The Investment Trend May Be Over In California
The Associated Press reports from California. “Foreclosures reached a 20-year high in California during the fourth quarter of 2007 as a growing number of homeowners fell behind on their mortgage payments, according to Dataquick. A total of 31,676 homes ended up in foreclosure during the quarter ended Dec. 31, marking the highest figure since DataQuick began keeping such numbers in 1988.”
“The total represents a 30.8 percent increase from the previous quarter and a 421.2 percent jump from 6,078 foreclosures in the same quarter of 2006, DataQuick said.”
“In addition, 81,550 default notices were sent to homeowners statewide between October and December, up 12.4 percent from the previous quarter and more than 114 percent in the year-ago quarter.”
“Most of the home loans that slipped into default during the fourth quarter of 2007 were made between August 2005 and October 2006, the final months of the housing boom.”
“‘We think depreciation is the main culprit,’ said Andrew LePage, a DataQuick analyst.”
The Sacramento Bee. “Foreclosures and defaults soared to stratospheric levels in Sacramento and the rest of the state last year. Notices of default in the eight-county Sacramento region, stretching from Amador to Nevada counties, were up 106 percent in the quarter.”
“For all of 2007, foreclosures in greater Sacramento were up an astonishing 496 percent, to 10,049, DataQuick said.”
“The latest numbers underscore the enormous challenge facing the state and national economy. The Fed’s rate cut may not stave off a recession, said Scott Anderson, senior economist at Wells Fargo & Co.”
“‘It could get ugly very quickly and this is what the Fed is responding to,’ he said. The cut ‘is not going to be a panacea’ but could help bring the economy out of a recession more quickly, he said.”
The Appeal Democrat. “Builders and developers took out half as many building permits in 2007 than the year before in the rapidly growing areas of Yuba City and Yuba County, indicating that the area’s building boom is over.”
“‘The real estate boom we had in 2003, 2004, 2005 was unprecedented,’ said Darin Gale, legislative advocate for the North State Building Industry Association. ‘We’re now below normal. Definitely, that real estate boom is over.’”
“In previous years, Yuba County issued more than 1,000 permits as people waited outside sales offices to buy homes in relatively affordable subdivisions in the Plumas Lake and Edgewater areas. But what goes up must come down.”
“And a triple threat of foreclosures, tight credit and waning consumer confidence caused the boom to falter despite what should be a winning combination for the home-building business of falling home prices and interest rate cuts.”
“Uncertainty in the mortgage business caused lenders to clamp down on loans even for qualified buyers, said Gale. That was a reverse from previous years when some people obtained loans without even having to show how much they made.”
“An inventory of homes accrued in Yuba County as the market slowed. Home buyers were tempted by the availability of nearly new foreclosed homes. ‘It definitely was slower because of foreclosures,’ said Gale. ‘There’s more of a supply of homes out there.’”
“Late 2007 was particularly brutal for home builders, and Yuba-Sutter was no exception.”
“No single-family home building permits were issued at all in Plumas Lake during September, October and November, according to Three Rivers Levee Improvement Authority reports. Yuba City also experienced months during which no one took out a permit to build a home.”
The Orange County Register. “More than 100 foreclosed homes around Orange County were opened to the public Sunday as potential bidders got a chance to look them over before the homes are auctioned next month.”
“Wilfredo Lanz, who lives in Irvine’s Northpark neighborhood, drove over to look at a vacant house in the same neighborhood.”
“The three-bedroom, two-story house is listed by a broker at $959,000. Bidding will open at $449,000 when it is auctioned at the Anaheim Convention Center on Feb. 2, according to the Irvine-based company that is organizing the auction.”
“He plans to bid as much as $700,000 for it. ‘That’s the highest we’ll go,’ he said.”
“The number of foreclosures in Orange County is nearing record levels. Last month, lenders foreclosed on 644 homes, the second-highest monthly total since DataQuick began keeping track back in 1998.”
“Most of those foreclosed homes become the property of mortgage lenders after failing to attract bidders at trustees’ sales that are held each weekday in Placentia and Santa Ana.”
The Desert Sun. “With the number of foreclosures mounting, homes all across the Coachella Valley are sitting empty. In some situations the grass is overgrown and the pool water is stagnant.”
“Those are the types of homes two east valley cities are hoping will get cleaned up with the help of a new ordinance that addresses foreclosed homes.”
“‘The problem is … we really have no tool to actually force the lending agency or bank or whoever owns the foreclosed house to maintain it,’ said Indio City Councilman Mike Wilson.”
“As of Monday, there were almost 6,000 homes in various stages of foreclosure among the valley’s nine cities, according to RealtyTrac. Indio, the most populated city in the valley, had the most with 1,119 homes listed.”
“‘The bottom line is with the great growth spurt we went through, Indio … is going to be faced with most of the foreclosure problems,’ Wilson said.”
“A problem code enforcement officials are facing in getting properties cleaned up is not knowing that a foreclosure occurred. Often time they’ll spend months going after the owner on record only to find out a bank or mortgage company actually owns the home now.”
“‘Sometimes it takes eight to 10 months to find the actual owner,’ said Ben Guitron, spokesman for the Indio Police Department.”
The Union. “Like the rest of the country, Nevada County has been hurt by one of the worst real estate declines in years. Home foreclosures have been on the rise, and some real estate agents are dropping out of the business all together.”
“‘One of the problems we were having is that the price of real estate was too high (in the area),’ said Larry Harley, president of the Nevada County Association of Realtors. ‘Sellers weren’t lowering their prices as fast as buyers wanted them to. That created a standoff.’”
“The market already has started to improve a bit, Harley said. ‘On a large scale, sellers have begun to accept psychologically that prices are less than what they used to be,’ he said.”
The Daily Press. “Good news for those looking to rent a home in the Victor Valley. The current rental market is excellent, said Karel Probert, office manager for VIP Property Management in Apple Valley.”
“‘Due to the real estate market, we’ve been bombarded with houses that owners were unable to sell,’ she said.”
“Competition in the market is good for renters because not only do they have a lot to choose from, but they also benefit from the fact that landlords need to keep their properties in good condition to compete, said James Phillips, broker in Victorville.”
“Suzanne Meyer, a real estate agent in Apple Valley warns those in the market to rent that they need to be on the lookout for a dangerous trend that occurred in the area in the 1990s.”
“‘People are losing their homes, so they stop making payments and advertise for a renter,’ Meyer said. ‘Then all of a sudden, someone’s at the door saying ‘get out, the bank owns this home.’”
“As prices continue to drop, local real estate agents say more people will likely buy High Desert homes as investments, though that’s not yet the case.”
“There are few investors out there right now, according to broker Jim Phillips, but it will not be that way for long. ‘Until buyer confidence gets to where they feel like those prices are good, they probably want to wait,’ Phillips said. ‘My guess is they’re lining up their ducks.’”
“Around 2001, the trend of buying homes as investments was common in this area. Then by 2004 and 2005, investors found that they couldn’t cover their investment with rent rates, said broker Caroll Yule.”
“‘A lot of people bought the homes anyway, and their payment far exceeded what they were able to rent the property for,’ Yule said. ‘Now with the lowering of the sales prices, we will reach the point again where it is a very good investment in the short term.’”
“Not everyone is as optimistic. Southern California economist John Husing said that because many investors were hurt when the market turned, the investment trend may be over.”
The Fresno Bee. “New buildings coming onto the market combined with fallout from a dismal real estate industry joined forces to increase the percentage of empty offices in 2007, a Fresno realty firm reported.”
“Agents at Grubb & Ellis/Pearson Commercial said construction will drop off this year as developers concentrate on finding tenants for the new buildings and existing offices vacant because of cuts in the construction and mortgage industries.”
“This office market is unusual in the amount of space available for sublease by mortgage, construction and affiliated businesses that have moved or downsized. More than 200,000 square feet of office space is available for sublease, four times the normal, said Phil Souza, a senior VP at Grubb & Ellis/Pearson.”
“Mortgage professionals say this is the toughest time they’ve ever experienced and that many companies have had to shrink.”
“‘We’ve downsized, moved to a smaller building and cut expenses,’ said Doug Heffner, owner of Integrity Lending Group and president of the local chapter of California Association of Mortgage Brokers.”
“‘Everyone has kind of bailed on the industry, or the industry has bailed on its people,’ Heffner said.”
“‘Everyone has kind of bailed on the industry, or the industry has bailed on its people,’ Heffner said.”
Ben!! We finally have a bailout.
I love Irvine, but I still think this is stupid. How much does this guy make?!
“The three-bedroom, two-story house is listed by a broker at $959,000. Bidding will open at $449,000 when it is auctioned at the Anaheim Convention Center on Feb. 2, according to the Irvine-based company that is organizing the auction.”
“He plans to bid as much as $700,000 for it. ‘That’s the highest we’ll go,’ he said.”
We should thank this guy, he is taking one for the team. Without knife catchers, we wouldn’t have any comps to demonstrate the market is falling.
That’s quite a range there, Tiger. Too bad it’s not on eBay or he could just hit “Buy it Now” before it gets away.
Speaking of ranges, I looked at two houses today, identical floor plans in the same ‘hood, one REO listing at 649K and the other underwater FB who has been on the market chasing it down for over 8 months. The FB originally had it listed at 899 and is down to 749 now. I think a knife catcher will buy the REO at around 599, and when this all shakes out, that same house will sell at about 450. Talk about a range! Maybe this market will meltdown sooner than we think.
So everybody knows now to Stop bidding at $675,000 let him WIN WIN WIN…ahhhh it never felt so good to spend $680,000 why i even got it for less then my maximum bid….WHOO HOO!
He’s pretty much guaranteed that a shill will be there to bid it to at least that.
Wow, a half million haircut to start opening bids!!!
“He plans to bid as much as $700,000 for it. ‘That’s the highest we’ll go,’ he said.”
Not only is this guy a brilliant investor, he’s a savvy negotiator, too! You always announce how high you plan to bid befoe the auction starts! He’s sure to be the next Donald Trump with these skills!
I personally think that these homes should have never been built. There is no economy out there to sustain any growth, let alone a decent standard of living. I use to drive out that way to complete government audits and it was really to find the Water District I was looking for, because it was the only building that didn’t look like a shack.
“With the number of foreclosures mounting, homes all across the Coachella Valley are sitting empty. In some situations the grass is overgrown and the pool water is stagnant.”
“Those are the types of homes two east valley cities are hoping will get cleaned up with the help of a new ordinance that addresses foreclosed homes.”
“‘The problem is … we really have no tool to actually force the lending agency or bank or whoever owns the foreclosed house to maintain it,’ said Indio City Councilman Mike Wilson.”
Mike, you are on the council ? Pass an ordinance with abatement proceedures and fines in it. Lien the house if the ‘owner’ doesn’t pay. Or, resign from the council you retard!
We think depreciation is the main culprit
Gets my vote so far for asinine quote of the year.
And WHY depreciation??????????
Could it be that we just had an insane speculative market that caused priced to detach from market fundamentals…including an fairly important one called AFFORDABILITY?!?!?!
If prices suddenly stopped falling, people still wouldn’t be able to afford the houses, immediatly causing a supply/demand imbalance that would cause prices to ????? FALL maybe?
It is about the PRICE!!!
I think the main culprit was unreasonable appreciation. Get rich quick, buy a house. Why work for a living, when you can live on a pyramid scheme?
Lifestyles of the broke and brainless. Time to open a blog site the LBB - dedicated to preserving moronic behavior. I am not sure if the San Diego Realty blog beat me to it?
Ok Leigh, what is your email address? I must pay up!!!!!
an aside: as a result of the targeted Bail of the banks - ( BoB ) - I am leaning more heavily to roaring inflation. The next move by the Federal Reserve after BoB is STeW.
If this did not involve people’s lives and well being the actions by the Federal Reserve would be amusing.
Yes Hoz, inflation will be severe. I told my husband this morning that we’d better buy him that new car now before the prices skyrocket. What is STeW.
Do you think the Fed will go to 0?
No way do you have to buy that new car yet. Inflation like you are talking about won’t just appear overnight. To get the price of items such as cars to rise you have to get money in the hands of potential buyers. How do you do that?
- Lunatic lending
- Wage inflation
- Direct government handouts
I don’t see any of those things impacting Toyota, GM, Honda, Ford, etc. at this point. Food and energy prices might inflate but cars? Not when none of the FBs can afford them. Ironically, the more the FBs pay for their daily bread, and oil, they have even less money for big ticket items which might bring those costs down further. Discretionary items will deflate while necessities inflate. That is my very unscientific opinion.
Hi NYCityBoy:
But if people can borrow at very low rates, then aren’t they more likely to buy things like cars? I agree they’re not going to start investing in RE again (because the price is way too high and suicide lending is gone), but there’s no reason why they can’t buy a car, as long as they can pay for it.
I think the “consumer” has finally reached the end of their leash. Who’s going to give them those 0%, no money down, loans that they need to drive off the lot?
Not to mention that there is a mass of auto loans that will surely hit the default category. Recent reports show an unprecedented amout of borrowers way upside-down on their auto LTV’s. Years of rolling the old balance into the new auto loan. This mess isn’t just contained to mortgages. Look for news of the crisis spreading to credit cards and auot loans.
Add to that spiking defaults in student loans.
Ex-nnv and Spike66,
Yes, we have a large variety of loans going into default. The reality is, we’re finally hit credit exhaustion. This is going to be one heck of a recession. (Yes, I still believe “Great Recession” and not a depression.)
Time for people to pay off debt. BB did what he thought would keep the banks alive. But what’s going to make people pay? Nada.
This has only begun.
Got popcorn?
Neil
Joe and Jane 6pk are getting SPOOKED now. Not to mention they haven’t saved s**t and are up to there eyeballs in debt. Borrowing, whether it’s CC or otherwise will be the new Black Pariah IMO (especially for RE). Just hearing about RE is going to make a lot of folks pucker. Many of the dolts that jumped-in and got reamed in the RE bubble won’t even want to buy when RE is once again cash-flow positive in comparison to rents (not that they could with their trashed credit anyway).
Consumption is going to fall through the floor. The RE bubble retail robots are in limp mode–or will be very soon when they realize they’ve had enough, and are DONE loading up on toys, gadgets and such. RE, autos, appliances, and other luxury items are all going to sit and sit and drop and drop in price. Pump prices are also going to drop IMO.
The next bubble? Food and alcohol
(I’m picturing Eddie Murphy crying, jamming ice-cream and pouring M&M’s in his mouth in “Nutty Professor)
DOC
Lifestyles of the broke and brainless. Time to open a blog site the LBB - dedicated to preserving moronic behavior.
Hoz, I believe that blog already exists. Check out Luxist.com. Careful though, it might make you sick.
Wanna bes. funny site
Hoz baaaaaaaaaaaaaaaby!
Let’s talk.
barbluvsong@yahoo.com
Most honorable Hoz,
GDII, er…soon.
Run…short inflation, fast deflation…er…implosion?
It’s to big, my luv!
Ya just can’t make this stuff up!
Best Always,
Leigh
P.S. Good to see you again!
I posted this in a dead thread I think awhile back, but thought it was worth getting my fellow HBB’ers opinion. This took place last year or mayble late 2006. This is what happens when builders and city councils are NOT held accountable and allowed to raze the land and create a moonscape for short term profits. The guy who owns the property is just a deadbeat.
http://tiny.cc/LKQoB
Hey Stewie,
I got a youtube of the Helotes Mulch Fire. Is that what you meant to url? Please explain further. Thanks.
tinyurl’s expire after a time and are re-used. Redo?
“Suzanne Meyer, a real estate agent in Apple Valley warns those in the market to rent that they need to be on the lookout for a dangerous trend that occurred in the area in the 1990s.”
“‘People are losing their homes, so they stop making payments and advertise for a renter,’ Meyer said. ‘Then all of a sudden, someone’s at the door saying ‘get out, the bank owns this home.’”
This is the very reason why my wife and I are living in an apartment at not a house. We could easily find a home to rent for the same price of our rent, but we are afraid that will lose our deposit to something like this.
In case anyone didn’t get it, this is the FB’s final effort to recoup loses. They figure collect rent for at least 6 months until the lender finally shows up at the door. If I was a renter in Victor-Hell, I’d show up and never pay rent. One fraudulent turn deserves another.
A co-worker that was just hired moved from “Victor-Hell” a few months ago. I always thought that the place was nasty, but never had any evidence except for the white trash that I had to deal with when they came down the hill to my college. But he informed us that for the last decade the cities up in the high desert have had a huge influx of gang members from the LA area because of the cheap housing. He told me that he thinks it’s worse their than the LA area. I would beg to differ, but he assures me that I haven’t seen what he has. He says random drive by shootings are very common in Victorville.
.” But he informed us that for the last decade the cities up in the high desert have had a huge influx of gang members from the LA area because of the cheap housing. He told me that he thinks it’s worse their than the LA area.”
I’ve been out there as well as in the community of Mohave near the river. There is a large section 8er segment out there and imperial ave/nickerson gardens style projects crawling with idle drug-dealing gangsta punks. Lots of welfare assistance gov’t centers all over the Victor Valley area and I have seen folks which i can only describe as compton?inner LA transplants , bringing their gang bangin kids out to the cheap housing tracts in the hi desert . I always tell everyone i Meet that parts of Victorville are every bit as bad as Scentral and not to buy a home there .
The story of those two kids getting murdered by some crazed killers in a deserted bunker is not surprizing as there are indeed assorted crazed loonies, desert methheads & , gun-toting jackbooted slimeballs out there in the scrub wastes.
If U live out in the desert in Victorville or Lancaster better have an array of weaponry and razer wire around the perimeter. Plenty of open space for target practice.
No problem, just shoot back, and being a better shot would be a plus.
If the aim of the return fire is good, it’ll mean at least one less gangbanger to have to deal with.
http://www.youtube.com/watch?v=Ubsd-tWYmZw
YOU ALL FORGET THIS IS AMERICA…even deadbeat landlords and tenants have a day in court.
Nobody can kick you out PERIOD. Unless you lose in court So there is a good chance you can live rent free for a few months too.
That is what process servers are for. To make sure YOU and anyone in the building aka John Jane Doe, get sufficient notice to appear in court, then in court you ask the judge if you can stay a month to use your deposit as rent.
=============================================
but we are afraid that will lose our deposit to something like this.
“…This is the very reason why my wife and I are living in an apartment at not a house. We could easily find a home to rent for the same price of our rent, but we are afraid that will lose our deposit to something like this…”
Leasing a apartment doesn’t guarantee that you won’t lose your deposit in the case of foreclosure, although the event of loss is less likely…
Poster is selling used slightly used US Army tents and river camping sites near local transportation(RR tracks) under the Victorville Narrows with shady comfortable Joshua tree benches.
Out of State Idiots, RE agents and Investors of all types Welcome…CASH or GOLD IN ADVANCE
Like any of those out-of-state investors have cash or gold? Without a wad of borrowed money they’ve got nothing but their foul stench.
Rats Minnesota boy.. I thought I had you signed up;)
Next
Don’t count on me. But I can give you plenty of referrals. I know a lot of people that are always looking for a good snipe hunt. They can hold a bag with the best of them.
Sheesh You’re a hard sell NYCityboy…how about some prime Lake Vermillion bog with lakeshore and monster moosetracks …it’s a balmy -18 degrees tonight ha ha
I know. We are on the lookout for FB LLs. Renters’ rights during foreclosure are brutally lacking. Luckily, we have put a deposit down on our neighbor’s house (to rent, not to buy, of course). We are chummy with the neighborhood gossip king (he’s lived in the neighborhood his entire life), so we know the scoop on her. Only danger is that she breaks up with her BF and wants to move back in. We’re fishing for a 2-year lease.
If I was a RE Agent in CA named Suzanne, I’d be heading for the Deed Poll office about now.
Just sayin’.
poste comment: Wilfredo Lanz, who lives in Irvine’s Northpark neighborhood, drove over to look at a vacant house in the same neighborhood. . . . .
The three-bedroom, two-story house is listed by a broker at $959,000. Bidding will open at $449,000 when it is auctioned at the Anaheim Convention Center on Feb. 2, according to the Irvine-based company that is organizing the auction. . . . He plans to bid as much as $700,000 for it. ‘That’s the highest we’ll go,’ he said.”
well now, thats REAL SMART, telling the whole world (especially auction people who also read online blogs) in advance how high you will bid. what an arrogant dumbass! what a PLAYA he is - I’m so impressed.
wanna bet the auction goes to … gee, the amount he mentioned he would pay?!?!
(the auction co. will use shill bidders in the audience to counter his offers if the bidding slows down beneath his now QUITE PUBLIC FINAL BID PRICE.)
Unless, of course, he is already connected to the McAlbatross.
“I have 695, do I hear 700. Going once at 695, going twice…SOLD to the gentleman in the corner with the soiled undershorts. ”
Wouldn’t be the first time.
I agree. It sounds too much like an auction shill…
How many people can even get a $700k mortgage in today’s market anyway?
I’d be tempted to tell someone $700k and end my bidding at $495k. Oh… the looks would be priceless!
Got popcorn?
Neil
I’ll throw the BS flag here, he’s a shill to keep the prices up.
Perhaps the guy quoted in the the article is an agent of the auctioneer, trying to fluff up the value before the auction begins.
Just to reiterate what i said on the previous thread, the Fed can’t re-inflate the housing bubble. The Fed can lower the rate to zero, but they can’t put a gun to the lenders heads and say lower your underwriting standards to zero. Money is on the table and no one can get to it. I’ve already handled many calls today from folks (most not in trouble) looking to cash in on the lower rates. None of them had the values anymore to take advantage. Looking to buy?….you still better have a bucket load of cash to get in. Some knife-catchers might have the cash to take advantage of the low rates, but the FB’s that are needed to reinflate this thing are still on the outside looking in.
We are beginning to see the downfall of the Federal Reserve. Historic indeed!
I generally agree with you (99% of the time), but I am having an inner battle on this one…
I am going to change my name to “cybil” as I cant get my finger on the pulse: re-inflate or Japan Redux?????
Follow the money Crisp. How are they gonna get it out there? No more equity extraction, that’s pretty much a given. No more high LTV stated, no-doc, limited doc,…hell, hardly a high LTV full-doc to be found for purchase or refi. You guys haven’t seen what I’ve seen come down the pike over the last 6 months in the way of lenders going to the extreme on puckerbutt underwriting guidelines. As fo equity lines? HAH! Don’t bother. I watched a lot of the big HELOC players go from 100% equity withdrawl for stated-income borrowers, to 80% LTV and no more stated. They can’t get to the money - period. Anyone who has bought in the last 3 years has no value left on which they can borrow. Most that have bought in the last 7 years have already tapped the equity so they’re in the same boat. Hey, we had a very unique situation over the previous 5 years where the Fed printed it for nothing and the lenders were there to hand it out for nothing. Who is doing the handing out of money now?
You don’t know what you are talking about. LTV and credit scores don’t matter. Ara Hovnanian was just on CNBC and told the Fast Money dopes that the problem was with buyer psychology. That’s it. Now that the Fed made their move the problem should be solved. So quit over thinking.
I have to go. I think there’s an apartment I might be able to get at a discount. It belonged to some guy named Heath Ledger.
LOL!!!!!!!!!!!!!!!!!!!!!!!!!!
The cops: “We think it could be drug-related”
A 28 year old, white, high income male with no history of major illnesses…….no Sh#t, Sherlock.
Sign me up for Mensa, I figured that out from 1000 miles away.
I apologize……all you guys on this blog are starting to rub off on me.
I like your anger.
I’m finding that I’m getting a shorter and shorter tolerance for stupid as I get older…….not so much from teenagers (Some things you just don’t learn until you screw up yourself), but from 30-40-50 year olds that should know better.
Like my sister. (Typical Clownifornian, is convinced her McCrapbox is going to be worth a million bucks in 4-5 years…..renting it out, moved to Texas, bought a new house in, you guessed it, Allen, Texas.
I had a former co-worker that owned a house in Allen, TX. He wanted to sell it and move to Minnesota. He gave up trying to sell it and is still stuck inside of Allen with the Minnesota blues again.
When I think about how the money spigot is being turned off…
Yea… BofA still goes to $1M, zero down, on a full doc “Doctor’s loan.” (Proffesionals who just saw a huge delta in their income.) But even those loans will be turned off. The fed cannot do a thing.
The REIC will take a long time to understand what it means to get to a bottom. Cest la vie.
Got popcorn?
Neil
On the local SF Bay Area sports station radio (KNBR 680) they have the The Mortgage Factor: with A&B Lending on Saturday mornings. The two hosts were spouting that 100% mortgages were still available through them (don’t know of the details / fine print). These guys seemed fairly responsive and weren’t as off the wall as the moronic “Its the biggest no-brainer in the history of mankind” ads run by Lenox Financial.
Got a flier from Countrywide today, trying to sell me a 40 yr loan. I wonder how they think they can get anyone to bite on something like that. 40 yr mortgage in AZ?
Countrywide is trying to move the ARM and jumbo loans into conforming loans so they can re-sell them. The loan guys are getting a ton of pressure to convert people to conforming loans.
How are lending standards? I know subprime is dead, what about the other categories??
The subprime you used to know is gone. The Alt-A you used to know is gone. The loose FNMA you used to know is gone. The Jumbo market you used to know is gone. The free-n-easy HELOC money you used to know is long gone. I’m not going to bore you with the details of just where the underwriting guidelines are today, but suffice is to say they’re the exact opposite of what they were 3 years ago. The pendulum didn’t swing to “balanced”, but rather swung about as far as it could go the other direction. Do you think any of the recent news, especially the likes of FB’s sueing lenders, govt bailouts, foreclosures, is going to do anything to stem that?
What if you are just some mullet who wants to buy something that fits in the FHA guidelines? That’s me.
But from what I can tell, they will still lend at PI=45-50% of gross monthly income, so we aren’t quite at traditional lending standards. But 20% down, 680 FICO, less than $417k are now generally required.
The 20% down part you mention is enough. Heck, 5% down would be enough with todays J6P. The average FB for most of this housing bubble had no money. It got to where I wouldn’t even ask if the borrower had a down payment. My biggest worry was could they cover the closing costs. Sometimes I would ask the “down-payment-question” just to see the wide-eyed stupid-look that resulted. It was quite amusing. Towards the end of the bubble you started seeing down payments, but they were the result of the purchaser selling their previous home, or, as we all know, the result of the purchaser maxing the MEW potential of the home they still owned yet hadn’t sold. Now that very few can climb the property ladder, MEW is all but dead, and no one has any money, where does that leave us? (I think i just heard Bernanke say “Doh!”)
However, as the losses start mounting, that debt ratio will start to decline.
“The 20% down part you mention is enough.”
I’ve always wondered how people got stuck making two payments. MEW, huh? So as I understand things, it is now very difficult to buy a new home before selling your old unless you have a cash downpayment (which few have).
This could explain why we have (Pullman, WA) “pending sales” from October/November than still haven’t closed. In fact, almost nothing has closed in the past two months.
ex-nnvmtgbrkr,
I always look forward to your posts. In case you missed it, NBC eve. news did a “How to Survive Hard Times” piece at the end of the broadcast. Suggestion #2–refi–saying rates are at their lowest in years. Suggestion #3–save 10% of your income. Suggestion #4–pay down your debt. So, given your experience, how removed from reality is NBC news? Would you say absolutely, completely or totally clueless?
Spike I have seen that similiar argument as recently as this morning with Cramer on CNBC. I actually heard the suggestion of getting a HELOC and putting it in your back pocket.
I would say have no f****** idea, the MSM is very very removed from any sense of reality.
Wait, what was suggestion #1?
I don’t know about that. Just days ago a relative of mine was just approved for an FHA loan for up to $400K. He has tons of debt (fancy car payments, credit cards, expensive girlfriend), has gone BK 2x in his lifetime. He only has to make a 2-3% down payment. He does have a decent salary I guess.
jumbo loans at wells fargo are very strict:
20% down up to million
25% down million +
No more no doc loans
No home equity lines unless you are willing to put more down.
How do someone write “expensive girlfriend” on a loan ap? I’d love to see that. Does that go under assets or liabilities? LOL.
– Judge Smales
“You’ll get nothing and like it”
Do you think any of the recent news, especially the likes of FB’s sueing lenders, govt bailouts, foreclosures, is going to do anything to stem that?
I still have hope that a government freeze on mortgage rates will do the trick. Yep. Probably we oughta freeze all investment returns, too, just to be safe.
We’re pretty much back to conforming type criteria. Reading BrokersOutpost has been quite the education.
How are lending standards? I know subprime is dead, what about the other categories??
There may be a few bank/lender/broker Alt A/Prime executive VP’s among the DEAD along with the subprimes shortly
You never reinflate a popped bubble, but you can start a new one.
If the Fed can influence the 6-month LIBOR down to 2% then many of the teaser-rate ARM borrowers should be able to handle a reset to LIBOR + 200. These would be the borrowers who currently have a fully-amortizing ARM loan that was fixed for 3 or 5 years. While they couldn’t refinance they should be able to make payments on their existing loans if they are willing to carry an under water residence.
LIBOR was stuck at 5.35 for two years and now it is near 3.80, yes that is still going to hurt…
Bottom line is that we had another bad day on Wall Street. Not as bad as it could have been, but bad just the same. Every passing day that there’s a bad performance brings us close to a state of total panic, which in turn means a loss in confidence on both the professional and consumer level. Damage the psychology- damage the desire for people to buy homes.
I think the damage for the most part has been done.
If you don’t think there was total panic today, you weren’t listening to the MSM Business Channels during the initial European trading.
As for the ARMs that reset to LIBOR, yes it’s good that LIBOR is down. But if it goes back up, don’t the re-set payments continue to track LIBOR. My point is, the FBs might be able to afford a LIBOR re-set for 3 to 6 months, but if LIBOR jumps again, aren’t they just re-screwed?
– Judge Smales
“You’ll get nothing and like it”
That’s true, but it doesn’t do anything to allow new buyers into the market. You have to have new buyers, or the market falls.
“Not everyone is as optimistic. Southern California economist John Husing said that because many investors were hurt when the market turned, the investment trend may be over.”
How do the gloomsters come up with these crazy notions?
WTF? I go away for a couple of days and all hell breaks loose. The investment trend “MAY” be over? “Hello Mr. Stopped Clock.” That is one time you are right. Too bad you are one of those clocks that keep military time so you are only going to be right once. I’ve seen stuff from this Husing guy before. He seems like most of the economists that understand a fraction of what is going on and then miss the rest.
I have returned from another “investor” driven market, Charleston, SC. My first time there. I have never been so unimpressed in my life and I have been very unimpressed many many times during my years. I was almost as unimpressed as the market seems to be with AAPL’s earnings.
NYCcityboy, I agree, I`m from the state and I go there on business every 2-3 months and I don`t get it either. One wrong turn and your in crackville. I have a customer thats in deep on wild dunes and he is hosed. Were vacation or working? I am intrested in Myrtle Beach area, for two reasons only the beach is not bad and I like partying. lol
Lane
We were vacationing. I went down to the waterfront yesterday afternoon. There were no people. It was a little chilly. But it could have also been the fact that the entire waterfront smelled like stale farts. It was just disgusting. Imagine the 4 train while a guy sits slumped over in his own excrement.
I’m not a huge Myrtle Beach guy either. I’ve been there 3 or 4 times. It is so redneck and the amount of overbuilding is like something you would see in California. Neither place makes me want to move there.
Yea, I could not live either. There are some nice areas but you have to know where they are, which is pretty much the USA. You would prolly like Kieawha (spelling?) or hilton head, nice, but too quite for me.
Regards,
Lane
It is so redneck and the amount of overbuilding is like something you would see in California. Neither place makes me want to move there.
smashing idea! And please encourage others along the same line of thinking
Don’t get your hopes up. I will confess that I could see myself there during part of the wintertime during the offseason. That’s when it’s not so crowded. Don’t worry, people will continue to flock to Myrtle Beach. The Yankees love the golfing.
Myrtle Beach is the only beach where the people at the beach are actually fatter than they are back home in Potown, N.C. A complete desecration of sand and sun.
Whoa NYC boy Charleston i lived there for 7 years cheap as all heck back then, i left 8 months before Hugo hit…
It was the only place a saw duplex trailers yes one 12×60 or 70 trailer split into 2 1br apartments.
Then Charleston boomed in the 90’s by cutting down all the wonderful trees and putting up housing communities…Up and down Dorchester road and west ashley….yes no trees in the hot summer…
In some ways there was a lot of opportunity in alternative employment then here , because of the tens of thousands of military and factory shift workers.
My DJ partner is from Charleston, and she wound up working for Walter Cronkite…….
The downtown area seemed like a big nothing to me. Some trendy shops, a few restaurants and a fart-smelling waterfront didn’t impress me.
I’ve never heard of somebody not being able to spell the place they live, and yet you nailed “estuaries” and every other word. Remarkable.
You bet Myrtle Beach is overbuilt but go 15 miles inland still plenty of farmland check out the link on my name…its her Charleston website..
LOL! This place cracks me up.
“…the investment trend may be over.”
So glad to see this in the Cali thread, since as CA goes, so goes the nation.
I just checked realtor.com for land prices…people around here expecting $100-$200k/acre - in the middle of a town, not even out in horse country or anything.
It’ll be about a year or two before the Cali domino fall hits us though.
Land speculation by both large & small, Competent and incompetent investors throughout Cali has been every bit as bad as the single family market…
“For all of 2007, foreclosures in greater Sacramento were up an astonishing 496 percent, to 10,049, DataQuick said.”
Greater Sacramento= Northern Inland Empire
“Greater Sacramento= Northern Inland Empire ”
clever
“New buildings coming onto the market combined with fallout from a dismal real estate industry joined forces to increase the percentage of empty offices in 2007, a Fresno realty firm reported.”
I think commercial RE is the sleeping giant. I’ve mentioned in prior postings about how much retail space has gone up around the Boise area and much of it sits empty. Near my home, on the same avenue, four new mini strip malls strip malls sit empty with a couple more in various stages of construction. Much of the smaller retail space in the new Kohls shopping center sits empty. West of here, the smaller retail space in a new plaza anchored by JCP sits empty. Retail and professional space continues to go up in other parts of the valley and I can’t think of what other types of businesses can open in these mini strip malls. We have plenty of cell phone stores, Subways, Quiznos, tanning salons, Check Cashing, etc….I have no clue how the space is going to be filled. As we head to recession, I think we are going to see a lot of retail and professional space sit empty with banks as the bagholders.
“We have plenty of cell phone stores…”
Nah, can’t ever have enough of those.
Why is it that everytime I pass by a cell phone store/kiosk I get the feeling that the customers I see haggling with the salespeople have been to every cell phone store in a 25 mile radius over the course of the past year?
Question about cell phones. I don’t have one, but my father’s offering me his. (He says he doesn’t use it.)
Now, the only thing I’d ever want a cell phone for is to be able to call 911. A friend tells me that I don’t even need to have a calling plan. All I need to have is a fresh battery in the phone, then I can dial for help.
Yes, that is what I understand too - 911 calls should go through on a operable phone.
IMO, pay as you go is the way to go. I carry mine only for emergencies and to check in (elder care issues) - otherwise I despise talking on the thing. Contracts stink - just another bill to pay.
true!
Correct, you should be able to call two numbers on an unsubscribed/expired contract cell phone: 911 and that cell provider’s billing department.
They are also mandated to have a means incorporated into the phone that allows them to locate you (GPS,GPS-A, triangulation, etc…) in case you can’t speak after dialing 911.
Also, this is likely a per-state thing or maybe even a ‘public-service” on the part of the phone co., but deactivated land-lines here can also dial 911.
As others have pointed out, all you need is to be within range of a cell phone tower and some battery power.
When I worked for Motorola writing software for controlling networks of cell phone towers, the first thing we always tested were emergency calls. Not because they’re important (they are…), it’s because emergency calls are the easiest calls to make. The system bypasses most of the setup process (such as billing) and immediately grabs an open “slot” for the call. If there are no open slots, it will disconnect a paying customer to complete the call. The system also doesn’t actually “call” 911, it routes the call to the local emergency system. So if, for example, you’ve got a quad band phone in Australia and dial 911 it will go through. And if an Australian were in the US and dialed 112, it would also go through.
“If there are no open slots, it will disconnect a paying customer to complete the call.”
So you’re saying that all those dropped calls I used to get on my Moto weren’t because it was a POS, but instead were caused by you guys testing code? Figures.
ha, yeah most of us didn’t carry Motorola phones. The phone division was in a totally different city. Might as well have been a different company.
And no, everything we did occurred in a laboratory. Once they sold the equipment, a different set of people (in yet another city) worked with that.
Subways, Quiznos, tanning salons, Check Cashing, etc…
Ditto Las Vegas. I am amazed at the number of strip malls with stores in them that are completely useless. I need groceries, alcolhol, hardware, bicycle parts and the occasional towel or pair of slacks.
Now, not only do we have dozens and dozens of strip malls with nothing useful inside, we have tons more with nothing at all inside.
And most of the new stores that have popped up in the past decade weren’t built for longevity, and once they become empty, i’d expect deterioration to do it it’s trick, quickly.
Don’t forget the TCBYs, Mailbox Etc.’s and dog grooming places. Can’t have enough dog grooming places.
– Judge Smales
“You’ll get nothing and like it”
Oh definitely. And you need to get your dog groomed today, otherwise you’ll be priced out forever.
Consider that an investment. History shows that within one-year’s time, that investment will *double* …. not in value — in length of dog hair.
I think I’m going to wear a tan sportcoat, get some stupid business cards, and go sell some dog hair cuts.
Yeah, I’ll agree with Las Vegas having alot of unfilled commercial space. I’m a LV local and I’m appalled by the amount of strip malls that have gone up in Vegas…and the thing is, the Las Vegas Valley isn’t that huge! Often there will be an identical store in another strip mall a few miles away. To go to another store at the other end of the valley takes maybe 25-30 minutes with traffic. Its disgusting…I just can’t help think of wasted space, energy, and building materials when I see all these half empty strip malls. And alot of the individual, non-chain shops are useless, boutique crap that no cash strapped local in their right mind would buy. I can see specialty shops like this going up on the strip in the casino related malls, but off the strip…what a waste.
And as rents become cheaper “out there” I wonder how it will affect “downtown” Boise. I wonder if 8th St and the surrounding area will start seeing plywood windows if/when retailers move out and boutique becomes passe.
8th street area has been heavily developed- Urban Outfitters, Anne Taylor Loft, Levi Store, Jos Banks, PF Changs, etc. The past few trips to PF Changs on the weekend, it was only 1/4 full midday. I never see too many people in the stores, though the movie theater always draws a crowd and the restaurants get a good showing at night. Retail has been suffering in other parts of Dowtown and the latest person trying to complete the “Boise Tower” (currently a big hole in the ground) has gone bankrupt. The retail and food places going into downtown are a little more expensive, so we’ll see how they hold up.
There is so much vacant commercial RE in the Corona area it is unreal. The best are a couple of vacant (Pardee, Del Webb, & etc.) housing offices that have a banner across the front of the builder saying vacant. What scares me is that with all these buildings becoming vacant and the jobs being lost; what the hell are these people going to do for work. I’m just baffled on what to think!
Mission Accomplished
Friends of mine who moved to Eastvale last June bragged about how there was so much great shopping in Norco. Guess that has come to an end as well.
Eastvale is nasty! Smells like cow sh#t all day long because it’s next to the pastures. Who the hell would want that?! And the only shopping in the area is really a Target, Ralphs, and a lot crap in strip malls; nothing special at all. Your friends must really have low expectations when it comes to shopping, but so do I (I’m cheap).
I was reading an RE ad not to long ago, and it took me a minute or two to figure that Norco is now “North of Corona”. Has this always been the case, or is this new marketingese to make this cow dung heap seem more upscale?
Always been Norco. Use to race bikes around there when I was a kid.
“There is so much vacant commercial RE in the Corona area it is unreal. . What scares me is that with all these buildings becoming vacant and the jobs being lost; what the hell are these people going to do for work. .. “and it took me a minute or two to figure that Norco is now “North of Corona”.
” I’ve been thru those areas at least hunded times and they are very IE typical overdeveloped. South Corona area especially around Magnolia Ave off the 1-15 saw entire new mega commercial/shopping districts interspersed with new housing , all put up in typical IE ugly sprawl patterns. One of the Big National HB’ers/lenders had their IE regional office there .
Standard homes had their IE office off main st on Rincon ave (N of 91 fwy). Even in late 2006 it was a dead office. Already saw signs of a impending slowdown in Corona back in early 2006 as many of those new commercial developments were virtially empty to start with.
Norco has rapidly transformed from a former dusty rural horsetrailer ranch community into the newest IE development hotspot. The new boutique shops, target store, strip malls, eateries sprung up suddenly along hammer ave west of the 15 fwy seems out of place in such a former rural hamlet. Norco went up too fast in a classic IE overdevelopment binge , and will fall hard. Dusty, hot, hazy, and flat is what describes Norco.
“Dusty, hot, hazy, and flat is what describes Norco.”
Don’t forget smelly.
I live in Irvine and let me tell you there is so much vacant NEW commercial space here that we would have to add 20% to the population just to fill this space down to 6% or so in vacancy. OUCH! I see a price war coming in Commercial Space.
“The latest numbers underscore the enormous challenge facing the state and national economy. The Fed’s rate cut may not stave off a recession, said Scott Anderson, senior economist at Wells Fargo & Co.”
“‘It could get ugly very quickly and this is what the Fed is responding to,’ he said. The cut ‘is not going to be a panacea’ but could help bring the economy out of a recession more quickly, he said.”
-128.11 points means we are headed into a recession, ever deeper.
Name: Freddy F*cked Borrower
Age: 37
Marital Status: Married (but divorce is on the way)
Household Yearly Income: $101,000
Household Yearly Outgoing: $139,000
Housing status: Owner
House value: $396,000 (delusional value of $6.3 million)
Mortgage amount: $511,000
Monthly mortgage payment: $3,848
Credit card debt: $17,259
Savings account: “What the f— is a savings account?”
401k account: Refer back to savings account information
1st Car: Chevy Tahoe
2nd Car: Lexus SUV (nothing but the best for my future ex)
Monthly car payment: $1,072
Monthly Insurance: $341
Children: Brittany and Britteny
How does today’s rate cut help me?
My ex-wife wanted to make me a Freddy F*cked Borrower.
Ditched her (well, she ditched me, but it worked out great), sold the condo in ‘05, banked the savings, paid down all my debt … she got the Passat and the car payment, and a brand-new condo so she could start the debt cycle anew …
Heartwarming, eh?
Almost there last year, but my wife saw the light. Know she is perfectly willing to wait until we can purchase a home with just one of my biweekly checks. Even better is that she is sending me info on the housing market telling me how smart we are to wait it out (LOL!). Gotta love her.
Nice work, amigo!
Children: Brittany and Britteny
NYCityBoy, these days you are required to give all your girls male names, preferably with wierd spelling, Morghan, Addison, Avery, Taylor, Makayla, Reagan. Or to name them anything asexual that starts with a K, Kaylan, Kylee, Kylie, Keane, Karli, Kelton, Kenan.
Genius.
NYcityboy
That was one of your best !!
LMAO!
what is the percentage of all forclosures as compared to all homes owned whether there is a mortgage or not? Supposedly, 70% of Americans own their homes - what percentage are in foreclosure? I’m hearing people say that the foreclosures are just a small percentage of all homes so it’s no big deal.
AAPL just TANKED in after hours… the consumer is dead!
Lucky (and now unlucky) for them that they released the IPod before the onset of the credit crunch…
I would love to know what percentage of people that live “below the poverty line” have an iPod and/or a cell phone.
I don’t know but while in an ATT cell phone store lately I saw a hispanic lady trying to purchase two cell phones, one for her 8yr old and one for her 10 yr old. Sales clerk told her it would run $50 per month and she didn’t even blink. She was dressed as though she just came in from working in the fields. My point being that those who can least afford some of what we’d call toys are the ones buying them and paying the most; of course they get the free medical care.
“…of course they get the free medical care.”
And they save money on their car insurance…
No, but I stayed at a Holiday Inn Express.
Got popcorn?
Neil
So, Salinasron, Hispanic people aren’t allowed to have cell phones?
Sometimes I am outside of the house wearing rough clothes. Nonetheless I can afford a cell phone.
SiO2,
Not what he meant. He meant someone working their tail off picking lettuce for slave wages shouldn’t waste it buying cells for an 8 YR OLD!!!!! Save the money and move UP the economic ladder. Rather than throw it away and continue being a debtor for the rest of their lives. And, oh yeah, ain’t got a ppot to piss in but goin’ to get fancy phones for the kids. what message does that teach the kids?
And, yeah, I’m told my taxes have to go up because so and so can’t afford health care but then I see so and so with all the latest consumer gadgets. The latest I can’t provide my kid because I can’t afford it. Why, because my freakin’ taxes are so high.
It really isn’t a matter of affording a cell phone anymore, they’re most people’s primary communication device now. As a friend told me once, “when I call someone, I want to talk to them - not to their house.” The idea that a phone is something you just have at home is, like the people who still think that’s the way it is, dead, or almost so.
The hispanic woman should shop around and look for a family plan. Kids with cell phones aren’t unusual - it’s how you keep track of them, and allows for better parenting.
I understood the point he was trying to make, which is not to waste money buying cell phones for little kids. But I do have to object to his use of race in his description. Perhaps the lady is rich and can easily afford those cell phones. I buy all my clothes on clearance at Kohls. The money I save goes to feed my electronic hobbies.
Saw it coming, and have been shorting them for several months. It’s been painful because they’ve been such a goldilocks stock, but now I get my day.
Tee hee.
Goldilocks has a wicked case of crabs.
Americans can’t afford to keep buying iPods but we are supposed to believe that they can keep buying houses without fools in 3-piece suits? Bwahaha.
Just saw Kudlow on CNBC. Pimp? Goldilocks?
He’ll turn Goldilocks to the streets soon. Thats the “new” Goldilocks Economy. He’s almost there already with those fine threads - all he really needs is a huge zebra-skinned hat with the foot-long feather. And maybe a monacle (white pimp gonna need a gimmick).
This is one of those times I wish I was even halfway decent with Photoshop…
http://www.marketwatch.com/tools/quotes/intchart.asp?submitted=true&intflavor=advanced&symb=AAPL&origurl=%2Ftools%2Fquotes%2Fintchart.asp&time=13&freq=1&startdate=&enddate=&hiddenTrue=&comp=Enter+Symbol%28s%29%3A&compidx=aaaaa%7E0&compind=aaaaa%7E0&uf=7168&ma=1&maval=50&lf=1&lf2=4&lf3=0&type=2&size=1&optstyle=1013
I’ll just say no knife catching this spring people. Even on the REO properties.
I’d just like to note that we are part way through that first ARM peak that many had been anticipating. There is a large second wave that will kick in durring 09.
The comps will set much lower this year so the next wave of “higher quality” ARMs will also have surprisingly high failure rate.
There will be further damage from the second wave defaults especially since banks will be weaker and loss provisions for higher quality ARMs are much lower.
There should be a wave of knife catchers that buy it this spring. They will not be aware of this till 2010.
Also figure the “albatross” of the over priced purchases will start to shake loose many of the stronger hands. There aren’t many out there that can stand for 4-5 yrs of a down market; followed by the long flat period.
The seige will now continue.
The seige will now continue.
A lot of the descriptions from people around here who seem to know what they’re talking about are so tight and such a quick read, but the reality of their vision is so slow-moving.
It’s really sort of fascinating. It’s like watching the tsunami coming in in slow-motion.
I agree. “Seige” is the best word to describe the battle we’re in. As I’ve said before, this is the part where we dig our heels in.
Seige is a nice metaphor… You don’t waste troops. You still have access to supply lines…
Yes, we dig in and have wine carted in.
The FB’s huddle over their rat dinner…
Got popcorn?
Neil
If the economy crashes as much as badly as the bears are calling it we may all be feasting on various rodents and roadkill…
Oops, I just looked it up, and siege is spelled with the “i” first, much like almost all other words. How silly of me.
“Siege” is French for “chair.” Very apt — just sit back on an Adirondack, catapult the occasional cow carcass into the enemy castle, and sip some fine Lacrima cristi while the defenders, having eaten the last of the rats, start eyeing the page boys and wondering “bake or braise?”
I was lucky enough to discover this blog way back when FB’ers regularly joined in the discussion to tell us how wrong we were.
That created this crew of finely skilled debaters and educators, but lately there’s no one left to argue with. Except perhaps the occasional Goldbug slap-fight or the always entertaining “2008: bad like Mad Max or bad like The Color Purple” debate.
It’s almost like we’re beating a dead horse at this point (hmm, has anyone ever kicked a dead horse? Is it this fun?).
P.S. I’m a dimwit. Really - not that bright at all. I know zippy about economics, never really cared. SO IF SOMEONE LIKE ME COULD SEE THIS COMING TWO YEARS AGO……………………
It’s really therapy for me, personally. Mind you I bought in 97 so I’m a happy homeowner with a low HELOC balance and the principal whittling away at 5.25% fixed. But after years of hearing relatives, neighbors and friends go on and on about their great RE investments, it’s really just…what’s that word again? Rhymes with schmadenfreude…
i think i may finally buy an ipod…not
beta slammed AH, bidu, good, aapl, rimm.
rimm will have a big miss this q.
I’ve been waiting for the horsemen to crack. It’s not too late to get short here.
All tech is tanking AH. AAPL is bringing them all down. Good lord!
I got aapl off at 142.5 So far so good
SBUX testing it near 52 week low at 18.25 (down 0.42 in after hours).
Airlines stocks are bleeding a bit more…
Defense stocks are flat to a penny or so up…
House builders are giving up part to all of the day’s gains (excluding BZH which went down during normal hours and is up a little tonight)…
Restaurant stocks are losing a little.
Lowe’s and Home Depot down a little.
I’d say this is a broad based flight to quality/cash; could this be international investors? (Note, I’m asking.)
This certainly isn’t normal…
Got popcorn?
Neil
This is AAPL-specific, IMO. High-fliers have to crush expectations in a bad market; others not so much. This stock is probably owned by more people who have never seen a real bear market than any stock out there. Your earnings growth decelerates from 75% to 50% with a forecast to go lower - that’s it for AAPL. Stock could get carried up in a better market, but I agree with you that it’s done.
But, having said that - I saw more hemming and hawing and equivocation today than I’ve seen yet - nobody was willing to step up and say the market will be higher at the end of the week or this is a good time to get in and take a shot. I’m thinking with potential positive comments out of Davos and a good Asian market that the market could do well tomorrow, despite AAPL. I mean, down 10% in 6 days, 20% in 5 weeks, maybe a 1-2% rally is not out of the question?
“Most of those foreclosed homes become the property of mortgage lenders after failing to attract bidders at trustees’ sales that are held each weekday in Placentia and Santa Ana.”
Auction # 1 on the courthouse steps didn’t go so well.
“More than 100 foreclosed homes around Orange County were opened to the public Sunday as potential bidders got a chance to look them over before the homes are auctioned next month.”
Auction # 2 should accomplishment the same results as auction # 1.
And the beat goes on…
A #2 auction. How appropriate.
Question:
I want to make an offer of 170k to a 408k bank owned home in the IE so do i go the agent selling the house or do i need to get me an agent and make an offer?
You shouldn’t make an offer at all, that house will go for less than that in a few months.
Not sure how the law works in Cali, but you really want a buyer’s agent, if you can find a good one. The selling agent has the fiduciary obligation to get the most money for the seller, in this case the bank. A buyer’s agent, technically, is supposed to work in your best interest. In other words, you want someone who will go to the table in the spirit of competition, not collusion.*
*The above statements are made with the assumption that real estate agents follow the law, are ethical and knowledgeable in their field.
Let the flames begin.
‘There are three people against the buyer in a real estate transaction.’
Old, but good advice. I personally will low ball and tell the selling agent they get to ‘double dip’ if they can close the deal.
I dislike the 6% commision… I think we’ll see more discounting. But as long as the system is in place, I’ll use it to my advantage.
Got popcorn?
Neil
you think i should make an even lower offer?
Go ahead and make the offer; you won’t get it at that price because the market hasn’t fallen that low yet. I think the point being made here is that you should wait a couple years, then make an offer that seems like a lowball relative to the then-current prices.
One of the wise men on this blog previously made this statement: If you’re not ashamed of your offer, then it’s still too high.
There’s something to be said for making radically low-ball offers. Even when they’re not accepted, when those are the only offers being made, it wears down the delusional sellers’ resolve. As Petain said, je les grignote.
The average poster here would probably advise that you wait a year and then make an even lower offer. I agree with the average poster.
You never “need” an agent to buy a house. If you don’t use an agent then have a lawyer with residential real estate experience write-up the offer, review documents, and be with you at closing. What you should do first is approach the agent on your own and find out if the bank will entertain your offer. Also, since you do not have an agent, demand that the bank’s agent split the commission (it’s ok to settle for less than half). If the bank says they will consider your offer then submit one prepared by a lawyer.
If the bank won’t accept contingengies, such as a satisfactory property inspection report, clear title, etc. then forget about the property. Also, don’t buy without title insurance.
Can you answer my question above? Is FHA lending affected by all of this provided that your property is within the guidelines?
FHA and VA lending is still around but because of the tough underwritting standards and low loan amounts there were very few FHA/VA originations in the last few years. The current Dallas Metro loan limit for an SFD is $200,160.
I suspect you would have to qualify on your husband’s income; they used to require regular, documented income. See, http://www.fha.gov.
How much was it in late 2005? If it was like 500K and you can get it now for 170K, I would go for it (66% off from peak).
But, but, but - isn’t $hithe@d Bernake’s rate cut going to save everything? He looked like such a dumb@$$ when I saw him on TV - picture only, no sound. He looked like a spineless weasel. His actions prove it.
Did he sort of look like Wesley Mouch?
Ben, someone (realtor? FB’er?) posted on the comments section concerning the St George Spectrum’s “now is a good time to buy” pro local real-estate “news” story. It appears that he/she didn’t like all the other commentators (”amateur opinions”) who seem to understand the local economic environment better than the author of the article and disagreed that “it” is different in St George.
GOB2
Joined: 07 Nov 2007
Posts: 1
Posted: Mon Jan 21, 2008 10:57 am Post subject: amateur opinions
Good to see the uninformed still have a forum. A small handfull of amateurs with no real “topic” experience gather together to banter and pontificate. Check out the profiles and see how many “posts” these people have. Holy cow! get a freakin life already. And if you just can’t pry yourself away from your computer long enough to see the positive things in our communities, at least admit that Washington County is NOT in California or Florida. As far as your realtor friends are concerned, trust me on this one, they are not all created equal. Many are too lazy to know how to work. Of course they will become a statistic soon enough and will end up back where they started out three years ago, bagging groceries and pumping gas. Well, that should be enough to get the vocal minority fired up again. I won’t be back to check on you so have a nice day.
Wish me luck…….I am going to do battle with my local water district tonight. My Community gets our culinary H2O (wonderful water) from an underground spring that has more than enough to supply the Town.
However, our water district wants to “join” up with Washington County (and increase our rates considerably) because “we” will need much more water to supply the zillions of people that will be arriving here in the not so distant future. What a joke.
“And if you just can’t pry yourself away from your computer long enough to see the positive things in our communities …”
That’s what these “experts” hate so much. It’s the fact that all we have to do is log on, and we have access to the same data they can get. The quoted statement is just another one of those social persuasion techniques that people start to use when they are losing the logical debate.
I would love to have a thread listing all of the useless businesses that we see out there. I have my #1 vote for here in Albuquerque.
How about those places where suburban housewives make a bunch of dinners and freeze them for later (like “Dinners Ready!”). We have about four or five of those places in the area. what I don’t understand, is their target market probably has granite kitchens with nice stainless appliances, yet they can’t cook at home?
They had those here too. Dinner Station. A friend of mine did their LLCs and corporate stuff. Most of them are bankrupt already.
I recall Mr. Rodney Dangerfield saying “My wife came up and said she wanted to go somewhere different, I said “go downstairs and make a right” She said, “What’s there?” I said, “the Kitchen.”
Hate to say that my wife frequented one a few times with her friend. I figured that the resulting $15 per meal to feed the two of us (for decent food that would have cost $5 if purchased directly from Safeway and cooked at home), is still less than a uneventful dinner at Chilis or Olive Garden. Since we only go out to eat about once a month anyway, no harm done.
Not surprising that they are going out of business quickly, as the plastic tags are finally removed from the insides of all those Viking stoves put in during the “luxury remodel” in 2005.
That might be another nice craigslist market:
“Barely used high end appliances for 40% of original cost (plus please bring your 10 year old used Kenmore to fill the resulting space in my kitchen!) Please Help!”
Life Coaches
Feng Shui consultants
Personal organizers
Personal trainers
Personal shoppers
House stagers
Scrapbooking businesses
I never understood how a whole store could be devoted to scrapping- not sure if I have ever seen scrapbook store stay in business.
Scrapbooking store “The Crop Circle” in Westchester CA (LAX area) closing this weekend.
What the hell do they sell? I had a scrapbook when I was in highschool. I just glued newspaper clippings and mementos in the book. Is the whole store devoted to books and glue?
Spraying lawns green in the winter? Sounds like a great business.
Just heard an ad for the first time in our town. We spray our grass green, it lasts for 90 days, you’ll be the envy of your neighbor hood, and it will help sell your property.
I have a feeling it’ll look like the Hulk’s chest hair on a humid day. Oh, and good luck growing anything on that lawn after 4 coats of toxic foliage.
They did that all the time in Texas when I was a kid. IIRC, those are fertilizers and/or pesticides with dye in them, so they’re supposed to be good for the lawn.
It does look like someone took a can of neon-green spray paint and spent 30 seconds spritzing the yard, though.
How about all of the nail salons and spas? It looks like all of those heifers that are walking the streets in their flip-flops will soon have to save money by staying at home and painting their own hooves.
Regarding nail spas and salons, some may go out of business, but the business itself doesn’t go away. It’s not much to pay $10 for having your nails done and it always looks better than when you do it yourself. Women who dye their hair (most women) also need their roots done periodically if they don’t want to look really bad (that’s why I never started the dyeing thing). They might change to a cheaper salon, but they will still go to a salon. The ones that are in for a world of hurt are those high-end spas where you spend the whole day doing nothing and getting $200 masks. Those are toast, methinks.
And a nitpick… It looks like all of those heifers that are walking the streets in their flip-flops
Its well known that women’s feet *usually* do not grow with weight, nor does it effect their fingernails. Hence, obese women will spend quite a bit of their income on shoes, painted toes, and have their nails done.
You might as well as people not to drink beer. Will people spend less by going to lower quality? Yes.
As Cassiopia already noted, The Spa’s will die off. Low cost salons will thrive.
I do not claim to know women (even while married), but this has been a topic of conversation amoung my female friends and relatives for years!
Got popcorn?
Neil
So right. Went to hair/nail salon today and it was definitely less crowded than usual. Talked to the owner and he confirmed that people are cutting back: instead of getting a color and cut every month, they are cutting back to every six weeks or longer. I’m lucky that my hair grows very slowly and I only have to go in every three months. For most women I know, it would be unthinkable to not have your hair and nails done.
“Regarding nail spas and salons, some may go out of business, but the business itself doesn’t go away.”
Hey Neil, that hoof is still linked to the leg by the cankle. I guess that is what makes the foot of larger women look even bigger. You can’t really separate them in the mind when you are looking at them.
Got toejam?
I will lower my standard by switching from ‘Fat Tire’ to Bud Light. Wonder if the BLS will adjust their CPI to reflect this substitution? hehehehehehe
NYC, your attitude is so annoying. Remember to duck next time 2 airliners come your way meting out a little hubris.
the one common theme of the so-called occupations listed by TXchick?
they all serve as a reason/excuse to get out of the house, or break up the cubicle/office routine and socialize. thats all they are; reasons to pay someone to hold group meetings with common themes, or individual counseling / yak fests for bored directionaless people.
what a sad, sad nation we have become when we willingly pay others to tell us how good we are, and to fill our empty lives with meaningless pursuits of false serenity.
serenity now ! insanity later
I met a life coach, he was making a killing. I was floored, kid was 4 years out of college. What the hell is he going to tell me, he’s freaking 26!!!
He could tell you to become a life coach and make a killing!
I kid you not, there’s a business in Miami (and no doubt others elsewhere who have the same name) called “Let’s Scrap.” Say that one fast 3 times.
Reads like the business card (or Lack of business card) section of any bulletin board in the grocery store, community newsletter, etc
I nominate the Meatpacking District and Bleecker Street, here in NYC. It is all boutique bulls–t. There is no way they are making money. This recession will knock a lot of this Marc Jacobs and Coach sh-t right the f— out of there. It would be so nice to see real business run by real people for real people in their place. At least you can get a good, not great, cupcake at the Magnolia Bakery. They are overrated but once in a while they taste good. I’ll take a mediocre cupcake over Juicy Couture any day of the f—ing week.
With apologies to the dog lovers:
Gourmet dog biscuit stores.
You should appreciate this story NYCityBoy. A few years back, me and the Mrs. were in NYC for the first time and walking around near the north end of Bleecker. There is a park situated right there at the beginning of bleecker. As we walk towards the park, I comment about the wonderful diversity of people playing with their children at the park. My wife comments, “take a closer look at the kids”. I then beheld the pale looking kids with their “multicultural” nannies. I haven’t lived that one down yet.
That would be the little park between Bleecker and Hudson near Perry Street. I see a lot of the yuppies with their little brats there. I never noticed the multi-cultural nannies but that is, “so New York”. I bet there are a lot of double baby strollers for all of the turkey baster babies. I avoid that park like the plague.
You sound so pleasant a human being, NYCityBoy… were you the one looking for work? Ever find anything?
Yeah, you seem more like the Washington Square park type. Much more character over there.
How is the Chelsea and meatpacking district condo market? Lots of construction last time I was there…
That’s the dj looking for a job. I like Washington Square Park. Meet me in the Village for a few beers and you might see my playful side. Do you like to play pinball? I’ve got just the place.
I think the Meatpacking District is a disaster waiting to happen. I sent pictures around of one development that is beyond description. It faces the West Side Highway and is just awful.
Have you seen the “rent-n-roll” wheel shops?
I dunno what the payment intervals are, but people pay either monthly or weekly to ‘rent-to-own’ their 22″ chrome rims…
Yeah, I mentioned that earlier, those things are popping up to service the sub-90 IQ crowd in the Southeast. You get your payday loan and go rent a set of oversized chrome wheels for your bad-ass low-rider weasel machine - makes a powerful fashion statement when they peel you off the light standard at 3 a.m., BAC of .3.
True! Everyone that has a plan pays an extra charge of $2.00 for the ability to dial 911 on a cell phone even if you don’t have a plan. All you need is a fresh battery.
–
“Not everyone is as optimistic. Southern California economist John Husing said that because many investors were hurt when the market turned, the investment trend may be over.”
Does this guy know the definition of investment? “The speculation trend IS over.” Got it, Mr. Husing?
Jas
He misspelled ‘infestment.’
Fed Cut Not Seen Curing Housing Woes
Tuesday January 22, 5:37 pm ET
Investors and Economists Say Fed Interest Rate Cuts Mean Little or Nothing for Housing
A 10-month supply of unsold homes sits on the market, according to the National Association of Realtors. Newport said home prices will have to sink an additional 15 percent to 20 percent and 750,000 to 1 million homes will have to clear before the market can stabilize.
“Rate cuts are not going to be an elixir that makes the overhang of inventories go away,” said Doug Peta, a market strategist with J. & W. Seligman.
The torrid pace of growth in the “subprime” mortgage industry, or lenders catering to home buyers with bad credit, invited a whole segment of consumers into the market who should not have been there, Rothe said.
Subprime borrowers, who composed a fifth of the market in 2006, helped fuel home prices to unsustainable levels. Now that the bubble has popped, Rothe said prices will eventually return to normal — meaning a market without marginal home buyers.
http://biz.yahoo.com/ap/080122/housing_fed.html?.v=1
“Fed Cut Not Seen Curing Housing Woes”
Exactly! The Fed is only trying to get money in the hands of J6P to spend but doesn’t get the fact that J6P is tapped out.
Here’s my husband’s contribution. Sorry if this has already been posted somewhere.
The ongoing mortgage crisis is rapidly reshaping home
sale activity nationwide. According to a new Inside
Mortgage Finance-sponsored study, a significant number
of home sale listings are being triggered by problem
or troubled mortgages.
The study, based on a national survey of real estate
agents, found that 11 percent of property listings
were tied to defaulted mortgages and foreclosures
pending. A sizeable 12 percent of the listings were
potential short sales due to property values dropping
below the outstanding mortgage balances. And 6 percent
of the home listings were directly attributable to
mortgage borrowers facing resets on adjustable-rate
loans.
More than 2,400 real estate agents responded to the
survey conducted by Campbell Communications in early
December. The survey asked respondents a number of
questions related to the impact mortgage market
problems – particularly rising delinquencies and
defaults – were having on the listing and sale of
homes.
Aside from highlighting the big influence problem
loans are having on home listings and sales, the new
research found real estate agents were quite critical
of the way many mortgage servicers dealt with problem
loans. Specifically, respondents charged that the
inability of mortgage servicers to act quickly
prevented the sale of many distressed properties prior
to foreclosure.
Much of the criticism leveled at mortgage servicers
related to the response time needed by lenders to
approve pre-foreclosure sales, particularly those
involving home sales where the purchase amount is not
enough to pay off the outstanding mortgage balance.
Real estate agents reported not only having trouble
locating the decision makers at servicing operations
but also getting approval in less than a month or two.
“It is very difficult to achieve sensible negotiations
with banks. They spend so long making decisions or
refusing to accept even modest short sales that they
wind up making far less in the end than they could had
they been more cooperative from the outset,’
complained one survey respondent. “Streamline the
process so we can get a response in less than four
weeks,” suggested another respondent.
Not surprisingly, more than half of the real estate
agents responding in the new survey reported spending
much more time in handling short sales than regular
transactions. They also reported receiving smaller
commissions with short sales. The story was much the
same in the handling of real estate owned or REO
sales.
In terms of short sale transactions, real estate
agents reported that the average home sale price was
on average 16 percent below the outstanding mortgage
balance. And in a somewhat disturbing finding,
two-thirds of respondents reported that property
values in their area were falling compared with a year
earlier.
Much of the new study, “How Agents View Lender
Relationships in Stressed Markets,” examines the
relationships between real estate agents and mortgage
lenders. Included in the new analysis are ratings of
individual lenders based on a number of
mortgage-related factors.
For information on how to obtain the full survey
results, contact John Campbell at Campbell
Communications at john@campbellsurveys.com or (202)
363-2069.
2008-01-22 15:53:21
Name: Freddy F*cked Borrower
Age: 37
Marital Status: Married (but divorce is on the way)
Household Yearly Income: $101,000
Household Yearly Outgoing: $139,000
Housing status: Owner
House value: $396,000 (delusional value of $6.3 million)
Mortgage amount: $511,000
Monthly mortgage payment: $3,848
Credit card debt: $17,259
Savings account: “What the f— is a savings account?”
401k account: Refer back to savings account information
1st Car: Chevy Tahoe
2nd Car: Lexus SUV (nothing but the best for my future ex)
Monthly car payment: $1,072
Monthly Insurance: $341
Children: Brittany and Britteny
How does today’s rate cut help me?
I did financial services planning in the Bay area. This is pretty dead on of a lot of people whose finances I went over.
Most useless business in Albuquerque. Some dimwit guy runs an Indian grocery store (India). He insults all of the Indian women (the few) that patronize his store. He made 25 calls to my wife (from India) over a stupid DVD. I went in and told him how much we appreciated the harassment and we wouldn’t be his customer anymore. And we would let every Indian family in the area know that. If you run a market that caters to a small minority in an area that depends on repeat business, you better treat your customers like gold. This guy sits in there empty, day after day. Nobody in this community will admit going and buying anything from this guy. They would rather travel farther, pay a higher price to buy from the multi-ethnic, but clean and well managed store that is well supplied.
To be strictly accurate you’ve just described a useless manager rather than a useless business.
Household Yearly Income: $101,000
Stated income on loan documents: $185,000
Actual income: $37,000
OT–
According to fresh, homegrown data for southern Santa Barbara County, the median sales price of all new and existing South Coast SFRs, PUDs, and condominiums for the entire year 2007 was $999,900. The median family income among residents of the cities of Santa Barbara and Goleta is approximately $70,000 at present. (This is my estimate based on 2006 data, as 2007 figures are not yet available.) You do the affordability math.
This week at my blog (click on my handle above), I’m following up on Ben’s post last week about a Santa Barbara condo builder of 37 years who’s calling it quits — he probably wants to spend more time with his family.
Saint Barbara
SB,
Notice how Spendy McFlaw’s Celebrity Pals Newsletter doesn’t trumpet housing prices anymore?
When the median was pushing $1.2m, it looked like they used the same size typeface as for the attack on Pearl Harbor.
–
LA Times Zip Codes data for several SoCal counties is out:
http://www.dqnews.com/ZIPLAT.shtm
Palmdale PPSF is around $150.
Palmdale 93550 28 $212 -31.8%
Palmdale 93551 41 $350 -16.7%
Palmdale 93552 17 $220 -38.9%
Palmdale 93591 6 $243 -13.4%
Jas
Misprint sends caller to sex service
CALVERT, Md. (AP) — A Cecil County man who phoned the governor’s office with an opinion about the mortgage foreclosure debate realized he wasn’t talking to a secretary when the woman who answered greeted him with a “Hi, sexy.”
Pete Pritchard of Calvert discovered the number for the governor’s office is misprinted in the latest edition of the Armstrong Telephone Co. phone book. The printed number connects with a phone sex service.
The previous edition had the same mistake. Pritchard wonders if he’s the first person in two years that ever called the governor’s office by using that directory.
An Armstrong executive said the directory information comes from a third party source not controlled by the company. He said the error will be addressed in a message included with February bills.
That’s IT…A mental health trip out of Asylum USA IS REQUIRED before the entire country and my dollar both go totally joe6pac comatose with sheer stupidity.
If I can’t find my passport, maybe I can bribe Customs and DHS to LET ME OUT with cheese, CC and some old counterfiet Rupees
Why would you have to bribe anyone? They don’t even care as no passport is required to leave the country.
The question is whether you plan on returning.
OT, Last night I watched Antique Roadshow, and a lady brought in an ivory statute of St. Joseph. The appraiser told her it was worth 30,000 to 50,000 thousand dollars. I’m sure a lot of FB’s were drooling over it thinking it would surely sell their house, if they could only get a HELOC and make her an offer.
Julie
“we really have no tool to actually force the lending agency or bank or whoever owns the foreclosed house to maintain it”
We do however, have a “tool” that’s trying to force more credit on Joe 6pk through lower interest rates…Unfortunately, Joe’s kinda spooked and already reeling in debt. Wouldn’t be surprized to see him start taking pot shots at Bernanke’s helicopter with his deer rifle–just like the pissed-off flooded-in New Orleans folks.
DOC
txchick57..you must have at least 5 fast computers and a herd tiny elves working for you
Anecdotal, but a clear indicator of how bad it’s getting in SoCal (San Diego). A co-worker of my wife said her husband, who works at a casino, told her 400 people got laid off today, including some management. He said apparently other casinos are doing the same thing. HELOC, CC gambling money not so much, huh.
Not surprising. If Vegas is getting hit, only the addicted are gambling. Anyone know how the Connecticut Indian casinos are doing?
Got popcorn?
Neil
i was in Vegas last weekend for annual soccer tourney….very, very slow…recession is here….dinner tables and craps tables were empty!
Travel sites are starting to show lower prices and more special deals on hotels in Vegas, which I haven’t seen for a couple of years.
Maybe it’ll get as bad as the early nineties, when you could get rooms on the Strip for $20 midweek.
Not sure, but the stocks have just been hammered the last 4-5 months and the casinos with Macau exposure are getting pounded the worst. High overhead business, Q.E.D. “naturally” leveraged.
Which casino would this be?
I just went to Bankrate.com and tried to find today’s rate for an IO 5/1 ARM with no points and 0% down in San Jose, CA. I got 0 results.
I searched again using 20% down and got 4 hits, ranging from 6.5 to 7.1%.
BTW: This is for a $550,000 loan.
How long will it take for the rate cut to start affecting people’s minimum payment? How can I get data on the average Alt-A rate being charged to people with pay-option ARMs (like LIBOR + X%)?
OMG! I just realized the second search was in error. The page automatically switches your loan type to sort of fit the amount you’re borrowing. I redid the 2nd search, replacing their automatic “40-year fixed loan” with a “5/1 IO ARM”, and got only 1 hit. APR = 5.4%.
If I reduce the loan amount to $417k (5% down), I still only get 1 hit. Same rate.
This surprises me. I thought it was easy to get a “conventional” mortgage. Like the one I got 17 years ago for my Sunnyvale home: 20% down, balance was well under 3.5* my income. (It was a 15-year mortgage, now paid up.) Is it not easy for a person with income and 20% down to get a mortgage anymore?
My search for $417,000 was with 5% down on an IO ARM. The fixed-rate stuff with 20% down is still available. The only reason I was searching IOs and stuff is that those are the ones that people require to “get in to a home” these days.
I am reading through all the emails etc from the weekend.
This is from Wachovia’s Weekly Economic & Financial Commentary
Jan 18, 2008
“…As for inflation, we expect the Fed’s benchmark inflation indicator, the core personal consumption deflator, to remain at the top end of the Fed’s target range. Therefore, the inflation data do not support the case for an aggressive, panicked, Fed easing to bring the Fed funds rate down to the two or three percent range in the very short term. We realize that many market observers are calling for a far more aggressive move by the Fed than we are and yet our view remains that the Fed will be cautious and wish to avoid the perception of helicopter monetary policy that will only lead to another bubble down the road….”
So much for “aggressive, panicked, Fed easing”.
Wachovia
8 pg pdf
http://tinyurl.com/28avp7
this might imply that that the shock and awe campaign may be coming to a close perhaps….
hmmm..equities catcha bid for the short earnings campaign? Not gonna be tech…not gonna be financials…retail? the masses wait for the stimulus package to pay off the payday loan.
hmmm…so much to ponder. so little value, none of my value bids executed….guess we may be in for some more value via liquidations and forced selling.
Fed will be Cautious in easing haha
again, if you have failed to panic….dont worry…
there’s gonna be a bubble in something…you just dont know it yet.
strike: banks, technology, consumption, commodities.
Bullish signals are spelled out in the bond market which is already, signalling a 50 bps move lower…this does not bode well for equities….commodities comes down to how bad do you really need them..
we may be entering the domain of not being able to open a locked box at the bank without the presence of an agent of the IRS.
I wonder if the folks in the emerging markets understand the way Mr. Market plays out?
Australia and China are getting strong numbers as I type…guess the machine isnt quite broken enough. I will add this, those who are following the information streams online have been experiencing difficulties with information presentation, why?
I myself have had some really difficult times reconcilling information that appears to be altered and manipulated. again, voz is not a crackpot or moonbat…but cmon, guys.
“…difficulties with information presentation, why?”
At the gym they have one TV set to CNN. All last week, and every week prior, in the lower right corner they scroll through DOW, NASDAQ, SPY and then the time.
Tonight - they scrolled through the time zones only - no stock info.
This would be around 6-7 PM EST.
Based on my Bankrate searches (above), I can only conclude that Silicon Valley must be toast!
Now I just need to figure out what my LL’s ARM rate is. He can swing it if his rate goes down to 0.67% (assuming he increases my rent by $100/mo, which he could get away with). That doesn’t include property taxes or maintenance expenses, either. OK, that’s not possible, is it?
half point move next week.
time to get some long pieces. No buy sides hit this morning, hat tip FED, this is a controlled crash.
fed shot most of the wad,but stimulus is on the heals….doomed to fail Im sure, but perception is a b*tch. BRIC economies are falling faster than the US….insiders want out, but many are trapped.
began the nibble of the short side of financials and consumer durables after the BS open…..keep loading up on the shoe-droppers.
anecdote: had three employees at work inquire as to alter the distributions of the 401k….one inquired about a loan. Deposited last weeks take from the biz and went inside bank, counted 25 empty desks, tellers were three deep, thumbprint galore……its gettin ugly out there folks.
BRIC economies are falling faster than the US
yes how about that for decoupling of the world economies ?
Those that fly highest fall farthest.
A contrarian data point…
I saw a house in Los Gatos two weeks ago. a nice neighborhood, but the house was basically 1960 spec. Listed for 1.35. It got 13 offers and reportedly went for 1.55. Has not recorded yet so we’ll see, but still…
another one in Saratoga, very nice, for 1.4m. 12 offers, final price is tbd. So for good locations people are still buying.
OTOH houses by the freeway, power line, busy street, wrong school district, will sit for a long time.
Dear SiO2:
There’s no point in clinging to every little high-priced sale, thinking this is the sale that will save the housing market. Remember, the deal has to go through, and you have to see it recorded before you can believe it. Furthermore, you have to compare the last sale with the ones before it, not with the asking price. Perhaps the last comp was 2.05, so a 1.55 selling price is a clear decline. You should check Zillow in a couple weeks and remember that Los Gatos is just a cramped little mountain town with a horrid commute to Silicon Valley. All the “wealth” tied up there is prime exotic, and will begin to evaporate undeniably within 6 months.
Hi,
you are right in that these sales prices are lower than 6 months ago.
OTOH, there’s still a lot of people with jobs here. Apple’s results were bad compared to expectations, but sales were still up about 25% y-o-y.
I do believe prices will fall even here; if nothing else the stock price falls will impact the down payments people have. But hoping for 50% drops, in a place where few SFHs have been built?
BTW, the house in LG I saw was in the flatlands. Commute from there to the North SJ tech area (Cisco, Marvell etc) is 30-45 min. Horrid compared to 15, lovely compared to coming from other places.
Only one solution to this crisis and that is price and price alone. If a home came down 40% or more the public would run and not walk to buy it and even with a 6.25% loan they would still buy, but at 5.5% and prices still way to high the banks and the fed can whistle dixie ain’t going to happen this time around, the resales and new homes just over did it they must correct the huge mistake of price inflation the last several years?
The ex housing boom has vacuumed up all the capable buyers, all the marginal fools and anyone that had a pulse
So, IMHO no future buyers are left, + the insane inventory, psycho prices, imploded subprime lenders, busted banks, skyrocketing foreclosures, … We will be hurting for years no matter WHAT helicopter Ben does
So, your solution to the crisis is to but every bank into insolvancy. Put Freddie and Fannie into insolvancy. Shut down the last bits of construction that is occuring. Bankrupt all the builders. Encourage tens of millions of household to walk form their overpriced houses….
I’m not saying I disagree. It is the only possible end result short of govt. handing out $2-3 trillion worth of checks.
I’m just making sure you understand the ramifications of what you are saying.
Darrell:
The ramifications will be good for us (waiting to buy), and bad for them (recklessly bought). Some of us may lose our jobs and have to take lower-paying jobs, but that’s the medicine that a high-flying economy has to take. The other option (ala Big Ben Bernanke) is to allow the dollar to become worthless, which will hurt everyone even more. It won’t really hurt me to take a job paying 10% less if I can buy a house down the line for 50% less. I know I will move up again when the economy gets back in shape.
As I mentioned in an earlier thread, I’m refi-ing my house. Had to have an appraisal done. Wasn’t sure if I was going to get an honest one or a “hit the number” one.
Well, the appraiser came and did the appraisal. As he was leaving, he asks “What are you looking for as a number?”.
Guess that answers that.
Appraisers still hitting the numebrs needs to do the deal!
Well, I guess I have to wait a couple days to get the report…. but I think he will hit the number.
You should report the guy.
Didn’t the lender pay for the appraisal? If so, why’s appraiser asking you?
Too much weird sh*t is going on at once…. It’s time for mass distraction. I have the eerie feeling that an engineered sidetracker will happen shortly. Too much bad news for J6P. I actually heard for the first time people at my office talking about the economy, I mean REALLY talking about it (not in a good light). A few even asked me for advice- I was floored… I gave them nothing because I warned them 6 months ago that they better look at the market falling soon. But like I said, it’s time for a big story to break. Be it tied to the political season or (God forbid) a disaster somewhere, something has to give or all the pre-retirement folks are going to yank the rug right from under “the man”.
On another note, I was (once again) floored by the true lack of knowledge of how the monetary system works by J6P. Many are looking forward to the hand out being talked up by “the decider”. I told them that the $$$ you see now will surely cost you dearly in the future. They didn’t get it. Which brings me to “the next bubble”… I’m guessing it will be silver and gold. You have all weighed in about this subject and I know I’m asking for a smack-down WWF style, but never underestimate the stupidity of panicked masses. We saw stupid appreciation of homes in good times, backed by a lack of any moral standard on any level, gov’t included- does it not stand to reason we will see the “same” but entirely reverted? Bad times, paniced masses selling whatever they can sell to invest in metals because they have been told (and believe) that they will be able to pay off that silly mortgage with but a few ounces of $25K gold? It is starting to ramp up now. I saw a damn info-mercial on silver the other day touting $50 silver like the 80’s. Just wait till the panic hits, and I mean PANIC. Like I won’t be able to retire EVER unless I sell all my stock and buy that precious gold. We have seen it before with homes- don’t expect rational behavior now.
I hope I’m wrong for all our sakes, but you just never know until it hits.
Oh yeah, by the way, it is time for that “dead cat bounce” it may last until fri/mon but I doubt it… 80% chance the FED is supposed to drop the discount rate by another 50 points. FED(up) with my paycheck worth 3-4% less every 2 weeks damn it. Aren’t they charged with keeping the dollar STABLE???? Not the damn market!!!!
Foreclosure rate sets another record, jumps 137 percent in the Bay Area
http://www.contracostatimes.com/ci_8045900
“Bay Area homeowners continued to feel the housing bust as foreclosure activity doubled and tripled in most counties.”
Notices of Default Q42006 Q42007 % Change
San Francisco 173 334 93.1%
Alameda 1,173 2,573 119.4%
Contra Costa 1,511 3,805 151.8%
Santa Clara 874 2 162 147.4%
San Mateo 339 625 84.4%
Marin 101 224 121.8%
San Joaquin 1,293 3,746 189.7
Solano 781 1,793 129.6%
Sonoma 323 968 199.7%
Napa 87 220 152.9%
Bay Area 5,362 12,704 136.9%
http://www.contracostatimes.com/news/ci_8046512
USD oddly stable. Market is anticipating corresponding cuts from other central banks. Hard truth is that other central banks are forced to use real inflation rates. Also, ECB does not have a mandate for anything other than inflation. Watching the monkeys on CNBC screaming that the rest of the world needs to follow the fed was pathetic.
You have to be crazy to buy a house in California with all it’s troubles. Houses are outrageous overpriced, but sellers refuse to lower their asking prices. Movement is very slow, but they cling to their sale price. Thus, foreclosures and unsold houses everywhere. So California has a sea of unsold houses that will continue as long as prices don’t move. Once worth 1/2 million dollars … is now worth half, but sellers don’t see it that way. Buyers aren’t stupid, they will wait and wait ….