
Good thing I won’t be trying for a jumbo loan
In a state where the median price is over 500k, those rules are really going to limit the buying pool.
To about 2 dozen people.
Wow! That’s a huge deal. I was being pretty cocky about buying, but if its 20% down and 3 years (basically, as others noted, another 20%), they I’m locked out.
For about six more months.
Oh… this is a popcorn moment. I’ll have to listen for these ads.
Neil
That’s all well and good and will of course result in a safer loan portfolio, but just how many loans are they going to be able to make with those req’ts? Where is their profit going to come from?
I call BS on all of these new standards - just wait until the regional VP reports that his branches made 3 loans in the last quarter - we’ll see how long they keep these ’standards’. It’s ridiculous to try and switch overnight from giving liar loans to 20% + 3 yrs reserves.
Except, who’s going to fund the loans? Investors are all but scared off from financing them, and most banks don’t have much money, so it’s either eat the requirements or stop lending entirely.
They’ll have no problem making these loans if prices drop to such a point that people can afford to buy under these conditions.
Personally, I’d love to see RE prices move so low that people could have a life outside of paying for shelter. Beautiful!
“But if you ask Cesar Dias why he conjured up Repo HomeTours three months ago he’ll tell you it’s not about money, or profits, or exploiting the misfortune of others, but about saving neighborhoods in Stockton.”
Another “Good Samariton” parable?
As is often said,” Anytime anyone tells you it’s not about the money you can be sure that it is all about the money.
“The San Bernardino-Riverside area median price fell to $344,140, with sales in the region off 43.2 percent from a year ago. The High Desert was even harder hit, with sales down 52.1 percent and the median price of a home down 21percent to $262,650.”
- If you know anything about the Inland Empire the real wages would probably support homes in the 150k range. The I.E. is going to be ground zero for CA forclosures.
I.E. is dead. My ex-girlfirend bought a new house in Murrieta in Aug. 05 for $500K (I told her do not do it, she did not listen). I checked redfin.com last week and saw similar plan house in her street is for $380K and still not sold.
WHOA did you ever dodge that spendthrift of a GF……
Way to go!
“If you know anything about the Inland Empire the real wages would probably support homes in the 150k range. The I.E. is going to be ground zero for CA forclosures. ”
Real household income in San Berdoo county, the poorer half of the IE , probably barely exceeds $40,000. San berdoo cty also includes the entire hi desert region of Victor valley(Victorville, hesperia, lucerne valley, apple valley,adelanto, Mohave,ect).
This entire region has absolutely no hi-income sectors, nada , zero.zip. SB is the poorest County with the highest welfare rolls and a large population of ex lA gangstas, welfare section 8 ’s, and all other assorts outscourings and dregs displaced from out of the LA/ OC coastal metros. large areas of inner SB metro are on par with the most hideous Scentral LA cellpools. Tons of illegals and their gang-gangin offspring in SB. Yes, homes should be priced no more than $150,000 in any part of SB cty and thats where they will trend down to.
What a waste of former pristine Citrus grove and verdant farm pastureage given over to ratted ghettos and mass-produced cheaply- built stucco tracts .
I agree…..these high prices could not be supported by the history and mentality of the IE…..they will continue to ‘take down’ the prices until they are where the majority of IE residents are comfortable with….kinda like ‘we don’t need your stinkin high prices and Mc Mansions’…..right on IE’ens…..the wild west lives on.
My last 9 months in SoCal was spend working a contract is downtown San Bernardino in 2002. The housing bubble waswell under way elsewhere by then - but you could still get bet up 1940’s SFR’s in the city for $60,000. San Bernardino is like Erie or Buffalo, (only hot and dry and without without a lake.) No high income job growth at all, and the jobs are manufacturing or warehouse/trucking related. It is VERY ghetto.
This is amusing. Lots of California houses here
http://tackychristmasyards.com/
OMG: Two of Santa’s Reindeer, shot and hung from a tree, blood oozing, rendered in white holiday lights. Stay away from that house…
That reminds me of the time years ago when my department at work entered the company Christmas decorating contest.
Our theme? “The Day After Christmas”, complete with Santa peeing in the WC, and Rudolph roasting on a spit.
As automation engineers we really did it up right.
New Motto for 08:
How do you sell a $600,000 McMansion in California?
Answer: Start by asking $1.2 million dollars! haaaa
As the last Elvis said: Merrrry Cchristmas everyone!
I read that too fast and thought I saw Merry McChristmas. LOL.
–
Decline from the peak for the 20 regions in CAR report (SFH):
Median -19.6
Average -18.5
CA median decline from peak in 18.2%. Approx. trillion dollars of “wealth” already wiped out!
Jas
Yep, no deflation here folks, move it along.
Paul Kasriel at his best.
http://www.safehaven.com/article-9051.htm
Did anyone see this article on Yahoo!s front page: Tent city in suburbs is cost of home crisis.
The long article then goes on to say its just a matter of time before the folks in foreclosure end up in tent city………..
Why? Who else are the new owners of the foreclosed homes going to rent to? Or a renter buys the house to live in and frees up a rental. Everyone else is already living somewhere, right?
“The good news was for would-be buyers, who saw the median price of a home in the state fall below half a million dollars. The bad news is that it’s tough to get loans, particularly of the jumbo variety.”
It’s bad news for the sellers that loans are hard to get. It’s good news for the buyers - i.e. people who can get a loan, or don’t need one. Because it means even lower prices.
Or a renter buys the house to live in and frees up a rental.
Prices are going to have to fall a lot more before renters in any significant numbers are going to even think about buying a home.
Actually that article was VERY misleading.
1/2 way done the writer admits that NO ONE in the tent city had lost their house to foreclosure.
The one individual living there who was interviewed said that he was disabled, unable to work and getting by on Social Security and because of the cost of housing, could not afford the rent.
Frankly, the headline was a LIE.
It should have been captioned “Still High Cost of Housing Leaves People Homeless -Including the Disabled.”
Tent city? Do I get to be the first person to bring back this quote?
It’s a new paradigm, and everybody who doesn’t buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.
Renters, and anybody born in a future generation, will not be able to afford a 15,000,000 starter home in 15 years. They will live in tent cities, and Hondas.
This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.
“He estimated that 90 percent of homes on the market are overpriced, some by as much as 20 percent. ‘It’s taking sellers awhile to understand the new reality,’ he said.”
MAYBE 90% OF THE HOMES ON THE MARKET HAVE MORTGAGES HIGHER THAN CURRENT MARKET VALUE?
Simply amazing, as prices continue to fall, more homes drop under water. As more houses are under water, more forclosures. More foreclosures, more distressed inventory. More distressed inventory, more downward pricing pressure on houses.
Hey, weren’t we just here?
but didnt we hit bottom last month?
but didnt we hit bottom last month?
Thats right! (Until next months bottom)
OVERPRICED BY 20%????????????????????
Do you think that is the 20% they should have put down?
WHO THE F*^k ARE BANKS GOING TO LOAN $$$$$$$$$ TO RIGHT NOW????????
Builders, land developers, shopping center owners, condo builders………….how the hell are banks going to make any money?
Private equity deals?
How about to other banks? Can they keep loaning money to each other in ever increasing amounts at sequentially higher rates? Isn’t that the period we just came out of?
IE may be gaining and passing FL
property decline, 14.3 percent in the Inland Empire.”
Met someone from the IE 3 days ago. They said everything would be better by spring. I didn’t ask what year!!!!!
“‘I don’t care who sells it, you know, just sell it,’ said Bailey.”
Just stop the wreckage. Get rid of the realtors and the signs.
Hey Bailey we are having a housing recession and its not going to “just sell” until prices go to all the way back to 1997/1998.
This Is the Sound of a Bubble Bursting:
http://www.nytimes.com/2007/12/23/business/23house.html
But Mr. Jarrett (A Realtor®)hasn’t closed a deal in three months. He is on track to earn about $50,000 for the year, he said. Yet he needs $17,000 a month just to pay the mortgages, insurance, taxes and utility bills on his four properties — all worth less than half what he owes. Rental income brings in only about $3,500 a month.
Mr. Jarrett has not paid the mortgage on two of his properties in six months and is behind on the others as well, he says. His goal is to sell everything, move into a rental and start over.
He is supplementing his income by selling MonaVie, a nutritional juice that retails for $45 a bottle. He recently dropped health insurance for his family, saving about $680 a month. He is applying for a state-subsidized health plan that would cover his 9-year-old daughter. “I’m in survival mode,” he says.
Bang the drum slowly…………….
Play taps….selling $45/bottle nutritional juice isn’t going to pay the bills. (unless the stuff contains crack cocaine)
“The Hernandez’s see it as an opportunity as well and refuse to apologize for buying a foreclosed home. ‘We get ourselves into positions and if we can’t get ourselves out, it’s our responsibility to do what we have to do,’ said Jon Hernandez.”
“The Hernandez’s have not committed yet to buying, but it seems like they still have a few things to learn about mortgages. When asked if they were planning to get an adjustable or fixed mortgage, Jon Hernandez admitted that ‘I personally don’t know the difference.’”
Uh oh! If these folks are representative, then we’re poised to keep repeating the housing bubble/bust cycle over and over again!
(Hint to the Hernandezes: GET THE *FIXED* MORTGAGE!)
A little OT but did anybody read in the paper (LA/OC area) that the Attorney General for Huntington Beach just got an unscheduled raise of 11%, only 3 weeks after she filed for bankruptcy? Her salary was raised from about $180k to about $200k.
She was quoted saying she was trying to have at least $36k in credit card debt discharged, though she said she planned on making good on her $60k in student loans. She cited her mortgage costs in her BK filing, too. Well, sell the house you freaking whiner!
What kind of lying whores are we here in America? Lying, scheming, cheating, filthy whores! She makes a shitload of money and she’s going to discharge her debts. Just to spice it up, she makes sure her fat raise comes AFTER she files for BK, so that the situation looks slightly more dire than it really is when the judge looks at it.
Friggin responsibility got tossed out the window years ago, I’m afraid.
Huntington Beach would have a City Attorney (or Assistant City Attorney) and *not* an Attorney General - they are for an entire State (ex.: Jerry Brown is the Attorney General for the State of California). Not a District Attorney either - they are for the counties.
She must be a lousy lawyer (City Attorney): student loans cannot be discharged in Bankruptcy Court and with her salary, the credit cards would not be discharged either. She must have a toxic loan. As H_a_L posted, she should just short the house (which is probably the real reason for the Bankruptcy).
~Misstrial