The Higher The Price The Harder They Drop
The LA Daily News reports from California. “Foreclosures soared 435.5 percent in the San Fernando Valley last year as nearly 3,000 homeowners surrendered to higher monthly house payments brought on by rising adjustable rate loans, the San Fernando Valley Economic Research Center at California State University, Northridge, said Tuesday. The center’s numbers cover an area from Glendale to Calabasas, where sales of new and previously owned houses and condominiums fell an annual 32.6 percent.”
“Realtor Patricia Beltran is about to be counted in this year’s foreclosure statistics. The payment on her four bedroom, three bathroom home in Porter Ranch has jumped $1,200 to about $5,000 a month. She can no longer afford it and is desperate to sell.”
“‘I, like a lot of other people, was under the assumption that after two years I would refinance and my payment would go down,’ she said.”
“Beltran, who bought the home 2.5 years ago for $620,000, tried to refinance last summer, but by then credit standards had tightened and the market, and her source of income, was dwindling.”
“‘There’s nothing we can adjust for you because you won’t be able to pay it anyway,’ she recalled a loan officer saying last summer.”
“She listed the house four months ago for $765,000 and has since dropped it to $719,000. Beltran, a single mother, now has 11 listings, and eight of the sellers are in the same fix.”
“She’s been in the business for seven years and used to do 25 to 30 sales a year. Last year she did six. ‘We’re surviving off her (daughter’s) paycheck. She’s a college student,’ Beltran said.
“In December, the median price of a previously owned home or condo in the San Fernando Valley fell an annual 7.2 percent to $580,000 and sales fell 51.5 percent to 804 units.”
“Daniel Blake, a CSUN economics professor and the center’s director, notes that December’s median price is 12.1 percent under the record $660,000 set last May. But even with the kind of market distress we are seeing now, percentage price declines won’t match sales declines.”
“‘Prices would have to fall by half to even get to the 2001 (level) and that’s a huge drop. I don’t think it’s going to go that far,’ he said.”
The Daily Breeze. “South Bay home prices experienced across-the-board declines in December as the market continued to cool, according to a report released Tuesday. Each city cited in the report had a year-over-year drop in median price for all homes sold in December - from Carson, down 15.5 percent, to Torrance, which fell 4.8 percent.”
“As for the drop in South Bay sales, one notable omission in the CAR report may bring this reality home to area residents. Manhattan Beach, which CAR consistently lists as one of the top 10 highest-priced areas, if not the highest, was excluded from the December report of individual communities.”
“That’s because the trendy beach city did not meet the report’s threshold of at least 30 home sales in a month.”
“‘The Manhattan Beach market is somewhat uncertain more because in the last 10 years it has gone up more than any other market in Los Angeles County,’ said John Parsons of Horrell Realtors in Redondo Beach. ‘It used to be second or third to Palos Verdes Estates or Rolling Hills Estates. But now it’s more than anything on The Hill.’”
The San Gabriel Valley Tribune. “In Los Angeles County, the median home price fell 16.9 percent to $487,190 in December, from $586,540 a year ago.”
“Locally, Pasadena took the biggest hit, with a year-over-year price drop of 30.1 percent from December 2006. Azusa weathered a decline (-17.6 percent) that outpaced California’s annual price drop.”
“Marty Rodriguez of Century 21 Marty Rodriguez in Glendora, said that Pasadena’s sharp decline probably reflects that fact that homes in that city were priced substantially higher than many surrounding cities to begin with.”
“‘The higher the price the harder they drop,’ Rodriguez said. ‘Those very, very expensive homes probably aren’t selling that well.’”
“‘The whole year of 2007 was a pretty sharp decline,’ said Tom Adams, owner of Century 21 Adams & Barnes in Glendora.”
“‘The downturn, Adams said, has been a normalization process that’s weeded a lot of people out of the industry, which he views as a good thing. ‘I think it has taken a little while for the public to realize now is a good time (to buy a home),’ he said.”
“Rodriguez said homeowners looking to sell must realize what houses are selling for now. ‘The reason we have so much inventory is that the sellers don’t understand,’ she said.”
The Voice of San Diego. “As economists and real estate professionals offer split opinions on what’s ahead in 2008, data released Tuesday recapped an indisputably dreary end of 2007 for those on the selling side of San Diego County’s housing market.”
“The year’s foreclosure filings in San Diego County totaled 38,917 — triple the total in 2006 and eight times as many as 2005, foreclosure tracker RealtyTrac reported.”
“And Standard & Poor’s/Case-Shiller home-price index for November 2007 (showed) San Diego County’s prices for resale detached homes dropped 3.4 percent in one month, a significant monthly drop surpassed only by Los Angeles among the 20 cities examined in the index.”
“Between November 2006 and November 2007, prices declined 13.4 percent, a yearly decline second only to Miami’s 15 percent drop. And the county’s prices were down from the peak in November 2005 by 16.3 percent.”
“Rob McNelis, president of One Stop Lending and Realty in Santee, said there’s an industry understanding that any homes that come on the market between the second week of November and the second week in January are desperate sellers. And so since Tuesday’s data referred to deals struck before that time, he expected the data to get worse in the next couple of months.”
“‘Scary as it may sound, that’s not going to be the scariest number,’ he said. ‘December and January are going to be worse.’”
“Bank-owned homes constitute a large portion of the homes on the market, 31 percent of all home sales in December, according to analyst Andrew LePage from DataQuick.”
“‘We are experiencing … the effects of someone who’s drank too much wine,’ said John Robbins, immediate past chairman of the national Mortgage Bankers Association. ‘The good news is we’ve stopped drinking. The bad news is we’re going to have a hell of a headache.’”
The Union Tribune. “Tania Jones and her husband recently were able to purchase a home in Rancho San Diego for $417,000, but only after Tania spent five months working at her hospital job 12 hours a day, five days a week to pay off bills and save enough for closing costs and to put some extra money in the bank.”
“The couple could not have afforded the original asking price of $485,000 for their 1,200-square-foot house, Jones said. Now with a mortgage payment of $3,300 and other monthly bills totaling $2,500, they have to live frugally, watching what they spend and rarely going out to eat, she said.”
“‘I still think it’s expensive to buy a house here in San Diego,’ said Jones, who previously paid $1,200 a month in rent for an El Cajon apartment.”
“‘When we were looking at houses in La Mesa, all the ones that were under $400,000 were very beaten up. In five months, the price on our house went down, so I feel very lucky,’ she said.”
The North County Times. “Riverside County had one of the worst foreclosure rates in the nation during 2007, seeing a meteoric 191 percent jump from the previous year to about one home out of every 23 entering foreclosure, according to RealtyTrac. 29,826 county homes were in some stage of foreclosure in 2007.”
“An avalanche of data showing a slumping housing market has led some in the housing industry to forecast a long, steep decline in area home prices. Others, such as the California Building Industry Association, have predicted the housing market will see a modest recovery this year.”
“‘I see this being a tough market on through 2010 and into 2011,’ said Lyle Anderson, a Poway real estate agent. ‘I had people come to me last year who’ve been in the business 20 years and saying everything’s going to be fine this year. I’m looking at them thinking, ‘What are you smoking?’ I don’t see it.’”
“Norm Miller, a professor with the University of San Diego’s Burnham-Moores Center for Real Estate, said he agrees with Anderson that local home prices will continue to decline for two or three years. He said the market would then stabilize but recovery would not come until 2012.”
“‘We’re seeing a real, fundamental decline in house prices,’ Miller said. ‘Home appreciation does not pay for mortgages. That’s the lesson we’ve learned.’”
The San Francisco Chronicle. “In the Bay Area, December sales of existing, single-family homes plummeted 38.1 percent from a year ago, according to the California Association of Realtors.”
“Meanwhile, the average cost of those homes fell 8.6 percent in the region, the November Standard & Poor’s/Case-Shiller Home Price index said. That’s the largest drop since it began reporting numbers in 1988.”
“‘Basically, the markets are coming back into a bit of reality,’ said Maureen Maitland, VP of index services at Standard and Poor’s. ‘We’re definitely in a housing recession.’”
The Bay Area News Group. “Bay Area foreclosure filings continued to soar at the end of 2007 compared with a year ago, with one home in every 93 slipping away from its owners.”
“The number of San Joaquin County foreclosures rose 301 percent from the last quarter of 2006, the most in the Bay Area. Next were Santa Clara (254 percent), Contra Costa (218 percent), San Mateo (193 percent), Alameda (180 percent) and Solano (125 percent) counties.”
“California led the nation in total foreclosure filings and the number of homes in some stage of foreclosure last year. In all, 1.9 percent of households in California received foreclosure filings.”
“Alan Fisher, executive director of an organization that advocates increased access to credit and banking to low-income and minority communities, said that…upper-middle-class homeowners who saw the downturn coming were able to sell their home and had enough equity to come out with a profit. They may be renting now and waiting to buy.”
“‘You don’t see them on the foreclosure rolls, but they are affected by the phenomenon,’ he said.”
From The Sun. “Buck Byers remembers the humorous scene like it was yesterday. At the housing boom’s peak, dozens of trucks crammed the street in front of his San Bernardino lumber operation while their enraged drivers yelled vulgarities as they navigated through the congested mess.”
“‘That was all good, but that’s not today,’ said Byers, owner of Barr Lumber on Mill Street.”
“Traffic problems are the least of his worries these days. The housing market is racing downhill and local lumber dealers like Byers are struggling to keep workers employed.”
“‘Right now we’re just trying to keep our people employed, our trucks running,’ Byers said.”
“Among the company’s six branches - four of them in the Inland Empire - Barr Lumber has laid off 80 employees since August. Its San Bernardino work force was cut in half and went from generating $8.5million per month in sales to $ 3 million over the last year.”
“It used to charge customers double for lumber, compared with what it charges now.”
“But 2008 doesn’t hold much promise for a turnaround. Byers is almost certain more layoffs are on the way. ‘The biggest reason is because all the development companies are holding their cards so close,’ he said. ‘You have no idea what their financial positions are.’”
“Even 57-year veteran Barry Johnson at Chino Lumber is trimming to the bone on his budget. Johnson remembers charging more than $3 per 2-by-4 a couple of years ago compared with about $2 these days.”
“‘I haven’t seen these prices since the mid-’70s,’ Johnson said. ‘This could top that.” The lumber industry’s last calamity was during a nationwide recession in the early 1990s, Johnson said.”
“Byers said the industry will have to hunker down until business improves. ‘Everybody always asks, ‘Is this the bottom of the market?’ he said. ‘I’d like to think it is, but I consistently see it getting worse. This is the worst we’ve ever seen it. It makes profiting virtually impossible right now.’”
“Byers still daydreams about 2004, his best year ever. ‘It was unbelievable the amount of work we were doing,’ he said. ‘It was like we were the smartest guys in the world in the best market.’”
1,200 a month payment reset to 5,000? My god.
And she’s living off her college student daughter’s income. On the plus side, though, she’s teaching the kid a great lesson in real-life economics.
The lesson is taught at Benjamin Franklin’s dear school.
I say shame on her for dumping her financial obligations on the daughter - it’s difficult enough to work and go to college without having the household depend on you to survive. Mom ought to get her butt over to walmart and start working.
exactly
“Foreclosures soared 435.5 percent in the San Fernando Valley last year “…
“South Bay home prices experienced across-the-board declines in December as the market continued to cool, according to a report released Tuesday. Each city cited in the report had a year-over-year drop in median price for all homes sold in December - from Carson, down 15.5 percent, to Torrance, which fell 4.8 percent.”
“Locally, Pasadena took the biggest hit, with a year-over-year price drop of 30.1 percent from December 2006.”
SFV is pretty ragged & declining all across the entire east to central portion along the flatzones, which is over 2/3’s of the valley. Eastern 1/3 from San Diego fwy to the 5 and north of Magnolia/Burbank blvd is almost 100 % third world tenement zone. Entire SVF falls more than -40% yoy by end of 2008.
South Bay is way overrated . Carson , Gardena, East torrance, lomita, hawthorne, harbor city, lawndale ,basically the middle- lower dregs of the SB are in freefall. Rest of Torrance, Redondo Beach , San pedro will get shelllacked by end of 2008. Hi-end PV, Hermosa, manhatten will crash hard by 2009.
Pasadena finally shows its true colors. Overated and overpriced, with some growing cancerous slumzones eating at it . The supposedly Hi-end invincible areas (e.g., area around rose bowl)are waaay overpriced and will just sit unsold till their baffled owners cry uncle.
And I thought Pasadena was all rich Armenian business owners. Oh well
They are all in Glendale…
“Daniel Blake, a CSUN economics professor and the center’s director, notes that December’s median price is 12.1 percent under the record $660,000 set last May.
Blake said on Los Angeles radio that in the height of the last foreclosure bubble, the Valley had 7000 REO’s. OK, Mr. Blake if we are half way to 7000 REO’s, and the prices
are 12.1 %, how much calculations would it be to think when we reach 7000 REO’s, prices might be down 25%.
Now lets assume, sunce there were very limited arms and sub-prime last time, we go to 10,000 REO’s, this would bring prices fown another 12.1%, or close to 37% total.
I predict the San Fernando Valley will hit bottom with 10,000 REO’s, a 37% decline in prices, in Sept of 2009.
This is my 4th recession in 35 years in the Valley, this one will really produce “doom and Gloom”
“Earlier this month, the South Bay Association of Realtors released a report that said the December median price for single-family homes in the area rose 14.3 percent, but did not provide city-by-city numbers that may have shown a price drop in individual communities.”
This is the entire list of south bay LA cities and communities.
CARSON 23 $448,000 $530,000 -15.47%
GARDENA 18 $440,000 $499,000 -11.82%
HARBOR CITY 10 $415,000 $460,000 -9.78%
HERMOSA BEACH 13 $940,000 $1,233,000 -23.76%
LAWNDALE 12 $435,500 $522,500 -16.65%
MANHATTAN BEACH 19 $1,250,000 $1,325,000 -5.66%
SAN PEDRO 18 $459,500 $525,000 -12.48
TORRANCE 76 $564,000 $592,500 -4.81%
WILMINGTON 5 $410,000 $465,000 -11.83%
LOMITA 5 $562,000 $585,000 -3.93%
Palos Verdes Peninsula 35 $1,050,000 $1,070,000 -1.87%
I’d say that the South bay Association of Liars did a bang up job reporting the SB prices.
They keep saying this time won’t be as bad because last time the burst was caused by the ending of the cold war and loss of all the defense jobs. But, they’re not considering the huge disparity between housing costs and wages this time and the use of so many exotic loans. Instead of jobs causing housing burst, housing burst will caus job losses. It is starting to look like one of those beautiful domino patterns falling one by one.
Sorry i missed Redondo Beach:
REDONDO BEACH 42 $732,500 $735,000 -0.34%
Wal-Mart is probably where the daughter works, and they probably aren’t hiring. The less-stupid realtors in the area already snapped up all the available WM jobs.
My SIL is a realtor who lost her house this year. It was bought by an investor and she now rents it for much less than her mortgage was. Still, her credit is shot (again- she filed bankruptcy about 15 years ago).
“And she’s living off her college student daughter’s income.”
And what do you bet that the daughter’s income is student loans!
Now that’s a horrible thought! I’ve also heard of stories of people that use their kids SS and get credit cards in their names without them knowing and running up huge bills and ruining their credit. If this woman is so irresponsible about buying a house, even being a realtor, you can bet she’ll dump those loans on the daughter to pay. Nice way to make a lifelong impact on your kid’s adult life. I’m doing the opposite - working to help pay so daughter finishes college with no debt. She does her part by being very responsible with her money and doing excellently in school, while being a well balanced, healthy and happy. I just don’t get screwing up your kids.
She won’t be needing college after experiencing a real world lesson in economics
Real-life economics does NOT involve college students supporting their parents. That’s just a mess.
That must have been one heck of a down payment to get a $1,200 payment on a $620,000 purchase??
Tell me about it. That one actually slipped by me. Mayeb she had a negative interest rate cuzz that’s the only way I see getting that kind of payment.
It happens all the time. 1% option arm. Four choices: 1% pay rate neg am, I/O, full 30-year amort, or full 15 year amort (like the FB would choose that). 1% of $600,000 is $6,000/year or $500/mon. She was clearly overpaying and should have had a better mortgage broker! Of course the loan payment does not include the $7,000/year property taxes or the insurance. They do list the other payments right in the docs, so it is hard to deny she did not know a fully amortizing 30-year loan would be about $54,000/year or $4500/month at 8% interest, which is what they charge on these kind of loans.
Didnt you read the article? She was under the impression that once the low teaser rate expired she could refi for an even lower rate. Hmmm.
Also she was a realtor, how could she possibily be expected to understand teaser rates, refis, and falling real estate prices. You would think that being a real estate agent she would not want her name listed as someone that doesnt understand real estate, but oh well.
Indeed - eventually they would pay her to borrow money, I assume. Of course, given the irresponsibility of the people in charge (ranging from the Powers That Be to the Fed itself), is it really that surprising that people would believe in “free money” and ever-lower rates? Sad!
Try a 1% teaser rate
620,000 / 360 is $1722/month. So if she had a ZERO interest 30-year fixed no-money-down mortgage, she’d pay $1722/month. With tax, PMI and insurance the MINIMUM she would pay on this hypothetical no-money-down 30-year-fixed would be $2500 or so
I doubt she put anything down because otherwise
1. The payment wouldn’t be going UP to 5000! She would have at least had a better mortgage with 10% down
2. She’s be whining even more about losing everything.
She can probable send the keys back and do quite well. She probably didn’t mention a HELOC’d boob job and Hummer that she can keep, tax free. And she was able to rent a nice house for $1200/month!
My advice to her: Find a HUSBAND.
Who would be stupid enough to marry her? Maybe Larry Yun?
Please… no man deserves that type of leech on his wallet!
Now, if we’re talking about a “F’d Buyer Dating Show” where we pair irresponsible men and women together on the promise that they never, ever have kids, I am all for it! Haha!
I have a new show to pitch to FOX.
Realtard Swap.
Each episode will try to match up Realtards who are recently divorced but still living with the ex because they can’t sell the house and split the proceeds.
(I assume at least 100 Realtard couples were not greedy enough to touch their primary residence equity)
But that is really optimistic on my part…..
It says it jumped $1,200, so I’m thinking it was $3,800 and jumped $1,200 to $5,000. Although nothing would surprise me anymore.
I think she got a 2.5% teaser rate that jumped to market. In the meantime the difference in interest between the teaser rate and the market rate was being added to her principal. She was a realtor, nuff said.
I stand corrected. It did say it jumped $1,200 (ie, she was paying $3,800).
But very interesting how they phrased it. I suspect for most people reading it the 1st time, they would think it rose from $1,200 to $5,000. Think how much more dramatic that sounds.
think she got a 2.5% teaser rate that jumped to market. In the meantime the difference in interest between the teaser rate and the market rate was being added to her principal. She was a realtor, nuff said.
She’s a realtor? She sure screwed the pooch on that RE contract which is about par for the lack of business & basic economic acumen of most realtors.
It says it jumped $1,200,
Yeah just caught that too, my bad
“has jumped $1,200 to about $5,000 a month”
No, it jumped up $1,200 not “from 1,200″… so she was paying 3,800 initially. Still painful either way you look at it though.
A mere JT is not enough for this one…
A fully mature GST needs to fall on her sorry assets.
baobab perhaps?
I think all of you got it wrong. The payment wasn’t 1200 a month. The increase was 1200.
doh
Oh! That’s very different! NEVERMIND! (In my Emily Litella voice)
Classic.
“Beltran, who bought the home 2.5 years ago for $620,000,
“She listed the house four months ago for $765,000 and has since dropped it to $719,000.
Only 99K profit ? I bet you will be lucky to break even.
She’ll be lucky to short sell it for a $100,000 loss.
“payment on her four bedroom, three bathroom home in Porter Ranch has jumped $1,200 to about $5,000 a month.”
It jumped from $3,800 to $5,000. I had the same reaction at first. Still a lot but not a 4x hike.
“Beltran, who bought the home 2.5 years ago for $620,000, tried to refinance last summer, but by then credit standards had tightened and the market, and her source of income, was dwindling.”
“‘There’s nothing we can adjust for you because you won’t be able to pay it anyway,’ she recalled a loan officer saying last summer.”
“She listed the house four months ago for $765,000 and has since dropped it to $719,000. Beltran, a single mother, now has 11 listings, and eight of the sellers are in the same fix.”
Well, right there’s her problem: she only raised her asking price by 23%. If she’d raised it by the (CA) typical 50%, she’d have sold it by now!
We basically posted the same thing but of course, your response is much better. I can’t believe this woman is a RE agent (or maybe I can). Two and a half years ago is in the middle of 2005, the peak of the bubble and she’s trying to make a huge profit. Un-freakin-believable.
She would rather walk away than “give it away” many others are doing just that
Harm you missed the funnier part of the story.
“In December, the median price of a previously owned home or condo in the San Fernando Valley fell an annual 7.2 percent to $580,000 and sales fell 51.5 percent to 804 units.”
And when I see the sign
It points one way
The life we used to lead
Everyday
Just walk away Renee
You won’t see me follow you back home
The empty sidewalks on my block
They’re not the same
You’re not to blame
From deep inside the tears
I’m forced to cry
From deep inside the pain
I chose to hide
Just walk away Renee
You won’t see me follow you back home
Now as the rain beats down
Upon my weary eyes
For me I cry
Like gag me, with a foreclosure, Totally!
You are in a singing mood today Hoz.
Cry me a river. Still trying to make $100,000. EARTH TO BELTRAN: the reason you are in your situation is because the market is FALLING, not RISING. Oh, what’s the use?
How times have changed. Almost no one in the press covered the CAR report.
You bet. Case Shiller, Data Quick, the Warren Group, anyone but the NAR and its affiliates.
The mothership (NAR) is getting murdered on AdAge for it’ latest campaign. I think the media is finally allergic to them.
You think they RAN some adverts with dubious content, eh?
That article is phenomenal…thanks for mentioning it…
Thought others might want the link:
http://adage.com/article?article_id=123374
The comments to the AdAge article are pretty hilarious. Obviously NAR trolls. Great time to buy, rates are low. No mention of AFFORDABILITY.
“Beltran, who bought the home 2.5 years ago for $620,000, tried to refinance last summer, but by then credit standards had tightened and the market, and her source of income, was dwindling.”
“‘There’s nothing we can adjust for you because you won’t be able to pay it anyway,’ she recalled a loan officer saying last summer.”
“She listed the house four months ago for $765,000 and has since dropped it to $719,000. Beltran, a single mother, now has 11 listings, and eight of the sellers are in the same fix.”
Wow, is all I can say. She is desperate to sell yet she still shoots for a huge profit?!?!? Maybe if she were more realistic, she could get out of her predicament with credit still in tact but what do I know.
Realistic? She’s a Realtor(TM). It only goes up.
“Maybe if she were more realistic, she could get out of her predicament with credit still in tact but what do I know. ”
…and stop taking her daughter down with her!
She’s not desperate because she has her studious daughter to bail out. What a puke-o-rama today’s news is.
I meant to say ” …she has her studious daughter to bail HER out.” Totally the opposite of what I actually said.
“Now with a mortgage payment of $3,300 and other monthly bills totaling $2,500, they have to live frugally, watching what they spend and rarely going out to eat, she said.”
“‘I still think it’s expensive to buy a house here in San Diego,’ said Jones, who previously paid $1,200 a month in rent for an El Cajon apartment.”
$1200 a month in rent versus $3300 a month in mortgage payments in a falling price market? This makes me feel very sad for them. Why would anyone do this to themselves?
In order to flip. I give it 6 months before they come to their senses, walk away and rent again.
We make over 100k a year, and I would NEVER pay that much for a house. Don’t ANY of these people pay taxes, save for retirement, save for other things, eat, pay electric bills, etc. Our rent is $750, and I REFUSE to buy a house unless the PITI is less than $1000. We just couldn’t afford it.
Well we’re just under you income-wise but that was my reaction as well. It’s so beyond stupid, this purchase has it’s own gravitational field.
Wow where are you making over $100k and only paying $750 a month rent(what are you renting)
Where I live(south FL) median income is around $30k and 25% of that comes out to $625 a month to spend on a home. Youd be looking at a mobile home on a leased lot(which is around $500 here) or a crappy 1/1 condo/apartment in the ghetto.
Incidentally, the last time I checked out mobile homes for sale, one lady was making $30k a year and put up her mobile home for sale for $25k as she was leaving Florida along with the rest! The young people don’t stay long. Once they finish college, they are outta here as nothing is affordable. Only rich snowbirds and retirees can afford Florida anymore.
Bye,
Welcome to the midwest. The folks on the coasts have no idea how screwed they are. If I was offered a job at a midwestern Univ, I’d be out of CA in a texas minute.
Have you sent job applications for other locations? Austin Texas is popular and not terribly expensive, youd need $100k to $150k for a nice middle class house.
DJ,
I used to live in Iowa and their pretty big on their schools in that state. Have you ever checked out the Univ of Iowa or Iowa State? Of course you have to be partial for agriculture, but UC Davis is famous for that stuff, No?
He said “we” are making over $100K. $50K for one person isn’t hard to do in the Midwest, methinks. I made upwards of $40K in Cleveland outta college in 1994….
Too bad salaries haven’t kept with inflation. I see people making $25k to $50k out of college even today. $40k in 1994 is excellent!
“Where I live(south FL) median income is around $30k and 25% of that comes out to $625 a month to spend on a home. Youd be looking at a mobile home on a leased lot(which is around $500 here) or a crappy 1/1 condo/apartment in the ghetto.”
Not in Lehigh Acres - plenty of 3/2 houses for $700 a month
My wife and I live in Fort Wayne IN. The median price of houses is the low 90’s. Some of them are quite nice…We together make around 140K. Things work pretty nice. We go to Chicago to see a nice show now and then. A lot more sane then LA….
Tania, I know that you have been busy working extra hours at the hospital, but do you read?
The San Diego housing bust is no longer a secret. Stop paying so much for 1,200 square feet.
And she feels “lucky”. Yeah, it was sheer dumb luck that you stumbled upon that underpriced 1,200 SF bargain. Hope the doorknobs are made of pure gold!
“The Union Tribune. “Tania Jones and her husband recently were able to purchase a home in Rancho San Diego for $417,000, but only after Tania spent five months working at her hospital job 12 hours a day, five days a week to pay off bills and save enough for closing costs and to put some extra money in the bank.”…. Now with a mortgage payment of $3,300 and other monthly bills totaling $2,500, they have to live frugally, watching what they spend and rarely going out to eat, she said.””
If the $3,300 is truly their mortgage and doesn’t include taxes and insurance then they are paying an 8.9% rate assuming a 30-year fixed with nothing down. Ouch. And I wonder why the house was listed at the magical point of $417,000?
My guess is that they walk in 18 months when the value is $334,000. Am I evil to suggest we start a pool on foreclosure dates for knife catching FB’s?
This 12 hours per day working multiplied by tens of thousands of FB wage slaves, has increased GDP. Now if these greedy buyers-turned FBs foreclose and go back to rent, they won’t need to work those long hours. GDP falls. Not good for economy. That’s another shoe to drop. Lots of shoes dropped already, more to go!
The 12 hour per day money wasn’t going into the economy; it was going into a black hole of a bank where it disappeared.
When the tosses the keys and rents once again then she’ll have the surplus cash to feed into the economy.
When she tosses the keys …
No, it was not going into the economy. It was going into the GDP, assuming she worked a full 12 hour day with no diminishing productivity, she produced four more hours than the standard day.
Just like adding a second income to the average household - keep people in debt and working until they fall over; keep inflation high, savings rates low, and you can control everyone… until they run out of money and lines of credit! Oops!
‘The reason we have so much inventory is that the sellers don’t understand,’
I don’t think we talk about the inventory enough. If you look at the current inventory numbers throughout the West YOY, it’s staggering. Anyone predicting a recovery is surely high. The sober-minded will see it for what it is - a blood-bath for ‘08.
The really scary thing is all of this inventory is coming on the market with a 5% unemployment rate and 6% fixed interest rates.
What happens if unemployment goes to 6%, 7% 8%……??
Or interest rates go to 7 or 8%…..??
Staggering wouldn’t seem to decribe what that would look like…..
I keep thinking the same thing. We haven’t even got into any serious economic downturn and the numbers are almost as bad as the last recession in CA.
Probably the reason the econ web sties are making comparisons to the great depression. Seems like we are heading that direction.
Fed move didn’t buy the market much breathing room did it?
maybe that’s why the Fed cut so aggresively…..
And with the self-perpetuating bubble, I think the unemployment rate WILL go up a lot. As many have said, in the past, recessions caused declines in housing. This time, the decline in housing will cause the recession.
ex-nnvmtgbrkr-
Another thing that’s not being talked about is that the multi-family and commercial sector of the market is starting to unwind . Got a lot of clients starting to panic and try to re-position themselves for whats coming. Rentals are starting to show signs of decay.
I’m seeing that too. A lot of attention has been given to foreclosures, and rightfully so. But foreclosures are just one of the symptoms the allow us to confidently diagnose the meltdown.
I hear lots of groaning about rentals here in Davis. it used to be student who couldn’t find an affordable unit. Now it’s the landies complaining they can’t find decent tenants and prices that are sustainable for them. What a difference 18 months has made.
I’m in a midwest college town. This place is flooded with rentals; many are sitting empty.
It’s going to get worse for the college towns as the HELOCs money dies for good and all those kids who were funded by their parents’ homes have to drop out. Double whammy.
“…the market is starting to unwind.”
The credit default swaps are suggestive of a melt down.
Burners refer to the 51 week period between Burning Man every year, as living in the “default world”…
The theme this year is “American Dream”
Should be most interesting~
Alad,
Not sure how many people saw your reference to “Burning Man”, or realize the significance, so I thought I might as well provide the link.
WHAT IS BURNING MAN?
Trying to explain what Burning Man is to someone who has never been to the event is a bit like trying to explain what a particular color looks like to someone who is blind. In this section you will find the peripheral definitions of what the event is as a whole, but to truly understand this event, one must participate.
http://www.burningman.com/
Never been but maybe some day.
Personally, I’m growing and trimming my beard to go to LebowskiFest as Walter this year..
DONNY UR OUT OF YOUR ELEMENT!!!!!!!
Missed out on the last Fest in LA helping my BIL f’d buyer move in the IE.
“The credit default swaps are suggestive of a melt down”
That looks like the nuclear-sized cockroach which threatens to collapse the world financial system. Some scary stuff i read in minyanville yesterday about this. Very complex and obtuse for my limited financial knowledge but i think the fed may be scared of this monster threatening to topple the world econony which is why they are in panic mode with the rate cuts.
agree… it’s pretty sweet, although I kind of feel bad for the bagholders now because these new projects will probably never pay back their loans (BKs coming) while some older, decently maintained properties are probably going to have to drop rents to maintain occupancy.
I’m it total agreement about inventory. If you build too many cars, you can’t sell them, because you only need a certain number of cars. The excess then sell, slowly, for less money. If you build a shitload, you have a big problem.
Same for houses.
I thought I would mention now, the coming fallacy of “Just in Time” based manufacturing.
When commercial credit vapor locks, then the whole idea of Just In Time turns into Must Be There inventory management.
How do you keep the places running if credit problems start damaging delivery times in your supply chain????????
I’m calling for global flusterclucks, as production lines wait for supplies because a handfull of vendors couldn’t get financing.
Opps then all of the insurers start getting hit with claims they can’t get the financing to pay.
Can anyone say systemic collapse.
Ahem.
Inventory is behaving very differently this year. May I plug my blog’s latest article?
Click on my name to be redirected.
Got popcorn?
Neil
C’mon, Neil! Everyone knows that “pent-up demand” is going to cut down all that excess inventory by the end of Spring. (Well, maybe Spring of ‘12)
“Locally, Pasadena took the biggest hit, with a year-over-year price drop of 30.1 percent from December 2006. Azusa weathered a decline (-17.6 percent) that outpaced California’s annual price drop.”
“Marty Rodriguez of Century 21 Marty Rodriguez in Glendora, said that Pasadena’s sharp decline probably reflects that fact that homes in that city were priced substantially higher than many surrounding cities to begin with.”
“‘The higher the price the harder they drop,’ Rodriguez said. ‘Those very, very expensive homes probably aren’t selling that well.’”
How odd. I clearly recall being lectured to by permabulls less than a a year ago, who all insisted “prime” locations like Pasadena could *never* fall as much as less desirable areas.
My father’s house was in Pas, and after he died in 2001 it was worth 359k as-is. So my nephew talks us into updating and we sold it in 2002 for 459k but I think the proceeds came out the same. Same place was upwards of 900k on zillow recently. Ridiculous for just a 2/1.5 ranch from the 40s. Nice ‘hood though.
$359k is still a ripoff. I am betting $200k for that shack
Pasadena is nice. I was just there after the rains, visiting friends whose parents own a big house on the hill. Beautiful, like Montecito really.
And without the smog (a first for me) the view was spectacular.
My boss is relocating to Denver as has to sell you 2 and 1 in Pasadena. Forget the fact that she bought a two bedroom house for nearly 800k, but she is frankly oblivious (or in denial) about what she faces. Still, I overheard her discussing the prospects of seling the other day and of course, she mentioned that prices don’t go down in Pasadena. Since she’s my boss, I’ve resisted the urge to tell her she is full of it, but I feel for her once reality comes in.
Of course, I’m in line for her job so not all is bad. In the end, she was the worst boss I have ever had so I really do hope she sells (or just leaves the keys) because I could not take much more of her anyway.
Pasadena is in for a world of hurt prices got way out of whack and the area is full of denial.
Practically had to BEG my sister-in-law to sell a negative cash flow rental property in Pasadena about a year ago.
She actually got two offers about at asking price (one all cash).
I have a feeling she’ll have a bit more respect for me in the future. Was out there in December; nice streets…littered with For Sale or For Rent signs.
So funny how the story changes to fit the current environment. Just another version of “we knew it all along.”
“How odd. I clearly recall being lectured to by permabulls less than a year ago, who all insisted “prime” locations like Pasadena could *never* fall as much as less desirable areas.”
Well I doubt anyone would call me a permabull but I would still argue that areas like La Jolla (sorry, don’t know Pasadena) are going to drop less than areas like El Cajon because they simply did not have the same increase. Houses in the best parts of San Diego doubled in price. Houses in the far reaches and less desirable areas tripled and quadrupled. If houses in La Jolla were 7 times median income (for the area not for the county) and houses in El Cajon were 12 times, the less drastic price increase will also mean a less drastic decrease.
I think everything will fall, but you still have to look at rents and incomes to determine how much. Flame away.
Why did the less desirable areas increase so much? Ive noticed this in California as well as Florida. Back when prices were at their peak, $200k to $300k got you little more than a shack in the ghetto. But add just another $50k to $100k and you could already get a decent house in a middle class neighboorhood at $350k to $400k price.
That $400k house is gonna bottom out at around $150k while that $250k shack may be around $60k or so. Looking at Texas proves my point. One can get a shack there for $15k to $50k but an upper middle class house can set you back $150k to over $300k! Huge difference in price! We should see those huge differences in CA and FL. Take Compton, CA who the heck pays $350/foot for a high crime area? Itll probably bottom out at like $80/foot
The answer is simple.
Rich people made money (because in the current economy all of the productivity gains is going to the top 1-2%) so they have actual money.
Everybody else had loans and other people’s money. This is evaporating, so they will be go back to being as poor as they actually are, but didn’t believe they were.
The bigger question is whether houses in Tijuana will be worth more or less than comparable ones in Tijuana-adjacent, north of the border?
I’ve heard TJ property values are skyrocketing. Weird, huh?
“How odd. I clearly recall being lectured to by permabulls less than a a year ago, who all insisted “prime” locations like Pasadena could *never* fall as much as less desirable areas.”
Not all pasadena is prime . There is a section north and east of the foothill 210 fwy (zips 91104-91101) which is a classic apt slum area where all the guest workers/gangstas crowd into. The foothill fwy acts as a barrier separating this rotten tenement slum area from old dwtn Pasadena , which is south of the slum district across the fwy barrier.
Across the 210 to the west is the Rose bowl area, zips 91103 and 91105 which is one of those supposedly invincible hi-end areas, which saw lots of folks putting up new million$ megamansions on steep hillsides , just like they were doing in hollywood hills during the height of bubble insanity.
There was a lot of speculative overbuilding of hilltop castles all over hilly elevated parts of LA during the bubble mania runup period, a classic precurser to an in impending RE collapse .
One thing unique to Pasadena, is that pseudo-British vibe, with the stone churches, all the gardens, etc. The Chinese can’t get enough of that. And they’ve got lots of dollars. It’ll still get hit hard, but recover more quickly than, say, Manhattan Beach.
yea, I specifically people on this blog stating “Santa Barbara will never go down” or “No way Pasadena will fall much” turns out those were the WORST hit, and we are just getting started, 40% drops.
From Bloomberg,more losses at global banks, to 265 billion…
“Standard & Poor’s said it cut or may reduce ratings of $534 billion of subprime-mortgage securities and collateralized debt obligations as default rates rise.
The downgrades may extend losses at the world’s banks to more than $265 billion, S&P said.
The securities represent $270.1 billion, or 47 percent, of mortgage bonds rated between January 2006 and June 2007, S&P said today in a statement. The New York-based ratings company also said it may cut 57 The downgrades may increase losses at European, Asian and U.S. regional banks, credit unions and the 12 Federal Home Loan Banks, S&P said. Many of those banks haven’t written down their subprime holdings and S&P said it will start reviewing their ratings. “
So far we have had about what, 125-150Bil, in write downs. This is 1/4-1/2Tril. Good lordy this will be the mother of all write downs. Half a trillion! Goodbye world economy and the Dow. And since we are now at 3% rates, BB has virtually nothing left to shoot with. And, to top it off, that is just for this year. Wait til those resets in 09, 10, and 11 come in as defaults.
We are so toast.
Got souplines?
Can anyone explain in pretty plain english where does that money go? My brother was asking me last night where it went. The money was on the books, so it existed, but now they write it off and poof it’s gone. I said it was never there to begin with - it’s all smoke and mirrors, but he said someone paid for those investments and the money went somewhere. As ricky ricardo would say - you have some splaining to do.
I’m guessing it is written in the value of the loan. That is, you make loans and expect a return of X, then it turns out that you’re not getting X because people aren’t paying you back. You’re getting a much lower number (or letter, as it were).
The money was created out of thin air when people borrowed money. Speculators were flipping houses to each other using the bank’s imaginary money.
The losers are those who put a downpayment. My dad’s cousin put down $200k for a house in Toronto. Bye bye $200k.
I bet the banks are secretly mixing in any other non-housing related toxic paper they can to the already public & accepted falling real estate portfolios.
I’ll bet anyone a tank of gas that you’ll see more financial shenanigans in the future about this topic. watch the results as the fed agencies can’t ignore the problem(s) anymore & anounce findings of bank impropriety.
err,… gee ya think?!?
the banks have already run risk matrix analysis and have built in future fines paid for by current profits to grease the wheels when eventually caught. much like how ford anticipated the pintos exploding gas tank lawsuits & budgeted money for settlements, instead of doing the right thing(and less profitable) and just stop selling the cars.
no one will really go to jail over all this- just some large fines- then bidnezz as usual. hell, is casey serin behind bars? and he even ADMITTED & BRAGGED about his swindles! (actually I bet ‘ol casy is singing like a canary right now about his crooked industry contacts to minimize or avoid some serious time.)
so ie: same ‘ol same ‘ol . . . hehe !
Aqius,
There is no reason for the banks and other financial institutions to do this. The banks and others can comply with Basel II regs and pay bonus to trusted employees without violating any regulatory rules. Nothing has to be hidden. The single biggest problem US banks and institutions had was the IRS deemed loan loss reserves were just a means for banks to avoid taxes.
So banking institutions had to cut their reserves. Now banks are in the process of having to double down on a losing bet. no reserves and having to come up with Basel II margins. Self perpetuating liquidation.
On an economic scale of disasters this is about the worst. As a nine inning baseball game, we are in the 3rd inning.
It may be only the 3rd but the visiting team’s is up 14-0 and we may have to invoke the slaughter rule…
A write down means readjusting the mark-to-market on your books downwards. For example, you have real estate you are valuing at $500,000 on your books. The auditors tell you the fair market value is now $400,000. You have to take a 20% write down. It never was cash, its just revaluation of assets that are declining in value to current market valuations.
The same anaylsis would apply to loans. If you have a higher than expected rate of default on your loans, you have to mark the value of such loans down. A 500k loan may be worth 400k if you have lowered expectations that you will ever be paid back. Where does the money go? You have to look to see how the borrower applied it.
where does that money go
I’ll take “What the builders got” for $200 Alex
The home seller got a portion, the interest is written off, right? I mean, Tolls and such made billion $ and such.
The money was borrowed into existence, as all money is, but was not taken in the form of cash but instead it was exchanged for a mortgage. This mortgage declined in value thus the money it represented declined in value.
If the mortgage increased in value then the homebuyer could have “cashed out” the increase in value by borrowing against it, thus more money would have been borrowed into existence.
The money previously borrowed into existence is currently being destroyed faster than newly borrowed money is being created. This ultimately leads to a shortage of money, a shortage of cash. People have money troubles because they can no longer borrow the cash needed to solve them.
This is why cash is king.
You mean that debt leverage works in both directions? Oh crap.
Just as you can make make a 1000% return or more on your investment in real estate (i.e., little or no down payment on an appreciating asset), you can also lose much more than your initial investment (i.e., little or no down payment on a depreciating asset) although I understand you can limit the downside by handing your keys to the lender.
The effects of debt leverage in reverse is what is causing the Wall Street implosion.
Like George Castanza says, “They just WRITE IT OFF!” (and he was an accountant at one point.)
Got barf bags??
“Byers still daydreams about 2004, his best year ever. ‘It was unbelievable the amount of work we were doing,’ he said. ‘It was like we were the smartest guys in the world in the best market.’”
Nope, Buck –just the smartest guys in the room.
The smartest guy in the room was the dude who could see what was coming and chose to live simply and sock the short-lived bounty away in the bank.
The dumbest guy in the room was the fool that thought the party would never end and spent accordingly.
Any industry folk that did well during the boom and are currently sinking get no sympathy from me. It all could’ve been avoided.
Ex,
This is what I had in mind.
Getting a lot of interesting calls and emails from industry folks ex…a lot of liquidation of personal assets going on. I’m waiting on a “sweet deal” to come my way in terms of a paid off 7 series BMW.
Indeed. Those who gathered acorns and lived simply in the boom times get to feast on those who didn’t……….and I don’t feel a bit bad about doing it. A big middle finger to those who think I’m heartless bastard.
Watch out though –the government is out to confiscate ’surplus’ acorns from evil acorn-hoarders like you and me, and then redistribute to all the wanton & reckless f@cked squirrels.
Harm…hush damnit, I really really want to spend my hoarded acorns on a “sweet” 7 series…you’re resounding common sense is annoying me…it’s downright depressing. Geez, I’ve been waiting years for a sweet deal. Damnit to hell HARM…
BTW this is OT but is the current crop of front runners in the Presidential race depressing everyone as well as it is me…can’t we do better?
MIS: I hear you regarding the Prez contenders. I guess that the people that would actually do a good job just don’t want to have to prostitute themselves, which is apparently required in order to raise the funds to run a campaign. (Note: I’m not advocating, and am not in favor of, taxpayer funded campaigns - just saying that the “successful” politicians these days seem to be those that are able to get the most contributions).
Oh, and good luck on that 7 series. If you saved your acorns, you should get to spend them on whatever you want. I think the Fed is too busy trying to avoid meltdown and politicians can’t raise taxes in an election year, so you might have enough time to find that deal before HARM’s common sense comes into play.
A big middle finger to those who think I’m heartless bastard.
If it’s any consolation, I already thought you were a heartless bastard before your 7 series comment.
And yes, that is the pot calling the kettle black.
I’m reluctant to vote for any candidate willing to run for the office.
Combotechie you are so right. But, for me, I just have to pick the best of the litter because it’s better then having no choice at all.
How can there be a pick of the litter when they’re all runts?
At this point in the faltering future of our country you might as well mash random buttons in the voting booth.
“Byers still daydreams about 2004, his best year ever. ‘It was unbelievable the amount of work we were doing,’ he said. ‘It was like we were the smartest guys in the world in the best market.’”
The Enron guys were the smartest guys in the room but Mr. Byers topped them.
“‘I, like a lot of other people, was under the assumption that after two years I would refinance and my payment would go down,’ she said.”
And, yet, this person earns thousands of dollars for doing nothing more than driving you around in her Mercedes for a few hours, periodically pointing out that “the schools are good” and “this is an up-and-coming neighborhood,” and then filling out a boilerplate form.
Used home salespersons should go the way of milkmen. http://en.wikipedia.org/wiki/Milkman.
I’m sure that the Mercedes has already been repo’d.
From Sacramento Real Estate stats, someone had this story. Cross posting because it was too good not to share:
‘The repo man commeth:
We keep seeing tow trucks driving thru the parking lot of our busted condo conversion project in Roseville. It seemed strange, but we assumed the drivers must live there.
Last night we were walking our little dog through the grounds and here comes another tow truck. Suddenly he stops, drops the hook up gear and quickly starts backing up. He turned into an open garage with the forks down, and without even getting out of the truck, snatches a nice Mercedes right out of the open garage door. The car had been there for less than 5 minutes and the owner was coming right back. The repo man spent no more effort than you would pulling a burrito out of the microwave. Once he had it in the parking lot, he stopped and tied it down, then silently left the area.
A bunch of us just stood around and watched, amazed at the process. The car owner knew what happened, because when he came back to the garage a few minutes later he just cursed out loud and went back into his condo.
It seems to be a sign of the times.’
Welcome to Sacramento in 1Q08 >; )
That’s funny…
RepoMan, the film from the 80s, holds up well. Great sound track (The Circle Jerks, Iggy Pop), interesting characters, bizarre plot. Set in HellA for your viewing pleasure. It will also remind you of when Ralphs used to market plainwrap items…
I thought they were in NM or AZ?
The best gag in that movie was the generic BEER can.
How about when Otto (Emelio Estevez) pulls a can out of the fridge that says “Food”? Hah. Actually, the Chevy Malibu they’re all chasing IS from New Mexico (thus the radioactive glow) but the action takes place in LA. Iconic images of auto racing in the concrete LA River and the cool WPA era bridge that spans over the I-5.
The sad part is these modern Mercs are total junk. Now if they’re repo-ing the mid-80s thru mid-90s S-classes I might get interested… Or a 1987 300TD wagon.. mmmmmm….
I wish we still had milkmen and I’d certainly rather have them than whatever we’re allowed to call them this week.
We still have milkmen in the UK, they are just about hanging on.
“Daniel Blake, a CSUN economics professor and the center’s director, notes that December’s median price is 12.1 percent under the record $660,000 set last May. But even with the kind of market distress we are seeing now, percentage price declines won’t match sales declines. ‘Prices would have to fall by half to even get to the 2001 (level) and that’s a huge drop. I don’t think it’s going to go that far,’ he said.”
Watch and learn - not only will prices drop, they WILL drop by half, and continue dropping…just as in the last depression.
I am almost positive prices will drop more than 50% in the most bubbly locations. In some areas of Florida, condos are half price from the peak and still dropping big time.
It’s those cheap areas that may not drop much while the expensive areas become almost as cheap. The huge disparity is gonna shrink big time.
In downtown San Diego, there are units that are listed at less than half of their bubble sales prices. And they still aren’t selling.
‘I think it has taken a little while for the public to realize now is a good time (to buy a home),’ he said.
These retards just won’t stop with this BS. Is that the only line they learn at RE school? Hey idiot it isn’t working any more get that through your thick skull, find a new angle.
find a new angle.
I would have guessed that pure hunger would have worked its magic by now, and the used-house salespeople would figure out that they need to put a gun to the heads of sellers in order to complete a sale.
Maybe the hunger is making them stupid.
Hunger has a way of doing that. I can recall my two-meals-a-day stretch in Pittsburgh during the early 1980s. Sure didn’t do anything for the intellect.
You would think with all the stories of how the banks done everybody wrong, you would have seen more pictures of people being forced to buy houses and take out just plain stupid loans at gun point.
(overheard in the SFV…)
“I’m just, like, so gone, you know?”
“Foreclosures soared 435.5 percent in the San Fernando Valley last year as nearly 3,000 homeowners surrendered to higher monthly house payments brought on by rising adjustable rate loans, the San Fernando Valley Economic Research Center at California State University, Northridge, said Tuesday.
Rudy’s on a train to nowhere, and I say good riddance.
I’m just worried that were going to get Mr. Wallstreet to fix wallstreet’s problems. Everytime I hear that Romney will fix the economy because he knows WS, it makes me want to vomit.
(sarcasm on) Of course, now that Nader is looking to enter the race, all of our problems are solved. (sarcasm off)
Good riddance to bad rubbish. Giuliani was a wannabe Mussolini with delusions of grandeur. Very creepy guy.
He’s the poster child for creepy.
“The last six years have been a golden age of American apprehension and mistrust. Thanks to the events of Sept. 11, 2001, all of America was united, standing shoulder to shoulder in sheer, unrelenting fear. But tragically, that atmosphere of panic and confusion has begun to fade, and without another terrible attack to bond us as a nation, we are dangerously close to entering a post-post-9/11 era.
We cannot allow that to happen.
We must all do whatever we can to preserve America by refocusing our priorities back on the contemplation of lethal threats—invisible nightmarish forces plotting to destroy us in a number of horrific ways. It is only through the vigilance and determination of every patriot that we can maintain the sense of total dread vital to the prolonged existence of a thriving, quivering America….”
M. Willard Thornton
This was written as satire, unfortunately it is the way I regarded Mr. Giuliani.
While I have huge respect for your economic savvy,
it appears you never actually listened to Guiliani speak.
“If one of them [democratic contenders for president] gets elected, it sounds to me like we’re going on the defense. We’ve got a timetable for withdrawal from Iraq. We’re going to wave the white flag there. We’re going to try to cut back on the Patriot Act. We’re going to cut back on electronic surveillance. We’re going to cut back on interrogation. We’re going to cut back, cut back, cut back, and we’ll be back in our pre-September 11 mentality of being on defense.”
Rudolph W. Giuliani
April 25, 2007
I think you should read his speeches. They are quite terrifying to this simple Midwestern boy.
I rarely listen to any politicians….
I do read. His speech on April 25, 2007 unfortunately reads like the above satirical comment. Very disturbing.
Sorry folks Guiani, did a lot for NYC. in 92 Dinkins was the wussie mayor allowing people to roam the streets selling crack, heck they had cops on all 7 trains to the mets games. Murders were rampant
As much as Black people hated him, he was the best mayor black people ever had in NYC. Because he took no crap. And crime went down down down, sure there was diallo and few others but cops used 50% less bullets then during the Dinkins “Black era”. So was he a good mayor? Maybe he was the Right mayor at the right time. And same with Bloomberg, we needed a non partisan mayor after 9/11
you’re wrong, crime went down nationwide, so what did giuliani do, again?
this has been studied in detail by criminologists. basically giuliani had zero effect good or bad. the police brutality and corruption is ridiculous, though. As Frank Serpico said, if the cops put half as much effort into fighting crime as they did into taking bribes, crime wouldn’t pay anymore.
Dont forget Amadu Diallo was a Bootlegger, Selling illeal movies and cd’s on the streets, a fact Al Sharpton forgets.
He was wanting for his supplier when the cops mistook him for a murder suspect and he ran, because he was waiting for his daily stash of illegal movies and cd’s….
And that changes what was done to him in what way?
“crime went down everywhere”… I just read in the book freakonomics that the decline in crime was actually attributed to roe vs wade. Abortions are typically performed on unwed uneducated mothers who give birth to children that have a much higher disposition to be criminals, thus 20 years after abortions are legalized the crime rates fell. Weird, huh? Unintended consequence. But truth none the less. So Rudy had squat to do crime, he was just in the right position to claim he “fixed” the problem.
Song title=Rudy, Group=Supertramp !
He ain’t sophisticated, nor well educated.
“Alan Fisher, executive director of an organization that advocates increased access to credit and banking to low-income and minority communities, said that…upper-middle-class homeowners who saw the downturn coming were able to sell their home and had enough equity to come out with a profit. They may be renting now and waiting to buy.”
“‘You don’t see them on the foreclosure rolls, but they are affected by the phenomenon,’ he said.”
I see no problem with this. Since we chose to ignore the mouthpieces of NAR and the “conventional wisdom” of the timeand made a conscious decision to abandon the housing market because fundamentals simply didn’t support it, to the victor goes the spoils.
And, at least we are not walking away, en masse, from our debt obligations.
Guys- Random comment here. As negative as we are on this blog about housing, i am here to say that it is probabaly worse than even some of the most negative predictions put forth here. I talk to these FB’s every day from all across the country and they are Farked. On the other side, i have to deal with the investors, they don’t want to lend to anyone (who blames them). We all love watching this trainwreck transpire but, it is another thing to be the emt trying to save as many as possible. God what a mess this business is.
Any specific stories you’d like to share?
thx, keep us posted……….
Yha, I frequent some consumer forums and uneducated people were asking about the rate cuts and advice on ‘is it time to go refi’?
It is pretty clear to me that less than 10% of the people who are screwed even REALIZE something is going on. They may not even realize that “subprime” means “mortgages and HOUSES”… and that it ain’t just subprime.
This is a very slow process. People are just now finding out about what happened 6 months ago.
Refi used to mean pulling out more money, as in Yippee. This time around, Aint’ gonna happen… Gambling casinos in SD are “rightsizing,” as in laying off employees. Folks have no more farm to bet.
Md, Any luck with the new prospect?
MD,
Can you say GRIDLOCK?!!!!!!
“but, it is another thing to be the emt trying to save as many as possible”
I admire if you are indeed trying to save these people, but it’s hardly the end of the world (ok, maybe in a global economic sense it is, but I’m talking on a personal level).
Many of these people will get a ding on their Fair-Isaacs, and have to go back to renting. I feel sorry for those that loose a house due to job loss or medical emergencies; these types of foreclosures have been going on for years.
However, I have very little sympathy for someone who bought a house with a teaser rate, or cash-out refinanced or HELOC’d there way into con-sperity. In the first case, they should have been renting, and will go back to renting. In the second case, well, they got to play with the make believe money from the cash-out or HELOC, and now it’s back to renting with them…not a bad bargain for (in some cases) hundreds of thousands of dollars of money to “play” with.
Life goes on for most of these people. It’s time for them to forget about a “dream house”, and start working on making a “dream home” (spending time with friends and family, etc.)
You go, Arroyo! I spend a fair amount of non-work time on neighborhood stuff, which includes going to various meetings, helping elderly folks around here, donating professional services, that sort of thing. I also enjoy spending time with friends and family, even if they’re not in Tucson. (Nothing like calling an older relative long distance. It makes their day.)
“She’s been in the business for seven years and used to do 25 to 30 sales a year.”
——————————-
She should be able to retire by now. If she cleared $20K per sale on 200 sales, that is $4 million pre-tax. A million to live on, a million for taxes, $2 million saved and invested. And that is living good for seven years.
Even if she only earned 1/4 that much she should be in great shape with over $100K/yr for seven years in a row. But, sadly, no.
It actually comes out to about 1.4 on 20 sales which is about 200k a year. After expenses it’s probably 140k a year pre-tax. Not enough to retire but enough to save for at least 6 mo’s to a year of rainy days.
How much commission does a realuhtor working in a brokerage keep?
If the seller’s agent gets 3%, how much does the agent keep and how much does the broker get? I heard it varied from 65-80%, depending upon how big a producer the agent is.
I read a while ago that they get 50% or less of the 3% (the rest go to the firm, advertising, etc.). I’m not saying that 6% isn’t too much or that the whole system isn’t broken, but simply that they don’t get to keep all of that 3%.
When you’re dealing loan drugs, you’d better not become your own best customer…
“Realtor Patricia Beltran is about to be counted in this year’s foreclosure statistics. The payment on her four bedroom, three bathroom home in Porter Ranch has jumped $1,200 to about $5,000 a month. She can no longer afford it and is desperate to sell.”
“‘I, like a lot of other people, was under the assumption that after two years I would refinance and my payment would go down,’ she said.”
More good news from downtown san diego. And no, it isn’t a short sale!
620 State St #119
San Diego, CA 92101
Price Reduced: 01/29/2008 from $545,000 to $495,000
Price Reduced: 10/18/2007 from $578,900 to $545,000
Sales History
Date Price Held Return Annual
12/16/2005 $610,000 2y 11m 69% 19%
12/27/2002 $360,000 1y 9m 9% 5%
03/28/2001 $330,000 2y 10m 74% 21%
05/18/1998 $189,900 2y 5m 46% 17%
11/30/1995 $129,770 6y 8m -3% 0%
03/31/1989 $133,744 n/a - -
1642 7th Ave #320
San Diego, CA 92101
Price: $219,000
Sales History
Date Price Held Return Annual
10/22/2004 $350,314 n/a - -
And not to leave out the bank owned properties…starting to wake up with the price reductions.
645 Front St #1310
San Diego, CA 92101
Price: $599,900
Price Reduced: 01/28/2008 from $654,900 to $599,900
Price Reduced: 12/05/2007 from $669,900 to $654,900
Price Reduced: 11/06/2007 from $679,900 to $669,900
Price Reduced: 10/07/2007 from $699,900 to $679,900
Sales History
Date Price Held Return Annual
05/02/2006 $850,000 2y 12m 82% 22%
05/06/2003 $467,576 n/a - -
$500k is a ripoff when it used to be under $200k before the bubble. Progress but still 3-5 years from bottom.
That complex shouldn’t be more than $225/sq.ft. This means it is going down to $265K. By that time it should be a short sale or REO.
“Bank owned” is at least fudge-free.
With builders or private sellers, you never know what’s been packed into the sale price.
‘It was like we were the smartest guys in the world…’
The Enron-inspired greed contagion continues its destructive rampage…
How much is too much?
“You never know what is enough unless you know what is more than enough.”
William Blake
aw, you guys
Henry Blake
“‘We are experiencing … the effects of someone who’s drank too much wine,’ said John Robbins, immediate past chairman of the national Mortgage Bankers Association. ‘The good news is we’ve stopped drinking. The bad news is we’re going to have a hell of a headache.’”
But the “drinking” hasn’t stopped. Builders are still building even though there’s a huge glut. We still read stories of people taking out large mortgages on a second house before selling the first. The drinking may have slowed, but it hasn’t stopped. At best, what follows will be one “hell of a headache”, probably closer to a decade-long migraine for those that survive.
John Robbins, immediate past chairman of the national Mortgage Bankers’ Association, is illiterate.
“‘When we were looking at houses in La Mesa, all the ones that were under $400,000 were very beaten up. In five months, the price on our house went down, so I feel very lucky,’ she said.”
Let me know how lucky you feel in another 5 months, sweetheart….
Joshua Trees are so last week… (sorry ex-, we’ve entered a new stage of the housing bubble)
A fully grown Giant Sequoia Tree weighs in @ around 1500 tons and is almost as tall as the Statue of Liberty. 1,000 to 2,000 year old trees are quite common.
http://en.wikipedia.org/wiki/Sequoiadendron
They have a shallow root system, and usually succomb to gravity after awhile.
2 of my friends have seen and heard this happening. both said the sound of a Giant Sequoia Tree falling, was akin to the noise of a jet engine.
I know this is incredibly off topic, but I would like to take the family to Joshua Tree and/or Death Valley this spring for a camping trip. With all the rains I bet the wildflowers will be spectacular.
Any campsite and/or little kid friendly activity suggestions from this smart and experienced crowd?
We were in DV in March of 05′, after a big rain year like this one, and the wildflowers were amazing…
Seas of yellow and purple as far the eye could see.
The campgrounds are nothing special, but they work fine.
Stovepipe Wells (near the sand dunes, fun with kids), and around Furnace Creek.
DV is more of a drive around exploration kinda National Park, perfect for wildflowers.
We had the best luck with flowers towards Ashford Mill, in the southern end of the park.
Your in a wilderness…do not loose track of your kids…mountain lions, coyote’s, rattlesnakes in rock crevices, homeless felons…have fun…but be AWARE…all the time. Scotty’s Castle in Death Valley is something you really want to check out. Joshua Tree is a bitch’in place. Enjoy
Any campsite and/or little kid friendly activity suggestions from this smart and experienced crowd?
For Joshua tree, Jumbo Rocks campsite is best. Well away from park entrance and the grunge rock climbing crowd at hidden valley. Absolutely gorgeous desert campsite but bring your own water, plenty of it. No piped campsite water, at least when i went there 10 yrs ago, though i think they have a water dispensing tank at campsite entrance . Up to March or maybe April JT ok but after that it get really hot.
My family used to camp at the Hidden Valley campground. It has some interesting history; Hidden Valley was used by cattle rustlers to hide their stolen cattle.
Anza Borrega is the place to see wildflowers - you could combine with Death Valley.
Thanks everybody!
I read an article recently, and I think it said they are still logging Sequoia trees on National Forest land somewhere in Calf. Could you imagine taking a chain saw to a 1000 yr old tree?
It’s not the tree that deserves the chainsaw.
One of my favorite Far Side Cartoons showed a father and son with a fallen tree looking at rings. “here’s where the big fella survived a fire”
I don’t get it.
Yes.
Its a tree, not a child. They grow back and in a couple of thousand years there will be new trees.
My limited understanding of Sequoias is that they are not suitable for any structural lumber. So why waste time cutting them down?
Imagine 1,500 tons of wood falling to the ground in a mighty whooomp!
I read an account of a guy, that as a kid in 1910, worked at a mill that turned Sequoia trees into pencils, as the wood shattered upon impact, and had little use, otherwise.
Visit the Converse Basin, which was logged in entirety, and you’ll see thousands of 100 year old Sequoia stumps, and it looks like a cemetery with tombstones.
“If trees could scream, do you think we cut them down? Yes. If they screamed all the time and for no apparent reason.”
Jack Handey
Here is a link where you can find the quote in the unbutchered form:
http://www.oliverbenjamin.net/handey.html
“2 of my friends have seen and heard this happening. both said the sound of a Giant Sequoia Tree falling, was akin to the noise of a jet engine.”
They must be Sequoia NP hiking addicts. Must be an extreme rare event in nature akin to a vertical overhanging sheer rock face suddenly collapsing and sending a gigantic avalanch of house-sized boulders crashing down onto the valley floor. I have seen dead fallen sequoias all over Seq NP and plenty more which look on the verge of crashing. A downed long dead fallen giant is as impressive as the still living upright ones.
I still get a thrill when visiting the hollowed out fallen giant which some mt homesteader back in the 1860’s turned into a natural log cabin- i believe it is Tharps log out in Crescent Meadow/Giant Forest/Seq NP.
I envy you folks who get to walk among the giants. Here on the East Coast, we don’t have such things, especially not in the paved over purgatory of suburbian.
“‘The higher the price the harder they drop,’ Rodriguez said. ‘Those very, very expensive homes probably aren’t selling that well.’”
I was doing a zillow search for Malibu and noticed homes that were going for 8 million in 06 are now in the 4’s.
Also instead of everything being 6 mill they are now in the high 2’s.
http://www.zillow.com/search/RealEstateSearch.htm?dg=dg1&addrstrthood=+Broad+Beach+Rd&citystatezip=Malibu%2C+CA+90265&GOButton=%3CSPAN%3EGO%3C%2FSPAN%3E
Malibu has finally started to blip down, but it has a long way to go. Take a look at what those places were selling for back in 2002.
Another thing about Malibu houses - they are in all different conditions - no two are the same. You’ll find a 1990 mansion with indoor lap pool right next to a crappy 1957 shack that is almost falling over from rot. In some places closer to town you will find clapboard wrecks, right on the beach, built pre-war, that should have washed into the sea years ago. Only one mile down the beach from Gefen’s mansion.
“‘When we were looking at houses in La Mesa, all the ones that were under $400,000 were very beaten up. In five months, the price on our house went down, so I feel very lucky,’ she said.”
http://en.wikipedia.org/wiki/Winner’s_curse
““‘When we were looking at houses in La Mesa, all the ones that were under $400,000 were very beaten up. In five months, the price on our house went down, so I feel very lucky,’ she said.”
…and it’s going down even further. There’s just no end in sight of how lucky you are, dipshit.
A little bit off topic but a head hunter is trying to get me to interview with IndyMac bank. Anyone knows if IndyMac is in as bad a shape as its peers ? Thanks.
I think Peer-Pressure is pretty the same for most every bank. They are all in the same leaky boat, bailing water, but the water is coming in quicker than they can bail.
LOL…I’d be very very careful with that.
Indimac is probably a little worse off than most of its peers.
So be very carefull. If the package is good… why not. But they will be bought out before 2010 in my opinion.
Got popcorn?
Neil
the government!
Somebody’s a Seinfeld fan . . .
lol…you got it
Pulte Homes just announced Q4 losses of almost 900M.
http://www.cnbc.com/id/22921047
How to lose a billion without really trying.
The higher they go…
http://youtube.com/watch?v=xGE4dnrPPZQ
“The [pigmen here] are tryin’ to keep me down…
Makin’ me feel like a clown.
And they think that they have got me on the run
I say ‘Forgive them, lord. They know not what they’ve done.”
And, of course, I’d rather be a renter in my grave, than living as a debtor and a slave. So much fodder! Bumberclot rasta Realtors…
I still can’t believe that this lay-up hadn’t been made by alidin yet!
MrBubble
I am your new groupie Mr. Bubble.
MrBubble
I’m more of a 3 point shooter~ ha
There are almost too many parody possibilities out there…
“Nothing can be more contemptible than to suppose public records to be True.”
William Blake
I can actually think of a lot of more contemptible things.
Why did the less desirable areas increase so much? Ive noticed this in California as well as Florida. Back when prices were at their peak, $200k to $300k got you little more than a shack in the ghetto. But add just another $50k to $100k and you could already get a decent house in a middle class neighboorhood at $350k to $400k price.
That $400k house is gonna bottom out at around $150k while that $250k shack may be around $60k or so. Looking at Texas proves my point. One can get a shack there for $15k to $50k but an upper middle class house can set you back $150k to over $300k! Huge difference in price! We should see those huge differences in CA and FL. Take Compton, CA who the heck pays $350/foot for a high crime area? Itll probably bottom out at like $80/foot
I wanted to repost this on the bottom, it’s a very good read!
Will exurbs and small towns far from major cities also experience a similarly huge drop? I see houses for $300k plus in Oregon and Washington in towns with no real jobs. I had predicted those houses to drop to $100k
“Will exurbs and small towns far from major cities also experience a similarly huge drop?”
IMHO that is where the crash started first. Then moving slowly to the city. In California’s case ground zero (if there is such a thing) is often mentioned in the news as Stockton. That is as far as possible from any real jobs. (I like old town Stockton, but going from 150K to 700K- WTF).
“Will exurbs and small towns far from major cities also experience a similarly huge drop? I see houses for $300k plus in Oregon and Washington in towns with no real jobs. I had predicted those houses to drop to $100k ”
In Scal region such places in the outer boonies as Banning, perris, menifee, hemet( all in the IE) fit the description of being far from major cities and without real jobs. Unless U consider Riverside/San bernardino major citys, which i don’t.
In LA county lancaster & Palmdale fit the bill quite well, and indeed they are experiencing the worst RE declines in LA county. Prices in these outer desert burgs are now down to almost $200,000 in some zips and almost down to $100 sq ft.
I like lonely isolated desert places but these areas are pure hell and the storys of methlabs and armed crazed desert loonies will keep me out of Palmcaster unless i can get a 4/3 on 5- acres for $50,000. First order of business is razer wire around perimeter and a small arsenal.
“She listed the house four months ago for $765,000 and has since dropped it to $719,000. Beltran, a single mother, now has 11 listings, and eight of the sellers are in the same fix.”
“She’s been in the business for seven years and used to do 25 to 30 sales a year. Last year she did six. ‘We’re surviving off her (daughter’s) paycheck. She’s a college student,’ Beltran said.
Not only is she a “single mother” she’s an especially bad one. Imagine taking money from your child just to flush it down the toilet.
So, what do you suppose happens in a decade or so when Mama is in need of more money (of course she’ll be in need of more money) and the daughter has realized what an el jerko Mama has been? Let’s hope she’s gotten the where with all to tell the leech no.
In a decade, daughter will be a “Single Mom”, too. And we’ll be supporting ALL of them!
Support Single Moms - Visit a Strip Club!
“As for the drop in South Bay sales, one notable omission in the CAR report may bring this reality home to area residents. Manhattan Beach, which CAR consistently lists as one of the top 10 highest-priced areas, if not the highest, was excluded from the December report of individual communities.”
“That’s because the trendy beach city did not meet the report’s threshold of at least 30 home sales in a month.”
___________________________________________________________
“There are lies, damned lies and statistics.”
Mark Twain
Way Off Topic:
Every evening at sunset a bird flies into my window.
They crash and fall thru the slats.
How do I prevent a bird death a night?
Fake plastic owls are perfect for keeping birds from doing themselves in…
It’s the one bird that screams “stay away” to other birds.
Thanks lad.
Where do I find a plastic owl?
Dalen Owls are pretty good…
http://www.provenrepellents.com/products.php?pid=747
Ok, I found blow up owls.
Half the price of plastic owls
Do they have the frozen expression of surprise, with their mouths shaped like “O”?
Who, indeed!
Put up a bamboo screen or some other type material you like.
What kind of bird? I would just cook it.
Just sayin…
Newbie, these are those cute little sparrows.
Damn, they die instantly.
I know, get a cat…on second thought, scratch that idea.
Open your window.
“Not everything that can be counted counts, and not everything that counts can be counted.”
Albert Einstein
“It’s the way you play that makes it . . . Play like you play. Play like you think, and then you got it, if you’re going to get it. And whatever you get, that’s you, so that’s your story.”
Count Basie
That is counting
Super duper…. I really liked that!
OK! Let’s do the math correctly now:
“Realtor Patricia Beltran is about to be counted in this year’s foreclosure statistics. The payment on her four bedroom, three bathroom home in Porter Ranch has jumped $1,200 to about $5,000 a month. She can no longer afford it and is desperate to sell.”
“‘I, like a lot of other people, was under the assumption that after two years I would refinance and my payment would go down,’ she said.”
“Beltran, who bought the home 2.5 years ago for $620,000, tried to refinance last summer, but by then credit standards had tightened and the market, and her source of income, was dwindling.”
“‘There’s nothing we can adjust for you because you won’t be able to pay it anyway,’ she recalled a loan officer saying last summer.”
She had a 3800/month payment and it went up to $5000.
We can presume that her payment includes PMI, tax, and required insurance.
A 30-year fixed, with 0 down, at 6.0 percent would be ~3700/month. Since her total payment was $3800, incuding PMI, tax, and insurance, that means that she was only paying–at best–$2800/month toward the mortgage.
That means she HAD to be paying a “teaser rate” because you need a rate of about 4% to get down that level.
Now this woman was a LICENCED REALTOR(TM). She said she thought she could refinance into a better rate.
Well, IT WAS A TEASER RATE! If prices had GONE UP and she now had 20% equity and could get a 30-year-fixed at 6.2% (about right before the rate adjust) she STILL won’t be able to afford it, even subtracting PMI, assuming $9000/year taxes and $2000/year insurance.
She’s either a FRAUDSETER, or Very, very, very stupid. In any event, this should be a wake-up call for legislators! They should outlaw real-estate agents. They clearly aren’t qualified.
Only an attorney should be able to give someone legal advice in CA, not some idiot “single mom” who can pass a test.
I think she failed the Electric Kool-Aid Acid Test.
Somebody somewhere started the whole “you can refinance later” meme, and it just spread. People who don’t think hear it and don’t think about it, and it works, not unlike “rent is just cash in the trash”, etc. Those memes allow people to think they’re thinking without actually doing any real thinking.
I know lots of people like her…she thought within a year it would be worth at least a million and then she would sell and buy two more, then they would double…and then she would be set for life.
U can’t refi unless you qualify. And they make sure that no one qualifies.
Paulson is being interviewed by Charlie Rose tonight on pbs. Paulson’s first statement…’let’s not point fingers. let’s leave history to the historians’.
Seriously, that’s what he’s selling, and Rose lets him slide on that one.
Next question, so what can we do now?
Well,having failed to pursue any questions on any accountability, and failing to ask what role Goldman and the other ibanks played, and their degree of responsibility for this toxic mess, and how they are writing down losses, and how much they are holding in pier loans and …
all the other questions that Rose fails to ask, the interview is basically worthless unless you want to watch a deeply uncomfortable man, unable to sit still in his chair, mumble answers to softball questions from Charlie Rose. Paulson’s equivalent is the FB who claims he had no idea what an Adjustable Rate mortgage is, and why he has one, and what the paperwork said.
Ibanks to the right of us
FBs to the left of us
into the valley of debt
they dragged the whole country.
I tried really hard to stay awake during this interview.
Looks like I didn’t miss anything.
“‘Prices would have to fall by half to even get to the 2001 (level) and that’s a huge drop. I don’t think it’s going to go that far,’ he said.”
I’m seriously starting to believe that most parts of California are going back to 1999 levels, and blowing right through 2001 on the way down.
“Beltran, who bought the home 2.5 years ago for $620,000….”
Greed at its best.
She is facing foreclosure almost, and still trying to sell the house to $715K.
What is wrong with these dumb people???