The Perception Is We Have A Ways To Go
Bloomberg reports from New York. “Long Island and Queens home sales dropped 25 percent in the fourth quarter and the inventory of properties surged as the housing decline hit residential areas east of Manhattan, Miller Samuel Real Estate Appraisers said. A total of 38,769 homes were on the market, 41 percent more than a year ago. ‘We’re seeing real price erosion across every major market,’ on Long Island, said Jonathan Miller, director of research for Radar Logic Inc.”
“Home sellers in the Northeast are having to lower their expectations as the real estate decline worsens. An index measuring signed contracts for previously owned homes fell 13 percent in the region in November, the most in the country, the Realtors group said in a Jan. 8 report.”
“The biggest hurdle to sales on Long Island is homeowners who refuse to lower their prices, said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I guess about 35 percent are saying ‘I need to get this price and if I don’t get it, I’m not selling,’ Herman said. ‘I don’t consider those real sellers.’”
Newsday from New York. “House sales and prices are down. Nassau Assessor Harvey Levinson, however, contends in a new assessment roll that the value of residential and business property is up.”
“But tell that to Nassau’s homeowners whose property tax assessments went up. The MLS of Long Island reports that the median sale price of a Nassau residence dropped 4.8 percent last month over the year before.”
“‘My clients resent that assessments are not reflecting reality,’ said Fred Perry, a Dix Hills lawyer who represents thousands of Long Island homeowners.”
“Vincent Jambrone, who was notified this month that his Hicksville home had increased in value to $558,300 from $527,200, said he wished he could find a buyer at that price. ‘I offered to sell it to anybody over at the assessor’s office,’ he said.”
“Levinson acknowledged that home values have decreased in some areas, adding that almost half of Nassau’s 383,000 homeowners received notice of a drop in assessment. The rest, however, went up.”
“Levinson said he expects residential assessments will catch up to market value by next January. ‘If the market continues to soften,’ he said, ‘it is likely that most taxpayers will see substantial reductions.’”
The Staten Island Advance from New York. “We’re all going to remember 2007 as a bad year for the housing market on Staten Island. Foreclosures zoomed, sales prices tumbled, and new housing starts darn near disappeared. And current sales of older homes have pretty much been stopped in their tracks.”
“‘It’s dead.’ one real estate agent conceded this weekend. ‘There’s nothing going on, and if you expect to sell a house you’d better be realistic.’”
“Would-be retirees counting on the sale of their Island home to bankroll a lavish leisure-years lifestyle have adjusted their thinking more to little-cabin-in-the-woods as opposed to beachfront in Bermuda. Such is the world of boom-and-bust finance, I guess.”
The Morning Call from Pennsylvania. “Lehigh Valley home prices fell last year for the first time since 1998, as the slowing market that has engulfed most of the country finally rolled back some gains from the boom years here.”
“At the same time, the number of homes sold last year hit the lowest level since 2001. ‘If you need to sell a house, this is probably the worst time in 10 years to do so,’ said Bethlehem economist Kamran Afshar.”
“And there’s little optimism that a turnaround is on the horizon. The number of pending sales contracts fell to its lowest level in December since the period immediately after the Sept. 11 terrorist attacks.”
“The scant number of expected home sales is more remarkable in light of new subdivisions that have boosted the number of houses in the Valley since 2001 by thousands.”
“‘People are not jumping into the market,’ said Stephen Thode, director of the Goodman Center for Real Estate Studies at Lehigh University in Bethlehem. ‘The perception is we have a ways to go on this. Prices could actually fall even further.’”
“‘Going back to the late 1980s, and early 1990s, we went through the same thing. It just had to come to a stop,’ said Jim Keim, a licensed real estate agent who works primarily as an appraiser. ‘It took a couple of years to recover. It really did.’”
“The association report shows that some of the Valley’s most desirable neighborhoods registered declines in average prices in 2007. Home prices fell year-over-year in the Salisbury, Bangor Area and Nazareth Area school districts. Real estate agents say some people have been forced to sell their homes at a loss.”
“‘I’ve seen people drop their price by $100,000 from what they paid four years ago,’ said Clay Mitman, owner of Prudential Paul Ford Realtors in Easton. ‘That’s happening, and it’s not just an isolated situation.’”
“Mitman, who sat on the board of the local Realtors’ association, said many people overpaid for their homes during the boom years and now owe more money than their homes could fetch if listed for sale.”
The Canton Repository from Ohio. “Terry and Darlene Gulley may be the face of the foreclosure problem in Stark County. In financial straits because of a job layoff, the couple turned to a subprime mortgage for their home and ended up losing it after 19 years.”
“Stark County has seen foreclosures grow from 380 in 1995 to a record 2,811 last year, well over a 600 percent increase, according to state Supreme Court figures. Despite the explosion, the numbers are growing even faster elsewhere in Ohio. Stark’s numbers grew at a rate that ranked 20th out of 88 counties.”
“Only about 15 percent of the foreclosures are tax-related, said Stark County Treasurer Gary Zeigler.”
“The Gulleys bought their home in Perry Township in 1987 on a land contract. Their payments were $385 a month. They took out a 30-year fixed interest mortgage at 7.5 percent in 1992, and the payments went to $585.”
“But like so many in Stark County, he was laid off in 2002 from his job. They needed money, so they refinanced with Equicredit on a five-year, adjustable rate mortgage (ARM) with payments of $725.”
“Then in 2004 Ameriquest contacted them and said they could get them a lower rate. ‘I told them on the phone I wanted a fixed rate,’ Gulley said. ‘Then we found out it was a 2-year ARM.’”
“Also, ‘The property was appraised way higher that it was worth.’ The price in 1987 was $39,900, and the Stark County auditor valued it at $80,000 in 2006. In 2004, Ameriquest’s appraiser valued it at $185,000.”
“Ameriquest…formerly one of the largest mortgage lenders in the country, stopped taking loans applications in August. ‘We are in the process of winding down the business,’ said spokesman Chris Orlando.”
“The Gulleys only borrowed $112,000. It was a 2-year ARM for a shorter term, so payments were $826. ‘We hoped we’d (eventually) be able to get a fixed rate,’ but after two years of on-time payments, Ameriquest said no. When the teaser rate expired, ‘It started increasing by the hundreds,’ Gulley said.”
“The first jump went to $1,015 a month. ‘When it got to that point, I said ‘We can’t do this.’ He called Ameriquest and ‘I asked them what we could do. The woman on the phone said ‘You just can’t afford your house. There’s nothing we can do.’”
“‘At that point, my wife and I decided to move’ in Nov. 2006, he said.”
“The house went for $55,000 at a sheriff’s sale, and ‘Ameriquest wanted to come after me for the other $50,000 or so,’ Gulley said. In September 2007, the Gulleys filed for Chapter 13 bankruptcy protection. A Chapter 13 bankruptcy is also called a wage earner’s plan, because it requires people with regular income to repay all or part of their debts.”
“Ohio joined other states in suing Ameriquest for its lending practices, getting $6.6 million for the state’s share of the settlement. The Gulleys’ portion would have been $255, but they didn’t file for it. ‘It’s like a slap in the face to me.’”
Note to MSM:
‘Lehigh Valley home prices fell last year for the first time since 1998, as the slowing market that has engulfed most of the country finally rolled back some gains from the boom years here.
While the decline was small — the average price of an existing home dropped $1,000 to $227,000 — it’s a dramatic change from the four previous years, when home prices rose 10 percent or more each year…’I've seen people drop their price by $100,000 from what they paid four years ago,’ said Clay Mitman, owner of Prudential Paul Ford Realtors in Easton. ‘That’s happening, and it’s not just an isolated situation.’
Over and over, an article will report statistics showing a tiny drop, but quote people in the industry on 5 or 6 digit losses. So which is it?
You know the answer.
The median price of the smaller number of homes that sell is held up by the fact that less valuable houses have stopped selling.
The person who was going to spend $200K still spends $200K, but buys the bigger, newer, better house that would have sold for $300,000. The house that would have sold for $200,000, and could now only sell for $120,000, doesn’t sell at all. The median price of homes that sell stays the same.
We won’t see the real price until the market starts to clear.
Then the question becomes, if you and I know that, why doesn’t the media look into it?
Well, they are quoting Shiller’s index, based on repeat sales, more in their stories. That’s a start.
I’d say in most of the articles I’ve read (and it’s mostly articles I read here) Shiller has replaced the NAR in most articles on the housing market. I also see Dataquick and the Warren Group used as background information.
NAR data is only quoted in articles on the release of NAR data, or in markets where an alternative is not available. Heck, I’ve stopped reporting it myself in reports I write, though it was in the template of facts to cite on each region’s economy when I was hired.
This is where other metrics such as price per square foot make more sense. I know there are many variables which go into the price of a home, many of which are intangible, but a raw median is worthless in every regards because it says nothing at all about value for money, only transaction amount.
I suggest we call them “OM” as in Old Media
“But tell that to Nassau’s homeowners whose property tax assessments went up. The MLS of Long Island reports that the median sale price of a Nassau residence dropped 4.8 percent last month over the year before.”
“‘My clients resent that assessments are not reflecting reality,’ said Fred Perry, a Dix Hills lawyer who represents thousands of Long Island homeowners.”
Tax revolts were commonplace, all over the country in the early 1930’s…
“Vincent Jambrone, who was notified this month that his Hicksville home had increased in value to $558,300 from $527,200, said he wished he could find a buyer at that price. ‘I offered to sell it to anybody over at the assessor’s office,’ he said.”
“Hicksville”???? Come on - it should not be that easy to make fun of him…:) Is there a J6Pton out there too?
Hicksville is a large community whihc has in the last few years gotten very popular among the indian community
but 560k for hicksville? nah try 300k tops imo
this is a typical home in hicksville
http://www.mlsli.com/uniDetails.CFM?MLNum=1997748&typeprop=1&start=1&rpp=20
Good grief, 1953, 6k/yr in taxes and they want 350k for that?
and ben that is cheap-
now you see why i rent
and all of our friends who live on long island are just dying for us to buy out here
i guess misery loves company
I owned a house that looked alot like that one, built the same year too. Cost me $66K.
Ben:
Towns like Hicksville was designed to be commuter towns, about an hour train ride to Manhattan, so most housing was blue collar middle class Levittown style.
Ben,
mgnyc99 ain’t kidding! That’s dirt cheap for Long Island.
Though I must admit, you couldn’t pay me to live in Hicksville. My friend grew up there and I remember as a teenager feeling unsafe when visiting.
Thanks for photo. The values are 50% overpriced at least. We may have years of painful contraction.
Looks like the roof is made of beer cans.
Ahhhhhhhhhhhh, just think, after you take care of the mortgage, you become a land renter from the county for a tidy sum of $500/month for the rest of your life or until you find some bigger fool. Of course, you will also be paying that while paying off the mortgage. Ouch! Now, if that house was a 100K, maybe a would rent it from the county at 500/month, but not at 350K mortgage. Heck, move to TN or NW PA for that amount!
Why make fun of him? He’s only telling the truth and expressing dismay that he is being taxed too high.
Steve, I think he’s making fun of the name of the town….Hicksville.
Foe such a huge town it really is a funny name.
Shiller: New York City overpriced, heading for either a housing bust or a loss of economic vitality.
http://www.observer.com/2008/shiller-new-york-we-re-ancient-rome-right-fall
“If it gets too expensive in New York, people will leave it, no matter what—they can’t afford to live there. And so it’s just not true that New York will keep appreciating independently of everywhere else, I just don’t believe it. Elementary economics say people will always substitute away when the price gets too high, and so they’re doing that.”
“It would be a great thing for New York if prices came down, because more interesting people would move in. Your artists can’t afford to live there anymore … They’ll move out of Brooklyn, they won’t be anywhere nearby.”
“People like urban living, I think we’ll see a movement toward building more urban centers… We have to create new Manhattans, there’s a demand for them. It’s too expensive in Manhattan, there’s no reason why we can’t have a brand-new one somewhere. We just have to build it, plan it all out, a planned city, put it somewhere where land is really cheap, on the coast somewhere with a good location.”
“Did you know that the world financial center [of the 1600’s], Amsterdam, created a second city called New Amsterdam? And it’s the world financial center today. Amsterdam hasn’t gone up! It’s the satellite city, called New York now, that’s replaced it … New York will set up satellites; we’re starting to do that with Greenwich and Stamford and I don’t know where else, and it doesn’t have to stay there. The idea that it’s just going to keep going up, especially with the Internet age, which makes communications more easy, I just don’t think it’s reasonable to think it’s just going to keep getting more and more expensive.”
God, I hope the NYC satellite city isn’t Philadelphia! I’ll have to eat a lot of crow if prices don’t drop here.
That’s been talked about for years. The location is right, along with the transit system and urban character. But you aren’t going to leave Manhattan and move to the Philly burbs. And the tax and murder rates in Philadelphia proper are a problem.
We considered moving to Philly in the late 1980s bubble, but never made the leap. Then Brooklyn became affordable again. If the prices we have in NYC now aren’t enough to make people go to Philly, what will?
Naw, they already built it, it’s called Dubai, and it’s doing quite well.
Dubai, then London.
Yep. There is, unfortunately, no reason that the New York satellite has to be domestic US. As the various industries get priced out, they have to move.
Dubai is well primed to accept a *large* number of NYC jobs. But they won’t go to just one location. Cest la vie.
I had FOUR coworkers come to me to complain they’ll never be able to buy a home and ask of job opportunities within the company is less expensive areas. Why did they ask me? Well yes, the fox is in charge of the hen house…
Got popcorn?
Neil
put your fork down you will not in crow
prices in nyc area will either come down or it will be a city filled with the wealthy and surrounded by the serfs
come to think of it it is already pretty much like that
i would love to leave but where would i go? my wife flat out refuses to leave
If it weren’t for the schools and the housing prices, the serfs would have it pretty good in NYC. Mass transit. Beaches. Lots of free entertainment. Just not worth the price.
Same here but my GF never drove a car being a city girl…so it would be a very big lifestyle change for her.
“People like urban living, I think we’ll see a movement toward building more urban centers…”
We already have seen that - from Peoria to Phoenix. The real question is whether or not that’s true or just REIC hucksterism. From my vantage point it looks like they’re moving to cities to try to get by - not for the fun of it.
More time is needed for observation, but in the meantime it is obvious that many, many local gov’ts and C of Cs are absolutely betting on that claim.
What else do they have to bet on?
Much of suburban America is going to suddenly encounter the problems of an aging community — less competitive 50-year-old housing (see the Hicksville house above) and more public employee retirees with pensions, and thus more taxes with no public services in return. In a growing suburb, everything is new, and public services are staffed by young, cheap, healthy workers with few retirees to carry from the former rural self.
These suburbs are going to go through what central cities did in the 1970s.
So either economic activity and better off people will collapse back into the cities, or the donut hole will get bigger.
Yes, this historic reordering of the urban landscape is arguably the most profound since early suburbanization. Capital is one the move again and this boom/bust is proving an potent agent of these changes, but will we be left with something that is socially and economically sustainable?
“Did you know that the world financial center [of the 1600’s], Amsterdam, created a second city called New Amsterdam? And it’s the world financial center today. Amsterdam hasn’t gone up! It’s the satellite city, called New York now, that’s replaced it …
Maybe the fact that the Dutch walked away from what is now New York because they didn’t feel like putting up a fight when the English ( 4 ships) showed up explains some of that. I love how just 93 men talked Stuyvesant out of doing anything. The guys up the Hudson doing all the trading didn’t even know there was a change and never had a say. I guess you could say nothing’s changed.
(The guys up the Hudson doing all the trading didn’t even know there was a change and never had a say. I guess you could say nothing’s changed.)
Good news. Upstate New York is now part of Dubai. Sorry about your not receiving the memo.
LOL…Touche’!
http://www.bloomberg.com/apps/news?pid=20601039&sid=aEXlKAu61sYU&refer=home
like I said before…Goldman epitomized the moral hazard ‘motif’
unbelievable…
crush
Wait a minute — maybe this is the OPPOSITE of moral hazard!
Imagine you are the head of mortage securitization at Merrill Lynch, in 2005 or so. You’ve built up a competent profitable department, stocked with people you like, have been earning big bucks for the company and yourself.
Seeing the deterioration of credit quality and the other issues now revealed, and given the competitive “flight to stupidity” in the industry, you report to the CEO that continuing in mortgage securitization over the next three years will result in massive losses, that work must stop, and — with no revenues coming in — you and all your staff should be fired immediately.
Not going to happen. Moral hazard.
A risk manager coming in to the CEO, and telling the firm to shut down a $zillion dollar money marker and cede the market to competing firms? Even if it was done, it would be ignored.
So here is the genius at Goldman. Rather than stopping something and firing people, the firm just offset it neat and clean. Risk management that works!
I’d like to think they cared about the lower echelons…maybe they did, but they probably should have put out a statement to investors about this plan?
i wonder if their shorts are actually going to pay off in the end…?
crush
I used to work at Merrill. A risk manager did in fact advise CEO Stan O’Neal that there was too much risk in this area. He was ignored….and Stanley Dumb walks away with $100M+.
Arguing truth to power on Wall St. is a surefire way of getting fired.
Stark-naked
“Stark County has seen foreclosures grow from 380 in 1995 to a record 2,811 last year, well over a 600 percent increase, according to state Supreme Court figures. Despite the explosion, the numbers are growing even faster elsewhere in Ohio. Stark’s numbers grew at a rate that ranked 20th out of 88 counties.”
“But like so many in Stark County, he was laid off in 2002 from his job. They needed money, so they refinanced with Equicredit on a five-year, adjustable rate mortgage (ARM) with payments of $725.”
I don’t get it. If you’re laid off from your job, why would you refi and up your payment. At $585 he could have gotten 2 fast food jobs and made ends meet until he could find something else. So now he has a $1015 payment, filed bankruptcy and may still be liable for the $50k loss the bank took. Not a smart move.
agree with you about the refi problem - here is how he saw it on his end;
1) he would refi with a fixed for a slightly higher payment until things picked up however . .
2) the rep on the phone misled/lied to him about the nature of the loan, saying he would get a fixed, not an ARM. Why would the rep do this ? because they CAN GET AWAY WITH IT! the rep is a t some phone center, probably half a country or half a world away, and gets a large increase in the commission of ‘ converting’ this loan to an ARM.
just like the mortgage brokers you speak with in-person, but less risk as this phone rep. is hidden & protected.
I tell ya what, whenever I need to do any bidness over the phone, I RECORD the converstion on a tape player, then play back a portion for the phone rep to hear when I’m done. Dont need to do it very often but boy howdy you should hear the squaking from the shyters when I do … hehe .. and the honest ones have no problem with this. go figure
I think the real question is why was he even approved for this loan if he was out of work?
Yeah it used to be you had to have an income to get loan approval. I guess the key phrase there is “used to be.”
“‘I guess about 35 percent are saying ‘I need to get this price and if I don’t get it, I’m not selling,’ Herman said. ‘I don’t consider those real sellers.’”
Well no, they’re not “sellers”; they’re “listers.”
Dottie Herman was the one “bull” at that NYC RE conference last week. She seemed quite level-headed for a RE agent.
One can sound convincing, intelligent, and reasonable but still be a bonehead and completely wrong.
wife and i rented home in east hampton for the 2008 summer. the rental market is going gang busters. we have had more request by agents to show the home this year than the past. i’m not sure what the deal is but it’s only in its third rental season.
gotta love the hamptons. one road in one road out and filled with
some pretty cheezy people and horrific traffic
i would only go if i could helicopter in each weekend
so i guess i won’t be there for awhile
oh well
wife is a local. here is a quote from one of the city folk my wife’s mother heard a city person say one summer in line at the grocery store:
“i wish they would make a place where the locals could go shop.”
I’ll bet the locals wish that too!
“The Gulleys only borrowed $112,000. It was a 2-year ARM for a shorter term, so payments were $826. ‘We hoped we’d (eventually) be able to get a fixed rate,’ but after two years of on-time payments, Ameriquest said no. When the teaser rate expired, ‘It started increasing by the hundreds,’ Gulley said.”
The same only “sad” story… couple uses home as ATM then foreclosure…
What the heck did they do with $112,000 in two years…that is like $80K per year in pre-tax income. People take no personal responsibility in this country. I bet there was a new pick-up and harley in the garage.
Should have borrowed the whole 180k. The article mentions that they lost their truck, too…
And how did we get to a place where an 80k house is appraised at 180k, but only sells for 55k; in Ohio of all places? But let’s slap Ameriquest on the wrist and make the CEO an ambassador!
A co-worker very early in my career used to say that if you distributed all the world’s wealth equally among everyone, within two generations it would be back to today’s distribution. The Gulleys are Exhibit A in the body of evidence supporting that statement.
The saying is “Money always finds its rightful owner”.
That’s probably true in a general since but I couldn’t help but take note of an interview of the new CEO of some guitar company. The company was formerly dying but under his hand was experiencing noticable growth again. He mentioned the first thing he did was get rid of all the people in power whose ideas were in the way of real growth and empower the hungry little guys with fresh ideas. I could’t help but notice the implications that the guys in power (who were stagnating things) kept the little guys from rising and as long as that situation was intact, their product was dying. So much for the rightful owner idea.
since =sense
Maybe a one of those feminine looking Fords with the Hardly Ableson decorations on it?
It said there was a JOB LOSS - and bills do not stop coming, and food doesn’t magically appear….. and if they had health insurance through that job that was gone, they had to pay COBRA to keep any coverage. Now there is a budget-buster. Typcially COBRA runs around $1000-1200 a MONTH for a family and can last for 18 months. There goes $20K+. If the person who lost the job decided to to do what people are told to do when the working class jobs disappear (ie: go back to school), there goes mor money. Sad thing is these people get encouraged to take some garbage associates degree at the local community college which leads to no where but paying tuition.
First they would have rolled the old mortgage blaance into the new, then probably had to pay COBRA, and then ‘retraining and school’ costs seem likely and then COBRA would have ended and they would be left to try to buy coverage in the non-group market (even more expensive and hard to get) ……….
Try it sometime. Paying things like healthcare will easily run through the difference between the $112000 they borrowed and the balance of the old mortgage.
If they had some salable skills, they might make a go in their own businesses. But even that is a crapshoot. A big one.
Thanks Ann, I was going to point this out as well. Sounds like a lot of posters are ready to slag anyone who has suffered financial difficulties, and assume they’ve borrowed money to buy toys. Sure, it may be true for some people, but others have just been trying to survive a job loss or illness. Not all of us are financially set, pondering what to do with our six figure income and 100ks sitting in the bank. Oh, gosh, what fund should I put it in to get the best return, yaddah, yaddah, while Rome is burning. We need to have a bit of compassion, a little New Testament rather than hell and brimstone for all those pitiful sinners. Yes, people have been financially stupid, but does that mean we should kick them while they’re down just so we can feel superior (and allay our own fear)? We’re better than that.
“Sure, it may be true for some people, but others have just been trying to survive a job loss or illness.”
I believe we’ve had hard data w/link posted here that showed almost 1/2 of those in financial hardship are due to job loss or catastrophic illness. I caught Lou Dobbs making that argument several nights ago.
Having spent the past few years in a very materialistic environment, I know the sting of being invisible among the posers and shakers. But I’m not sure if I’m any better than them if I just turn the tables. I’d prefer to just know I did a better job than join them at the middle school lunch table. Didn’t we used to call that sort of thing self-confidence?
But the article says they “only” borrowed $112,000. “ONLY” $112,000!
“The biggest hurdle to sales on Long Island is homeowners who refuse to lower their prices, said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I guess about 35 percent are saying ‘I need to get this price and if I don’t get it, I’m not selling,’ Herman said. ‘I don’t consider those real sellers.’”
enjoy those taxes you stubborn bastards
i know there are some long island people here but i really find that lifestyle to be horrible
if i had kids i might not feel that way but it is not my cup of tea
No offense taken!
Admittedly, there is a loud and obnoxious population on this island that is showcased as the example of excess and stupidity. There IS, however, a population of reasonable, unimpressed people that are standing on the sidelines to take over when the idiots lose their shirts.
Of course, I have been accused of being loud but I’m also reasonable and unimpressed…..and fun-loving and smart and funny and beeeeaaaauuuutifulllll and….what was I talkin about?
We are actually considering moving back to LI. We have found that people really are just as loud and boorish in other parts of the country as they are on LI. We have family/friends there, otherwise I would never consider going back.
That’s why we moved back and the only reason we stay. Personally, I found I needed my kids to be actively involved with their relatives but I have a sis in VA who is happy as a clam far far away.
To each his/her own.
“Ohio joined other states in suing Ameriquest for its lending practices, getting $6.6 million for the state’s share of the settlement. The Gulleys’ portion would have been $255, but they didn’t file for it. ‘It’s like a slap in the face to me.’”
Imagine what they’ll think of ’ssshrubery’s $250 fistful stimulus program?
$250? Really, just about anyone nowadays has ready access to thousands of dollars via credit cards - and even then the consumer economy is sputtering. What a crock.
$250 = one last cigarette…in front of the firing squad.
$250 = one last cigarette…in front of the firing squad.
Two weeks groceries in the midwest.
“$250 = one last cigarette…in front of the firing squad.”
So well said.
The Gulleys’ portion would have been $255, but they didn’t file for it. ‘It’s like a slap in the face to me.’”
Nothing like the slap in the face he gave whoever bought his mortgage from Ameriquest. The people at Ameriquest were right: He can’t afford that house, at least not once he mortgaged it beyond his ability to pay.
And once again, here’s someone who didn’t read his mortgage docs. Sure, he “told” the broker he wanted a fixed rate and ended up with an ARM, but here’s betting the broker told him (probably accurately at the time) that a fixed rate mortgage would start with much higher payments than he wanted to pay. So he went with the ARM anyway.
hey that is not fair i want a do-over and there was definately a harley in the garage and fake boobs on his wife i’m sure
poor victims lmfao
If I read it correctly, this article ignores the truly outrageous part…..the guy didn’t even have a job, and he STILL is out trying to borrow money. And getting it.
The rate was “fixed” for two whole years. The mortgage industry deserves to go bust, and so do the Gulleys. There were liars on both sides of that deal.
The article about 25% drop in sales in Q4 07 on Long Island, NY confirms what I believe to be the inflection point for RE in the entire state and parts of new england. Oct 07 sales hit a wall in all of NY state. Also, the denial was as strong here in NY as it was anywhere and still is in many cases. The further out you get from NYC, the more clueless people are about how this is coming apart. I think many in and around NYC are more inclined to concede that prices are falling, sales are falling and the future isn’t bright. Upstate folks? Completely bamboozled and blind to what’s happening right on their own street. I refer to a family acquantance who is a realtor as “the brain surgeon” who bought a shack for 4x over it’s 2001 street price. and my family replys “but he’s a nice guy”. Ok…… he’s a nice guy without a clue.
The Gulleys couldn’t come up with another $200 per month to keep their house? Cancel the cable and high speed internet and you have 1/2 the money right there. Have a garage sale, sell everything in sight, adjust your income tax withholding, get a part-time job.
WOW that is so logical, maybe the Gulley’s need to hire you as their “Life Coach”. LOL
I think they were planning on appreciation to pay their mortgage, not hard work and sacrafice. The law of unintended consequences is at play.
I think they were banking on him finding another job.
Stark County is very hard hit by the collapse of the manufacturing industry.
And Penciloid? Go try to pay COBRA and then buy non-group coverage health insurance or try paying out of pocket. Sounds like they would be in the age group where employers say “not a good fit’ when what they mean is “don’t want you, you are over 40, 45….” That is a blue collar area and very hard for older workers.
I know that area and it is tough for those wholive there to find jobs
And before a lot of you get on your high horse and say ‘they should move’ , move to where? To do what?
Some of you desperately need to learn some empathy skills. What would happen if you lost you job, lost your health coverage, were over 40/45 and didn’t have the skills for the jobs pushing non-essential papers around?
“I think they were banking on him finding another job.”
Exactly. No one banks on house appreciation in Ohio!!!!!
What most people on this blog don’t seem to understand is that Ohio, much of the midwest in general, and most of the non-metro areas in America are lands of haves and have-nots.
If you have a job, you live very well, at least for the area you are in. For those without a job (due to job loss, etc), you live in poverty. And if you are over 40 and lose your job, it’s very difficul to get another, so you quickly fall into category 2.
Schadenfreude and “empathy skills” don’t go together.
Maybe so, but I certainly wouldn’t try to borrow my way out of unemployment. All borrowing does is make the problem worse. So he loses his job and totally eliminates any potential for stability by putting his house at riask by borrowing more against it, a lot more.
1. He shouldn’t have refinanced, unless he knew that the job loss was very short term (i.e. had something else lined up)
2. The bank should have never loaned him the money
3. He should not be surprised that he lost it all once the borrowed money ran out.
Well put.
You can’t borrow your way out of debt.
“You can’t borrow your way out of debt.”
Are we sure about that? Seems to be the Wall Street plan….just need a little to hold me over until…..
“You can’t borrow your way out of debt. ”
Is that a BUSH quote?
He was borrowing time to find a new job/income, and in the meantime took on more debt. Frankly, I’d have done the same thing in his situation. We applaud this type of chutzpah with entrepreneurs and hedge funds and IPOs and whatnot, gambling on future returns. He took a risk and lost. So be it, let him rest in peace.
Yep, sounds to me like a guy that was probably facing losing his house a couple of years ago, or borrowing against it and hoping to somehow get back on his feet.
To me this is more of an indication of a widespread problem that is only now coming to light. The reality that a huge number of Americans have slipped from Middle Class into the lower class.
Real wages are down in many parts of the country, and expenses are going up daily.
In general we are witnessing first hand the adjustment period of the American standard of living. It is going down, and it isn’t pretty. Few people are truly immune from this trend, so a bit of empathy is probably in order, because who really knows how this whole mess is going to end up.
I think many here have seen such greed, dishonesty, avarice, stupidity, collusion, and short-sightedness in this bubble that they have a hard time believing these stories.
This guy took a gamble and lost. He was in a position where he had to make choices. He made a choice but did not understand the risk-reward of his gamble. He made the wrong choice because of misplaced hope, not because of rational thinking.
What if he did not take out the loan 2 years ago? He could have sold his house for a profit and moved to a place where he could find a job. Or he could sit tight and lose his house without the $112,000 debt.
The Gulley’s story is sad, but it is a story that’s going to repeat itself 2 million times over. I’ll bet 1/2 of them could have been avoided if they just peeked behind the curtain of the offer and made a decision based on real probabilities, rather than wishing.
Do I have empathy for them? Sure. Do I think they made stupid, short-sighted decisions? You bet. Will they learn anything from this experience? Probably not.
” . . The Gulleys’ portion would have been $255 … ”
Bet the lawsuit lawyers got paid much more than that, in cash, no rebate coupons!
plenty of lawsuit class action ambulance chasing ads on the margins of some webpages. been a victim of ” insert company name here ” !??! (join the lawsuit = which essentially means give more ammo & credence to the lawyers while actual client payouts are diluted to a tiny fraction of the settlement, since you must pay the lawyers first, then divy up the pitiful remains amongst the group).
BUT … but but … I can hear the lawyers now whining, at least you get SOMETHIING for yer efforts, joe consumer. Well sure he does, AFTER mr lawyer takes the lions share of the settlement. right away. in cash.
“This guy took a gamble and lost. He was in a position where he had to make choices. He made a choice but did not understand the risk-reward of his gamble. He made the wrong choice because of misplaced hope, not because of rational thinking.”
But why heap all of the disdain on the homeowner? Why not the lender. This guy should never have been given the money. No one in their right mind would have made that loan under normal lending behaviors. No loan would have probably turned into the exact scenario of him selling his house to pay his bills. He then would have been homeless two years ago rather than this year…and the broker would not have made any money.
Thanks for the reminder Ann. I think the problem is that many of us on this board are in a good sitcheation and have forgotten what it is like. I realize it is easy to pick on the dumb moves some of these people make, but we often forget what it is like in some of these places. Exhibit A is the NY Times article yesterday where the guy moved back in with his mother. Heck, he was only making 14/hour and lost his job. It wasn’t like he was making 60/hour w/full benes just for screwing in screws or surfing the net while on the job.
Even before this big bust, possible depression, started, some of these areas, i.e. midwest/rustbelt have been hit hard.
We need to remember that it could be any one of us with what is coming.
I agree. These people may have honestly had no good options.
On the healthcare age discrimination thing, not that I doubt it, but, if all we ever hear of is people without healthcare these days or employers not offenring it, what the hell does it matter how old someone is if they’re on their own in many cases to figure out how to get healthcare? Shouldn’t a company then just look to hire someone based on their skills and let the employee worry about their healthcare. Is there some law that states that a company of a particular size HAS TO offer healthcare? Just curious.
Don’t know if anyone is still reading this thread, but, here in California, if you lose your group health coverage for any reason and have ANY kind of pre-existing condition (even high blood pressure that is under control) you CANNOT get an individual policy. Something has to be done.
My company offers a health care plan, but they contribute zero to it, and I’m sure they get a kickback from the providing HMO.
As a result, it’s essentially the young workers (like myself) subsidising the large number of older workers. I said “hell no” and bought my own for 1/4 the price on the market. That last bit alone should tell you what a scam the whole thing is.
Ann Scott: What would happen if you lost you job, lost your health coverage, were over 40/45 and didn’t have the skills for the jobs pushing non-essential papers around?
Except that, if you read the article, it says this:
But like so many in Stark County, he was laid off in 2002 from his job at a law firm.
He wasn’t working in the manufacturing sector. If that were the case, I can certainly understand the difficultly he would face in landing another job at similar pay at his age.
Working for a law firm, he must have had some sort of white-collar job. So he would have had the skills to push “non-essential papers around.” I can’t think of many blue-collar jobs in law firms.
Maybe he was the janitor, but I seriously doubt this, as most firms either rely on the building that houses the office to provide those services, or have a contract with a janitorial service.
Bottom line is that he probably would have been better off putting up the house for sale and moving, and given that he worked at a law firm, I would bet that his skills could be transferred to another employer fairly easily.
5 years before the word normal will be used in terms of this mortage problem. Pockets of somewhat normal will occur in parts of the country in the next 2 years but as a whole the trillion dollars that’s right trillion by the the time the whole mess is a memory will have gone into a blackhole.
I still feel that the Fed Reserve of the past under Greenspan saw the storm many miles away and refused to issue a warning ,i don’t see why people at Enron and World .com got jail time or bif fines and Greenspan and the like are not brought up on charges?
“i don’t see why people at Enron and World .com got jail time or bif fines and Greenspan and the like are not brought up on charges?”
What about the leadership at NAR and NAHB? And lenders? Yup….. good old fashioned “personal responsibility” is good for me and you but doesn’t count at the top.
How’s that for hypocrisy?
OT - wife and i have been paying much attention to the 22180 vienna, va area for awhile. 12k sq ft lot now for sale (short) for 379k. it was bought in 11-2005 for 490k.
that is the first lot in the 22180 zip code that has been listed under 400k since we have been watching. it was probably around 550k at the peak in 2006.
(i say lot but there is a house on it…allot of 1950’s ramblers have been torn down and rebuilt over past few years. vienna is very close to tyson’s corner)
michael,
You probably already know this, but just in case you don’t I want to post the URL for the Northern Virginia bubble blog. Many amazing price reductions are posted there. The blog administrator is a regular here on Ben’s site.
http://novabubblefallout.blogspot.com/
land hit it’s low in 1995 here- 6 years from peak
Michael,
In 1996, we turned down a Colonial in 22180 (as a move-up) for $242K, thinking it was too expensive for us. (Its first price was ~80K in 1976).
This is what happened next:
09/05/1996 $242,000
06/05/2001 $530,000
06/24/2004 $725,000
Most of the original owners in the neighborhood (who retired) cashed out and moved away after Y2K to escape the property taxes.
The bits bucket is at almost 300 - can we get a new one. Us guys on the West Coast are getting lost, I guess we can wait until the CA thread.
hey crispy just like the escalating foreclosure numbers the bits bucket is hitting all time highs
LOL!!
Everyone waits for the SoCal post - it is the climax of the day.
Lets face facts, Calif gave birth to the subprime loan and leads the nation in every direction that it takes at pretty much every important level.
Wait till ALT-A’s start to reset. Sub-prime is small potatoes compared to the losses there. Folks with great credit can supplement using credit cards and have longer reset periods, which only means when they do fail they will fail more catastrophically and with far greater losses per foreclosure.
“Vincent Jambrone, who was notified this month that his Hicksville home had increased in value to $558,300 from $527,200, said he wished he could find a buyer at that price. ‘I offered to sell it to anybody over at the assessor’s office,’ he said.”
—————-
I think there may soon be a trend at the local/state level towards forcing the assessor to buy the property for their assessment if they will not lower it when the market is tanking. At this point my 2008 assessment is higher than the real market value, and I’d gladly sign it over to Maricopa county for a nice check, as would many others in the Phoenix area I’m sure.
I wonder if there are 5th amendment “takings clause” ramifications in a too-high assessment?
And yes, I do know that the local govt’s would just jack up the rate, but at least it would force them to be honest about it.
They could also end up with thousands of homes on their hands and go bankrupt in a hurry.
What I find most amusing about all this is that people have been fleeing the great lakes area “rust belt” for over a decade now because they needed to escape all those oppressive taxes and get down to the sun belts where houses were cheap and taxes were affordable.
Now that taxes are going way up and all of the money they might have used to move has evaporated in a cloud of home depreciation, what will they do now? Where is the hot new area to move to with low taxes and cheap houses? Looks like the sun belters may end up moving to India and China. I hear houses are dirt cheap out there, and taxes can’t be that high.
BB sees no moral hazard in throwing cash at deadbeats- don’t have to have a tax return ?
so cash for illegals?
also 100 billion in subprime losses so far ?
dude, it’s a tad higher than that !
‘
“The biggest hurdle to sales on Long Island is homeowners who refuse to lower their prices, said Dottie Herman, CEO of Prudential Douglas Elliman. ‘I guess about 35 percent are saying ‘I need to get this price and if I don’t get it, I’m not selling,’ Herman said. ‘I don’t consider those real sellers.’”
what we have here are sellers looking for buyers with money printed in 2005 who believed that money was worth more than any other money.
problem is that 2005 money is gone. people have to buy it with 2008 money now. money printed in 2008 will not be in demand as much as that 2005 money. pffftttttttt! gone!!!!
“Pennsylvania…Lehigh Valley…The perception is we have a ways to go on this. Prices could actually fall even further…Going back to the late 1980s, and early 1990s, we went through the same thing.”
Question: how wide spread was the late 80’s/early 90s RE decline? I was in Los Angeles at the time, and I watched it wipe out my parents…however, I had no idea that it was more wide spread. What other areas were effected during that time?
(And I thought that all real estate was ‘local’).
PS There was that “fire burn” house price report a year or so back that showed appreciation and depreciation graphically by area and year…I think that had graphs of other areas in the US plotted against year, but I can’t seem to find that PDF. Anyone have a link?
As I recall, the housing price bubble was confined to the NY area, New England, and California. Lots of places that were unaffected last time — Florida, Washington DC, the Mountain West, had price bubbles this time.
Texas has a construction bubble that had popped earlier. Looks like they are doing it again.
The national bubble in the 1980s was in commercial real estate, not residential. But in NY, New England and California we had both.
This Dec. 24th AP story about PA housing says that prices in Reading climbed 7 percent last year and prices in much of PA will rise again this year 3 percent, while the rest of the nation declines overall by 3 percent. Different take than what the Morning Call had. http://tinyurl.com/3cz5nm
Jesus Jenny!! 459 posts in the Bits Bucket at 3:35 EST.