There’s More Risk On The Downside In California
The North County Times reports from California. “Record numbers of Southwest County homes fell into foreclosure in 2007, and the growing stock of bank-owned houses hammered at prices that had already begun to fall from eye-popping highs. Homeowners in Riverside County defaulted on more than 26,000 mortgages between October 2006 and September 2007, with the numbers rising higher in each three-month period, according to one research firm.”
“Banks own nearly 1,900 houses in Southwest County, representing about 28 percent of the houses listed for sale locally, according to one statewide database of foreclosure properties.”
“In the last six months, agents say, those lenders have grown more willing to cut prices to recoup some of the loans they made. That has helped to push the median sale price in Riverside County from more than $430,000 in the summer of 2006 down to less than $360,000, a level most neighborhoods hadn’t seen since late 2004. Lenders are selling hundreds of houses for much less than that.”
“‘If there’s a silver lining, it’s the fact that you can get a single-family home now in the high 200s,’ longtime real estate agent Gene Wunderlich said. ‘That’s hopeful.’”
“Many national and local economists and analysts…think tumbling prices and sales are nowhere near halting. James Welsh, founder of a Carlsbad-based investment firm, said he thinks the housing market might not hit bottom until 2010.”
“‘It’s going to get worse in all areas before it gets better. And now it’s only a question of, ‘Does it get really ugly?’ Welsh said.”
“Home prices in San Diego County have fallen 13.3 percent from their November 2005 peak, according to Standard & Poor’s Case-Shiller Home Price Indices. Low-tier home prices, those selling for under $462,003, fell the most, dropping 18.8 percent over the same time.”
“Throughout San Diego County, the number of homes sold in December through the 27th was down 43.6 percent from last year to 1,109, according to data compiled by Dennis Smith, a Carlsbad-based local real estate agent.”
“Smith said he expects sales numbers to drop an additional 10 percent next year and prices to continue to fall for at least six months from now.”
“‘I think (2008) is going to be a very good year from the buyers’ perspective because they’re going to be able to buy properties at pre-bubble prices,’ Smith said.”
“Realtors said consumers should be most concerned with finding a home that fits their needs. And if they find one, they should buy now since home prices are, at the very least, near the bottom, said Robert Kleinhenz, deputy chief economist for CAR.”
“Phil Bellante, owner of San Diego-based Guardian Mortgage and Realty, said he disagrees with that philosophy because he expects home prices to tumble over the next year and says they could fall for four more years after that.”
“‘A lot of people have talked to me about buying, but I have quite a conscience and tell them, take your time,’ he said. ‘Let’s wait until next year. I don’t want to get you something for $600,000 when I could have gotten it for $480,000.’”
“Diane Goodwin of Oceanside is one property owner who has seen the value of her investments drop to…where they owe more than own, and she used 20 percent to 30 percent down payments.”
“With mortgage payments set to jump in six months, she says she cannot refinance and is asking her lender to freeze her current payments until the market recovers so she can avoid foreclosure.”
“‘It’d be 10 times worse 10 times faster (if we did 100 percent loans). We’d already be in foreclosure with most of these homes if we didn’t have the equity we do now,’ she said.”
“The no-money-down products are still available, but they are getting scarcer every day and could be eliminated over the next year, said Dave Hopkins, a mortgage broker with Encinitas-based Morfacts.”
“‘The banks are really eating it on these mortgage notes,’ Hopkins said.”
“Securing one has proven difficult for Nick Gonzales, 28, who wants to buy his first home, searching mostly in Southwest Riverside County. He said he has above-average credit and solid, verifiable income. Three months into his home search, he has not qualified for any 100 percent loans.”
“In part, Gonzales cannot find a loan because some lenders have designated San Diego as a declining real estate market and applied a 5 percent penalty to all loans for the area. That means a homeowner looking at a 100 percent loan for a $400,000 home would need to put $20,000 down to secure the loan, effectively eliminating all no-money-down programs.”
“‘It’s almost like people who were not responsible for the downfall of the market are being affected by it. We feel like we’re innocent and being held guilty,’ he said.”
“Gonzales, who rents a home in Mira Mesa, said he is only looking at fixed interest rates. He and his fiancee hope to move into a new home before their March wedding and have cut expenses, including Christmas presents, in order to save up for the home.”
“‘Our gifts are our wedding rings and a new home,’ he said.”
The Press Democrat. “Sonoma County’s slumping real estate market should finally hit bottom in late 2008, ending a three-year slide that has already wiped out almost $120,000 in value from the typical home.”
“Home values, which peaked in August 2005 when the median hit $619,000, have already dropped 19 percent. In November, a typical single-family home sold for $500,000 in Sonoma County.”
“Pegging the bottom remains a difficult task for economists, who have underestimated the severity of the county’s housing slump. ‘It was hard to imagine this housing cycle would be as deep as it is. And it’s got a ways to go still. This is big,’ said Steve Cochrane, regional economist for Moody’s Economy.com.”
“A more optimistic outlook from the California Association of Realtors in October will likely be revised downward, said Leslie Appleton-Young, the association’s chief economist.”
“The association’s initial forecast called for a 4 percent drop in prices statewide next year. The declines could be potentially steeper in Sonoma County due to fallout from the subprime loan crisis and because housing here remains costly for first-time buyers.”
“‘There’s more risk on the downside,’ she said. ‘I just don’t know how much lower we can go. It’s close to as bad as it’s ever been.’”
“In Windsor, Ashley Long paid $470,000 earlier this month for a four-bedroom house that was worth $630,000 near the market’s peak. The sellers, which originally listed the home at $525,000, cut the price twice to attract a buyer.”
“A first-time home buyer, Long looked at more than 50 houses over three months, trying to find the nicest house for the lowest price. She didn’t hesitate, however, to make an offer on the Windsor house after Souza spotted the latest price reduction, yet Long still went under the seller’s amount.”
“‘I got a pretty good deal. I know this is a low market and the house is worth more than that,’ Long said.”
“To lower her monthly mortgage payment, Long made a 10 percent down payment to lock in a low interest rate on a 30-year loan.”
“‘It’s the only time I’m going to be able to afford to buy in Sonoma County,’ she said. ‘I can’t imagine it going down a lot lower, and eventually it has to come back up. I don’t want to gamble.’”
The LA Times. “The California Assn. of Realtors and the research firm DataQuick both reported last month that November home sales and prices slipped in the state from year-earlier levels.”
“The state realty organization had reported a 36% drop in statewide sales from the previous November, and a 12% year-to-year price drop. In Southern California, November sales fell 43% from the previous year and prices dropped 10% according to DataQuick.”
“DataQuick also reported a slight October-to-November sales pickup in Southern California. But DataQuick President Marshall Prentice cautioned that a single-month increase may not be significant: In 1994, November sales also rose from the previous month, but sales and price then resumed their declines in following months.”
“Despite the upbeat National Assn. of Realtors assessment, other economists continued to predict further weakening of the housing market.”
“Robert Shiller, a Yale economist who co-founded the widely cited Case-Shiller index of housing prices, said in an interview with the Times of London that housing prices in California and Florida could fall 35%. ‘There is a good chance this housing recession will go on for years,’ the newspaper reported Monday.”
“Los Angeles economist Christopher Thornberg, principal of Beacon Economics, has predicted a 30% drop in Southern California home prices from their peak. Of the latest national figures, he said: ‘What I want to know is: How many of those are foreclosures? That’s not stabilization; that’s the market getting worse.’”
The County Sun. “Some real estate agents in the Inland Empire stinging from the housing meltdown may have a new tact to drum up business, and help out homeowners: self-help seminars. Bill Ruh, government affairs director of San Dimas-based Citrus Valley Association of Realtors, said it’s encouraging to hear Realtors getting involved in these seminars as home sales have dried up.”
“One San Bernardino-based Realtor, Karmel Roe, said she can’t count the number of times she’s caught wind of homeowners being foreclosed on. Roe says it pains her to hear about it and that’s why her company, Sweet Dreams Realty Inc., is starting a free once-a-month seminar on overcoming financial obstacles to home ownership.”
“‘Everywhere I turn, someone is telling me that someone else is losing their house,’ she said. ‘My hopes are that by the end of the year we’ll end up helping thousands of people.’”
The Palo Alto Daily News. “With a wave of mortgage trouble sweeping the country, Martin Eichner’s agency has its hands full. Eichner is director of a non-profit organization that educates people about housing rights.”
“In all of 2006, the group’s Sunnyvale office, which provides mortgage counseling to residents of Santa Clara, San Mateo, Alameda and Stanislaus counties, got one or two calls a week from people seeking advice, Eichner said.”
“Now it’s getting two or three calls a day. ‘Right now,’ Eichner said, ‘we’re drowning in these calls.’”
“Sometimes, Eichner said, clients don’t call until they are ‘upside down’ - owe a bank more than the property is worth. At that point, there is little an adviser can do, he said. Eichner said most Peninsula residents who have been calling about mortgage problems are from places where home values are lower, such as parts of Redwood City and East Palo Alto.”
The Fresno Bee. “Central California’s housing slump is in its second year, and the slowdown is nowhere more apparent than in the number of new subdivisions being created. Since 2005, the number of applications filed for new home tracts in Fresno has declined by two-thirds. There were 81 applications that year, compared with 27 in 2007.”
“The number of lots in those tracts has dropped proportionately. The 2005 applications proposed 8,572 lots, compared with 3,029 in 2007. Builders are also delaying work on previously approved tracts…totaling 600 homes in once-active areas of southeast and west-central Fresno.”
“‘On paper, we’ve got a lot of lots that are capable of being built,’ said city development director Nick Yovino, who estimates the number of lots already approved at ’several thousand.’”
“Michael Prandini, president and chief executive officer of the Building Industry Association of the San Joaquin Valley, said the slowdown in tract map applications and the recent extension requests is no surprise in a down market.”
“Getting lots approved and bringing them to market takes money. Builders don’t want to spend that money any sooner than necessary to keep pace with prospective sales. ‘That’s typical in times like these,’ he said. ‘The maps they have, they’re not prepared to move forward on.’”
The Merced Sun Star. “Two years ago, Atwater Ranch was the most controversial housing project proposed in the city. Now, the 379 acres where the project was once set to prosper is just one more piece of land for sale.”
“Real estate agent Andy Krotik began hawking the $22 million swath of land just as Florsheim Land Co. announced that it no longer would develop the site because of the housing market’s slump. With no signs of improvement, it wasn’t a good business move, a spokesman said, though the company had already spent thousands on the project.”
“The subdivision south of Highway 99 was expected to add 4,500 homes to the city.”
wow , repeat wow
Banks own nearly 1,900 houses in Southwest County, representing about 28 percent of the houses listed for sale locally,
All that pent up buyers demand in Southwest County. Just waiting to burst like a volcano absorbing all inventory, causing prices to scream higher. Just you wait.
Agreed -
“‘If there’s a silver lining, it’s the fact that you can get a single-family home now in the high 200s,’ longtime real estate agent Gene Wunderlich said. ‘That’s hopeful.’”
Hopeful? If by hopeful this chump means that you’ll be able to purchase a 3/2/2 for somewhere in the neighborhood of 180K, then I agree. Last time I checked median income for most of IE was just under 50K. From there it’s easy to do the math on where “hopeful” prices should, and will, be.
We are about 150K - 250K away from 180K. It seems that you could only get a shack (2 bed/1 bath) for 300K still and houses are still being sold for this amount.
Huh? I personally have a friend who is moving out at the end of the month and leaving the keys on the counter after failing to sell his 3/2/2 as a short-sale at 199K. Granted, this property is out by the fairgrounds off of Ramona, but still a huge drop from the top. My bro-in-law lives in Orangecrest, which is kinda upper-crust for the IE (if there is such a thing as an upper-crust in the IE. I guess a lawn turd also has an upper-crust) Just got back from there last week. He has listings that are not selling in the mid 300K range that are placing him at about 200K down off the peak. Again, they aren’t selling. But really, all these anecdotes are a big whatever because fundamentals rule the day. IE, as well as every other place, will revert back to historically acceptable affordability levels.
Ventura is going down hill in a big hurry with houses not selling for 20-40% below previous sales of the fraudulent 2004-2006 levels..Oxnard is even worse.
Use to be good wine in Chino. Pierre Biane’s, great varietals. Also, all the dairys. Costamagna’s farms. My head hurts, too many years ago.
There are hundreds of 3/2/2s in the IE for under $200K now. They might not be in the best areas but many of them aren’t shacks in the barrio either. The price declines in the outer areas (Perris, San Jacinto, MoVal, Hemet etc) has been moving at light speed. 4 or 5 months ago there was NOTHING under $300k that any normal person would want to live in. Now there are hundreds of 1/2 decent homes under $200K. I looked at a very nice 4 bedroom REO on Moreno Valley Ranch GC (7th fairway) for $298k last week. Nice house! If the bank would take $250 for it you could rent it and maybe even make a buck or two. I also looked at a nice 3/2.5/2 (1900/sf) that was $190k. My mom sold the exact same model in the same tract in 2/2001 for $180k (hers was nicer though and had a pool). But to be priced close to 2001 prices is just insane. An identical home sold for $410k last December and it was in worse shape.
The problem is with the other 95% of the inventory. That 95% is still priced 30% to 50% too high.
Why anybody would consider buying in the i.e., is simply beyond me…
Take a trip to the Salton Sea, to see your future.
I hear ya “golfproz”. Maybe “Inland Empire” is referring to a different IE.
As I’ve said before, it’s unfair to lump the entire IE into one big turd because of the outliers (Hemet, Perris, Victorville, etc.). Some of us in the IE do live in areas that are 20 minutes away from Orange, Los Angeles and Riverside counties. Hate to sound like a broken record, but my city of Chino Hills boasts the 6th highest median income in the U.S., ranked 21st Safest City by the FBI, and is no. 68 in the Top 100 Places to Live by Money magazine. Try topping those stats! Also, not a brown lawn in sight…
Isn’t the Prison there? In chino?
Really those stats you describe is that really true?
I never heard those before..maybe so, Chino?
Driving to LAX or OC..never ever thought of Chino Hills ..didn’t see it in the Money Mag Best Places to live issue.
And Salton Sea has its “charms” when the sulfur smell rises and permeats the entire valley…yummmmmmmmm
Who really cares about Chino Hills? Ranked 21…Big deal.
I’m sure those stats will be much worse after the upcoming year…
CHINO???!!!! BWAH-HA-HA-HA-HA-HA-HA…….(damn….I just coughed my balls up again) Oh my, that’s rich! I’d Joshua tree ya if you weren’t so pathetic. I guess you really love suckin’ up them tasty dairy fumes. Mmmm-mmm gooood!!……Chino…..I gotta tell this one to the wife.
My SIL teaches at Salton Sea - there are no good areas left anymore. It actually used to be a pretty nice place. Many people summered there. For the person that said they are 20 mins from LA, Orange and LA counties, that may be to get to the county line, but to actually get to Westside or downtown LA, or the OC coastal communities takes way longer, particularly at rush hour. Anytime you have to take the 91 fwy is torture. It once took me 6 hours from Anaheim to the desert - 4 of it just to get near Riverside.
4 Bedroom houses in the IE rent for $2500?
“Laugh it up fuzzball”
http://www.chinohills.org/index.asp?NID=93
Hey ex-nvv, I’d personally bend over for the JT if you come on by and see the City for yourself instead of assuming it fits into what you remember from 10 years ago. Although Chino Hills neighbors Chino, they’re worlds apart. Not a dairy to be seen (or smelled).
Anyway, keep laughing while I enjoy my 3600 SF 6/3 that I bought in 97 for $320k, 5.25% 30-yr fixed that takes up 22% of my DI, low-bal HELOC and 45 minute commute to Irvine using the tolls. Life is good.
Also 21st ranked in safety by the FBI is for the ENTIRE U.S. How many cities are there in this country…hmm..I think a little more than a couple dozen…
JT
Let those fools buy. Rent is less than half the cost!
I still think that the lower upper 100’s/lower 200’s is too high for the IE. IMO these days a family earning $80,000 per year can’t truly afford much more than $150k. Times have changed. Prices have gone up, job security has gone down, and most people have very little in the way of savings. If you want to hang onto your house through good times and bad you’d better be prepared to spend less than 3x or 4x income.
Also, a lot of first-time buyers have kids just before or after they buy, so they’d better be prepared to make the mortgage payments on one income for a few years.
And some of the places in the IE, like Victorville, should be even cheaper due to the commuting time and costs. Victorville is 90 miles from Los Angeles. That is not a typo. I paid $3.19/gallon for 87 octane this weekend. I generally think the hysteria about gas prices is very much overblown. Many of us here are fortunate in that gas prices don’t really affect us, but if we lived in Victorville and commuted 180 miles per day to our $19/hour job in a Los Angeles factory, gas prices would matter a lot. Stuff like this really does impair your purchasing power. I would think that a 3/2 1,300 sq ft ranch in Victorville should be around $90k at the very most.
“90 miles”
Make that 90 miles plus one honest-to-God MOUNTAIN RANGE. Seriously — there are parts of the Rockies not much higher than the mountains around Cajon Pass (between LA and Victorville). That’s not a commute, it’s an expedition.
People are insane. I have lived 10 minutes from work for the past 8 years and love it. I can’t imagine commuting 4 hours each day.
“Smith said he expects sales numbers to drop an additional 10 percent next year and prices to continue to fall for at least six months from now.”
“‘I think (2008) is going to be a very good year from the buyers’ perspective because they’re going to be able to buy properties at pre-bubble prices,’ Smith said.”
How will another 10 percent get you to pre-bubble prices, given a more-than-doubling of San Diego home prices since 2000? Is Mr. Smith lying, or just mathematically challenged?
That jumped out to me as well. Pre bubble homes in my area were about 200k, and they are still selling when listed in the mid 400’s.
If prices go to pre-bubble in 08 then homes in my surrounding area need to tank 50% this year. Possible, but highly unlikely.
The lady states
’she underbid the sellers asking price, got it, but still knows the house is “WORTH” more’…. what?
Worth more when it goes down further?
WOrth more to whom? are the fixtures GOLD plated? then in todays mkt, maybe I could agree, that is IF the door knobs are also gold and platinum.
Where’s the financing going to come from ?
“Possible, but highly unlikely.”
- How does one measure likelihood in unprecedented circumstances?
- If someone had told you as of 2000 that San Diego prices would more-than-double over the next five years, would you have considered that likely, or even possible, for that matter?
You are almost always right, PB, but I would agree with buckwheat on this one. There are just enough knife-catchers out there to keep the rate of price decline kind of molasses-like. Also, when you consider how many fixed-rate mortgages exist, it behooves the banks to drop prices so slowly that the fixed FBs’ mortgages will amortize about as fast as they depreciate. With a lot of 10 and 15 year notes on my hands, I’ve been feeling that I’ll be fine if prices go down “only” 10% per year and just keep doing that year after year after year. From the point of view of wanting to buy a Calif house, I’d be happy if some beachy bubbly areas lost 50% in 08, but I consider it (sorry:) UNLIKELY.
50% in 2008 = UNLIKELY
50% by 2012 = UNLIKELY, unless you mean 50% real / inflation-adjusted (LIKELY)
“- If someone had told you as of 2000 that San Diego prices would more-than-double over the next five years, would you have considered that likely, or even possible, for that matter?”
I thought prices were high then. Prices of 2004 are no bargain. You’d have to go back to pre-1998 and lower than those levels given current financing.
The condo I paid $420k for in July 2005 sold for as little as $70k in ‘99. I thought when I bought it that in a worse case it might fall to $250k. I’m now thinking $150-200k in the 2010-2015 range. I now think it will take at least to 2030 if not 2040 to return to its 2005 value.
There may be some properties that will not return to their peak 2005 values in the lifetimes of those that once “owned” them.
Very much agree with you, SD Greg.
What you’re seeing is “pent up demand” in the form of knife-catchers. Once those people have bought, there will still be plenty of inventory and that’s when prices will plummet.
“Securing one has proven difficult for Nick Gonzales, 28, who wants to buy his first home, searching mostly in Southwest Riverside County. He said he has above-average credit and solid, verifiable income. Three months into his home search, he has not qualified for any 100 percent loans.”
“In part, Gonzales cannot find a loan because some lenders have designated San Diego as a declining real estate market and applied a 5 percent penalty to all loans for the area. That means a homeowner looking at a 100 percent loan for a $400,000 home would need to put $20,000 down to secure the loan, effectively eliminating all no-money-down programs.”
1) 3 months, no 100% financing..hey Nick, get the message….
2) $20,000 or 5% should not be an issue for someone looking to borrow nearly $400,000
3) an above average credit score, huh..well, what the avg credit score?
4) why are they calling the 5% down requirement a penalty?
WTF?
Well, it’s only two days into the New Year and I have already broken the cursing less resolution..
Good thing he has so little cash flow in the three months of looking, he hasn’t saved a dime for down payments. I guess we can still blame the MSM for not getting the message out, debt is not money.
Good thing the banks are finally wising up and saving this clown from himself. One day, he’ll thank them for “penalizing” him.
why are they calling the 5% down requirement a penalty?
Because borrowing $400k+ to grossly overbid on a used house is a “right”, and requiring collateral or evidence of ability to repay would be infringing upon Nick’s “freedom”. Also, because he has a Spanish surname, Nick is automatically designated as a “minority” (despite now being a majority in CA) who cannot be “discriminated” against by lenders that will not lend him money for his Constitutionally guaranteed house.
“‘It’s almost like people who were not responsible for the downfall of the market are being affected by it.
-We feel like we’re innocent and being held guilty,’ he said.”
This is a total California ‘entitlement’ mentality. Everyone is entitled to the best of everything and not one thing should go wrong.
The amazing thing is Gonzalez doesn’t even realize he dodged a bullet by not being “allowed” to take out a NINJA on some overpriced Riverside P.O.S. He is the luckiest idiot in the world and sees his good luck as “punishment”.
You are so right, dodging that bullet, too bad we all can’t call the guy and tell him to relax!
I thought I had heard every thing but NO! What the H is a Ninja??? Help me out bloggers.
No Income No Assests.
As a true life example, my friend refinanced his overpriced condo, pulled out 40k, bought a BMW, and was unemployed when he did it. How you ask? He used a NINJA and the bank actually approved him, he is just about in default today, 2 years later.
No Income, No Job, No Assets. Basically a Liar Loan.
I thought I had heard every thing but NO! What the H is a Ninja??? Help me out bloggers.
No Income No Job (or) Assets
no income, no job-applicant
“This is a total California ‘entitlement’ mentality. Everyone is entitled to the best of everything and not one thing should go wrong. ”
This Entitlement thingy is not strictly California. I see it all over the US. It is a Societal thing grown from this generations entitlement seen through television,media and our corporations,celebrities, politicians who have for the last 30+ yrs Lived the HIGH life and “we” think we are all going to live the High life.
Keeping up with the Jones’
Champagne tastes, beer budget.
“Lifestyles of the Rich and Famous” (1984-1995) on the Tea Vea was one of the key turning points.
I would argue that the TV itself was the turning point.
That’s when entitlement officially “jumped the shark”
Entitlement is about to get eaten by the shark before this mess is over. Happy Days has been cancelled.
–
“This Entitlement thingy is not strictly California. I see it all over the US.”
Could it be a product of the democratic (small d) mindset?
Jas
I don’t think that’s what he meant. I read it to be very similar to many here on the blog - he didn’t buy at the top of the market, he didn’t lie on an application, he was careful to maintain a high credit rating and he didn’t take a toxic loan and yet all the fools that did all that stuff got to get loans and buy houses.
He missed his chance to screw himself, and now has to save for a downpayment just like everyone always had to up until the lunacy of the past few years. Boo hoo.
Here’s a beaut from the article from Gonzales’ mortgage broker:
The 100 percent mortgages with fixed-interest rates are great products for first-time home buyers who do not have the cash for a down payment, said Yamila Ayad, owner of Mission Home Loans, a San Marcos-based mortgage firm.
“These loans are meant to be for people who are buying the home for a long time. They are saying … ‘If I can live with this today, I will be able to continue making this payment. If the value goes down next year, it doesn’t affect me because I’m not leaving,’ ” Ayad said.
Interesting when you pair that line up with the quote from Mr. Hopkins.
“‘It’s going to get worse in all areas before it gets better. And now it’s only a question of, ‘Does it get really ugly?’ Welsh said.”
“worse”? “really ugly”? What’s so bad about used-house prices falling to levels mere mortals can afford on an average wage? Does the media ever report falling food or gas prices as “bad” or “ugly” (not that that’s going to happen anytime soon, thanks to Heli-Ben).
Does the media ever report falling food or gas prices as “bad” or “ugly”
They do if they are reporting in the interests of Cargill or ExxonMobil. And high house prices are in everybody’s interest, except for us few bitter bunnies who are throwing cash in the trash.
“And high house prices are in everybody’s interest, except for us few bitter bunnies who are throwing cash in the trash. ”
I disagree. Even if you were a homeowner, unless you intended to move to a low cost area with the proceeds of the sale of your home, higher prices only meant higher taxes, insurance and transaction costs. Only investors holding multiple properties that sold at the right time, mortgage brokers, realtors, governments, and those doing mortgage securitizations benefited. I’d say that’s less than 25% of the population. Most of the ppl getting screwed just were not bright enough to realize it as they pulled equity out. Oops.
I stand corrected. How about “high house prices are in the interest of everybody who buys advertising for said media, or buys off said media itself (exhibit A: CNBC).”
as a consumer i’m quite sick of cnbc cheerleading $100 barrel oil.
“as a consumer i’m quite sick of cnbc cheerleading $100 barrel oil. ”
As an American, I am sick of the cheerleading which is against all decency to the citizens, this is sort of like cheerleading a HS Football game when you are the dweeb ie not quarterback family. Or those nuts who paint themselves colors. ?????????
does that improve the quality of their lives? No, and yet the ‘pretty faces’ on tv still root for the Big Prices?
Don’t these people drive?
rant off.
Don’t these people drive?
NO, most TV people i have worked with usually move VERY CLOSE to their jobs… with breaking news stories etc….having a long commute is not a good thing. Even at a network level Terry Moran, Rikki Klieman, and even Nancy Grace lived less then 6 blocks from the Court TV studios. I have known local TV anchors who used to bike to work. and even do the newscast in their biking shorts or sweatpants……
Instead of complaining about it, consider adjusting your lifestyle so that you don’t drive so much.
I do not have a problem with even $200/barrel oil.
$200 oil encourages the economy to allocate energy resources more efficiently.
We are already many times more energy efficient that just a few decades ago. Why? Because of energy prices. At $200 oil, we will become even more energy efficient.
So for example, car companies who sell what people want to buy will be rewarded, those that operate with excess capacity of the wrong types of vehicles will either have to change their business model or go out of business. And so it goes with the rest of the energy dependent industries. I do not have a problem with this.
So when J6P wants to buy a big gas guzzling 3/4 ton truck because (and for no other reason) he “wants to sit high and be able to see over the other vehicles” he will have to decide if $5 or $6 gas is worth his “high seat.” It is his decision to make, and I will respect it.
Energy efficiency just means running out of cheap energy at a slower rate. It’s not gonna be my problem, so let the grandkids ride in the horse and buggy.
Let’s get drilling in Anwar and build more refineries. Screw the Sierra Club and the Environmental Defense terrorists. By the way, the Chi-coms and the Cubans are drilling off the Florida Keys.When they hit oil, can we spread the blame around to the dem retards or do we just blame the Bushies (Jeb and W).Boy are we stupid.
Oklahoma,texas and Nebraska have plenty of oil.
We can get to them easily, and in fact the Odessa area is booming because they are drilling big time again.
We don’t need no stinking Anwar …which would take over 10 yrs minimum to develope.
It makes no sense to increase refining capacity for a resource that is in obvious decline (oil).
As for ANWR, it makes sense not to exploit it until oil prices are even higher than they are now. In 20 years, we may use this precious resource more wisely than pumping it into oversized commuting vehicles.
The environmental movement is not responsible for current high oil prices. Expanded production in the gulf and development in ANWR are but a drop in the bucket in terms of total global production, and wouldn’t even make up for declining production in many of the aging fields.
My main gripe against the environmental movement is its opposition to nuclear, which is really the only mature technology (other than coal) that can meet future energy demands. The nimby-ism with respect to waste storage, and general paranoia about technology is very unfortunate.
which is really the only mature technology (other than coal) that can meet future energy demands
Not to mention meeting all the demands of people 10,000 years in the future for toxic waste that never decays.
no, let’s try to be smarter than dickwads like you.
that’s toward pismo doof
What’s the definition of really ugly ??
Are we talking “interesting” or truly nasty, Wicked Witch of the West?
I told my wife when the boom began in earnest that it wasn’t sustainable. (Duh.) When the first cracks appeared, I said we would have foreclosure and dislocation in the Inland Empire and Palmcaster areas on a mass scale. We were in the Antelope Valley over the weekend and witnessed this firsthand.
What’s next? Don’t know for sure…but I suspect a full blown recession led by the initial losses in real estate followed by a drop in the stock market followed by waves of layoffs in financial services.
What’s the definition of really ugly ??
So ugly that even Ted Danson wouldn’t buy it
I could see a great B movie that’s kind of a mix of Night of the Living Dead, and Road Warrior, taking place in Palmcaster, about a bunch of mutants running around, living in abandoned houses.
“From the farmlands of the Central Valley to the swimming pools, green lawns and flowering landscapes of Southern California, it is all a brilliantly engineered masterpiece. It is an extensive rearrangement of the existing natural order, created by the ingenuity and will of man, and costing billions of taxpayer dollars in the process. California is home to two of the largest water systems on the planet, as well as numerous smaller ones, and yet most of the residents do not realize that to live in Southern California is to bear witness to the most extensive rearrangement of nature’s hydrology on the planet.”
“California’s history is written in gold mining, the railroads, and the development of water. Water irrigates millions of acres of farmland, making California the nation’s leading agricultural producer and exporter of agricultural goods. Water has made the development of Southern California and Bay Area cities possible. However, California now faces monumental challenges in meeting the water demand of its current and projected population. Further compounding the problem is that the public remains largely unaware of the major issues confronting the state, yet will likely be facing a set of competing ballot initiatives in the fall.”
http://aquafornia.com/californias-water-crisis/
You only need to look at the barrenness along the butt-ugly I-5 to see what a pitiless, bone-dry landscape the Central Valley really is without irrigation.
West valley, perhaps. Before the rivers were dammed for irrigation, the Central Valley had a very high water table with beautiful tree-lined rivers and many seasonal wetlands. Ironically, irrigation projects (pumping out the water table, followed by damming and channeling the seasonal floods) turned much of the CV into semi-desert.
And salmon runs up the San Joaquin River.
I was reading last week, and Jedediah Smith pronounced one of the rivers that flows out of the Sierra, as the finest river for Beaver, he’d ever seen… (and he’d seen a lot of rivers)
in 1828.
http://en.wikipedia.org/wiki/Jedediah_Smith
And Grizzly Bears roamed the valley, making forays into the foothills occasionally. The last California Grizz was shot in 1926.
I often wonder what California looked like, before the Gold Rush?
Guess he didn’t make it to the French Riviera?
In the 1870’s, a clipper ship made it to what is now Tulare.
Don’t know about you all, but this floored me:
coming from a realtor. If I ever look to move to SD, and look to buy a house, Mr. Bellante is going to be my realtor. Unless he’s blowing pure smoke (could be) - there’s someone truly looking out for his clients.
Also consider ‘Jim the Realtor’ His blog has been honest for a long time.
Got popcorn?
Neil
So, I was chattin’ with my 88 y/o grandma over the weekend. She lives in a 55+ mobile home community. When we spoke 9 months ago, people were buying up units, ripping them out, and moving in bigger units. On both side of her, double-wide moble homes (800-1000sqft or so) were replaced by what can only be described as “manufactured housing” (1300sqft and up). Absolutely as large as the space will hold. There is now half as much room between her mobile home and the places next to her.
Well, now 19 of the 220 units in the complex are up for sale, but NONE have sold since summer. Oh, and several are already bank-owned with more in the foreclosure process. About 10% of all of the units are behind on space rent, so the complex just upped rent to everyone else to cover costs.
And… she’s very unhappy with the “young people” (remember, it is 55+, but I guess 55 is young when you’re 88) moving in. They play their rock music too loudly, drive too fast and drink too much alcohol down at the community center.
I should add… 210 and Archibald in Rialto.
LOL!
“You young whippersnappers playing your Perry Como records, driving your Oldmobiles at the speed limit without the left blinker on! Get off my lawn!”
Sounds like…trailer trash!
Gotta remember, the Stones are in their 60’s and Paul McCartney is 65 soooo that means all our music is
Whippersnapper?
LOL
This is pretty funny. Don’t forget “we” are all much older than we think, unless you were born when Devo or Justin Timberlake was your idol in the Disney Mousketeers…LOL
This is pretty funny.
sorry if this appears ltr…
Just remember the Stones are in their 60’s and so is Paul McCartney-65 and Jane Fonda is 70…etc..so LOL this is pretty funny, all the WHippersnapper music is US!!
Unless some of the posters are Justin Timberlake Disney Mousketeers fans!
LOl
“A more optimistic outlook from the California Association of Realtors in October will likely be revised downward, said Leslie Appleton-Young, the association’s chief economist.”
Translation:
The (hype-inated-one) really has no clue about the market, in retrospect.
Yeah, but what does she look like in a tight sweater?
every, ahem, “market,” looks good when it’s going down…
no:
http://tinyurl.com/2rz4hp
he he
Actually, L.A-Y looks like a normal fifty something woman - pretty good compared to Ken Lay, her male counterpart.
Naah, I’m 62 and I look better than that. But maybe it’s the facial expression that’s the problem.
We need a babe like Romo’s girl friend instead of some dump like LAY. When I’m lied to, I want have some eye candy.
“Securing one has proven difficult for Nick Gonzales, 28, who wants to buy his first home, searching mostly in Southwest Riverside County. He said he has above-average credit and solid, verifiable income. Three months into his home search, he has not qualified for any 100 percent loans.”
Maybe he should take this as a sign that qualifying for a mortgage requires more than “above-average credit and solid, verifiable income”; it also requires a downpayment. Crazy, I know . . .
From this site today:
Number of properties for sale in San Diego County: 17,590
Number of “Distressed” properties for sale in San Diego County: 10,060
(Featuring 7,918 in “Preforclosure”)
Holy smokes… all of those distressed listings but still only relatively minor price reductions. Are they all under water?
Must not be *that* distressed, or else they would be more willing to lower the price.
If they’re not underwater right now, the waterfall that follows the Spring selling bust should do the job.
‘Spring selling bust should do the job.’
just 11 weeks away
Glub…Glub…What do you mean, underwater? Glub…Glub…
Hey! Don’t bogart that snorkel!
I don’t think a lot of these places are going for the price reduction strategy. It is either “give us our full price” or…”honey, call the bank and find out where to mail the keys to”.
These people can’t afford price reductions.
Very insightful comment, jm
What’s even more staggering about those numbers are the widfires two months ago. I spent 27 days there during that, and something like 3000-4000 homes burned down. I expected that new artificial demand + insurance payouts to buffer the stats for a few months.
They are screwed. Royally.
What insurance payouts? The insurance companies had their money in CDOs and got wiped out.
Underwater Ranch
“Two years ago, Atwater Ranch was the most controversial housing project proposed in the city. Now, the 379 acres where the project was once set to prosper is just one more piece of land for sale.”
“Real estate agent Andy Krotik began hawking the $22 million swath of land just as Florsheim Land Co. announced that it no longer would develop the site because of the housing market’s slump. With no signs of improvement, it wasn’t a good business move, a spokesman said, though the company had already spent thousands on the project.”
$58,000 per acre for ag land near Merced! Absurd. They are still wishing for a greater fool developer price. Try taking a zero off the price and maybe a farmer will bid.
Ben, I bet the former blogger of Merced Going Quickly enjoyed that news about Andy Krotik.
4 E Ringbit, Rolling Hills, 90274
Status: ACT MLS#: P943145 $2,200,000*
List Dt: 03/12/2007 PType: SFR-D Orig Price: $2,830,000
can you say 630K price drop? 90274 located on hill between LAX and Long Beach.
Our house we sold in 90275 in 2005, is still worth $50k more than we sold it for, according to zillow…
http://www.sell.com/2382HJ
They say “bring all offers”, “seller very motivated.” So do you think I’d insult someone with a $400k offer?
I put up a post on Trulia, saying:
1) I need a southern california realtor
2) I have cash to purchase
3) I would offer no more than 20 percent of list price (if that)
And all of a sudden, the realtors mentality of “just make an offer” changed to “stop insulting people.” I thought it was comical, but will be even more so in a few years when that’s all they will be getting anyway…
Can anyone explain to me why prices have come down in LA and San Diego but seem to be sticky and coming down much more slowly in San Francisco?
They are all three desirable CA cities, places that the residents think are “special” , but currently since SF is not experiencing things like the rest of CA is, people are still delusional that it “won’t happen here”.
What’s different about San Francisco? We are probably one of the bubbliest places in the country, yet are not getting slammed like other places (yet?)
You’ve still got your smug, and smug goes a long way.
Smug Alert.
Great question. I am also curious about this. Christopher Thornberg always says that when prices come down, nowhere is immune. But I’m not sure why…
If anyone has any good articles or essays (or book recommendations) on this phenomenon, would really appreciate them! Thanks…
Very similar denial in Eureka. A realtor came into my wife’s place of business (she is a banker) and said “I don’t understand why buyers are so hesitant to buy…it is a great time to buy!” after apparently having an offer fall out of escrow [yes, the dumbass, pot-smoking trash in Humboldt county are still buying houses like crazy]. My wife commented that we sold our place in 2005 and have watched comps in that old neighborhood slide 30% [this was in Visalia, CA].
Of course, the realtor said that this could never happen in Humboldt county because we’re different and retirees will keep the market propped up; people who are buying now are smart because there are deals to be had.
Denial runs very deep in Humboldt. Probably more so than any other area of the state, San Francisco included.
Anthony, do they still catch salmon in Humboldt Bay? I hooked a lunker from the shore many years ago. (HSC grad)
Nah, I know people in San Diego who still think the market is hot and prices are soaring!
What’s funny about this, my daughter went to Humboldt State in Arcata (a stone’s throw from Eureka) in 1999-2002, and it was by far the cheapest place in the state to go to a CSU and live off campus. What are the rents now in Arcata, does anyone know?
Rents are about $1500-2000 in Arcata for a small house. Most are rented out as grow houses.
At the risk of sounding xenophic, LA is slowly but surely becoming a third world “country”, thus it may not be as desirable as the Bay Area. As time goes on, I’m curious to see what home values do as people continue to bail on Cali as it continues to move into the crapper.
The percentage of “white” kids in the SF public schools has been under 10% for a few years. In SF and better parts of the Bay Area prices are goign down but due to low sales volume and renovations (that push prices) the drop has not showed up in the overall numbers YET…
LA became a 3rd world country about 25 years ago (I mean a land of haves vs. have nots that has nothing to do with race). The final nail was when the defense industry disappeared in the early 1990s.
San Francisco/San Jose had major problems in the 1990s but the dot com bubble helped them recover. House prices were already quite high from dot com money before the broad housing bubble started in 2003. Also, San Francisco proper is very small and people still line up to move there. It actually is about a unique lifestyle.
The city of angles is like a lot of big cities in our country…
There are 2 worlds there, the Hispanic world and everybody else.
And the 2 worlds have never really gotten a chance to meet one another, except in matters of commerce, and seeing each other on the freeways or streets, only from about the chest up.
And each world thinks the worst of the other, because both sides believe the stereotypes that always present one another, in the worst possible light.
It’s City of Angels not angles.
Not from what I remember of the place…
Um, ever been to Korea town?
I can relate - chosing to live in New Orleans because of it’s unique lifestyle. Watched it all die in about 5 hours due to a natural disaster.
Good thing San Francisco is immune to Mother Nature.
Brian you are kidding right?
Instead of Mother Nature, just call her Mother Rocker. She reminded us she still can shake, rattle, roll, and rock in 1989.
Don’t sweat it. It’s the new black.
People are moving out of San Francisco county, largely because of high home prices. I think the stickyness in the Bay Area has to do with the fact that there really is a lot of commerce here, so there are fewer poeple who have to sell because of a job loss. That said, if you don’t make enough $$ to pay your mortgage, then it doesn’t matter whether you have a job or not. The decline is definitely “on” here, but it just hasn’t reached critical mass yet.
Prices haven’t really dropped anywhere in LA that you would actually want to live.
A few deals in the 5-10% range might be had but overall, stuff is still moving at asking or getting rented out for an equally obscene amount.
I can rent a house in Santa Monica for 3500.00
I can rent a house in La Jolla or Newport for 4500.00
I can rent a house in Encinitas/Carlsbad for 2900.00
Or I can live in a hilly seaside O’side neighborhood for 2100.00.
I can worry about a mortgage or worry about bond yields.
I can’t dream about buying a home in the “American Areas” because prices start at 650k.
Well, not much is moving - sales volume is through the floor, and if prices are falling slowly it’s because a huge number of potential or soon-to-be sellers are still holding on hoping for the bounce… In the nice neighborhoods in L.A., we aren’t seeing as many of the early/subprime resets, but will have to wait for the option/IO ARM resets starting in another year or two…
I’ve been saying this for a while.
Basically people can’t reduce prices to sell. They can only lower it to where they break even and then sit there till they fail.
Once some low comps come in from when the older folks retire (paid off houses) then its total lock up. No one will be able to buy at the prices they need to sell at.
Then we should see a lot of people walking away after the six months of free living.
That will be agonizing torture for a lot of these people.
It will also happen in slow drip. The Fed will lower rates and kill the dollar. That will make wall st and banks happy by lowering their costs.
We in the middle will lose our buying power on inflation.
Unfortunately due to the length of this bubble percolating, and the reduction of lending standards to anyone who has a pulse or can fake one, a lot of even the retired folks refied, and heloc’d themselves silly living it up on the house ATM.
Maybe not most of the retirees but we hear about enough in the mainstream media that there are likely thousands for one we read about.
“Basically people can’t reduce prices to sell. They can only lower it to where they break even and then sit there till they fail.”
My gut tells me that this isn’t the case in LA. It’s greed, pure and simple. This isn’t an area where prices went up $50K in a few years. We’re talking a house going from $250K to $1M in a few years. Sure, they may have HELOC’ed some, but it’s a sense of entitlement to a phantom profit (that their neighbors got) that is keeping prices sticky. EVERYONE in LA has to keep up with the Joneses.
Because the San Frans bought with option ARMS and Hybrid Option ARMs and nearly all of the those puppies have not yet:
(1) ballooned (option); and or
(2) reset (hybrid)
Those are usually a 3 or 5 years option ARM or a 3/27 or 5/25 option ARM.
Same deal in the good parts of LA. The current owners were never subprime risks, so they generally didn’t get subprime loans. but I’ll bet a lot of the loans are Alt-A Option ARMs. They won’t know what hit them until later this year.
It just goes to show how much more carnage is still ahead. It’s when these cities have imploded that we might be getting towards the bottom. Not yet.
If it’s like Salinas, they are coming down. It’s just that the RE community is hiding the facts, not putting up multiple signs while still maintaining the listings (don’t want it to look like everything is for sale). All you have to do is walk the neighborhood and look at the unkempt lawns, vacant houses, etc to see what’s happening. One house was up for sale (wouldn’t give it away), people just moved out, weeds grew for 4 months, and now a RE sign in the mowed (weeds) yard after a clean up crew worked on the property for several days. See how many businesses are going out of business, how many high end cars are sitting in local strip malls, talk to the local mailman, talk to the local business owner about %age fall in sales and you’ll get a much different picture. Big clue here is talk to the mailman as they sometimes rotate routes and they have a clue by the number of vacant deliveries showing up on the city routes.
airline loads are down. Further than I have seen this time of yr to places like Phoenix etc Palm Springs for Midwesterners during coldsnaps…
The best spots are the first to go up, the last to come down.
Take a look at the Schiller index information for SF split by property values. You’ll see the cheapest homes have come down the most, the most expensive, the least.
The most expensive homes generally (note that I’m saying “generally”) have owners who have the strongest hands and deepest pockets. While the true market value for their house goes down, they simply refuse to sell. BUT, in the meantime, the buying pool for their home is evaporating (all the lower end homes from people who would “move up” are going lower and lower in price, eliminating their possibility of using the equity to move up).
So, what do you end up with, a lot of rich folk to refuse to think their home is worth less, so they don’t sell, slashing the volume of homes that sell. The longer they wait, the fewer potential buyers there are as the equity pool below them continues to evaporate.
So wait for your pitch. Eventually, there will be a divorce, a relocation, a “need to sell” (for whatever reason), and then the guy with cash and income is king. Patiently wait for distress. I guarantee you that I can wait longer than that guy who will need to use his savings after his option ARM adjusts (which is the next major batch of ARMs to begin adjusting).
I’ve notice this and wondered about it, too. Couple of things. Prices have declined, but not a great deal. Could be the beginning of things to come. Incomes are generally high here - at least for the people able to buy homes. They can still secure the loans needed to bury themselves in debt forever. The people buying don’t seem to be concerned with resale value or flipping. They buy a place they can’t afford, then if they can’t make the mortgage, rent out a room or an apartment in hopes of making up the balance. Rentals are still in demand and rents are sky high (too high). Most of the people I know that have bought recently hold good jobs and, though strained by the debt, plan on staying. Thus, to them, buying is a “good investment”. Several that I know, though, are in way over their head and they just don’t know it yet and will - without a doubt - lose their homes to foreclosure. It doesn’t take a genius to figure it out. They simply don’t have the income and any change in the delicate balance will push them over the edge.
I had read somewhere that most of the garbage loans in SF have yet to reset - that will happen this year. I’ve also noticed that a lot of places stay on the market for a long time. I’ve seen some for sale signs posted for as long as 6 months.
And I often wonder if true prices are ever reported. The building in which I live went up for sale. We held our ground, hoping the new buyers would either let us stay or buy us out. The place was listed for 1.1 mil. Well, nobody showed up. Literally. There was no foot traffic for the open house. After about one month and only two prospective buyers who walked away, the owner dropped the price by 100k. And again, no one showed up. After three months, he took it off the market. Now, if you ask me, a 1.1mil dropped to 1 mil is pretty close to a 10% drop in price. But how would anyone ever know? Zillow still has the place listed as worth about 1.2 mil.
So, I’m still waiting for - and expecting - the s*** to hit the fan here.
There’s all that. Another thing is that not everybody has a toxic loan to start with. Plenty of people have been living in their homes for years and the housing bubble doesn’t necessarily affect them directly. It’s more of a wave that passes over a divers head.
San Francisco is special, to a degree. More people would rather live there than in Antioch, so prices there will sag a bit, perhaps a fair bit, but only that, while Antioch will become the new West Oakland.
Ever heard of supply and demand?
Here’s a hint: Supply is lower because of land use laws. Demand is higher because of higher incomes.
Thanks for the tip…except that incomes haven’t increased markedly in the last 5-7 years to justify the boom in SF prices. Next.
IMHO, price declines will first be seen where:
1. There are few/no **good** jobs (good job market means lots of jobs locally in the 6-figures).
2. “Nobody” wants to live there — think middle of the desert with the meth heads.
In San Diego, the “starter” areas are down around 30% already, but the better areas have been fairly flat since 2004 (and even missed out on some of the appreciation seen in the lower-end areas). Now, it’s starting to creep into the better areas. It’s subtle & noticeable when you’ve been watching like a hawk for many years. A house here, a house there…going for about 10-15% off peak prices. Seeing some prices now that haven’t been seen since 2003 — this in the “better” areas.
At first, LA lagged SD, but am starting to see some definite cracks there. Looks to be off by about 10-15% in middle/upper-middle-class areas.
IIRC, Oakland is seeing some stress. It will creep into SF proper. Just takes time. (and SF does have a job base, which is why it’s holding up better…so far)
I was thinking about median vs average. It’s true that the median family income since 99 is pretty flat in SJ-SF. But the per capita (average) income has increased. How could it be? If we have 100 people, person 1 makes $1/yr, person 50 makes $50/yr, person 100 makes $100/yr etc. The median is $50 or maybe $50.5. The average is also $50.5.
If people 51 through 100 get 100% raises, now person 51 makes $102/yr, person 100 makes $200/yr. The median is still $50. The average is more though, maybe $75 or so. (too lazy right now to work it out.)
So how does this affect the housing market? The following is not meant to be a renter slam even though it may read as such. Presumable people that make less money are more likely to rent, and people that make more are more likely to buy. That’s my experience. It’s true that some prefer to rent even if they make tons of money but that’s less common. So in my example above, lets say that people 1 to 50 are renting, and 51 to 100 are buying. The pool of people who are buying now have more money, in fact 2x as much. Hence home prices would go up even with median income flat.
In Jan 98 the NASDAQ was 1574. Now it’s 2652. So people who get paid in stock (presumably the higher earning folks) have seen a significant increase since then, which won’t show up in the median as much.
Price should fall even on the high end, since the NASDAQ is matching now what it was in 99, when houses were less than now. But looking at median is somewhat misleading.
And finally, it’s true that it would be cheaper to rent, but a lot of people simply don’t care. Sure it would be cheaper to rent, but don’t want to have to move because the landlord gets foreclosed, or wants to sell, or whatever.
but that does mean that buying a house for investment is not a good idea.
For SFH at least, not a lot of new construction in SF, San Mateo, Santa Clara. Except the east half of Santa Clara County where prices are falling.
in LA, Riverside, SD there was a lot of new construction in the last few years.
Also the Silicon Valley economy is still going ok, job market is fine, traffic is as bad as it’s been since 2001 even with the road improvements.
We live in LA but I worked in the Bay Area for four months last year. I didn’t make any money on the deal. It was all eaten up in cost of living.
You’re talking about a group of people who are so wealthy and so ridiculously over educated and (generally speaking) so tech savvy that, you know…maybe it won’t happen there.
It’s an amazing place.
“I can’t imagine it going down a lot lower, and eventually it has to come back up. I don’t want to gamble.”
Ah, the imortal words of knifecatchers.
imortal = immortal
“I can’t imagine it going down a lot lower”
Also the words of potential FB’s that use their ‘imagination’ to make the biggest purchase of their life, instead of good old fashioned research.
But, ex-nnvmtgbrkr, you know that “we can’t throw numbers out there”, that would be boring. You really should educate yourself by taking a real-estate buying seminar. Sheesh!
I see the reason why she bought, she thinks that prices cannot go lower.
Reality check - what we believe and what actually IS can be two different things. Just because some people believed that their beanie babies were worth $700 did not mean that they could be sold for that much. And even if you cut their price by 50% you were still overpaying.
Similar situation here.
And the ‘come back up’ part is really, really funny. Yes, it WILL come back up…
But NOWHERE near what you paid for it.
It will be like this:
- Top = $500K
- bottom = $150K
- ‘come back up’ = #$225K
Things like qualified buyers, credit and funny money are freezing up fast.
It’s going to be entertaining to see how many of these “entitlement princesses and princes” can hold onto their wonderful ice castles when things really heat up for them going into 2nd quarter 08
The should forget about kissing Frogs and prepare to DIE like a boiling one
‘“In part, Gonzales cannot find a loan because some lenders have designated San Diego as a declining real estate market and applied a 5 percent penalty to all loans for the area.’
- I reported last week that my loan broker brother in Orange County was sharing this news about ‘distressed areas’ getting the
Big Lebowski from the lenders.
- In the Inland Empire it’s called ‘NO Bueno’.
When the bank isn’t willing to make the investment, that’s one good clue that maybe you shouldn’t be willing to make it either.
OT–
This week at the Santa Barbara Housing Bubble Blog I highlight a recent SFH sale at a price approximately 50% greater than the seller’s purchase price 11 months earlier. The sales price struck me as, uh, suspiciously high — but who am I to appoint myself appraiser of last resort, especially as I am not privy to the circumstances surrounding either transaction?
Certain of the blog’s local readers are scratching their heads over this as well. (In some ways, it feels more like Jan. ‘06 than Jan. ‘08 here.)
Saint Barbara
Wait for the early payment default by the straw buyer
“Phil Bellante, owner of San Diego-based Guardian Mortgage and Realty, said he disagrees with that philosophy because he expects home prices to tumble over the next year and says they could fall for four more years after that.”
“‘A lot of people have talked to me about buying, but I have quite a conscience and tell them, take your time,’ he said. ‘Let’s wait until next year. I don’t want to get you something for $600,000 when I could have gotten it for $480,000.’”
He’s absolutely spot on, except I bet that second number will be more like $300,000 or even lower.
But, but — he’s still predicting a fall for the next four years but advocating buying next year?
My wife and I live in Merced where we currently rent a new 4/2 home in a new subdivision for $1100/mo. I have been following the bubble since 2004, and could not believe the run-up in prices. Our gross income is right around $90K as we are both young professionals in stable goverment jobs (no kids yet).
Prices here are falling fast, houses like the one we are in are falling below 200K now, and I think one could be had for 170K. Think we should keep waiting, or give it a go while interest rates are still low? I think prices here will continue to decline for some time, I’m just concerned about interest rates in 2008 and beyond.
Mark to Merced…
Keep renting your brand new home until you see how neighborhoods perform around you, in a down market.
Price is a determination certainly, and so are interest rates, but if you buy in a dodgy neighborhood, what does it matter?
Keep renting and saving up your cash. It’s still a long way to the bottom. Be patient.
When you can buy a $1100 rental for $140k, start shopping cautiously and prudently. With the massive glut of new construction in Merced, you want to make sure you don’t buy into a dying subdivision where everyone is selling or being foreclosed upon, abandoning their houses to deteriorate and exposing you to crime, declining comps, etc.
It is a concern, for sure. First you get locked out because of price, then because of interest rates.
I guess one way to look at it is this. Let’s say interest rates shoot up. You know prices will fall hard. But let’s say the rates go up so high even with lower prices it cost more per month. That sucks. But consider this. If this happens, you may pay more per month today, but since you didn’t overpay on price you can refi later. And if you absolutely had to sell today, by paying a lower price your chance of getting creamed is less.
Price takes precedence over rate.
JMHO
“Price takes precedence over rate.” — Absolutely. The ultimate way to look at a house purchase is to look at it as if the money were your own. Cash buyers are not invulnerable: we will have to roll with the cost of prop taxes, ins, maintenance; yet these costs too are lower when prices are lower. Every month that Joel_CA rents puts him closer to being a cash buyer.
HIgher interest rates = lower prices.
Incomes in the area can only support a certain amount as a payment for principal and payment. So, if the price has to drop because the interest went up, it still can only come out to that monthly payment of about 28-31% of gross.
If I had to choose between higher price and lower interest OR lower price and higher interest, I pick the lower price/higher interest every time. You can deduct the interest but not the principal (price.) You can always refiance down to a lower interest rate but you can not reduce the purchase price.
You can always refiance down to a lower interest rate but you can not reduce the purchase price
HAHAHAHAHA
“stable goverment jobs”
You’ve got to be kidding?!! There is no such beast. Wait until the state has a short and see just how stable your jobs are. The government has a routing MO of outsourcing jobs when things get tight and you my friend, just starting out, are on the bottom of the totem pole.
Right on. There are two types of government jobs: the kind that would be performed in the private sector if the government didn’t monopolize certain industries (e.g., education, safety services, etc.), and the kind that wouldn’t be performed at all if the government didn’t exist. All government jobs are expendable in the long run.
In fact, there is really no such thing as a stable job for any employee.
Curiously, this analysis brings us full circle to an idea that the only safety lies in owning arable land. But, having no farming skills, I’m trying to survive by owning sovereign debt of foreign govts.
Uh, there is in California. You don’t know that because you’re in a Right To Work state.
For better or worse, the public employee unions run Sacramento. They OWN it. It’s theirs to play with. It’s basically their property.
This is all due to the longstanding liberal politics in California. Even Reagan had to deal with it when he ran the state back in the sixties.
If you have a government job here, it’s stable. Trust me.
Problem is, they’re hard to get. That’s by design.
I’d not worry to much about interest rates. If you wait a bit and keep saving you may be able to do a 15yr loan instead of a 30. This combined with lower prices should make up for higher rates if they come at all. Think about it people can afford to by now if interest rates shoot up who is buying then ?
One thing you have to consider is you might have to sell in the future better to wait till the market shows some life or prices vs rents work out really well. Just treat any house as a potential rental and you should be fine. If you would not buy a rental right now don’t buy a home to live in.
I agree with the posters above, the homebuying consumer is so stretched that higher interest rates will mean that home prices come down even further. Wait for things to bounce along a bottom for a while. I don’t think you are in any danger of prices jumping back up. In the meantime, save a bigtime down payment–when you go to bargain with a seller in a few years, you will be a very attractive person to cut a deal with (not contingent on selling a house, very likely to get a loan, etc.).
In the end, if you and your wife feel that you need to live in a bigger/better place, rent a bigger or better place. You’ll still be better off.
Stick with renting, and I hope you both have some high level of tenure in your Gubment jobs.
California is going to have to cut the back to 2000 FY spending levels by the time we hit bottom (I’m being optimisitc).
The bond market will be trashed, revenues from sales tax and property taxes will keep shrinking.
Do you expect any of your bosses (politicians) to raise taxes???
Didn’t think so.
Government agencies will unleash stealth taxes in fees and penalties to make up for shortfalls. This short sighted move will push out any job creators left with the resources to pack up and move.
Seriously look into jobs where the rich refugees will flee to (flyover states with low taxes, or resort towns)
Add me to the “stand pat” voting bloc. Variables are income, interest rates, lending standards, and price.
-Assume income remains constant.
-Assume momentum back to traditional lending standards. (and perhaps bye-bye to 3% down payment for first time buyer)
Rate rise and/or 28-31% of gross rule (as per Ann’s comment) will drop prices further.
Good luck.
Did interest rates in Japan go up or drop to 0% after their debt bubble popped?
I’m not sure our interest rate can go to zero like Japan’s did.
1. We depend on foreign money, do to the fact that Americans don’t save much.
2. Japan could drop rates and not cause inflation due to the deflationary effect of China and cheap oil. Commodities are going through the roof and China is unlikely to produce the deflationary effects of the past.
–
“…that’s why her company, Sweet Dreams Realty Inc., is starting a free once-a-month seminar on overcoming financial obstacles to home ownership.”
It is high price, Sweetie!
Jas
LOL. How long do the seminars last, 45 seconds?
Instructor: “Lowball your bids. Any questions?”
26,000 i.e.d.’s went off last year, in the i.e.
(Inland Empire Defaults)
“Record numbers of Southwest County homes fell into foreclosure in 2007, and the growing stock of bank-owned houses hammered at prices that had already begun to fall from eye-popping highs. Homeowners in Riverside County defaulted on more than 26,000 mortgages between October 2006 and September 2007, with the numbers rising higher in each three-month period, according to one research firm.”
YES!! Someone needs to shoot and post a photo of a weed-choked, abandoned house somewhere in the IE and label it “California IED.” Maybe make a video and put it up on You Tube.
If more homes are foreclosing and fewer homes are selling; where are the real comps?
If nothing is selling how do we know what the real prices are?
Should I ask the CAR?
Take a look at the lowest price listing for any particular comp, then reducce 5% - 10%. That should give you a feel for where prices are today. Make sure you repeat the process every 30 days becasue the old numbers will then be irrelevant. Welcome to a declining market. That help?
Wait for the foreclosed homes to be resold by the vultures that got them from the bank…then there will be “real comps” that the appraisers won’t be able to ignore.
It’s coming…patience will pay off…
I apologize if this has been posted, but quite a comedic exchange in this Fox News debate between Peter Schiff (who has been calling the housing bubble about as long as this blog) and a Connie Degroot “Beverly Hills Realtor”.
http://europac.net/Schiff-Fox-1-01-08_lg.asp
Fox had also done another one back on Dec 6 with Schiff & another real estate agent:
http://europac.net/Schiff-Fox-12-06-07_lg.asp
Now if Ben Jones could make a video clip each week that would be cool.
Wow, that bitch was crazy. I guess we shouldn’t expect much from Fox, though.
The best part was when the unRealtor lady kept saying “I don’t want to bore people with numbers”, then said Schiff was disconnected from reality. OK, honey, you go right ahead and continue to ignore the numbers. I, on the other hand, will continue to count my change.
I watched that and felt a burning desire to feel the frozen trout in my hand.
Wow like the old Tom Jones tune? I felt the trout in my hand and she laughed no more?
LOL. Thought I was skating on thin ice there anyway. If nnvmtgbroker was around, he’d get it.
I did get it. In fact, I’m so used to the frozen trout that I failed to see the euphemism teed-up and there for the taking. Damn, I must be slipping.
Picture ex doing his best Jack Nicholson, except the ax is now a JT………”Here’s Johnny!!”
That bag pretty much sums up everything that’s wrong with peddling real estate for a living.
she didn’t want to use numbers- why do folks use realwhores when all the “numbers” are on the net ?
I haven’t used one in 20 years
“In Windsor, Ashley Long paid $470,000 earlier this month for a four-bedroom house that was worth $630,000 near the market’s peak. The sellers, which originally listed the home at $525,000, cut the price twice to attract a buyer.”
Yes, but their drop isn’t spectacular if they only paid $200K for the house anyway.
‘It was hard to imagine this housing cycle would be as deep as it is. …’ said Steve Cochrane, regional economist for Moody’s Economy.com.
Gee Steve, prices more than tripled while incomes rose by around a third over the same period… was it really that hard to imagine? Oh, wait, I guess it’s difficult for paid shills to imagine things being other than as their masters instruct…
“‘Our gifts are our wedding rings and a new home,’ he said.”
Biggest waste of money ever! Wedding rings that include diamonds make me sick, you may as well put a STUPID sign on your forehead. Debeers force fed marketing of a gullible women, just like Century 21 used “Suzanne” to win over the previously financially smart husband.
Diamonds are as rare as glass and were not in vogue pre-1900’s, all marketing, get a cubic zirconia or a synthetic diamond grown in the lab, or better yet, get another precious stone.
Yea thats right its amazing what marketing can do
I just got a diamond wedding ring for Xmas this year. After 22 years of marriage. I like it but the cost bugs me, even though he got a hell of a deal.
But, but, but, a diamond is a dowry, didn’t you know that? Silly Rabbit. McDiamonds convey that you have been accorded a covetable value among your bubble-headed peers.
Gold and opals are my favorite jewelry.
I just want to share a little bit of good news with you all. I got another dose of vindication yesterday while talking to my neighbor. I was telling him that I wanted to find a new place to live before my landlord sells this one because I didn’t want to have to take whatever ickyness I could find within 30 days. I was tickled pink when he replied “DON’T HOLD YOUR BREATH; your landlord will have a lot of difficulty finding a buyer for this house.”
That’s the first time I’ve heard the don’t-hold-your-breath comment in reverse.
LOL! Good to hear.
Didn’t realize other people have been subjected to the “don’t hold your breath” line, too. Great reversal.
………………..AND prices are STILL in the stratosphere in Los Angeles, Pasadena, Glendale, Burbank, etc……….with all this lowering of prices, etc, why aren’t we seeing movement in these areas?
Because el lay is/was the see me-dig me showcase, and because houses went up by the $100,000’s a year, and because except for Hollywood and a bit of leftover military industrial complex, nobody was ever making the kind of jack needed, to do see me-dig me…
People opted for the 1st National Bank of Your House, which was loaning 24/7.
It’s not that prices have come down, but people’s lives became based on hitting up the house for a loan, as an ersatz livelihood.
Lots of people.
I know how you feel, but it’s coming… Follow the foreclosures, NOD’s etc. They’re starting to ramp up even in “nicer” areas. (search by zip code using foreclosureradar) And inventory, though falling seasonally, is still considerably higher than the *peak* inventory #’s in 2006. That’s important.
Also, many sellers, who bought in the last 2 or 3 years, *can’t afford* to lower their prices. Asking prices are still stupid, but there are cracks appearing. Look at listings in ZIP realty, and check the previous sales dates/prices. Very telling.
Also, there *is* a lot of $$ in these areas. People still don’t believe prices can fall very much, and some of these people are still buying. The denial is just turning into anger/fear. This years “selling season” should be very interesting…
That’s an important point about the $$. Although I suspect that things are about to change, almost everyone I know had a great year last year, is fully employed, and making good money. The exception, of course, is the writers and the below-the-line folks in television, but they haven’t been out of work long enough for the impact to make a difference. We’ll see how things look this spring.
“but they haven’t been out of work long enough for the impact to make a difference.”
If they’re typical Americans (and they’re likely even worse because they are overpaid and underbrained) and they’ve missed more than one paycheck, it’s gonna make a difference, you just might not have seen evidence of it yet.
“Although I suspect that things are about to change, almost everyone I know had a great year last year, is fully employed, and making good money.”
Agreed. However, I do know a couple of folks who HAD to switch careers, and the HELOC was the glue that kept the marriage intact. With the easy credit now gone any future layoffs are going to hurt badly since most folks are real close to living check to check.
I’m not sure if I buy the $$ thing. My wife and I clear well over 6 figures…we have no debt…(i.e. monthly credit card that we put all expenses on and pay off every month). We have no car payments, etc…YET we could not imagine paying $3K a month for a place…even when clearing close to 10K net per month. Just not possible and not feasible. Perhaps it’s just our unwillingness to get into so much debt versus others out there. I just can’t fathom the mindset of someone who would do that even with our combined incomes.
I’m not boasting when I say this but I honestly do not think most people in LA who are now sitting fat dumb and happy in overpriced homes make close to what we make…please again…don’t take this as being arrogant as Lord knows I’ve been laid off many many times over my career. But somehow I don’t think it’s $$ here..and if it is, it ain’t from working a 9-5 job for alot of these “rich” people here that’s for sure.
Definitely a lot of money in the entertainment industry in LA, but I’ve known a few people who were steadily employed (support jobs in entertainment) over the past couple of decades and now have changed careers or taken second jobs, etc.
There are cracks in LA. I’ve just started seeing them the past few months.
That’s the key….second jobs, more hours…I think that’s how people are making it. Frankly there are very few people who can make it this far with one job (or even combined)…stability in work is down the drain…people are lucky if they keep their jobs more than 3-4 years anymore.
–
The purpose of bubbles is to break down people’s resolve and patience. Be patient and it will be rewarded. How long? 2-3 more years. The minimum target by 2010 is 1999-2000 prices.
Jas
‘I can’t imagine it going down a lot lower, and eventually it has to come back up. I don’t want to gamble.’”
Ahh, the Gambler’s fallacy…
actually she did gamble (and will lose) that prices wont go down further. well you know the rest of the story
Bill & Roe’s Excellent Adventure
“Some real estate agents in the Inland Empire stinging from the housing meltdown may have a new tact to drum up business, and help out homeowners: self-help seminars. Bill Ruh, government affairs director of San Dimas-based Citrus Valley Association of Realtors, said it’s encouraging to hear Realtors getting involved in these seminars as home sales have dried up.”
“One San Bernardino-based Realtor, Karmel Roe, said she can’t count the number of times she’s caught wind of homeowners being foreclosed on. Roe says it pains her to hear about it and that’s why her company, Sweet Dreams Realty Inc., is starting a free once-a-month seminar on overcoming financial obstacles to home ownership.”
“‘Everywhere I turn, someone is telling me that someone else is losing their house,’ she said. ‘My hopes are that by the end of the year we’ll end up helping thousands of people.’”
Administering last writes…
WTH, a “seminar” is going to prevent them from foreclosing? She should just give a run-down on what the various materials in the house will fetch at recyclers. Copper, aluminum, granite, hey maybe even the 2×4s could be re-sold if you’re careful about disassembling the frame.
Short sale commissions… The bank gets 90 cents on the dollar instead of 50 cents… The homeowner likely has the place rented at a loss and downsized to another place as owner occupied and would prefer not going to foreclosure… The caring former real estate agent who has the homeowners interests as a top concern might not get 6% but gets a piece of the action large enough to live on.
“Real estate agent Andy Krotik began hawking the $22 million swath of land just as Florsheim Land Co. announced that it no longer would develop the site because of the housing market’s slump. With no signs of improvement, it wasn’t a good business move, a spokesman said, though the company had already spent thousands on the project.”
My wife and I rented a plane last month, and took a flight over the Central Valley, and there are so many failed housing projects visible from on high.
“‘I think (2008) is going to be a very good year from the buyers’ perspective because they’re going to be able to buy properties at pre-bubble prices,’ Smith said.”
“Realtors said consumers should be most concerned with finding a home that fits their needs. And if they find one, they should buy now since home prices are, at the very least, near the bottom, said Robert Kleinhenz, deputy chief economist for CAR.”
“A more optimistic outlook from the California Association of Realtors in October will likely be revised downward, said Leslie Appleton-Young, the association’s chief economist.”
I think it’s very important to note that there is no entity whose job it is solely to illuminate the downside of real estate.
There are economists, who strain to be objective and then there’s the REIC who are anything but.
But there is no “Office of Falling Housing Price Evaluation and Prediction”.
The closest thing we have to that is the unorganized, ad-hoc network of internet sites such as this blog.
In other words, I think it is extremely fascinating to contemplate how much more quickly this situation might have accelerated due to the unfettered distribution of “anti real-estate” information; something that I’m fairly certain never happened before.
Sure the information is largely anecdotal and subject to wild exaggeration, but it is still here for all to see and peppered with quite a few knowledgeable observers who’ve found it not self-destructive to speak their minds. I’m thinking here of people like ex-nnvmtgbroker and az_lender; industry insiders who could conceivably withhold their insight for fear of harming their own incomes.
Interesting times, for sure.
I think it’s very important to note that there is no entity whose job it is solely to illuminate the downside of real estate.
Ben Jones??
Ben Jones??
I think I was quite clear about the significance of blogs like this.
Probably something I wasn’t clear about is that there is no “established” entity to whom the MSM can turn for objective info on the “down” side.
Traditionally, when reporters wanted to question someone about real estate, what were their choices? Real estate agents, brokers, lenders, economists, etc. It is true that more and more of the MSM is turning to blogs for information, but it’s not nearly as automatic as their ingrained response to consult with “experts”
That’s changing, sure, but it’s still far from common.
With mortgage payments set to jump in six months, she says she cannot refinance and is asking her lender to freeze her current payments until the market recovers so she can avoid foreclosure.”
“‘It’d be 10 times worse 10 times faster (if we did 100 percent loans). We’d already be in foreclosure with most of these homes if we didn’t have the equity we do now,’ she said.”
Most of these homes? How many do you need? Because you made stupid investments and drove up the price for everyone else, your lender should freeze your payments. Give me a freakin break. Sing your sob story to someone else.
I saw a billboard today 10 miles West of Palm Springs. It was by Lennar. It said if you’re stealing copper tubing from housing, we’re watching you. — Smells like desperation
if you’re stealing copper tubing from housing, we’re watching you.
And we’re really tired of you flipping us off.
you’ll never take me alive, copper.
“You’ll never take me alive, copper.”
Cleverest line of 2008 so far, hands down.
– The Judge
“You’ll get nothing and like it”
“In all of 2006, the group’s Sunnyvale office, which provides mortgage counseling to residents of Santa Clara, San Mateo, Alameda and Stanislaus counties, got one or two calls a week from people seeking advice, Eichner said.”
“Now it’s getting two or three calls a day. ‘Right now,’ Eichner said, ‘we’re drowning in these calls.’”
Hmmm.
Group = more than two people
Calls a day= 2-3 calls a day
Result=”we’re drowning in these calls.”
Can we say…Slackers…..Geez
non-profit ? so Eichner does this out of the goodness of his heart?
HANG SENG IS DOWN HARD
get ready to buy oil and gold tomorrow…
Insiders are the weakest hands.
I thought it funny that the oil that traded over $100 was a call from the pit…
1. Oil at $100 per barrel works out to about $.14 per 8-ounce cup. Refined gas is probably about $.20 per cup. Oil is still basically the cheapest liquid that can be purchased by average citizen.
2. Considering there are approx. 1 quadrillion “dollars” in existence, including derivatives contracts (and more sure to follow), one ounce of gold for $850 seems pretty cheap.
“one ounce of gold for $850 seems pretty cheap.”
“Rural property, access to water and wood, good friends, and a happy marriage will be more important than gold and silver to the “goldbugs”. by the end of 2008″
Im a little more intersested in oil.
If I could only lay away some oil @ current rates of exchange, and store it in the dozens, if not hundreds of tanks needed, for just around $50,000 worth of it?
Or, there’s another non-renewable that holds value even better than crude, and weighs almost nothing and is universally recognized as wealth?
$50,000 worth of it weighs in @ around 4 pounds.
“1 quadrillion “dollars” in existence,”
Heh. That reminds me. A colleague at work showed me the statement from his stock brokerage account. It stated that his balance was 22 quadrillion dollars, plush change. That’s 22, followed by fifteen more digits, followed by a decimal point, and then two more digits to indicate cents. I sh!t you not.
I informed him that he had way more money in his account than existed on planet Earth.
Obviously this was a computer glitch, but it sure was funny to look at!
BTW, all, in case anyone cares, I used to be Home_a_Loan. Now for 2k8 I’m BackToTheBank, a theme more appropriate for the new year!
It looks like all of asia is doing a sympathy drop with Wall street.
Interesting ‘January effect.’ I thought that was a stock rise… Hmmm…
Got popcorn?
Neil
commercial re just went upside down
on the map
“Los Angeles economist Christopher Thornberg, principal of Beacon Economics, has predicted a 30% drop in Southern California home prices from their peak. Of the latest national figures, he said: ‘What I want to know is: How many of those are foreclosures? That’s not stabilization; that’s the market getting worse.’”
What I want to know is, when exactly did Thornburg make that prediction? I bet it wasn’t more than three months ago. That guy gets WAY more credit than he deserves for being a supposed visionary.
dwr, Thornberg has been talking the bear talk for years. He has been talking it more clearly since he left the Anderson Forecast in mid-2006. You are wrong about the 3 months. Thornberg is one of the Good Guys.
You’re right, AZ Lender. I think he’s still too optimistic, personally, but he is one of the 3 bears (Ivy Zellman, Christopher Thornberg, and Peter Schiff). I think all 3 of them deserve credit for trying to warn Goldilocks about her impending doom.
How about Dean Baker and Shiller for some real (early) bears? All through 2006 Thornburg was talking about housing prices five years later being at the same level as 2006, and now all of a sudden he’s Mr. 30% drop. Yeah right.
2nd that. Thornberg was also bearish at risk to his employment; that has earned him high respect from the HBB crowd.
Got popcorn?
Neil
Go google Thornburg and 30% drop, I guarantee he wasn’t talking 30% drops 6 months ago.
im almost ready for the FED to monatize gold.
think about it, the run on the liberty dollar has subsided….grab the rest.
In November 2005, sold my mom’s 60-yr old house in San Lorenzo, all 1,050 feet of it, for $570,000 ($10,000 over asking), to a young couple from So. America. He’s a chef, she’s a part-time school teacher, they have a young son. That was the beginning of our education as we tried to figure out how they could afford to pay that much for that house….and why would anyone want to? I just saw that the house turned over again (what a coincidence, the two-year teaser rate probably just reset) - they were asking $570,000, got $499,000. I didn’t see any notices of foreclosure, so I’m assuming this is a short sale. Sad to see my childhood home become a statistic.
“In part, Gonzales cannot find a loan because some lenders have designated San Diego as a declining real estate market and applied a 5 percent penalty to all loans for the area. That means a homeowner looking at a 100 percent loan for a $400,000 home would need to put $20,000 down to secure the loan, effectively eliminating all no-money-down programs.”
Gee how tragic to have to cough up 5%. Hey lenders, do we look like we’re made of money or something. Ay dios mio!
But Dude! All the books say you don’t have to use your own money!
What’s funny is this isn’t “5% down”. It’s 5% in FEES. Still, FB are stupid enough that they’d probably rather pay 5% in fees and zero down, then come up with a down payment that actually goes toward the principal and ave no fees.
Relocating-job in Ontario 91761. Moving from TN, looking for a nice ome in a good school district. Intersted in Corona 92880 foreclosures and Eleanor Roosevelt High School. All info welcomed. Thanks!
You can rent brand new apartments by the Ontario Mills Mall or Victoria Gardens for around $1500/mo for a 3/2, pool, laundry, several weight rooms. Or look on craiglist for a SFH in the 1500 - 2000 price range. You will be about 10- 15 minutes away from work taking side streets.
You can rent brand new apartments by the Ontario Mills Mall or Victoria Gardens for around $1500/mo for a 3/2, pool, laundry, several weight rooms. Or look on craiglist for a SFH in the 1500 - 2000 price range. You will be about 10- 15 minutes away from work taking side streets.
Oh yeah I forgot you will be in the Etiwanda School District which is one of the best in Southern Cali.
“In Windsor, Ashley Long paid $470,000 earlier this month for a four-bedroom house that was worth $630,000 near the market’s peak. The sellers, which originally listed the home at $525,000, cut the price twice to attract a buyer.”
“A first-time home buyer, Long looked at more than 50 houses over three months, trying to find the nicest house for the lowest price. She didn’t hesitate, however, to make an offer on the Windsor house after Souza spotted the latest price reduction, yet Long still went under the seller’s amount.”
“‘I got a pretty good deal. I know this is a low market and the house is worth more than that,’ Long said.”
“To lower her monthly mortgage payment, Long made a 10 percent down payment to lock in a low interest rate on a 30-year loan.”
“‘It’s the only time I’m going to be able to afford to buy in Sonoma County,’ she said. ‘I can’t imagine it going down a lot lower, and eventually it has to come back up. I don’t want to gamble.’”
Another knife catcher and FB