A Riches To Rags Story In California
The Orange County Register reports from California. “Kim Freeman calls her tale a ‘riches to rags story.’ At the center of it is a house in Tustin her husband calls ‘the albatross.’ The good news here is that the Freemans’ house is in escrow after 2 1/2 years on the market. The bad news is they’ve had to cut their price to $563,000 – $226,000 below their original asking price and $140,000 less than what they paid for the three-bedroom ranch house.”
“To make matters worse, the Freemans’ marriage has broken up, in part because of the house. And Kim Freeman…has been laid off from her job.The couple now is six months behind on their mortgage and could lose the home outright if their escrow doesn’t close.”
“After trying for 1 ½ years to sell his Mediterranean-style house beside a bridle path in Nellie Gail, Laguna Hills resident Paul Beyer’s cut his $2.09 million price by $600,000, and still hasn’t had a single written offer.”
“Beyer has decided to try something different. On March 1, he’ll auction off the house in his back yard.”
“‘It’s been just a year of – ugh!’ said Beyer. ‘You ride it down. I wanted to do it right. I kept groping for the right thing. If I had more offers, I could have adjusted. I was in a vacuum.’”
“When Bill and Kim Freeman bought their Charloma Drive house in the spring of 2004. They had just sold a home in Las Flores for a $180,000 profit after owning it for less than a year. Their plan was to do the same with the Tustin home, reselling at a higher price in less than three years.”
“They saw the three-bedroom home on a corner lot, noticed it had a remodeled kitchen and pounced before another buyer could get it. They paid $703,000. In retrospect, she said, they probably moved too fast.”
“‘We were caught up in that house-buying frenzy,’ Freeman said. ‘Back then, you didn’t think you could ever lose.’”
“They put $70,000 down, all that remained from their $180,000 profit from the Las Flores house after taxes and paying off debts. They were able to afford the home by using two interest-only loans. Their house payment was $3,300 a month, but would reset to more than $5,000 after three years, more than they could afford.”
“After a year, they were ready to move out. They put the home up for sale for $789,000 in the spring of 2005. They got an offer for $750,000. Acting on their agent’s advice, they rejected it – a decision the Freemans now regret.”
“In the fall, when sales slowed, the only ones stopping by their open houses were curious neighbors. A couple of buyers offered to pay $700,000, which they considered to be ‘bottom-feeder offers.’ Not now.”
“‘If you had a crystal ball, you’d do a lot of things differently,’ she said.”
“In March 2007, the couple rejected a $675,000 offer because it would have meant losing their down payment, plus an additional $10,000 in cash they’d have to pay at closing. It was their last chance.”
“This past fall, they finally went into escrow, selling the home for $563,000, $70,000 less than what they owe on the mortgages. Because it is a ’short sale,’ they can’t close until the bank agrees to accept less than the full loan amount, so the deal is in limbo.”
“The house now sits empty. The swing set that they bought for their daughters has been abandoned since Freeman has no room for it in her new apartment.”
“‘My husband used to refer to this house as an albatross, and I get it now,’ Freeman said. ‘Everything about this house was bad timing.’”
The North County Times. “Oceanside building chief Jim Zacaro said the city issued 147 building permits for single-family homes in 2007, compared with 298 permits in 2005 and 285 permits in 2006.”
“‘We’re starting to see a real slowdown,’ he said.”
“Zacaro said nowhere is that more evident than in the Arrowood development, a 1,000-home subdivision that has been growing since 2001 on about 600 acres north of Highway 76.”
“In the early days of the project, prospective buyers lined up to buy new homes as soon as they were available. Now - in the roughly five Arrowood neighborhoods still under construction — there are several empty pads and finished houses waiting for buyers.”
“‘They’ve stopped building,’ said John Greenway, who said he bought a home in Arrowood in 2004.”
“Association data shows that in the fourth quarter of 2005 - when the housing market was strong - there were 48 new homes for sale in the city, compared to 94 for sale during the same period in 2007.”
“In 2005, when the quarter ended, 17 of those 48 homes had not sold. In 2007, 75 of the 94 homes had not sold by the end of the quarter.”
The Press Enterprise. “More than a year after The Promenade Shops at Dos Lagos opened along Interstate 15 in Corona, many of the tenants in the upscale shopping center are struggling and even more are complaining that not enough people know the place exists.”
“The 360,000-square-foot lakeside center, designed to resemble a traditional Main Street, has run into the headwinds of a weakening economy and housing crash.”
“‘It was poor planning. They thought they would build this and the people would come and it doesn’t happen,’ said Angela Myers, owner of Bella’s Boutique, one of more than 70 tenants at Dos Lagos, which was created as a ‘lifestyle center.’”
“Myers said her store at Dos Lagos is losing money with no turning point in sight.”
“At Z Gallerie, assistant store manager Kristy Guerrero said the home furnishings store opened with strong sales that diminished dramatically with the drop-off in housing construction. She said the store started with about 32 sales people, then over the summer laid off all but 10.”
“Inland Economist John Husing said the timing of the Dos Lagos center, which was expected to demonstrate the growing household income and sophistication of western Riverside County, ‘has been terrible.’”
“Riverside County’s once booming retail ‘turned on a dime,’ Husing said. Husing said he believes the busted housing market is the major cause for the drop-off in retail sales. He said the Dos Lagos center probably is harmed by exceptionally heavy foreclosures in communities along the Interstate 15 corridor.”
The Sacramento Bee. “In 24 years as CEO of Sacramento’s Safe Credit Union, Henry Wirz said he’s never seen such ‘widespread credit problems in the Sacramento region.’”
“It began last September with rising delinquencies on car loans. By December, the late payments spread to real estate loans. Now, increasingly, borrowers have maxed out their credit cards and home equity lines of credit, said Wirz.”
“And the problems, he said, appear worst in newer neighborhoods.”
“Wirz talked about a credit crisis he believes is still in early stages. Here are excerpts. Q: You’ve been here since 1984 and…this is the worst credit problem you’ve ever seen in Sacramento?”
“A:…’In every crisis, when we first have a downturn, it’s the people at the bottom of the economic pyramid who seem to experience the worst outcomes. I think what surprised us was in this downturn we’re seeing people who had, at the outset, relatively good credit having negative outcomes.’”
“‘In this downturn, where we analyzed the folks having problems, we saw a disproportionate number of people in that 680 to 719 credit score.’”
“Q: You’ve said you saw the problem start in September with auto loan delinquencies. What explains what you’re seeing?”
“A: ‘It makes sense in retrospect. You kind of prioritize your obligations….I think, for a lot of people, the most important thing was to hang onto their house. This is primarily a problem of people having too many bills and not enough income to cover them. So they began juggling their bills. Credit cards, auto loans, things like that took second place to keeping the mortgage payment up.’”
“‘We’ve seen a lot of the credit cards and home equity lines get fully utilized as people have drawn them down to support their monthly expenses.’”
“‘I think we’re now at the end of that rope. There just isn’t any more credit card balance available. There isn’t any home equity available, and now people are having to confront the ultimate problem, which is how do I keep my house? How do I keep my mortgage intact? I think that’s why we’re seeing people coming in.’”
“Q: You say we’re at the front end of this credit crisis? How long might this continue? A: ‘In almost every kind of lending problem it takes 18 to 24 months to work through it. I hope this one is a problem we can work through that quick. I’ve heard some others say it might not be.’”
“Q: Earlier you said that homebuyers are bypassing sellers altogether and waiting for a bank to take back the home. They think that’s where the better deal is. When do you see this housing market starting to stabilize?”
“A: ‘We’ll know there’s a turnaround when we see buyers come in and buy these properties earlier in the process. Right now, were not seeing that. People are waiting for the bottom. Everybody wants to buy at the bottom, and there cannot be a bottom until buyers come in. We’re not there yet. My guess is we’re maybe into April, maybe June or July, before we see that.’”
The Merced Sun Star. “Merced’s housing market ended 2007 on a down note, with prices and sales in December continuing the slide that defined the year. The county’s median home price fell to $257,000 in December, a 21.2 percent dip from December 2006, according to DataQuick.”
“Sales activity posted an even sharper dropoff, with just 150 houses trading hands, compared with 347 homes sold in December 2006 (although the data did not include the last day of the month).”
“Dorothy Kielty, president of the Merced County Association of Realtors, said plummeting prices could be traced mainly to foreclosures and ’short sales.’”
“Sellers should do their research…said Realtor Peggy Flanagan, but the question for them is how badly they need to unload their house.”
“‘At this point in time they have to make some real hard decisions,’ said Flanagan. ‘The guy that’s starting a new job and has to leave the area is a whole lot different than the guy who’s just wondering what kind of price he can get for his home. We’re actually counseling people that if they don’t have to sell, then don’t.’”
“With Merced’s prices dropping closer to the $200,000 mark, Flanagan said she’s seeing the return of out-of-town investors, a trend she called a positive sign.”
“‘To me, that’s really the tail-that-wags-the-dog indicator,’ said Flanagan. ‘We’re getting looked at again (by out-of-town agents and investors), and by 2010 people will be wishing that they bought in 2008.’”
missed a part.
Comment by need 2 leave ca
2008-01-19 22:05:36
He’s cut his staff by about 40% to less than 100 workers. Hoaglund also has cut his advertising budget in half.”
“Lenox recently foreclosed on a Moreno Valley home for which the borrower didn’t even make the first payment. The house that initially sold for $460,000 has been declining in value and was last listed at $250,000, he said. After paying real estate agent fees, the house could bring a loss of about $150,000, he said.”
And who says there is no justice for this ‘biggest no brainer in the history of mankind’ clown. hope the storm takes him out and we don’t have to hear his dumbass voice anymore.
Reply to this comment
Comment by need 2 leave ca
2008-01-19 22:27:28
“‘We’re hoping to make it through the storm,’ Hoaglund said.”
I hope a very special Joshua Tree is uprooted and planted firmly up his A$$ hard. He is one of my poster boys for the bad that has happened. I also hope that the Prince of Darkness has a special eternal hot furnace reserved this ‘order a pizza no-brainer’ mortgage fraud specialist.
“hope a very special Joshua Tree is uprooted and planted firmly up his A$$ hard”
how about medieval Turkish impailment. JT sound too mild!
I used to hear all kinds of junk like that on KNX1070 am. “Questions , Answers ” I don’t know what retard took over programing at that radio station. The ads that were allowed to run were terrible scams like that ‘ Biggest no brainer on the planet” mortgage guy. Or a “fixed rate mortgage is a gamble and you have lost” becasue ARMs had been less expensive for some period of time. bad stuff.
And the Dems/Reps in the congress allow the retards to skate on their taxes after a foreclosure. Thankfully Cal does not recognise this bail out!
The Freeman’s story doesn’t sound all that tragic. People make bad investments all the time. They took out two interesting only mortgages and then wouldn’t sell when they could. Looks like the kind of people that should stay away from investing and stick to working a job.
They were a Dime a dozen, people like the Freeman’s…
In lieu of working, they were going to let their houses do all the heavy financial lifting~
Great freudian slip or type - “interesting” only mortagages
“interesting only mortgage,” that is hilarious, was this accidental?
I think you coined a new phrase. LOL
No takers for the new “interesting only mortgage!”
“by 2010 people will be wishing that they bought in 2008.”
More like by 2010 people who bought in 2008 will wish they has waited until 2010.
2020 more reasonable
I’ll second that. Too many expect a Hollywood ending - it is more likely we will get a very foggy, very slushly recovery - one where buyers doubt their decisions for many years - even the smart ones.
To paraphrase Michael Douglas, in the movie FALLING DOWN:
we need to roll back the prices to 1965! …:)
We need to roll back a lot of things to 1965.
Like life expectancy and racial relations?
If we could keep the civil rights achievements since 1965, AND roll back African-American violence and illegitimacy rates to pre-1965 levels — u-freakin’-topia.
Why not roll the African-Americans back to the 1970’s, the decade of affirmative action and the greatest gains in economic status for African-American households (think the Jeffersons)?
And afro’s are waaaaay more classy than than straightening-pomade look.
1965 is before STAR TREK and I SPY.
ps–the 60’s was when they used to hush up “domestic matters” and violence–including murder–at schools, leading to a lot of the great serial murderers of the 1970’s being let free out of juvy, “cured”; or free out of prison, on a psychologist’s says-so; or free, period, because nobody wanted to press charges. NO THANKS.
We have no idea what the rates for “out of wedlock” births were in 1965. What we have are estimates as to what they might have been. These rates weren’t measured at all until the 1970s and still aren’t measured accurately. Until quite recently births were reported as being to married parents when the parents shared the same surname. Given that 1/3 of married women in this country keep our birth surnames when we marry, that’s a very iffy measurement.
Couldn’t agree more with that one! Let housing be affordable when my kids get out of college.
How many times have you tried to get breakfast (or lunch) and be told by some idiot that you are 5 min too early or too late.Loved this movie.
http://seekingalpha.com/article/60605-housing-prices-expected-to-bottom-in-2010-21-off-06-highs
The futures market predicts a bottom to house prices in late 2010.
That’s certainly possible as long as Washington doesn’t muck things up and drag it out. I think the more realistic expectation is 2012.
Trough on Nov 10th, 2010. I’ll keep that in mind.
I’m ok with any report saying don’t buy in 2008/2009. That should deflate the worst of this bubble by then. I’m not worried about people being knife catchers after then. By then the mania will be over. Not to mention, the REIC employment will be back down to levels it should be at.
Anyone else think Realtors ™ are going the way of travel agents?
Oh yea, we’ve been saying that for years. 
There will still be some (just as there are still travel agents out there). But not the huge numbers of today.
Got popcorn?
Neil
I don’t think trough is the right word. It implies something narrow. There will be a wide flattening of at least two years before even a hint of an upswing. However, I still think the beginning of the flat period (end of the drop) could be as soon as early 2009. IMO, if you buy an “aggressively priced” home anytime starting in 2009 your downside risk will be minimal. Just my opinion.
IMO, if you buy an “aggressively priced” home anytime starting in 2009 your downside risk will be minimal. Just my opinion.
Depends where you are. Silicon Valley and SF haven’t even started dropping yet - I find it hard to believe that they’ll bottom in 2009.
In some parts of the country the nominal declines might end by 2009 (though I doubt it, if we go into a recession), but they will likely stay flat for years afterward, hence continue to drop in real terms. So the downside risk remains.
Bill,
It will be a long flat. But I just don’t see how the biggest real estate bubble ever will hit the long flat bottom after only one year. In particular, the Option ARM loans, due to start resetting in mass in about May.
Most will say ‘that’s not on the charts.’ True, the charts show the Option-ARM resets if IO payments were being made. But we know 90% of them are the minimum payment. In May they’ll hit their 110%/120% limits in mass. That will continue well into 2009. Since foreclosures take 9 months to process… We’re still going to see downward drivers through 2009.
I don’t see the start of the ‘long flat’ until 2011 to 2014. Yes, a broad range. Since we know to wait… its not like we cannot debate later if its ok to buy and what the risk is.
Got popcorn?
Neil
2011 and on is fine with me since I won’t be ready to buy until then. Will be debt free by then, that is when I will start looking seriously.
Essentially, things were flat in some areas from 1991 to 1997. So things could be flat for that long. I know a couple who bought a house in an upscale retirement area of Williamsburg, VA in 1990 and sold it for the same price in 1998.
Really hard to say. The boomer effect is such a big factor that I wouldn’t expect to see a bottom for 10-15 years.
And who is going to buy the boomer’s overpriced houses? If they are going to relocate to the sun belt, they will have to pay in, and a lot of them don’t even have savings to speak of.
“And who is going to buy the boomer’s overpriced houses? If they are going to relocate to the sun belt, they will have to pay in, and a lot of them don’t even have savings to speak of.”
They’ll end up in cheap ‘retirement’ trailer villages in cheap trailer homes located iN Las vegas , phoenix, coachella, hemet, bullhead city and other sun-friendly cheap desertburgs in desertville trailer tract # zyz located in some forlorn forgotten deadend suburb tucked away in the outer fringes of sunnyville, township LN ,or some god-forsaken aply named semi-desert forgotten corner of a faceless sunbelt city or region.
The next boom in housing will be retirement trailer parks packed with single-doublewides , or cheap manufactured mobile homes easily transportable and plunked down anywhere in Desertville, SW USA. Especially marketed to aging Boomers with no savings.
.
Hi there Ernst Blofeld (which James Bond story, I forget?) — I do notice a trough in 2010, but then it looks like the decline resumes in 2011-12, no?
As one of my co-workers used to say, “don`t bother getting married, just find some bitch you can`t stand, and buy her a house.”
Damn Earl.. That was funny!!!
I would not take futures prices as gospel three years out. Also housing futures are thinly traded.
Yes, the futures have been wrong on housing for quite some time now. They actually forgot to factor in the crash until just recently. We know more than they do at this point.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
“To make matters worse, the Freemans’ marriage has broken up, in part because of the house. And Kim Freeman…has been laid off from her job.The couple now is six months behind on their mortgage and could lose the home outright if their escrow doesn’t close.”
Did anyone else make an immediate association between the hectoring, sucubus wife on the infamous 2005 Century 21 “Suzanne Researched This” ad, and this failed marriage? I’m betting similar scenes [of marriages going up in smoke] are playing out between tens of thousands of couples, where the husbands, against their better judgement, crumbled under the relentless demands of their wives’ galactic sense of entititlement and perversion of the “nesting instinct,” aided and abetted by their faux female friends in Century 21 jackets.
“In the fall, when sales slowed, the only ones stopping by their open houses were curious neighbors. A couple of buyers offered to pay $700,000, which they considered to be ‘bottom-feeder offers.’ Not now.”
It’s not just wives. There’s many husbands out there, that if not for the wife, would not have a cent in their pockets.
Agreed. But generally, most men have an innate sense of caution about making big purchases or changes. Not all, by any means. And women, in general, are far more susceptible, in my experience, to believe in “research” (or marketing spiels) that happens to validate their sense of entitlement.
I think you can include pressure from families both one’s own and in-laws. Basically the pressure is to buy a house and produce grandchildren. My wife had worked in the mortgage industry so she was somewhat savvy to the market being way way overvalued. The pressure for us came from our family and friends. It is interesting that we are now being treated with a great deal more respect by those same people.
Marriage, house, kids.
My friend calls this the misery loves company effect. Whenever you visit friends after one of these events it’s always, “When are you getting married/buying a house/having kids?” Well, who said I wanted any of that?
“The bad news is they’ve had to cut their price to $563,000 – $226,000 below their original asking price and $140,000 less than what they paid for the three-bedroom ranch house.”
Re:’Tustin 3 bdrm Ranch house’
. Tustin is unique in that there are lots of these single story spread out ranch homes on large 7000-10,000 sq ft lots. Located in pretty good tidy hoods as well. Nice large spreads but rather anachronic is this day and age where McMansions are built 2-3 stories on puny lots wih zero lot lines. U can take one of these lots and cut and dice that large ranch spread into 4 smaller condos or townhome units, like they do in crowded Westside LA or Redondo beach.
Actually Tustin is a pretty decent community in the OC halfway between the northern declining older OC and the overpriced leafy geometricaly perfect but boring cookie- cutter- planned greenbelt communities of the south OC.
Only drwaback is that Tustin is right across the 55/5 fwy from that third-world OC cesspool region called Santa Ana.
Alexis Zorba: Am I not a man? And is a man not stupid? I’m a man, so I married. Wife, children, house, everything. The full catastrophe.
Suzzane reseached this
Whenever you visit friends after one of these events it’s always, “When are you getting married/buying a house/having kids?”
The answer I’m always tempted to give is, “WTF business is it of yours?”
I think now that you mention that, I’ve seen 3 cases personally of “strong pressure” from in-laws to buy a home. In all 3 it also involved contingent help with a down payment (well, I know in 2 cases the down-payment help was contingent on them buying a home at that time).
Freaking in-laws. Sometimes you just need them to STFU. My wife and I don’t have such in-law issues, however. My personality is too dominant.
A sadder case: senior-citizen divorced lady, renting within her means, with three 30-something kids who all have houses and mortgages. The KIDS persuaded her to Buy A House (the only way to Get Rich) which will reset beyond her means. Hope the kids are ready to bail her out.
“Large” 7,000 to 10,000 square foot lots?!
What’s the minimum side setback, 5 feet? (Meaning your neighbor’s house is 10 feet from yours)
LMAO
Nice Sleepless and B.J.S.!
BTW-having kids is no guarantee that you will not die alone.
How do I know this? Because there are seniors all around me who tell me they haven’t seen their kids in years - as I hold the bus doors open as they scurry to the store.
You can believe Hollywood or you can believe someone on the street.
“most men have an innate sense of caution”
Yeah, right. You can line up the Pigmen of Wall Street, the hedge fund boys, the greedy owners of mortgage bucket shops, the Treasury Secretary, the Fed Chiefs, Al and Ben, the guys doing the quant modeling, the do-nothing regulators, and the screw-em all brokers like that mope who murdered his wife and then jumped from a bridge yesterday, and you want to blame it on housewives?
‘Greedy, hectoring succubus’…do you mean Mozilo, or maybe Bob Arnault, perhaps.
You may dislike women so much you’ve lost your perspective.
I don’t know too many high maintenance men, but I know oodles of women that qualify.
They caught a whiff of lifestyles of the rich and famous, and it became their mantra…
Spike,
You said it much better than I could.
Spike,
Ordinary guys, the kind who are on the hook for most of the household bills, tend to be more wary of overextending themselves, in many cases, than spouses who are more susceptible to comparing themselves and their situations to those of their girlfriends and peers, and feeling themselves to be at a relative disadvantage. I know that my wife has had to put with subtle barbs because we’re renters, and she badly wants “a nice house of her own,” although she’s trusted me enough to believe that our time is coming around once sanity starts returning.
Also note that the harpy in the “Suzanne researched this” is not representative of most women, so I’m not sure how you leaped to the conclusion that I “dislike women.” I adore women, and treat them well. I dislike harpies and sucubuses who badger their spineless or beaten-down husbands into making bad decisions, and I make no apology for that.
By the way, I’ve noticed that most guys who immediately leap to the “defense” of women and loudly proclaim what champions of womankind they are, are never actually popular with the ladies. Hmm….
“By the way, I’ve noticed that most guys who immediately leap to the “defense” of women and loudly proclaim what champions of womankind they are, are never actually popular with the ladies. Hmm…. ”
“Popular” as in frequent repeated failed relationships?
Read “The Secret Agent”,by Joseph Conrad.
Sammy,
I’m not “defending” women…do you imagine olympiagal or azlender needs defending? Why not direct your venom and big guns for the real architects of this catastrophe, who are overwhelmingly the money guys. Blasting away at some nitwit housewives and the dumbazzes who married them is wasting firepower on plankton. In this mess, for every Big Hair who wants a house, there is a Receding Hairline who thinks he’s a mini-mogul with his “investments”. You gotta get out of the house more.
“I don’t know too many high maintenance men, but I know oodles of women that qualify.”
Wow. I am speechless. When I go down to the marina at Pauanui and see who are behind the wheels of the 40 foot recreational sportfishing boats, it never is women. Large boats, an even worse and more selfish investment than trophy homes and a male addiction.
I was in Melbourne the day they won the America’s Cup from us, back in the 80’s…
People out on Batman St. going crazy, like they won the Super Bowl, World Series and Stanley Cup, all in one.
Friends were trying to console me, about the loss.
I didn’t have the nerve to tell them that nobody gave a rat’s patootie about it, back in the states.
Boating is a different world, down under.
NZ Renter,
Was down in your area a few weeks ago. First trip to NZ and to the Coromandel. Stayed in Pauanui, too. Absolutely loved it!
I was in Auckland ten years ago on vacation. I went looking for the America’s Cup, only to be told that it was in the repair shop because a deranged local had attacked it with a hatchet.
And your ‘experience’ is meaningless.
Sorry but I control, and have always controlled the finances.
Ditto my mother - amazing businesswoman when women didn’t even work
Ditto my maternal grandmother
Ditto my college women-frineds with Wharton MBAs
Women have a far far better appreciation of things that affect the ability to obtain food and shelter. It is MEN who go off starting wars without regard to the consequences.
Too bad you only must hang out with idiot trailer-trash with Big Hair.
Ann! Most of my clients are female, and all of them are Trailer Trash, and none of them is a day late or a dollar short. Your defense of women is well-spoken, but don’t put down T T
For men, it’s more like: “HMMM..mortgage payment is $1,000 more than rent…..That means less beer!”
There are idiots and geniuses of all ilks. It’s generally a bad thing to generalize.
Hear, hear, Ann!
What I am wondering about is what went wrong that there seems to be a generation of women who have no money/budget sense? My grandmother’s generation was Alice in the Honeymooners–savers, risk-adverse, sensible about money, ran the household expenses like nobody’s business. But my mother’s generation–including my mother–seem to include a lot of “fly by the seat of your pants”-ers who make lousy decisions because it “feels right” or just lack discipline (my mother) and have a “stuff just happens to me” mentality (my mother again).
How did feminism turn into the his and hers outrageous credit balances? Because this seems to be the justification. Just saw an AWFUL book in the library about women hiding money from their husbands. Some of the women were women from the old school who weren’t going to divorce Mr. Alcoholic, Mr. Compulsive Gambler, or even Mr. Abusive Control Freak, but ensured the family’s solvency by squirrelling away a percentage of the money allotted for family expenses every week. Fine. I don’t have a problem with that. Where the book really turned my stomach was these younger women using their husbands as the ATM (they don’t work themselves) and hiding cash for the divorce lawyer (because he’s doing the same thing anyway). And the justification? Your husband shouldn’t be able to question your decision to buy Manolo Blahniks. WTF??
Okay, I’m not a femme so I can’t pretend to “get” that, but if you’re *married*, shouldn’t you be making *joint* decisions? Because “he got a boat, so I deserve fancy clothes” sounds like the fast track to the poorhouse. And why are these morons wasting their (or his) best earning years on lifestyle when they ought to be socking it away?
Maybe it’s this “sacrifice nothing” attitude… yes, sacrifice nothing (now) so that when tomorrow comes (not listening, not listening) you’ll really be up a creek.
Replace whites / blacks with men / women in your comment, Sammy, and it would be a completely racist statement. But since it’s ‘only’ slamming on women it’s OK?
A sense of entitlement, is what they are all about.
I have personal experience of both types — the “gotta keep up with girlfriends in the house-baby stakes” women and the “gotta have bigger toys than my buddies” guys.
Neither gender has a monopoly on gullibly falling for ‘Murkan Dream’ marketing bull, peer pressure conformity, or greed.
The antidote is “think for yourself”, a principle that is all too frequently discouraged in our society, in our workplaces and by our government.
Sorry, I call baloney on men being sensible big ticket item consumers. Men, like women, buy big ticket crap. It could be that houses are something women buy more often and sports cars are something men buy more often; but remember, that’s MARKETING. That’s the same crap that got us into this situation in the first place: believing the hype. NAR says we all want houses, and De Beers says we all want diamonds? And you BUY IT? These people are the voices of authority how?
I’m in a non-bubble burst area, and it’s my husband’s male co-workers who keep telling him we’re throwing our money away and we should “man up” and make the right investment choice. Should I make assumptions about all males on that tiny, single culture sample size? Of course not, for crying out loud.
It’s this sort of generalized reasoning - what people THINK they know - that made the bubble. And it keeps me out of these comments on this site. I stick to my local sites, where people are a little less willing to blame it on stupid chicks or stupid immigrants. Bloody hell, people, there are a lot of white men involved here, too.
Seriously, I’m sorry you folks hang out with women who don’t do their research, but you’re driving other sorts of women away. I tell folks of all sorts to stay out of the comments here.
The swing set that they bought for their daughters has been abandoned since Freeman has no room for it in her new apartment
Not for too long. Some unemployed former SA illegal-alien
construction worker w/beat up stake bed hauler will scoop up that sucker and sell it for scrap ,maybe get $20.00 after spending $10.00 in gas picking it up and taking it to some scrapyard.
I’m telling U scrap metals business looking good right now. scoop it up, crush it and sell to china. On other hand maybe the Mafia & Armenians already corner the market.
I’m glad to know that I wasn’t the only one that had a negative reaction to that commercial. I guess I can say this, being a woman but I find commericals like that one highly offensive to my intelligence, and I know a number of women with that galactic sense of entitlement that you are talking about. If I had hair on my back, it would go up every time I hear one of the women on the HGTV shows say that they are selling their old house and buying a new one because the current place doesn’t have enough storage. My reaction is; storage for what? All the useless c**p that you didn’t need in the first place?
I know probably even more men with the same sense of entitlement - sports car, blonde-bimbo babes, ATVs, pickups that do not get dusty let alone dirty, sports TV premium channels…….
AnnS…
Get over it !!
Chucky:
Ann S isn’t allowed to defend herself against the attacks these men are launching? If you weren’t “over it” yourself, then you wouldn’t have posted at all. Face facts Chucky, women are smarter than men and you are just jealous.
LOL!
Ah, the irony…the Gaussian for men’s intelligence has fatter tails than the one for women. So for every hyper-intelligent super-genius smarter than 99% of women (and men!) there is a drooling dolt out there who thinks with his little cabeza and can’t wrap his head around anything more complicated than “beer … NASCAR … mega-bucks”.
Another offensive commercail is DeBeer Diamonds are forever nonsense. UGGGGHH !!! And of late car ads that show a new car as just a typical Christmas present. Sickening.
Agree 100%. I did not spend a whole lot of money on my wifes ring, we have been married 13 years and now we joke about it. Diamonds are worse investments than homes, you buy today and next week its worth 50% less. We laugh about everything in the US anymore. We don`t buy into that crap.
Lane
“Diamonds are worse investments than homes”
Right.
“you buy today and next week its worth 50% less”
Actually, stacked up against many other “luxury” purchases, diamonds are a clear winner. Boats, cars, flat-screens, designer clothes, etc. are all worth zilch over ten or more years time, but I’ve seen quality diamond jewelry bought years ago retain solid value (if they’re decent stones) when being re-appraised. Admittedly diamonds are not easily turned into cash, but IMO they’re a hell of a lot nicer to look at than a useless 10 yar old money-pit Winnebago or leaky fishing boat rusting-out in the junkyard.
DOC
Diamonds are dumb. At least if you are going to go lux-o and buy an expensive car you can DRIVE it. Rhinestones are a girl’s best friend.
~3k BMWs for sale on ebay. I swear it was higher a few days ago.
…and I swear it will be lower a few days from now.
Bring them to their knees…don’t buy their garbage!
Car ads depicting the new car with a bow on top as a Christmas present and early in the morning (Christmas day?) all the young wives in the neighborhood come out and watch to see who its for. And the narrater has a British accent.
Who comes up with this twisted stuff ? If I buy a new car the first thing I want to do is get plates on it I hate showing off wealth.
I actually saw a new car being paraded down residential streets with the Christmas bow on top. Early 1980’s in Arlington, TX.
Isabel: Did you see the HGTV show, woman in LA looking for a condo, paid $470,000 and then another $30,000 in renovations, no down payment. Lender explained the 80/20 mortgage. The second was interest only, adjustable. Woman didn’t say a word, she just signed!
It LQQKS like Joe6pac and Silicon Sally’s Motto of “In Real Estate We Trust ” is changing back to “When DEBT walks in the Door, LOVE flies out the Window”
The LOVE of money…
The first time I saw the Suzanne ad I knew housing, and many marriages, were doomed.
I can’t believe the number of newlyweds turned floppers on “Flop that house.” It’s like they have a death wish.
Their sense of entitlement is ludicrous.
Hey, we watch Flip this House. Best situation comedy on TV. You just have to have the right perspective!
Most women want a house with a “ball room.”
A place to store hubby’s jewels.
Oh, great. Time to haul out the backup keyboard…. Serves me right for reading this blog while snacking.
I’d say it went both ways. I’m sure there are plenty of wives that went along with refis and HELOCs so men could buy toys and trucks. I also suspect it wasn’t always the wife insisting on the house.
It’s actually a really common theme in modern media, that men are the idiots of the household. You can observe it in cartoons like The Simpsons (Homer is the idiot while Marge is smart), Family Guy, and Sitcoms as well. Perhaps Everybody (hates)”loves” Raymond (shudder).
What is better is the comments on the YouTube video. Not only are people calling the housing bloggers that posted comments on there a year ago geniuses, but that same troll about people living in tent cities and Hondas is on there. That troll used to be posted on F’edCompany a bunch before it died. The interesting thing is, I think that bizzare troll beat even the housing bloggers. (The one about 30% gains for ever with huge riches, and everyone else living in tent cities and Hondas).
Why do you blame the wife? There’s nothing in the report to support this interpretation. It could have been the husband who made the bad financial decisions and had the sense of entitlement, etc. (cf. my first marriage!).
“I’m betting similar scenes [of marriages going up in smoke] are playing out between tens of thousands of couples, where the husbands, against their better judgement, crumbled under the relentless demands of their wives’ galactic sense of entititlement and perversion of the “nesting instinct,” aided and abetted by their faux female friends in Century 21 jackets.”
My take on this — expressed here before — has been that MEW has been keeping a lot of marriages going.
Wife unhappy? Nothing a new kitchen or new car won’t fix. Husband unhappy? Again, nothing a plasma TV or a stainless steel barbecue can’t help. Jewelry, dinners out, plastic surgery, ATV’s, etc. — lots of ways of papering over differences when times are good.
All that’s over now.
Weekend topic proposal for next week: Who’s superior, men or women?
(And please explain which deity and which political party is responsible.)
Statistically it has nothing to do with the gender of the in-laws.
Entitlement is a nature nurture effect.
My in-law caved into the wifes’ side of the family and jumped into the IE headfirst, (flopping up to 6 homes amoungts 4 couples). Tehy pittied my wife stuck being a renter while “her” nutty in-laws (my family) sold their houses and rented.
Now that the tide has turned, I’m the phnn genious as the in-laws wallow in flopdom, coming back to LA with their tails between their legs as renters.
They never once bothered to ask my advice then, but now they want to hear the truth.
I actually got them on board with Ron Paul, but all of a sudden her clan of loyal Bushies has decided to back Hillary, after hearing about her moronic plan to freeze mortgage payments.
A bunch of lemmings that follow anywhere the winds of hype blow.
That is the problem. Not the gender.
Look Sam, don’t you go off blaming women for this mess. It’s still a man’s world, and you all need to take responsibility for your own failings. Otherwise, you can kindly go back to whatever cave you crawled out from and we’ll get Pamela Anderson to guard the entrance so you can’t get out.
Oh, you’re being nice to women, Big V, so you aren’t going to be popular with the women who like to be slapped around by Sammy.
Oh please, let’s not fight the gender wars here. I’m sitting here in an over-priced money pit in Des Moines that my HUSBAND just had to buy when we moved here. I wanted to rent for a year (or more), but he used every emotional trick in the book (”don’t you believe in me?”)to get me to sign on the dotted line and rather than emasculate him - I signed. And now we’re stuck.
On the bright side, we did trade down to a 15 year mortgage, and we can easily afford the payments, and it is a great older neighborhood and not some suburban POS on a plowed under cornfield.
Don’t tell me wives did this to their poor innocent husbands - not buying that line of BS!
Holy crap! Where did this conversation come from? I’m a guy and honestly, I think PEOPLE in general are the equivalent of financial morons. Just drive down the freeway and look at all the low self esteem beer belly guys and their massive, oversized trucks or mullet-mobile Corvettes. Then watch all the women buying their 40th pair of shoes. They’re no different. People of all races, gender, and class too often associate success with material goods.
Trust me- I’ve had more than enough comments from people when they see me driving my dilapidated 13 year old truck despute making more than enough to buy something nicer.
Then again, if we all acted as I do, we would have no economy because we’d all be buying used crap at the Salvation Army.
Ha ha, we’ve been told that canard for years. If everyone were like us thrift-store-shopping a–holes, the economy would collapse!
Nonsense! Economies where households save are economies that invest in real capital goods like infrastructure and factories. Hmm, when was the last time we did that here? Outsourcing + overspending go hand in hand.
exactly,she cried in my ear for 3 years,i am so happy i didnt relent and am a haapy renter
Happy Sunday, Ben.
Talk about chasing the market down. The housing trainwreck will be in history books when my kids take HS economics.
Maybe the Freemans should sue Gary “in the bag” Watts?
Orange County has crashed! Finally! As the home of the Sub-Slime lending industry, I couldn’t be happier.
“We were caught up in that house-buying frenzy,” Freeman said. “Back then, you didn’t think you could ever lose.”
__________________________________________________
How did anyone not doubt this speculation at the time???
$2 million for that tract house. Definition of McMansion!
Ben didn’t include what I thought was the best quote:
“At any moment, he could get a two-hour notice of a buyer coming by, and he goes about turning on all the lights. ‘There are a lot of light switches,” he complained.’”
Ben - I love the riches to rags stories, especially in California. You are da man. Thank you so much for your hard work. These folks are now free. Free of having any money. LOL. I hope they sue In the Bag.
“It’s only after you lose everything, that you’re free to do anything.”
– Tyler Durden, FIGHT CLUB
Freedom means, you’ve got nothing left to lose.
Janis Joplin- Bobby McGee
I think that’s the quote. Please correct me if I’m wrong.
“Freedom’s just another word for nothin’ left to lose.”
Close enough.
“Me and Bobby McGee”, by Kris Kristofferson.
“Freedom’s just another word for nothin’ left to lose.”
Freedom means you`ve got nothing left to eat.
‘Mortgage’ is just another word for nothing left to eat.
LOL! Thanks for keepin’ it real, guys! Brightening my mood today.
“…After nine months without an offer, Beyer got a ridiculous verbal offer of just $1 million.
“I called my Realtors and said, ‘Tell him, thank you!’ Someone finally said something,” Beyer said…”
He should’ve took the offer…funny stuff…what a dumbass.
Greed and stupidity is going to be the downfall of a whole lot of folks in this downturn.
Just as we talked about so many times…chasing the market down. So predictable…
Yep, I can’t count how many times we’ve said that they’d regret rejecting the lowballs. The lowballs became the dream price. Poetic justice.
I notice that they’ve gotten over being offended at those prices.
Yet another HBB prediction coming true!
Exactly. Why should anyone assume that Stupidity is banned in America just because the market’s going down now?
Don’t these people get it?! If you don’t get any visits or offers then you are WAY, WAY over the market price. So far over than few, if any, will even attempt to low-ball. The “vacuum” is what we would find between this guy’s ears.
Was thinking the same thing. He says if he had had more offers he could’ve adjusted. Having NO offers should’ve been a clue to adjust big and fast.
“We’re actually counseling people that if they don’t have to sell, then don’t.
Do people have to be “counseled” about every damn thing? Can’t just figure it out on their own.
If you don’t have to sell don’t sell–for heaven’s sake get the effing thing off the market!
There are to many people out there wasting my time! Why on earth would you market something you do not want to sell!
Ya just can’t make this stuff up! grrr…
Leigh
Leigh,
Welcome back. Some of us were getting a tad bit worried.
So sweet of you San.
Gram’s was hospitalized in Pittsburgh. It was a rough go, but she’s home now and we took very good care of her for 2 weeks. No interntet connection though…she’s 90 years young and not hearing of such nonsense-LOL!
Grins,
Leigh
Welcome back. I was worried about you and asked where you had gone to. Hope all is well.
They want to roll the dice and move their mice, Leigh - that’s why!
Best wishes with the elder care - its a toughy!
Yeah, welcome back Leigh. Glad to hear that grams is OK.
They put the home up for sale for $789,000 in the spring of 2005. They got an offer for $750,000. Acting on their agent’s advice, they rejected it – a decision the Freemans now regret.”
But…but…the NAR specifically told us that realtors are worth every penny of their 6% commission because of their intimate and uncannily prescient understanding of local market conditions. And Suzanne researched this!
“‘If you had a crystal ball, you’d do a lot of things differently,’ she said.”
No, if you weren’t greedy for easy money you’d do a lot of things differently.
We *all* had a “crystal ball” 4 years ago: this blog.
“When Bill and Kim Freeman bought their Charloma Drive house in the spring of 2004. They had just sold a home in Las Flores for a $180,000 profit after owning it for less than a year.
“They put $70,000 down, all that remained from their $180,000 profit from the Las Flores house after taxes and paying off debts. They were able to afford the home by using two interest-only loans. Their house payment was $3,300 a month, but would reset to more than $5,000 after three years, more than they could afford.”
“After a year, they were ready to move out. They put the home up for sale for $789,000 in the spring of 2005. They got an offer for $750,000. Acting on their agent’s advice, they rejected it – a decision the Freemans now regret.”
“In the fall, when sales slowed, the only ones stopping by their open houses were curious neighbors. A couple of buyers offered to pay $700,000, which they considered to be ‘bottom-feeder offers.’ Not now.”
“In March 2007, the couple rejected a $675,000 offer because it would have meant losing their down payment, plus an additional $10,000 in cash they’d have to pay at closing. It was their last chance.”
“This past fall, they finally went into escrow, selling the home for $563,000, $70,000 less than what they owe on the mortgages. Because it is a ’short sale,’ they can’t close until the bank agrees to accept less than the full loan amount, so the deal is in limbo.”
It’s nothing but greed, plain and simple. $180,000 profit on their last house in a year. They lost $140,000 on this one. The way I see it, they are still $40k to the good. Oh wait they used $110k to pay down debt and taxes. That’s a lot of debt and back taxes, that doesn’t include a house. Then greedy little souls that they were they chased the market all the way to the bottom. No sympathy here. They lost $187,000 because they were too greedy to take a $750k offer. Good for them, they deserve everything they get. There are hundreds of thousands out there just like them, and our gov. wants to bail them out. This makes me more disgusted with every story I read. Most of them are worrying more about how much money they can make without working for it, than whether their kids will have a roof over their heads.
Only when the full consequences of the rampant greed and personal irresponsibility assert themselves on a mass scale - and the shrieks and wails of krispy-kritter FBs reverberates through the land - will sanity and true conservatism reassert themselves.
French historian Alexis de Tocqueville warned that American democracy would succeed only until the people realize they can vote themselves money from the public treasury, and then it would fail.
Most Asians are wisely wary of democracy - democracy carried to the current American extreme is a pretty nutty idea (IMO) that was not envisioned by the founders (Andrew Jackson’s radical democratic idea was that all property-owners should have a vote) and whose only possible ending is socialism.
“democracy carried to the current American extreme”?
How is our democracy extreme at current? As compared to, say, Western Europe, NZ, or Canada?
The only extreme that I see here is w.r.t. influence of the political process by REIC, defence industry, and various other powerful interests… not by J6P granting himself power of the purse (which has happened more so in the above-mentioned countries).
It’s not often you see someone who is against democracy. It’s flawed, but it beats the alternatives. Communism, fascism, and myriad forms of keptocracy don’t look much better. Are you longing for monarchy? I suppose with maybe you as king? Whatever you want, my guess is that you’d be one of the citizens with more rights and privileges than the others?
Thanks kockwurst, that was a good analysis.
Or when corporations realized they could buy themselves favorable regulations at the public expense.
But they do that in every country — the oligarchys, socialist states, etc.
No, he didn’t. That’s just another example of the right wing trying to create their own reality.
Below is what wikipedia says:
In Democracy in America, published in 1835, Tocqueville wrote of the New World and its burgeoning democratic order. Observing from the perspective of a detached social scientist, Tocqueville wrote of his travels through America (both in the United States and Canada) in the early 19th century when the market revolution, Western expansion, and Jacksonian democracy were radically transforming the fabric of American life. He saw democracy as an equation that balanced liberty and equality, concern for the individual as well as the community. A critic of individualism, Tocqueville thought that association, the coming together of people for common purpose, would bind Americans to an idea of nation larger than selfish desires, thus making a civil society which wasn’t exclusively dependent on the state.
This makes me more disgusted with every story I read.
________________________________________________________
Not me! It makes me happy to know that my analysis of what was going on was 100% correct. When every douche bag I know in Orange County (including my family) was telling me they could not lose and I didn’t know what I was talking about. Keep the stories coming.
This home is now back to early 2003 prices. This area has lost 5 years worth of value - WOW!!!
On the blog, we used to discuss whether prices would go back to 2002, 2000, etc. I remember thinking that the guys claiming 1999 prices were extreme. Then I remember thinking 1999 prices were in the realm of possibility. Now I’m sitting here hoping that it doesn’t go much below 1999 prices, or all hell is truly going to break loose.
Two massive bubbles have pretty much papered over the economy since 1997. Think about that!
I do and it gives me a headache.
Better start hoping for a pony, too, because they’re not stopping at 1999.
Wonder what the taxes were. Their tax-free home sale profit is $500k, $180k is not even close. Overdue property taxes on the first house?
The Freemans had only owned the 1st house for less than a year. That makes the $180,000 taxed as ordinary income. This probably put them in the highest tax bracket. So guessing that it’s around 30%, they paid about $60,000 in taxes for that profit.
If they had waited to sell after owning it for a year or more, they would have owed capital gains which is taxed at 15%.
If they had held on to it for 2 or more years, they would not have paid any taxes at all.
“They got an offer for $750,000. Acting on their agent’s advice, they rejected it – a decision the Freemans now regret.”
Better to make a fast nickel than a slow dime. Dopes, now they don’t get the nickel.
This is the comment I was looking for. Sellers have been greedy for years and only had to wait a few months for the right sucker to over-bid. Now, if they find a sucker ‘at any price’ they’re lucky.
Did you read about the Port St. Luce properties earlier today that were at $700k and now cannot find a buyer at $250k.
Now, I’m not expecting that much of a drop in areas with good incomes (non-REIC), but prices must trop to what incomes will support. Prices WILL undershoot.
Ok, my wife is watching TV and a public storage ad just came on. “Even in today’s economy…” was part of the sell. Generally, the less skilled trades feels a recession far before the… trades that have a longer learning curve. If companies are advertising for this market already, we’re almost there.
Got popcorn?
Neil
IMO, it is good that these greedy FBs chase the market down. This way the used house salespeople do not get the 6%!
Imagine that if the Freemans managed to unload this house at 750k to some other FB and this poor sod would continue selling at a reduced price say 650k to some other FB - all the while the used house salesmen get the money.
Thankfully the used house salesmen are not smart to figure this out. No?
Reading, I thought baseball. 3 strikes. OUT.
Look at it this way. They can take away her home, but they can’t take away the Double-D’s financed through the profit on the first home.
Or the dime. All they get are carrying costs, taxes, maintenance, and insurance bills… Weeeeeeeeeeeeee!
I do get a little tired of hearing about complete fools.
Thought I was free of them when I retired and quit practicing law - I used to call those who landed themselves in a mess throught their own greed and stupidity by the word “clients.”
Kinda makes you think about the so-called fi-douche-iary relationship.
Interesting, that you objected to those earlier who were painting women as a group with an excessively broad, negative brush, but show such contempt for your former clients. (possible alternative explanation: you were not earlier objecting to stupid generalizations, but were busy implying one of your own, i.e. that ALL women–and certainly those from whom YOU have descended–have it together financially).
Consider: you believed you were free of dealing with “complete fools” when you retired from the practice of law. Congratulations! My experience has not been so salutary; I run into them often enough even outside my practice of law.
You use the word “clients” to denote people who have legal problems occasioned “throught [sic] their own greed and stupidity”.
As a still-practicing lawyer, I find my clients–for whom I am, overall, quite grateful and who pay my considerable freight–a very mixed bag, not susceptible to easy generalization. Some are contemptible idiots; some are non-contemptible idiots; and very many are thoughtful individuals or careful businesses who have genuine problems–sometimes not at all or only partly of their own making–and who need good advice and representation.
Dude, you haven’t been practicing law long enough….
Your statements are true if you are a small-firm or solo attorney.
If you are at a firm, you work for the firm, not the client.
Um, what does Ann’s comment about her clients (all of whom she has actually MET) have to do with her admirable contempt for those who work to depricate women? For a lawyer, I’d say you’re a bit rusty on your argumentation skills.
Ghostwriter:
You said it so well!
“After a year, they were ready to move out. Bill didn’t like living in Tustin, parking on their street was too tight and they didn’t like the school district. They put the home up for sale for $789,000 in the spring of 2005.”
Let’s see…$789 (wishing price) - $703 (greatest fool borrowed price) = $86K increase = 12% in one year! - these arrogant pricks thought the value of the home went up 12% just because they occupied it?
Plus they made $180K on the sale of the first house, reduced by $110K paying off other debt with only $70K going on the downpayment on the eventual short sale.
In summary, these pricks came out $110K ahead on the debt paid off on the phony inflation on their first house. I don’t feel sorry for them. I think they should be locked up in debtor’s prison for 5 years for defaulting on the mortgages.
Got diversified assets?
The hell with locking them up in debtors prisons. Force those fools to work hard labor for 5 years.
Followed by another 5 years of inability to buy a house. We had to compete with these numbskulls the last 5 years as they artificially ran up the market.
We should have a lottery pool in guessing the bottom of the market. I see too many predictions from 2008 to 2015. We might have to put the pool money in some kind of escrow because it might take a while to find the winner.
…wet index finger to air…er…
3Q 2011. Aug 12, 2011.
Who’s in charge of the escrow account and how much?
Smiles,
Leigh
“3Q 20011. Aug 12, 2011.”
At 11:52 AM, PST.
Hey!
12:01 PM, CST.
Plbbbbbbbbbbbbbbbbb!
Leigh
3Q 2013 is my guess.
A minimum bottom of two years, IMO. Impossible to say any particular quarter as prices will be flat the entire time.
Which two years? My guess is 2009-2010.
Don’t you hear the bells ringing, the bottom is here now, it’s a great time to buy! (I win)
Bottom 2011 through 2013. I agree with Bill. A long flat.
Got popcorn?
Neil
I predict small blips of increases in specific zip codes overweighted by a statistically significant amount of HBB readers who will incite bidding wars on only the choicest parcels.
I call dibs on Pasadena and South Pasadena Craftsman’s.
CME futures market predicts November, 2010, down (nationally) 21% from the peak. Locally there will be much worse declines as the big bubble areas pop. In real terms, probably a 30% decline from peak.
2013. Very unlucky number, though.
Dec. 21, 2012 is the Mayan endtime anyway, so it doesn’t matter.
Mr Blofeld, again I object that the 11/10 bottom appears to be only temporary, as the 2011-12 trend appears to be downward.
2015? You’ve only been reading the optimistic projections!
Boomer demographics point to a bottom more around 2020. Sure, the major declines will take place in the next few years, but likely a continued slow grind down after that (ala Japan).
You know how there’s two WWs but only one Great Depression? I think we’ve got GDII between us and the bottom.
I predict the YOY California median house price won’t increase again until 2015.
Although we’re fools to try to predict, I submit end of February 2012 will be the official “bottom,” and it will scrape along until February 2019…this is based on the 2nd credit hit of option/int only etc., majority of resets, and the fact that these cycles usually last around 7 or so years…however, I caveat this with reference to the intro that it’s foolish to try to predict while in the midst of such uncharted waters…
Crush
My wife and I went to a party last night thrown by friends of ours. At one point I found myself in a knot of couples who were commiserating about the housing market and relating hushed tales of FBs of their acquaintance. Needless to say, all of these people were homeowners, and most, I’m guessing, have oversized mortgages. “Must…not…smirk” I kept repeating to myself. What a difference in perspective between us smug renters and our homeowner counterparts.
I hear the ‘hushed’ conversations here in Flagstaff now, too. It’s almost like they are discussing some natural disaster or mass killings.
I’d say “mass killings” gets it just about right.
Given that we exchange our lives for income, I would call it a partial killing. People are losing chunks of their lives when they lose that much money.
And when you consider how many literal killings/suicides are unfortunately going to happen before this is all over with, you have a very literal human toll as well.
An economic natural disaster consisting of mass killings of credit ratings, home ownership, marriages and jobs.
When ever I hear people talking to me about their friends losing houses I always say, “They should have known better and I don’t feel sorry for them at all. They can rent a nice place. I’m a renter.” Conversation over.
By saying something similar to old acquaintances this past Friday night, I incurred extreme wrath and invective. Do I wish I hadn’t said it? No, but I will have to stay away from these people for a while.
I wouldn’t bother saying anything in situations like that. Anyone who has been following stories here on the HBB knows where such conversations are leading & exactly how to incur “extreme wrath and invective.” Why bother?
Was at a party last week and a friend asked me if I was buying soon. I told him that I was not interested in buying at the moment. I have no NEED to buy a house at this current market.
He understood. He just bought a pig of a house a few years back. I think he is feeling it. I did not engage on how he was doing but I’m thinking he’s really strapped for cash. I bought him a few rounds.
I did not engage on how he was doing but I’m thinking he’s really strapped for cash. I bought him a few rounds.
You should have just bought him some rope.
Naaah, This was better. I just pulled out a wad of cash and paid the bartender and gave her a large tip. (a clue for her to take of me with quick service for the rest of the night). She asked me if I want to open a bar tab. I told her no. Cash is better.
I noticed my friend looking at my cash. He knew what a different world I am in. That felt sweet!
I’ve had three people from work ask me if I was purchasing a house soon. What kind of effing question is that? Why the eff must they be constantly snooping in my personal affairs? FWIW, I laughed and say “no effing way”.
I mentioned this on another thread - since when is it acceptable to ask people financial questions? It’s nobody’s business if I rent or own unless I choose to share that information.
It’s the whole misery loves company thing.
My co-workers here in Silicon Valley haven’t even come around to admitting the possibility that house prices will drop here at all, let alone by the 30-50% that I am predicting.
I used to live there — the smugness level of the inhabitants is revolting. There are some very nice areas of the valley for the multimillionaire set, but the average-Joe areas are pretty mediocre relative to the housing prices.
It’s interesting to me that in our society, it’s acceptable to discuss almost anything except personal finances. We can ask our friends about their marriages, their family, their job, etc.- but don’t dare ask about their finances. (Just an observation).
I think this is partially to blame for our state of fiscal naivete; and I sometimes think we’d be better off without this social taboo.
“‘My husband used to refer to this house as an albatross, and I get it now,’ Freeman said. ‘Everything about this house was bad timing.’”
They had great timing. It’s just they were greedy and listened to their agent who wanted more than 6% of 3/4 million. $45,000 is not enough when you’re in a new paradigm.
betcha the realtor wanted to hold out for more simply because they were not representing the buyer offering 750k…realtors are greedy
“…Dos Lagos, which was created as a ‘lifestyle center.”
Lifestyle center = Big Strip Mall
‘Lifestyle center = Big Strip Mall ”
- HeeHeehe.
The Inland Empire reminds me of a stepchild that wants to be loved and will do / become whatever is needed to be worthy of that love.
There is no sophistication at any level out there, period. It is a warehousing low income area that repeated the same drunken behavior that it did in the last housing bust.
I was just there a month ago. Being an avid HBBer I knew I was standing at Ground Zero of the So-Cal housing bust.
I helped my sister buy a condo in Fullerton in mid-2002, which they later flipped into a reasonably decent SFH in Corona. They pay ~$1000/mo on a 30yr fixed so they’re safe.
“Inland Economist John Husing said the timing of the Dos Lagos center, which was expected to demonstrate the growing household income and sophistication of western Riverside County, ‘has been terrible.’”
Sophistication and Riverside in the same sentance ? AH HA HA HA !!!
The Sacramento Banker piece is really the most important part of this post - imo.
Every banker in Ca feels this same way and when they do - credit tightens and that is what will take us further down…
Exhibit A:
“In almost every kind of lending problem it takes 18 to 24 months to work through it. I hope this one is a problem we can work through that quick. I’ve heard some others say it might not be.”
Exhibit B:
“People are waiting for the bottom. Everybody wants to buy at the bottom, and there cannot be a bottom until buyers come in. We’re not there yet. My guess is we’re maybe into April, maybe June or July, before we see that.”
Does not compute. A bubble 20 years in the making is supposed to rectify itself in 20 months, but the bottom will come in 5 months. WTF??
Bankers can no longer sell off the risk anyway. So credit is going to tighten dramatically. The era of the zero down is almost over. (I’m in shock reading BofA still offers ‘Doctors mortgages’ (full doc) to $1M with zero down…. Ghads! Zero down is going away, but persists like some damn fungus.
And the Realtors ™ will wonder why sales continue to dry up through this year. This will be nationally like the 1990’s SoCal downturn… when sales pick up sellers will get arrogant and try to raise prices… sales will then dry up and from then on increasing sales will only be due to fast declines in the selling price.
We have a long way to go.
Got popcorn?
Neil
In Kenya in December, I was seeing billboards advertising zero down mortgages. However, as you all well know, Kenya has since dissolved in disorder. Whatever bunch of infestors were chasing that yield, though, they probably still exist somewhere, so zero-down is perhaps not quite dead.
Most realtors can’t see beyond the comps in their own neigborhood, let alone any regional trends, let alone any macro-economic cause-and-effect relationships. They’ll still be wondering why the house down the street sold for $100,000 less than their POS last year.
At the Costo R E booth yesterday,I heard a rookie resale ‘expert’ tell a buyer that along as her bankruptcy was 2 years old, she could possibly qualify for an FHA loan. Her FICO was low, but the rookie said she was surrounded by a good team. The fraud and stupidity continues…
Of course its sales, but boy, both these two women were clueless. I could not believe the dance of greed and need. (And who in there right mind is buying right now?)I kept my big mouth shut, and took a free candy bar from the booth.
“Your credit report affects more than just your borrowing. I was struck by something Sheriff (John) McGinnis said when he talked to us not too long ago. He said one of the top problems they have in hiring deputies is they run a credit score on the new deputies. He says you can’t have a deputy that has credit problems out there. You’re always wondering, is he going to be subject to bribes or some other issue?”
I’ve mentioned this issue here before. We see it all the time due to Homeland Security requirements. It’s simply amazing how many educated folks are living on the edge!
If this keeps up, it’s going to keep a lot of Blacks out of civil service jobs. Blacks were more likely to be sold toxic mortgages than whites with identical credit. Furthermore, Blacks are more likely than whites to have grown up in poverty, and my experience from talking to the disadvantaged is that their money sense is nil. They may be able to control household expenses, but when it comes to any kind of investment, they are lambs to the slaughter.
I think a ‘United Negro Personal Finance Education Fund’ is needed more desperately today than the United Negro College Fund. The labor of a lifetime is a terrible thing to waste … especially when you have children.
I agree wholeheartedly as a Black male. While I am not in the 6 figure income range, I know many people who are, yet broke. One couple(black) I know of both have Ivy league education yet they have to keep borrowing money from the husbands parents, who are semi-retired blue collar workers.
“The house now sits empty. The swing set that they bought for their daughters has been abandoned since Freeman has no room for it in her new apartment.”
Hope they still have room for the circus trapeze, they were swinging from…
“The house now sits empty. The swing set that they bought for their daughters has been abandoned since Freeman has no room for it in her new apartment.”
Hope they still have room for the circus trapeze, they were swinging from…
Too bad they had never bothered to acquire the recommended accompanying safety net.
OK, time for a different view.
With the future full of many BK zombies I’ll bet two things.
FICO scores will start at two digits, and
Two digits scores will still allow a house purchase.
Where does the inventory overhang go otherwise?
Forgot to add,
Even after prices revert to the 3x income level?
We were just discussing this as home last night. I think FICO scores will be readjusted. There won’t be enough people with high enough FICO scores to buy or borrow.
I found this an excellent read.
MONEY,
BANK CREDIT,
AND
ECONOMIC CYCLES
by JESÚS HUERTA DE SOTO
Download from here (warning PDF file)
http://www.mises.org/books/desoto.pdf
You must be a fast reader.
I only read the pics
Getting real bad on the Street?
http://www.nypost.com/seven/01202008/business/blood_on_the_street__trader_866023.htm
The lawyer said he had two 50-something Wall Street guys call him this week, who, he said, “had lost hope, crying on the phone.”
“It is call after call after call like these,” he said.
Lost all hope - after huge bonuses.
This might cool off the Manhattan market a bit.
“NEW YORK (Reuters) - A leveraged buyout of apartment landlord Archstone-Smith may leave Wall Street firms hurt as they could be left holding some equity in the deal, Barron’s said on Sunday.”
equity bagholder language….
I think I inadvently reponded to an article, that is much different than the one above.
apologies.
Good article, Ben should toss it on the front page. As someone living near NY City, for the last few years every realtwhore has been saying “It’s different here, the Wall Street bonuses will move the inventory, better move fast!”
It’s amazing to me that so many Wall St people are just as stupid as everyone else when it comes to real estate.
A number of coworkers have asked me about buying in Manhattan. I always tell them to count up the cash they have saved in the past 5 years, double it, and consider that number the upper limit to spend.
Too many people have been spending most of their comp as if the boom will last for ever, and then plan to settle down a bit by levering 4-1 on property! That’s madness given that property values are so linked to WS comp.
I know one guy who built a custom 12000 sq ft home based on his high pay in the mortgage securitization biz. I hope he’s got $2M in the bank to help in the coming dry period. I doubt it, though.
I can tell you any number of Joshua-Tree worthy stories about these NYC “geniuses”.
The strangest part is that they can’t apply their skills to their own finances.
Are you referring to the skills that destabilized the global banking system?
There are some very smart people on Wall Street, but they usually work for themselves or in small private firms.
The big Wall Street organizations are stacked full of organizational politicans, people hired for their glib sales skills or personal connections in a ruthlessly conformist, stupid-aggressive herd animal culture.
There are a few smart thinkers scattered around the org chart, but they are the ones who have survived despite the dog-eat-dog organizational culture.
Like the subprime mortgage brokers, those jobs simply aren’t coming back in their lifetime either.
The Orange County Register reports from California. “Kim Freeman calls her tale a ‘riches to rags story.’
What an idiot! She never had any riches! While she did make a profit from her first sale, she immediately used it to get into more debt! So for her to say “Boo Hoo Hoo! Look how much we lost” is a bit of a lie. They never had the money in the first place. At no time in their financial timeline did they sweat and save away a pile of money and then lose it. They just borrowed, borrowed, borrowed until the party ended, and now want pity.
““‘If you had a crystal ball, you’d do a lot of things differently,’ she said.”
My balls aren’t crystal. And I knew not to play games with credit and phoney equity. (Yet, *I’m* the only one being made to pay for your mess, in the form of inflation and lower interest rates)
He who has crystal balls better beware of those who have hammers.
Or wives who have kinky s*xual proclivities.
“‘If you had a crystal ball, you’d do a lot of things differently,’ she said.”
I had a crystal ball. This blog. Without it I may have caved to the pressure to buy at the peak.
For those NoVa readers like me, here is a front page WaPo article today (20 Jan 09) about the drop in housing prices in the DC area:
“The data from the Case-Schiller Home Price Index showed that prices for single-family houses fell 7.7 percent in the region during the third quarter of 2007 from the comparable quarter in 2006. That is among the steepest declines in home prices since 1991, when prices fell 5 percent during the first quarter from the first quarter of 1990…”
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/19/AR2008011902156.html
The part about Alexandria going up in price is BS. Just look at the MLS listing for that area and there are thousands of listings. It’s really brutal. No place is immune. Some is worst off than others.
Some areas are overcrowded with illegals. I just drove by a house with 10 cars parked in front of the house. What cheap labor jobs are left for them?
Best quote from that article:
“It used to be location, location, location. In this market it is price, price, price,”
42% subprime in one of the DC counties… absolutely toast.
Now the article ended on a bidding war… yea. I’m simply not going to believe that. If a property sits, I bid, and somehow other bidders ‘jump in,’ my counter-offer just went down. (If I don’t just walk and wait to see if it did sell.) When they say the other buyer’s financing fell through, I’m not likely to believe it.
Got popcorn?
Neil
I see they took some liberty with the spelling of the Shiller part of the Case=Schiller name.
Tuesday is the Jewish Holiday of Tu B’Shevat (ט”ו בשבט), also known as the New Year For The Trees, but we’re celebrating it early today by doing some tree-planting.
http://en.wikipedia.org/wiki/Tu_Bishvat
Unfortunately, the nursery had no “Joshua Tree” seedlings, otherwise I’d have the perfect way of commemorating 2008 on this “new year for the trees”
That’s a cool holiday. A day to appreciate trees. I really like that, being a ‘tree hugger’ and all. I L O V E trees.
Well, a Happy BishKingLincolnmas to everyone! I love the holidays.
Haha, Joshua trees only grow in the Mojave Desert and will not grow well in other areas. They need the summer heat and winter cold and above all else to be dry. So they are tough to find for sale. I don’t think I have ever seen one for sale?
Aren’t they protected by Federal law?
Is this close enough for you?
http://www.plantdelights.com/Catalog/Current/Detail/01379.html
This nursery has several more similar species available. You’ll probably have to wait for the weather to warm up around here for them to ship, but it’s not like there’s going to be any less need for them in the spring…
That’s pretty nice! I think I’ll ask my gardener if it’ll grow in Sunnyvale
Another circus act….
Loan Jugglers
‘It makes sense in retrospect. You kind of prioritize your obligations….I think, for a lot of people, the most important thing was to hang onto their house. This is primarily a problem of people having too many bills and not enough income to cover them. So they began juggling their bills. Credit cards, auto loans, things like that took second place to keeping the mortgage payment up.’”
So many tragic stories. I feel sorry for the kids. But when it comes to passing around blame, the media played a huge part. So did the Fed, and of course the free market Republicans and their complete lack of regulation sealed the deal. People were also tragically naive. In this country it is ALWAYS buyer beware.
You can’t trust anyone, from the president on down.
I don’t feel sorry for anybody. The people getting burned are universally greedy and stupid. They’re not about to starve to death. The state won’t let that happen. They can go back to renting. I rent; is that so terrible?
Take a good, long look at this, folks. These cretins and hundreds of thousands upon hundreds of thousands like them are what helped to put home prices into the stratosphere. Of their ilk that have already fallen, I hope hitting the bottom hurt like hell. For the ones that are on their way down, or about to begin the fall, the impact when the bottom is reached won’t be hard enough.
OT…
Anti-Nokia anger in Germany for closing a factory is growing with politicians publicly ditching the firm’s phones and joining calls for a national boycott in Europe’s largest economy.
The Finnish mobile phone giant said on Tuesday it plans to close the factory in Bochum in the Ruhr industrial heartland and shift production to Romania where labour costs are lower. The closure will result in 2,300 job losses.
Finance Minister Peer Steinbrueck, from the left wing party in Chancellor Angela Merkel’s governing coalition, attacked what he called Nokia’s “caravan capitalism.”
Kurt Beck, head of the Social Democrats (SPD) party, has banned Nokias from his home, while Merkel has said consumers had a right to favour appliances “made in Germany.”
“As far as I am concerned there will be no Nokia mobile phone in my house,” Beck told the Bild am Sonntag newspaper.
“For me, and this is doubtless the case with many other Germans, the name of Nokia has not sounded good for the past week. I don’t want to be reminded of the incredible source of anger every time I am on the phone.”
This is what has been missing in this country for a long time. I really need to move my family to Europe and leave this fascist country.
What with all the jobs eliminated by Ford, GM, and Chrysler, I finally said OK I’m only buying Toyotas and Hondas since they are actually hiring Americans.
this one got my attention.
I try to avoid buying anything that will put more money in Americans’ pockets - it will only help to prop up the real estate bubble, so it’s against my own interests!
I’m a diehard Toyota guy too, but I have to admit that I’m fairly impressed with GM these days. I went and looked at an 08′ Malibu. Pretty damned nice car. Definitely 200 times better than the crappy previous version.
That and their new hybrid Suburbans get as good a fuel economy as my small Toyota truck. The last thing is that they have Bob Lutz who I think is a genius. He’s heading up the development of the Chevy Volt which will supposedly go 40 miles on batteries then switch over to a tiny 1 liter engine that recharges the batteries. Pretty cool.
And to the person wanting to move to Europe: If you think the US has problems…
Like Alec Baldwin was going to move to Canada when Bush was elected? Or re-elected, I forget which.
Talk is cheap.
Hollywoulda coulda shoulda
Those moving to Canada boasts of 2004-5 were hilarious, if anything I expect the exodous to start in early 2009.
Atlas is relaxing his shoulders.
Atlas has left the building.
Should’a moved Bill. At least the Loonie is now higher than the dollar. You would have made it up on the currency exchange.
Here is sonoma county the median has dropped an average of 1.5% per month since 8/05.In nominal dollars.another $200k off the median and we will be affordable.{median family income $53,400,peak price $619k}
A-Realtor-tale-that-wags-the-dogs
“With Merced’s prices dropping closer to the $200,000 mark, Flanagan said she’s seeing the return of out-of-town investors, a trend she called a positive sign.”
“‘To me, that’s really the tail-that-wags-the-dog indicator,’ said Flanagan. ‘We’re getting looked at again (by out-of-town agents and investors), and by 2010 people will be wishing that they bought in 2008.’”
That sounds like the sales pitch used by the last man to sell a Ford Pinto.
“by 2010 people will be wishing that they bought in 2008.’” ”
Gold, maybe…RE, not likely.
Portland Oregon 45.4 latitude.
Wow it got to 105 degrees in July 21, 2006. Seems like most summers there will be dangerously hot days with 90-105 degree days.
Seattle, Washington has milder summers with the occasional 90-95 degree day. The average winter Jan temperatures is 47/36 which means the high is almost always above freezing and the low is above freezing most of the time. People can grow palmetto palm trees on the west coast
I would like summers not to exceed 80 for a high nor go below 40 for a low and winters to be a little cooler than that.
I consider a mild winter if it rarely gets below 0 for a low. I checked Pittsburgh and it only got below 0 at -2 once in the last 10 years. USDA map rates Pittsburgh as zone 6a and the west coast as zone 8a and 8b depending where.
Very, very little snow on the west coast as it just doesn’t get very cold. 20-25 is about the lowest it gets. It’s winters are as mild as Tallahassee, Florida regarding minimum temperatures. Of course the average temperatures are lower on the west coast.
Look at the weather map now. Notice how the actual temperatures in the north midwest is minus 20s with windchill in the minus 40s! Pittsburgh is going to get down to around 10 degrees with windchill of near zero. That is cold but nothing compared to -40 windchill!
(it’s late and no one may read this, ill repost it again tomorrow)
Also I read the story. Typical greedy FB *rolleyes*
In my opinion, San Francisco has the optimal summer weather - foggy and 65 is a very typical day.
Ive been to SF and I can vouch for the nice summers! It wasn’t foggy, although there were some incredabily low clouds, like 100 feet above sea level! The tops of some high buildings were above the clouds!
But I will never pay those insane house prices, so it’s Pittsburgh or some other affordable city for me
I dig Pittsburgh. That’s hard to say considering I’m from Cleveland. I had friends who went to Pitt and when I visited I loved the architecture. I believe Pittsburgh has also done a good job of attracting biotech. Those hillside railcars are pretty bitchin’ too.
heh, yeah the funicular is sweet…
declining pop. though. I have a friend my age who went there with her husband. kinda depressing… (though I think it’s really pretty there)
As strange as this may seem, I think San Jose has the best weather of all, even though I bag on SJ every chance I get.
Except that it rains A LOT in the winter here. There’s only two seasons here: a totally dry summer that lasts from April-Oct and then almost six months of rain. I grew up in the Southeast and I’m almost more in favor of more regular weather. We had miserable summers though, so the Bay Area has that region beat by far in terms of summer temps.
Supposed to rain ALL WEEK. arg!
Received an inside tip from a Realtor that deals with banks and their now owned properties. Banks will be dropping prices up until about the may/june timeframe and then gradually increase from that point on. And no, monkeys weren’t flying out of his a$$ either.
Another beautiful tip from the Realtor. One must be in a mode to move/sell/buy every 4 or 5 years and by the 5th move, you should have the house you’ve always wanted. Assuming the average for those 5 homes in my area is $600K, that would equate to a hefty $180K in selling costs. Sounds pretty close to what one pays in sales tax during a lifetime.
I think this unrealtoR sounds like a bit of a fuddy duddy. The banks will TRY to increase prices in spring/summer, but will give up when no one bites.
Silly agent.
Shit hitting the roof in markets in Japan, HK, India and Singapore. Black Tuesday in the offing !!
Agreed, this could be a very interesting day for the markets. Have to admit that it’s bittersweet in a way after watching many of those same countries bash the US over the last few years and go on and on about how their economic issues had no dependence on the US, etc, etc. Oops.
Let it be known, this pie has multiple diverse layers! its base is generally constructed with our basic needs in mind (shelter, security, love,food) the fill is made up of our wants (unfortunately the things we want NOW - at whatever the cost), and the top base is what keeps our faith alive - our dreams. We all need to reflect on the current crisis; and heed the lessons encountered by our ancestors ie. act responsibly at all times. I am not here to judge all of our actions but rather we should bear in mind that our children deserve a prosperous future too. Let’s just hope that this correction can be curtailed through appropriate micro-economic management. I personally believe a short-lived recession is by far a more responsible outcome rather than actually producing something far more sinister - a Depression; God help us.
From here, in our homeland, we are being constantly bombarded by experts advising us that this crisis will not affect us to the same degree due to a prolonged propserous economic period. This view is pompass, arrogant and nieve to say the least. We are all different and have our own set of values and attitudes; always act responsibly and seek a second or even a third opinion .
Very well said. Seeing as how you’re originally from Australia, how’s things over there? To my understanding, the government bases spending on what they actually have versus going into massive debt. Is that true? also- Australia apparently has a healthy raw materials supply and has a trade surplus. Sounds terrific. Just curious what your take is.
“Everything about this house was bad timing”
not a bad decision…not stupidity on their part…just…bad timing.
Big money being lost everywhere, just yesterday a couple moved into a house 3 doors down and after all was said and down the couple who sold it lost 202k on the house they were retired and wanted to play the flipper game now they head back home sick and confused. They played high stakes poker and they didn’t know when to fold?.