The Adjustment Has Been Steep In California
The Union Tribune reports from California. “Homeowners desperately trying to save their dwellings from foreclosure in the subprime lending crisis say they are being led to a series of wrong turns, dead ends and blind alleys as they seek relief from lenders. ‘Sometimes it takes 45 minutes to an hour just to get to the right person’ on the phone, said Adeline Enriquez of the nonprofit Community HousingWorks. ‘They put on the music. They disconnect the phone call. I mean it is a mess.’”
“‘The governor and the president are putting out information, but that definitely hasn’t trickled down to ground zero,’ said Ed Smith Jr., VP of governmental affairs and industry relations for the California Association of Mortgage Brokers. ‘The feedback we get is (borrowers) go through the voice-mail rigmarole. The first person they talk to generally isn’t someone who is in a position to make a decision. The customers get put into voice-mail hell.’”
“In Chula Vista, Alex Rodriguez needs to modify the terms of his adjustable-rate mortgage before he loses the condominium he shares with his wife and two children. His payments recently jumped from $2,000 to $2,672, well beyond what the family can afford.”
“‘How do I try to save this property if they won’t work with me?’ Rodriguez said. ‘No one can refinance me because there is hardly any equity. All the doors are closed.’”
“To make ends meet, Rodriguez holds two jobs. After eight hours in the shipping department of a pharmaceutical company, he works six to seven hours on a loading dock. ‘It doesn’t seem like the effort is paying off,’ he said.”
From CBS News. “Ernesto Ramos is a real estate agent, but he couldn’t have picked a worse time to hang a for sale sign on his own home. ‘I decide to put the house on the market, but unfortunately we haven’t been able to sell the property, you know, here we are still,’ he says.”
“Ramos lives in Paramount, Calif., a working class community about 15 miles south of Los Angeles. Home sales there have all but stopped.”
“In the third quarter of this year, only 30 homes changed hands, down from 134 homes the previous year. That’s a 78 percent drop, the largest in the country.”
“Gary Endo has a real estate office in Paramount, but he will not accept new clients here because homes just aren’t moving. ‘A lot of the things on the market right now is fear. A lot of the buyers are sitting on the sidelines waiting to see what happens,’ he explains.”
“The problem for places like Paramount has been building for years. Home prices rocketed far beyond what a middle-class family could afford. For example, in early 2003 a home in Paramount cost around $200,000. Last year, a typical house sold for almost a half a million dollars.”
“But as prices dropped, many buyers were left holding a loan that far exceeds the home’s value. They are left in a bind.”
“‘It’s not easy to lower the price of your home, because if you only have 10 percent equity in the home and you lower it 10 percent, that may be all your equity,’ explains Delores Conway from the USC Lusk Center For Real Estate.”
The Record Searchlight. “Blame the slumping housing market for the delay in getting Big Wheels rolling. That’s the story from Michael Dastrup, who bought the iconic Shingletown restaurant, in 2004, about six months before a May 2005 fire torched his investment.”
“‘I am very real estate rich and cash poor,’ Dastrup said.”
“Dastrup has been trying to sell his two homes in Shingletown for nearly two years. The homes are listed for $450,000 and $285,000. Dastrup, who says he owns the houses outright, needs the sales profits to put 50 percent down on a construction loan.”
“But Dastrup doesn’t know how much longer he can wait. ‘I just hate to give up on anything I do,’ he said.”
The Bakersfield Californian. “David Crisp and Carl Cole, the image-makers of Bakersfield’s bygone real estate boom, ended the year deep in a quagmire of home loan defaults, allegations of deceptive borrowing practices, civil lawsuits and an ongoing FBI investigation.”
“Although Cole left the now-defunct Crisp & Cole Real Estate agency in 2006, the pair were still talking up ambitious deals at the year’s start.”
“By July, CSUB had nixed its condo tower negotiations with Cole and Crisp.”
“Later that month, tenants in homes in the North Country Meadows subdivision said they were in a lease-to-buy program run by Crisp & Cole Real Estate. Some had no idea the homes they hoped to own were in default until contacted by reporters.”
“As of the first week in December, at least 105 defaulted and foreclosed properties are linked to associates of the former Crisp & Cole companies, according to an ongoing Californian tally.”
“More than $64.6 million was borrowed against the homes, according to The Californian’s analysis of county filings.”
“The Crisp & Cole office is gone today, replaced by a real estate office specializing in bank-owned properties.”
The Modesto Bee. “The housing market is bad throughout California, but apparently it’s worst in Stanislaus County. Stanislaus’ median home sales price plunged 23 percent this November compared with last November, according to DataQuick.”
“Homes in Stanislaus sold for a median $285,000 last month, which was about what they were going for in August 2004. Median prices peaked at $396,000 in December 2005, but they’ve been declining since.”
“Only 392 homes sold throughout Stanislaus last month, 40 percent fewer than during November 2006. There also were more properties lost to foreclosure — 419 — than were sold by traditional means last month.”
“San Joaquin median sales prices dropped to $329,500 in November from a year ago, a 21.7 percent decline. Sales volume was down 34 percent.”
“Merced’s median sales price was $274,000 in November, which was down 16.8 percent compared with the previous year. Prices were even lower in October this year, however, when they hit $260,000. Sales volume was down 31.9 percent this November compared to last.”
The Daily News. “Let’s dub 2008 the ‘Year of the Home Buying Opportunity.’ That’s my glass-half-full take on what’s going to happen with the residential real estate market.”
“But the extent of the opportunity will materialize over time.”
“DataQuick noted that the median price across the Southern California region stretching from Ventura to San Diego fell a record 10.3 percent from a year earlier, to $435,000. (DataQuick’s stats include new and previously owned houses and condominiums.)”
“The price drop was bigger - 12 percent across California and in Los Angeles County - in the state association’s report, which focused just on previously owned single-family houses. Both reports noted that prices have dropped to early 2005 levels.”
“Robert Kleinhenz, the association’s deputy chief economist, recalled that during the market slump of the 1990s, the biggest price decline statewide was 7.2 percent in May 1993. Los Angeles County’s biggest drop was 11.6 percent in March 1993.”
“‘This is truly unique because it happened so fast and the (price) adjustment has been so steep,’ Kleinhenz said.”
“The ‘Home Buying Opportunity,’ or HBO, has certainly improved since April, when California’s median house price increased an annual 6.2 percent to a record $597,640. By last month, it had fallen $109,000, a drop of 18 percent.”
“So far there is little inclination among the nation’s legislators to help California. And the mortgage brokers also joined the ranks of prognosticators who don’t think that the market will improve until 2009.”
“‘There is going to be a lot of wreckage, but hopefully there will be some opportunity for people, and I think that will be a benefit,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘This is a very fascinating situation to watch.’”
“‘The governor and the president are putting out information, but that definitely hasn’t trickled down to ground zero”
Holiday message from the Governator: I voud like to vish all of you a happy holidays, housing bubbles, and this, that, and the other. I know some of you don’t like me for some of the things I say and do……heck…..some of you can’t even understand vat I am saying……vit my english as a second language and such. I am saving my christmas present for you until january…..when I vil announce one mucho grande (like my spanish touch?) horrific 14 billion budget crisis in cally. Hahaha….hohoho! To cut costs I vil release the top 30,000 inmates into your neighborhoods and cut funding for all the stuff that gets you real upset and raises your blood pressure…..the usual laundry list of fire, police, schools and such, that I got from previous politicians……it vorks….this vay…. I kept my promise not to raise taxes……then…..vith all the girlie man screaming and boo hooing and such…..you vil be begging me to increase your taxes to save your precious cally. Like GWB said…..I have a plan, not ‘I’ll be back, he can’t come back……last term and such,hehehehe. Get ready to hock all your presents for the good of all cally. And about my mucho expensive health, emissions, green and global warming plans?….a tax is tax is a tax…hehehehe. Look for me in the oval office soon. This cally job is for losers.
Brilliant. And sadly true.
Before moving to San Diego, I spent most of my life in Illinois and Texas, two states not exactly legendary for their commitment to clean, responsible government. That said, the degree of corruption at all level of CA government is simply breathtaking.
The worst part about it is that it’s not the type of corruption where you get multiple Playboy bunnies in a hot tub (aka Charlie Wilson) or grease a few palms to get things done (Chicago style!); it’s much more the bureaucratic, statist type of corruption that eventually caused the collapse of the Soviet Union, with a dash of a Mexican-style ruling class to give it a Third-World flavor.
Carrying that Soviet Union analogy a bit further, one should also include we have our own version of “Pravda” (aka, the San Diego Union Tribune), necessary for such a massive degree of corruption.
As it is, San Diego must hold bake sales to procure a 2nd fire-fighting helicopter…something of an important issue, given the recent fires that literally burned us out from the backcountry to the coast.
We’ve also been reduced to begging, as in ‘buddy can you spare a bond’, for routine maintenance of infrastructure. Of course, we have to beg for money, since Wall Street has locked San Diego out of the bond market for years, due to our fanciful accounting of yearly budgets. It was, after all, the Wall Street Journal that called San Diego “Enron-by-the-Bay”.
We have corporate Pravda
Media consolidation continues to be a priority of the current gov. FCC pushing to relax ownership rules again. America goes shopping. How long until they want to control blogs like this.
San Diego - Just get rid of the 25% of employees you don’t need. Reduce the bloated retirement plans and cut salaries accross the board by 15%. Zingo! Problem solved. If the SEIU complains, Tell them to ———.
Just look at California freeways, full of trash, like a third world country. It shows the don’t care, selfish, corrupted, arrogant attitude of Californians.
Ken Best:
As a 3rd generation native Californian, I can assure you that all of us natives are *not* selfish, corrupted, or arrogant nor do we trash our freeways. Nor are all of our freeways “full of trash.”
The freeway sections that are littered are in areas that have been/are populated by illegals and other economically challenged populations that are determined to bring everyone else down to their low level.
Further, sections of the 57 and 91 freeways are littered due to construction worker’s styro cups and drive-through junk food containers flying out of the back of their pick-up truck as they commute home to LA county areas like Diamond Bar and Pomona. Whether or not this litter is intentional or not, I do not know.
Lastly, if the “transplants” would return to their state of origin, I can assure you that many of California’s problems would disappear. And we could begin with Ms. Spears who should return to Louisiana, most of the movie “stars” who came to CA from flyover country, as well as each and every resident of the Bay Area who came from Vermont, New Hampshire, New Jersey, Ohio, Colorado, etc and who vote to keep Feinstein et al in office “because she’s from Northern California.”
Go on to City Data Forum and those who bitch about traffic in OC or LA nearly are all from some other state like New Jersey. Just read the comments - these people state where they’re from. My idea, as other Californians is that these drivers go back to where they came from and LA’s traffic gridlock will disappear.
~Misstrial
Let’s raise the price of gas to just $4 per gallon (it’s $3.27 here in Pismo) and the IE and Antelope Valley are toast. Any commute over 25 miles will be very costly.
Don’t forget the 5 million illegal immigrants clogging up the highways. As for American citizens, more are leaving California than moving there.
IE and AV are already toast.
Misstrial, Great Reply! And I was born in Fresno, a smoggy place, but plenty of down-to-earth people. Not all Californians are the type that Ken Best is prejudiced about. There are quite a lot of Californians who pay taxes, hate pollution, cannot stand illegals, cannot stand socialism, which ruined the state and the political correctness that came with it.
I held a minor political office in California at 23 as a member of the Libertarian Party. I was the campaign manager for a State Assembly candidate that same year. I tried hard to encourage the state to get out of socialism. There still are a lot of good people in California, and that includes San Francisco, Los Angeles, Orange County, San Diego, Sacramento, San Jose - all over the state. Shame on Mr. Best and his hasty generalizations.
Most Californians are not the kind Mr. Best describes. If they were transplanted to any other state, they would be indistinguishable, save for their license plates. Mr. Best’s comments are pretty much a single projection on 1/8th of the US population, a population that produces 17% of the US GDP.
It’s pretty easy to insult just about any place. Yeah, there is a lot about CA that really sucks, and CA certainly has it’s share of kooks and crooks…but that could be said about just about anywhere else.
Where do you live, Mr. Best?
Heck no. I am NOT going back to NJ. No way. No how.
Deal with it suckka.
The irony of blasting someone for generalizations with blanket statements about the poor’s evil conspiracy to bring the rest of us down to their level, or immigrants making everything miserable for “real” Californians, would be as fascinating as it is burlesque, were it not for the fact it was likely all typed with a straight face.
If we immigrants all left en masse, you’d have to deal with $10 a lb lettuce in your all-American burgers and zero revenue for the state, seeing as Silicon Valley and agriculture are all powered by foreign sweat.
I love this blog, but some of you people need to think a little more before you type.
Oh, and merry Christmas.
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“IE and AV are already toast.”
But not like burned toast yet. Palmdale, Lancaster, Rosamond, etc., need to come down to double-digit. The same applies to Tehachapi and surrounding towns.
Jas
bill in Maryland:
What District did you run in?
*wonders if I voted for bill in Maryland*
~Misstrial
This was in 1982 and in California in the Fresno area.
True … but the population is only 1/3 native.. leaving 2/3 from somewhere else. I met someone recently who calls himself Californian.. actually from Maine. Been here only 3 years. LOL…
Forgot to mention… our Rep.. currently House Speaker Boxer… actually came to New York about 10 years ago.
Native are only the Native Americans (Indians). The rest are all immigrants, either 1st, 2nd, 3rd or Xth generation.
And by law you are a Californian, if you have lived here for at least a year.
House Speaker Boxer? Don’t you mean Pelosi? Boxer is a senator…
Once again, you guys have me in hysterics! Merry Christmas, Happy Holidays to all!
“This cally job is for losers.”
Exactly!
Happy Holidays Everyone
My apologies if this has been posted. Here is the CEO of overstock.com saying that the US economy is a house of cards.
http://itulip.com/
He’s a moonbeam. Check out the chart of OSTK.
“‘It’s not easy to lower the price of your home, because if you only have 10 percent equity in the home and you lower it 10 percent, that may be all your equity,’ explains Delores Conway from the USC Lusk Center For Real Estate.”
- You see the point, we can’t lower prices in SoCal because ‘that may be all of your equity’.
The rest of the country needs to understand our situation out here.
My coworker lives in Paramount, he told me that the mexicans actually set up swap meet style stores right on the sidewalks all day!
what is swap meet style stores?
A folding table with an umbrella attached - stacked with used clothes and other crap from a nearby dumpster.
“what is swap meet style stores”
Set up a folding table or two, put merchandise on it, along with a hand painted sign…wait for foot traffic or car traffic to bring you customers. Like an on-going yard sale, but with actual merchandise.
Nothing wrong with it in an intellectual “capitalism” sense, except they usually lack permits or licenses, and they tend to make the neighborhood look like a shopping bazaar.
There’s a swap meet every Sunday morning on the sidewalk outside the Catholic Church at Harvard and 16th Street in Washington DC. They catch all the folks coming out of mass. This is within 20 blocks of the White House.
“mexicans actually set up swap meet style stores right on the sidewalks all day!”
Little Tijuana?
Oh we understand perfectly the situation in Cali. I left there in ‘05 because I felt everyone buying a home in my neighbourhood in Long Beach was a lunatic to pay $1m or more for a house (or $500k for the condo we owned, no less).
The only solution for California now is a long, painful process where the fools that bought the homes suffer for their short sighted greediness.
” he told me that the mexicans actually set up swap meet style stores right on the sidewalks all day!”
I see this all over Heavily Hispanised Burgs all over LA inner city areas. They put out their yard sales in front of their lawns in even the ugliest dumpy hoods. Even seeing this in the better upcale neighborhoods done by distressed white families. They put out more of a variety of items including decent hi-quality stuff whereas the Hispanic immigrants just put out mostly used clothing. IN long beach U need to get a permit to do yard sales wjich costs 8$. and U are only permitted only a certain number per year. I imagine in lots of inner city crapped- out hoods the LA City gov’t looks the other way when poor immigrants do these yard sales, which are part of the infamous underground untaxed LA economy which accts for 25-40% of all transactions.
No sales tax, no shop rent to pay to landlord, all cash , like selling hot goods out of back of van.
Crispy: you ever hire that donkey? It would make a great picture for your Xmas cards next year.
This is a very fascinating situation to watch. My Foot….
Actually, it is a very fascinating situation to watch. That’s what most of us on this blog are doing every day.
“To make ends meet, Rodriguez holds two jobs. After eight hours in the shipping department of a pharmaceutical company, he works six to seven hours on a loading dock. ‘It doesn’t seem like the effort is paying off,’ he said.”
This is really sad. This guy could have rented the same townhouse for about 60% of the mortgage and instead of working two jobs, he could spent more time with the wife and kids. Our society insists that a person must own a house in order to be a good provider - even at the expense of health and family continuity.
Non-working wife, two kids, and a sub-prime mortgage. Not a very good mix.
Hopefully he’ll be too busy to make anymore kids. We don’t need anymore low IQ clowns.
But the banks wouldn’t be happy if he didn’t have two jobs. Got to keep the payments coming in as there are bonus, etc. to be paid. The debt slaves must know this otherwise how do you expects the game to continue? Credit card slaves are welcome guests also and late fees, higher interest rates adjustments are appreciated along with the “timely” new bankruptcy act to keep all debtor slaves in their place. Happy New year!
” Our society insists that a person must own a house in order to be a good provider - even at the expense of health and family continuity. ”
No, society does not insist on that. The problem is that there are a lot of dumb, dim-wits who have an American Dream. The Dream is turning into a nightmare.
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DataQuest November report is out:
http://www.dqnews.com/ZIPCAR.shtm
It keeps getting uglier by the month.
Jas
See my post below. Check your numbers.
What do I want for Christmas? A Realtor in a Joshua Tree!!!
Maybe twelve (realtors or others responsible for this mess) of them (Greenspan, Fun Yun, Liahrah, Bernake, Leatherface, LAY, In the bag Watts, the Squirrel lady, Suzanne, the Ameriquest crook, the idiots that complained about losing their home in Fullerton after extracting $600K in HELOC, and pick your favorite crooked MB).
I have the perfect place for them. On the median on Sunport Bl, the road that connect the Albuquerque airport to I-25. Lots of Joshua Trees there.
pick your favorite crooked MB
Hmmm…fill this last spot with Casey Serin, or John “sold-my-stock” Toll? It’s a tie.
Don’t forget Nina and her buddies who were flipping in Temecula or there about?
Next bubble which will burst and REALLY hammer real estate are credit card debt. Many FB’s have been “topping up” their mortgage payments and buying essentials like food and gas with with credit cards. Not willing to cut-back from their extravagant life style, you can be sure the credit cards got a very good work out this christmas. The biggest percentage ever on record of credit card holders over 90 days late is being reported by several media outlets. The tide went out when the property boom went bust. Now 2008 will see the tsunami arrive as the 40′ waves roll in and engulf debt laden americans. A slight ray of hope. Europeans and other cash rich foreigners, who have seen their currency grow stronger as the US Peso loses value, are buying America which is now on sale.
“Europeans and other cash rich foreigners, who have seen their currency grow stronger as the US Peso loses value, are buying America which is now on sale.”
Good! When times get tougher, we’ll need someone to rob.
Was at Circuit City check-out line. A Hispanic guy was in front. Overheard the counter girl: you are approved for $3,000, sign here …
They are flooding the system with money, there is no credit crunch!
What’s the big deal here? I am routinely approved for this sort of credit. It doesn’t mean that I use it irresponsibly. Are you saying that because the guy is Hispanic he can’t do the same?
http://www.npr.org/templates/story/story.php?storyId=17576904&ft=1&f=1003
Credit card delinquencies have jumped 26 percent from a year ago, a recent Associated Press poll shows.
WTF is a “personal finance coach”?
““‘How do I try to save this property if they won’t work with me?’ Rodriguez said. ”
Why lenders would want to work with you? Lenders know very well that many houses are lost cause and they do not want to risk loan on a depreciating asset.
Lessee. You have no equity, can’t pay down the principal, and want someone to “work with you” while prices are falling every day? Anyone want to stand up and take that bullet for him?
That’s no life, this fellow and millions more have a damn house strapped to their backs and can’t carry it. I will never understand this, what appears to be an overwhelming desire to “own” a home at any cost. Perhaps it’s because I’m 50 now but looking out on the world it’s kind of like watching an ant farm. No thanks, I prefer a low pressure life and pursue the things that tend to help me be content. It’s over before you know it.
Succinct and very well put. It’s a shame that so many still believe this mantra about home loanership. Why be a slave to bankers? Renting is not for chumps. It is for smart people who know the real cost of owning. This isn’t your granpappy’s home anymore.
The one who ends up with the most toys debt wins.
To all those that will accept my wishes, Merry Christmas! And remember, most, if not all of the winter holidays *isn’t* about spending money, it’s about spending time with your loved ones and making the world just a little bit better and a little bit happier place to be.
So, I saw that the “new” zip code numbers are out. http://www.dqnews.com/ZIPLAT.shtm
Went I looked at the zip codes I track I noticed that the numbers are identical to October. Anyone else notice this in their own zip?
In other words, the Nov. numbers for my zips are bogus. Even if the median and sales numbers happened to be the same the percentages from last year would change.
Is someone asleep at DQ?
I don’t think the November numbers are right. DQ just republished the October numbers. That’s what it’s gotta be. At least, that’s the way it looks to me.
Agreed, the question is, error or conspiracy.
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I posted link to Cities and Counties data for November and that looks good to me, i.e., it is not the same as October. Are you looking at LA Times Zip Codes data? I haven’t checked them.
Jas
zip code data.
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City data for palmdale looks bad, but the median is still too high at $300K, down 23% from the peak. YoY sales down 57%.
Jas
“In Chula Vista, Alex Rodriguez needs to modify the terms of his adjustable-rate mortgage before he loses the condominium he shares with his wife and two children. His payments recently jumped from $2,000 to $2,672, well beyond what the family can afford.”
“To make ends meet, Rodriguez holds two jobs. After eight hours in the shipping department of a pharmaceutical company, he works six to seven hours on a loading dock. ‘It doesn’t seem like the effort is paying off,’ he said.”
Hey A-Rod, get off the treadmill! You can get a NICE 2 bd condo with garage in Carlsbad right now for $1600! Then you won’t have to work 2 jobs and get that monkey off your back, life is too short to be working two jobs just to “own” a house, you can RENT for much cheaper and in a nicer area IMHO.
Again, very well put. 2008 should be the mantra of life is too short…
Put in what you want…
-To work a gazillion hours for a home, condo, etc.
-To be away from family
-To keep paying scads in CC interest
-To keep driving 2 hours to work and then 2 more back home
Any number of life-stressing financial choices would work!
Dan, I certainly agree with all of this. But the real challenge is not so much to decide not to live with the financial stresses, but to learn how to live with somewhat less. Somewhat less space, somewhat less possessions, somewhat less restaurant food, etc. Of course, if people set their lives up to have more time, they’d notice that there are an awful lot of wonderful things that are free or pretty darned cheap (a hike, the public library, the sunrise, etc.).
I think your New Years resolution will be embraced by a lot of folks in the coming year. Maybe not by choice, however.
Uncle, that is the very attitude that very well could sink this economy.
Almost everybody could do with out, not only without a little bit less, but a without a whole lot less….and that is just not good for the economy.
I am not saying that I don’t live that way, but I am saying that if even a larger percentage of Americans start living within their means it will hurt the economy.
I know the stats for GDP, Consumer Spending and other things take into account the influence the really, really rich have on the economy, but they are the fringe.
The low, lower Middle and actual Middle class employ far more people in their everyday interactions than the upper 1/3 of the economy.
The Goldilocks economy has only been Golden for a small portion of the population, but the pain will be very well spread out, whether us Housing Bubble Bloggers like to think so or not.
The pain is real. There are a lot of people that even with buying a house at normal, historical rates of debt to income and income to housing ratio are hurting. I know that many people in CA, AZ, FL, DC, NV and others don’t believe it but the hurt is real and is spreading.
By hurt I mean that raises in wages have not kept up with raises in everything else. The prices at the gas pump, prices at the grocery store, prices in home heating/cooling, Cable, Health Care, College and who knows what else.
I know this blog has a much higher than average income, but let’s not forget that there are many, many good people that bought within their means, but have had their cushion inflated away.
“‘I am very real estate rich and cash poor,’ Dastrup said.”
– I am bankrupt! –
Hey Merry Christmas all! Best Wishes.
I bet mr “very real estate rich” will get frustrated at not getting his target price and will rent for a loss so that he loses everything. The funny part is that he claims he has been trying to sell for two years. If the set a realistic asking price two years ago, he would be “cash rich” now. Chicks dig it when he tells them how much his real estate is worth. Never mind no one was willing to pay that much for his properties in “Shingletown” even at the peak. I’m rich he’ll tell you. RICH$$$
As we wind down here at work this afternoon, I too would like to wish the blog a VERY Merry Christmas. If Christmas is not your thing, accept it in the spirity of good will toward all people. If Christmas is your cup of tea, may Santa bring you all you need and even some of your wants.
I hope everyone has a safe day and has had a blessed 2007. It is not easy remaining real in a world gone mad with cheap easy credit and now finds itself even questioning its very solvency.
Dang, it is hard when you were on the wagon that saw of all this mess heading for us.
As we used to say back in Brooklyn, פֿריילעך ניטל (”Freylich Nitl”), Yiddish for “Merry Christmas”.
Of course, the number of non-Jews who spoke Yiddish were few and far between, so we didn’t get to say this very often.
Let’s all hope for a peaceful and bubble-free 2008, where we all get along!
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Herr Jones und Ihrer Bloggenfreunden,
Schadenfreudliche Weihnachten!
Saint Barbara
Santa Barbara Housing Bubble Blog
Merced’s median sales price was $274,000 in November, which was down 16.8 percent compared with the previous year. Prices were even lower in October this year, however, when they hit $260,000. Sales volume was down 31.9 percent this November compared to last.
$260K??? Is that all?
Seems to me they’ve got a long way to go then, as Merced isn’t exactly a hotbed of high paying jobs…
All of California still has a long way to go. This is just getting started. Median house price in San Bernardino down to “only” $330k? You could have bought in a beach town for that less than ten years ago, and will be able to again by the time this thing hits bottom.
I wish everyone a profitable Gift Receiving Day!
For Santa Clarita bloggers/realtors:
How much would you buy this house for?
http://www.shapell.com/ss/find/sienna/overview.cfm
The model is for sale with all the furnishings included. It is listed for $813,000 but builder is negotiable since it is the last one left unsold. It is beautifully upgraded with a nice pool and fountains in the backyard and still has a nice grassy area. I know that prices will go lower in the future so I am looking for a constructive and reasonable price. I am thinking of $675K, which is 85% of the listed price. Previous houses without upgrades and on much smaller lots sold for >$800K in 2005-2006.
I dont know that area, but even at 675k you are looking at 5k plus a month to live there. You have to compare that with the local rental market and your job and family status (as if you something comes up, its gonna be awhile before you can unload the property even at a loss). Also, you have to factor in at least another 10% decline in 2008 and im being conservative. That sets you back another 67.5k per year. When all is said in done you buy the house today, pay 5k or more on the mortgage and carrying costs, and another 5k or more going down the tubes as depreciation. I see it costing about 12k per month when all is said and done. More if housing falls further than my conservative estimate used in this example. Renting is much better until the end of 2009. Then I believe we will be near the low, although i dont see massive appreciation again for another 5 years. It takes awhile for the burn to wear off. For those that lived through the Great Depression, it took a new generation.
Just bid $450K. What’s the worst that can happen?
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I know the general area and have data going back to 1997. Median price doubled in 4 years, 2003-06 and tripled in 8 years, 1999-2006. I would say that a minimum price drop of 50% from the peak is an cinch. If the house you are looking at were worth a mil at the peak then I would say that you shouldn’t buy for more than $500k. $400K is a better target. Sharp decline in prices will take place during late 2008 to mid 2009. The bottom is years away. You need to be patient at least for one more year. There will be lot more and better deals.
Jas
Sorry, forgot to include that the house is Residence 2: http://www.shapell.com/ss/find/sienna/plan_2.cfm
Even in the high $600’s is too much! It’s worth in the $500’s at most. Think about just how much money this is! A half-a million dollars!! For a “tract” home! Wait till this time next year and see where they are at. I have a good friend who is a multi-millionare investor in Pasadena who says there is still NO VALUE in the current market. She may begin to look for something the end of next year. BTW.. She and her husband have been living in a 750 sq. ft. apartment for over 3 years since they sold their place! Talk about frugal! Santa Clarita has a long way to fall and it will. It’s simply too far away to maintain the prices they are asking. Think of all the building and development going on up there! I swear almost 75% of the houses I see on MLS are either a short sale or a foreclosure. The money’s not there!!
Thanks for the reply. My family has been renting since we sold our house in 2004. Similar situation as your friend but not close to being a multi-millionaire. Neither are we investors, just looking for a place to call home.
There are similar houses in the same development that are for sale for $560-$590K, purchased in 2005-2006 for high $700K to low $800K. Not as nice as the model house but decent. Anyway, I offered $660K yesterday and agent said, “absolutely not” but is willing to negotiate in the $690K range.
Just wondering how much a model house is worth over a regular house. I heard that it is in the plus 20% range because of all the upgrades, furnishings, location, view, landscaping. That’s how I came up with my offer price ($560K + 20% = $672K).
I was going to say maybe 450 but I’m not that familiar with the area.
txchick,
Santa Clarita is 30 miles north of LA City. Nice, quiet suburb with excellent schools and highly rated as safe in the FBI crime list (taken with a grain of salt). Hot in the summer and high risk area for fires. Traffic/commuting can be hellish but I take the Metrotrain to work so is inconsequential. Your $450K price may happen in the distant future but I am getting tired of waiting that long. Have been renting for four years and the government is always trying to screw the prudent savers.
Merry Christmas to all and here’s to an explosive ARM New Year.
Why a McMansion?
We’ve owned two, and the lifestyle stinks. First, unless an oversized home is on a reasonable lot (mature trees, space, etc…), the fishbowl effect is dreadful. Then, you have the totalitarian HOA dictating your rights away. Trust me, HOA’s stink in PUD’s (Planned Urban Developments).
On top of that, the CC& R’s regarding vehicle rules don’t work, rules on color of window treatments facing the street, your backyard isn’t private, your home starts to feel like a glorified townhome, etc… I could go on forever.
Look, McMansions are always have knock out interiors, but I’m telling you, you will regret it later.
Oh, and it took us 18 months to get all the builder issues taken care of, and that’s after we hired an Attorney. Model Homes haven’t been lived it. Inspections don’t tell all, you have to find the problems as you live in it.
Its not only the wrong time to buy, its a bad choice in housing.
All communities now brag about schools, and lifestyle, and so forth. BFD.
We sold in Wood Ranch with a panoramic view of Thousand Oaks and Simi Valley. We had a luxury McMansion on top of the hill, built in fridge, workout room off master/french doors with a deck and fireplace in master, just a stunning home.
Don’t get sucked into “the dream”. It isn’t.
Wood ranch I know that area. Where did you move to?
We moved into Thousand Oaks and live among the illegals, awaiting the right time to buy a home for cash. It is 3:15AM. Illegals, and their 24/7 noise. I wish they would take up reading!
Wood Ranch has a pretty macro feel (trees, landscape, manicured everything), but its micro (individual living style) is a dictatorship fish bowl.
What a crock of crap. If they’ll take 690 they should take 660 to make the sale. That’s chump change at that price level. Tell them to go pound sand.
Agreed. I think they are simply trying to preserve “values”. We have been renting since ‘03 and the tax situation is pretty onerous for us being dinks! I hate the fact the gov’t rewards homedebtors, but I would much rather begrudgingly write the IRS a check for $10k in April than over pay $100k or more for a house! It just doesn’t make sense! These people are scam artists and they are looking for the biggest “sucker”. I refuse to participate! I too am sick of renting - I hate the dishwasher in our rental PUD and the layout, but I am NOT going to pay $100k + to get something I like better.
Former,
I never heard of a standard premium for a model home. Think of it this way, when you go to sell is the next buyer going to care about the fact it was a model or had nicer, now warn furnishings.
Just add what the extras are worth to you or would cost if purchased later. Extra land may be worth something. (Extra taxes too.) Do you want the pool and if so, what would putting one in cost? Go item by item, not a %. Good luck!
Model Home = Depreciation on HVAC. Its been on as people have trucked thru it. (7 days a week @ what, at least 10 hours a day.)Wear and Tear, keep that in mind.
Any agent that says “absolutely not” gets an immediate 10% reduction of verbal offer.
Yes. Tell her you were insulted by her verbal communication and that you will take if off their hands if the builder calls you back by Friday willing to accept 600k. That 30k they are bickering about should come out, at least in part, from her commission. She should have bought you dinner and kissed your feet for showing interest. If she is rude again try to call the builder directly and cut her out of the transaction. They treated ppl like crap for years. Time to turn the tables.
Agreed w/all comments about the abusive realtor. Also add a clause that said realtor must feed your squirrels should you buy the house.
Happy Christmas, Happy New Year and above all things GOOD HEALTH in the future. Why? Because those 10 rental properties you own and that $10 million you have in the bank in the Cayman Islands or that 1 kilo of gold in your safety deposit box, do NOT compensate if you are not healthy.
Speaking of kilos of gold, that is where most of my life savings is sitting. It really helps put things in perspective. To go home to Cupertino and buy a tear down shack just to get the land to build on would cost 40 kilos of gold. Absurd. This is more than half my weight in gold, more than I can carry, for less than a quarter acre of dirt. In any other period, that would be understood as a price appropriate for the very wealthy
A flat building section with no view in a cookie cutter suburb in small town New Zealand still costs 7 kilos of gold. Bollocks! I bought a lovely 4br executive quality home in Eugene, OR, with deer and old growth forest in the yard, in 1989 for less than that. Looks like we’ll be renting next Xmas too. Cheers to all.
I almost hated to do this to such a beautiful song, but:
Kate Bush and David Gilmour Perform:
Running up that Bill
Debt doesn’t hurt me.
Do you want to feel how it feels?
Do you want to know, know that it doesn’t hurt me?
Do you want to hear about the deal that I’m making?
You, it’s you and me.
And if I only could,
I’d make a deal with God,
And I’d get him to swap our places,
Be running up that load,
Be running up that bill,
Be running down that building.
Say, If I only could, oh…
You don’t want to hurt me,
But see how deep the debit lies.
Unaware I’m tearing you asunder.
Ooh, there is plunder in our hearts.
So much bait for the ones we love.
Tell me we both matter don’t we?
You,
It’s you and me,
It’s you and me won’t be unhappy.
And if I only could,
I’d make a deal with God,
And I’d get him to swap our places,
Be running up that load,
Be running up that bill,
Be running down that building.
Say, If I only could, oh…
You,
It’s you and me,
It’s you and me won’t be unhappy.
C’mon, baby, c’mon darling,
Let me steal this moment from you now.
C’mon, angel, c’mon, c’mon, darling,
Let’s exchange the temperence, oh…
And if I only could,
I’d make a deal with God,
And I’d get him to swap our places,
Be running up that load,
Be running up that bill,
Be running down that building.
Say, If I only could, oh…
And I’d get him to swap our places,
Be running up that bill,
With no problems.
Try Chris Rea and his song Road to Hell. Great about credit and F’dBs.
I wish all of the HBBers a safe, Merry Christmas, and a Happy New Year.
Thank you. You have kept me laughing, given free knowledge, and most of all justified my gut feelings of “something is rotten in the state of Denmark.”
Take care everyone
ahhhh, the joys of the ownership society.
““To make ends meet, Rodriguez holds two jobs. After eight hours in the shipping department of a pharmaceutical company, he works six to seven hours on a loading dock. ‘It doesn’t seem like the effort is paying off,’ he said.”
but Rodriguez, you can paint the walls any color you want! MERRY CHRISTMAS!
To Ben and The HBBers– Merry Christmas All!
Housing Recession to Housing Depression in 2008, when unemployment begins to take hold in coming recession (I see a 7%+ unemployment rate by the end of 2008)..
“Ernesto Ramos is a real estate agent, but he couldn’t have picked a worse time to hang a for sale sign on his own home. ‘I decide to put the house on the market, but unfortunately we haven’t been able to sell the property, you know, here we are still,’ he says.”
Would you trust this agent to sell your house? If he knows that little about the market in which he works, what are the chances he would market your house properly much less be able to sell it? Six percent of nothing is still nothing, but you’ve lost time in a declining market if you’d use him as your agent.
‘The governor and the president are putting out information, but that definitely hasn’t trickled down to ground zero,’ said Ed Smith Jr., VP of governmental affairs
==========================================================
Oh, it HAS trickled down to ground zero. It’s just that all the California FBs are down at ground -600K.
Merry Christmas to all of the HBB bloggers from Albuquerque. And special thank you to Ben for hosting this fabulous site.
I realize it’s not Thanksgiving… but at this moment I am having a thankful moment. I thank my mom for not doing drugs when I was in her tummy. I thank my parents for feeding me nutritious stuff while growing up and making sure I went to school and strive to do well.
Although I had to put myself thru college!
But anyway, I thank them most of all for putting me in a position to have a brain. And that brain has since told me to stay away from buying a home, when I could, over the past 4 years.
Anyway, I am thankful.
Merry Chrsitmas and Happy Holidays!!!!
Mr. Rodriquez is finding out what I have posted here before; that debt is an equal opportunity enslaver.
I have never owned real estate. I never thought that paying interest to buy an aging building that will cost you to purchase and cost you to insure and cost you to maintain was such a smart thing to do. I reached this conclusion on my own decades ago. All of my equity is in common stocks. The most I ever earned at a job was about $50k/yr (the last year that I worked) and my equity is now in the low seven figures. I never had an inheritance or windfall of any kind.
I am no braniac, but obviously, a not-so-smart guy like me has done a few things right. It begins with the understanding that most of what we have been pre-programmed to believe about RE is a farce.
Hey, Merry Christmas to y’alls and may your holiday season with your loved ones be very warm and cozy
“‘This is truly unique because it happened so fast and the (price) adjustment has been so steep,’ Kleinhenz said.”
HEY kLEINHENZ are you a stupid F^&%^$ idot?
Prices went up 20% + a year and you are F%^$#$@# surprised??????????????????????????????
‘Sometimes it takes 45 minutes to an hour just to get to the right person’ on the phone, said Adeline Enriquez of the nonprofit Community HousingWorks. ‘They put on the music. They disconnect the phone call. I mean it is a mess.’”
Could this be because nobody knows who owns what and they’d rather not say anything that could be used against them in court??
Wow! I didn’t see this announced yet. Seems that there aren’t enough deals to package!
New York, NY- Markit, the leading provider of independent data, portfolio valuations and OTC derivatives trade processing and owner of the Markit ABX.HE index, today announced that the roll of the Markit ABX.HE has been postponed for three months. The Markit ABX.HE is a synthetic index of U.S. home equity asset-backed securities.
The new series, the Markit ABX.HE 08-1, was scheduled to launch on 19 January 2008. The decision to postpone its launch was taken following extensive consultation with the dealer community. It follows a lack of RMBS deals issued in the second half of 2007 and eligible for inclusion in the forthcoming Markit ABX.HE roll. The Markit ABX.HE 07-2 remains the on-the-run series until further notice.
Under current index rules, only five deals qualified for inclusion in the Markit ABX.HE 08-1. Markit and the dealer community considered amending the index rules to include deals which failed to qualify initially but decided against this approach at this time.
Markit and the dealer community remain fully committed to the index and will update the market as and when appropriate.
“‘I am very real estate rich and cash poor,’ Dastrup said.”
“Dastrup has been trying to sell his two homes in Shingletown for nearly two years. The homes are listed for $450,000 and $285,000. Dastrup, who says he owns the houses outright, needs the sales profits to put 50 percent down on a construction loan.”
HA HA HA! This was too funny! “Real Estate Rich”. If you can’t sell them, they’re worth $0, aren’t they?