The Image Of Our Consumptive Age In California
The Valley Sun reports from California. “As prices dip and California soars to the top of the list in the nation for real estate foreclosures, Realtors in this little hamlet are holding their collective breath for ‘the other shoe to drop’ — but, as yet, prices and sales don’t appear to be affected by national, or local trends, said Carey Haynes, Realtor in La Cañada Flintridge.”
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
“She told of another couple who hoped to move back to La Cañada but were afraid to become involved in a bidding war on a home they liked, since that was the way of the market a year or so ago.”
“‘They were scared the home would have multiple offers, so they did nothing about it. Two weeks later, the home was still available so they made an offer, along with a nice letter to the owners of why they wanted the home,’ she said.”
“At first, the homeowners said they weren’t interested, but after thinking about it, they called back and said they’d take the offer. ‘The only difference I’m seeing [in sales] from a year ago is that there were more multiple offers. Now, there’s time for people to think on things and not just run on emotion,’ Haynes said.”
“‘A year ago, people would leave gifts on the front door step, give their children away, anything to get the owner to sell them the home they wanted. Now, it’s not run off of emotion so much,’ she said.”
“This isn’t to say that some homes in La Canada Flintridge haven’t been on the market for a few months, and may not remain there for a while yet. While driving down La Cañada’s Oakwood Avenue Tuesday morning, Haynes pointed out one home…listed with a different Realtor, that’s been on the market for several months.”
“‘If they’d been more realistic on the price it probably would have sold by now,’ Haynes explained.”
The Ventura County Star. “Obtaining a jumbo loan to refinance his home has been a challenge for Mike Brennan. Instead of selling and trading up, the Camarillo resident decided three years ago to use his equity line to make several home improvements.”
“He did not anticipate the housing crash, which has swallowed much of the equity in his home of 21 years.”
“In Ventura County, sales for existing single-family detached homes dropped 38.2 percent in December from the same month the previous year, the California Association of Realtors reported.”
“The median price fell to $604,730 in December, down 3 percent from $623,510 in November and a 9.9 percent decline from $670,830 for the same month a year ago. The last time the median was at this level was in November 2004.” “‘
“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”
“Prices are falling, but Ventura County’s median is still three times that of the nation, said Robert Kleinhenz, deputy chief economist at CAR. ‘You still have a situation where buyers are not yet convinced that the market has bottomed out, rightly so, and therefore they’re content to sit and watch the developments,’ he said.”
“Some buyers might be scared by reports of a rapidly declining median that has occurred even in high-cost areas such as Santa Barbara. For the first time since December 2004, Santa Barbara’s South Coast median fell to less than $1 million, to $925,000. ”
“It’s difficult, but not impossible, to get a jumbo loan, Ventura County mortgage brokers say. ‘They’re available, but they are harder to qualify for,’ said Scott Friedman, a mortgage broker in Camarillo. ‘Prior to August, if you had good credit and any equity, you could probably get a jumbo loan.’”
“Now that the standards have changed, potential borrowers have to demonstrate that they can pay the loan back. This means a good credit score, equity in their homes and a minimum 10 percent down payment.”
“‘We’re looking at tax returns and pay stubs, things that were not looked at as much prior to August,’ Friedman said.”
From ABC 7. “There’s been a new surge in foreclosures in California. According to RealTytrac, which keeps tabs on foreclosures, default notices, auctions and bank repossessions, activity shot up 33-percent last month.”
“And that brings the total number of foreclosure filings in California for the year, to more than 2.2 million. That’s a 238-percent increase from 2006. The Bay Area numbers were only slightly better– 200-percent higher than 2006.”
“The most increases are in Contra Costa, Napa, and Solano counties. Foreclosures in Alameda County are up 545 percent over the past two years.”
“Perry Vittoria, a real estate agent in San Leandro says many of these homes were purchased with 100-percent financing. Most of those loans adjusted to amounts buyers could no longer afford. He says these homes could now sell for 25-percent or more below the asking price in a short sale.”
“‘It could take up to three months to get a decision back from the bank if they’re going to accept the offer,’ said Vittoria.”
“George Tribble is the former president of the California Association of Mortgage Brokers. He says approval delays by lenders are understandable.”
“‘The loan may not be their loan. They’re servicing…it’s sold through securities on Wall Street. So you have many investors, many are foreign governments that own these mortgages,’ said Tribble.”
“Tribble says these short sales may prevent some foreclosures but he believes many more are on the way. ‘Right now were probably not halfway through the foreclosures. I think there are many more on the way,’ said Tribble.”
The Voice of America. “Welcome to the foreclosure bus tour. For $20, potential buyers will tour and bid on as many as 10 homes in just under four hours — all of them at fire sale [very low] prices.”
“It is an opportunity Mike and Mary Hays did not want to miss. ‘We’re recently married and are looking for our first — well, our dream home,’ Mike said.”
“With nationwide default rates skyrocketing, bus tours like this one are becoming popular across the country. Realtors say in some cases, homes initially valued at $650,000 have sold for under $450,000.”
“Potential buyers Sandy and Jim Fisher say there is only one problem. ‘No one knows what they’re going to be asking in two to three months. That’s where the problem comes in,’ said Jim.”
“The market’s uncertainty has created hardship for Mike and Dawn Lembeck. Their four-bedroom, three-bath home has been on the market for nearly a year. Home seller Dawn Lembeck says she is optimitic about selling her home. ‘Well, we expected to have this house sold before we moved. We refinanced this home to move into our new home.’”
“The Lembecks are prepared to hold on for a year. But housing analyst Karen Weaver predicts tough times ahead for people trying to sell their homes in expensive markets like California.”
“‘It’s going to be three years before we even have flat home prices, or stability in home prices. We just have this tsunami of defaults facing us and that’s driving down prices — it’s inescapable,’ Weaver said.”
The Recordnet. “Foreclosure activity in San Joaquin County is still on the rise - just at a slower pace.”
“A total of 3,746 notices of default were filed countywide in the fourth quarter of 2007, according to DataQuick. That was a 189.7 percent year-to-year increase, compared with 2,961 default notices in the third quarter, up nearly 230 percent year-to-year.”
“‘We’re seeing a steady stream of foreclosure listings,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton. ‘We’re not seeing any let-up in it at all. We’ve still got a lot in the pipeline. It’s going to be a tough two years.’”
“This year, foreclosures will continue to swell the for-sale inventory throughout this year, but sales are finally on the upswing, said Larry Matos, broker based in Modesto.”
“Beginning in the fourth quarter, asset managers of repossessed houses began to aggressively cut prices, putting them more in line with the market, he said. ‘They’re not as unrealistic as they were last year,’ Matos said. ‘We saw a fundamental change.’”
The Desert Sun. “As of Tuesday, roughly 4,500 homes were in various stages of foreclosure across the Coachella Valley, according to RealtyTrac. ‘They bought high and their homes are not worth what they paid,’ said real estate agent Ernie Moreno.”
“Meanwhile, many homes now weaving their way through the foreclosure process are vacant and neglected.”
The Press Enterprise. “Riverside and San Bernardino counties last year posted among the highest foreclosure rates in the nation, according to a report.”
“Riverside County recorded 57,241 foreclosure actions in 2007, including notices of default, foreclosure and trustee sales, and bank repossession, said RealtyTrac. That was up 228 percent from the previous year and 827 percent from 2005.”
“San Bernardino County recorded 45,265 foreclosure-related filings last year, up 246 percent in a year and 680 percent in two years.”
“RealtyTrac spokesman Daren Blomquist said high levels of foreclosure activity also are expected in 2008 when new waves of adjustable-rate mortgages are scheduled to reset at higher interest rates.”
“‘That would point to at least another year of fairly tough times,’ he said.”
“Blomquist blamed the willingness of people to take on such mortgages several years ago while speculating that property values would continue to rise.”
“‘Eventually the booming market hit a ceiling and those people were left with payments they couldn’t afford and didn’t have the option to refinance or sell,’ he said. ”
The New York Times. “Look around at the still-life of half-built neighborhoods and red-tiled roofs, all so new, planted during the Miracle-Gro years when homes became A.T.M.s.”
“Look closer and you think you’re staring into a ghost exurb – empty homes left to bankers.”
“This is the new America, Southern California’s affordable edge city, drowning in a sea of debt. In the Inland Empire, the eastern-most suburbs of Los Angeles, one out of every 43 households is facing foreclosure proceedings.”
“Peek behind the palm trees and there you see the most shocking sight: abandoned swimming pools. Thousands of people have walked away without even draining the water. Mosquito control agents now patrol these murky pools, treating them with pesticides to keep disease-carrying larvae from forming.”
“‘With the skyrocketing foreclosure rate, the problem is compounding daily,’ said Jared Dever, a spokesman for the government district that monitors insect breeding grounds. He said about 2,000 abandoned swimming pools would have to be treated in just one part of Riverside County.”
“Is this the image of our consumptive age: the empty swimming pools of Riverside County? Or maybe we should look just to the west, to Orange County and beyond, to the half-empty glass hulks of the banks that changed the rules of lending, now being picked over by federal investigators and civil litigants.”
“I knew something had drastically changed a few years ago when I saw a man with an advertising sandwich board standing at a busy intersection in Los Angeles; the board said, ‘Re-fi now – guaranteed low rates.’ The banker as virtual squeegee man.”
“Now, you sense a meanness around the abandoned swimming pools of Riverside County.”
“‘Perhaps now we’ll see a removal of the low-class types,’ wrote one man in a reader post for the North County Times. ‘Too many house-flippers. Maybe they’ll be burger-flipping now,’ wrote another.”
“People who bet their pensions, their savings, their college funds on something that seemed so safe now look at these wrecks on the banking frontier and wonder: what were we thinking?”
“It’s obvious what we were thinking, all of us – homeowners, appraisers, brokers, buyers, bankers. We were all in on the bet.”
“It seems like the consumer fell off the cliff.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRO3LPH9maws&refer=home
The Cliff Divers of Americapulco
Do I smell another emergency rate cut in our future for tomorrow morning? Why not? F–k the dollar and anybody that works for a living. It’s all about supporting my neighbors and their casino they run down the street.
My advice to you, would be to start drinking heavily…
Too late.
“My advice to you, would be to start drinking heavily. . .”
Check!
“You should listen to him Flounder, he’s pre-med.”
“Fat, drunk and stupid is no way to go through life”
Or..maybe it IS.
“Fat, drunk and stupid is no way to go through life”
Well, how about skinny, drunk, and grouchy? Will that work? I sure hope so, ’cause that’s MY plan.
Oly!
More like skinny, inebriated and funny as heck!
Smiles,
Leigh
I’m down with skinny, drunk and grouchy!
That’s my plan too.
check this out:“‘They were scared the home would have multiple offers, so they did nothing about it. Two weeks later, the home was still available so they made an offer, along with a nice letter to the owners of why they wanted the home,’ she said.”
I am wondering what this letter says. probably to the effect that you’re a fool if you don’t sell to me now for cheap. The days of writing a letter and promise to feed the squirrels are probably gone forever. it would also be interesting to see the sale price vs asking price.
I had a bidding war on my house in ATL, and I received two letters from potential buyers telling me how great they were, how great my house was, etc. I threw them away in disgust. It reminded me of the essay portion of a college application. Just a bunch of worthless BS to try to introduce bias into the equation. Most of them aren’t even true, or are written by others. How much are you willing to pay, and prove to me you are qualified. Period. Save the BS for Harvard and Yale.
I may leave a little something on the doorstep of a prospective seller; it’ll be in a paper bag on fire and smell bad.
We do not live in La Canada, but had children that went to school there and attended church in this ‘hamlet’. Oh it’s different alright. Most homes are priced $600K and up. Split between asian and caucasian and sits right next to JPL. To your face, the residents seem sincere and really nice, but the gossip will eat you alive. They have an ‘image’ to uphold at all costs, so most of them are living on the edge. They do not like outsiders, so if you do not live in town, you are not part of them. Something of that stepford wife thingy going on. Great schools, but it is my understanding that they score really high on API due to the fact that handicapped or academic challenged children do not attending schools in their town, but just outside the ‘hamlet’ so it doesn’t mark the schools down. It has more private schools in any town I know of for kids.
And I too, would love to know what the letter said, along with what the house listed and what it sold for. We do have just a few friends their, but most of them seem to think this ‘hamlet’ is better than living on the beach. It sits between two towns that have social issues (lower income and gang activity.) But La Canada has its own golf course and club and is in close proximity to the Rose Bowl.
IMO - there was alot of kool-aid being ingested and the mind set is it can’t happen there. It’s just another town that straddles a freeway (I-210) don’t really understand why that is soooo appealing to want to pay $600K for 1000sq ft 50 year old house. There are some really big beautiful homes there, are they worth over $1M - not really, it’s just a building and I believe there are millions more just like them all across this country.
Could or would I live there, probable yes, but for over $600K anything - never.
RE: “It seems like the consumer fell off the cliff.’’
I went to Sears this morning to purchase a pair of Levi’s.
Dead stone empty with racks and racks of foreign produced merchandise piled up everywhere.
Totally pathetic.
I went to lunch with a buddy of mine, to the same place we go to every few months.
Two years ago, they were buzzing with people. Last week, it was 70% empty.
We ended up chatting a bit with a waitress we knew. She was going to tell the manager to let her work the Superbowl Sunday or else. There was no money to be made working lunch hours anymore.
so they made an offer, along with a nice letter to the owners of why they wanted the home…
It appears they’re still feeding the squirels in LaCañada.
It must be different!
“along with a nice letter to the owners of why they wanted the home”…
I will NEVER be able to wrap my brain around that kind of mind set… Never! It’s a house, bricks, sticks, plastic. I was surely born in the wrong century.
Sing it!
It’s a thing. There will be other things. Even Madonna got over not getting her 5th Ave. penthouse with the Snooty-McSnootingtons!
AMEN to that!
Ben, you have done it again w/the dailt Klowniforny post. I live here and almost puked after reading about The Canada. PUHLEASE, La Canada. Talk about snobs. I realize you guys in other states, most everywhere have problems, but this state is long gone. We need a massive, and I mean massive, upheaval here. Way too much Kool-Aid for too long. I am disgusted.
I need to go home and take shower to get the filth off.
Dan,
What are the rents like in LC?
You can’t use LC to diagnose anything as far as the market goes. They were right in calling it an island - that is, an island of insignificance. Let the snobs buy their homes, it means nothing in the big picture.
Looks like they are comparable to here in the O.C. $1200-$1500 for a 1-2 bedroom, around $3K for a large family home, (I grew up in Pasadena, just over the hill, so I’m familiar with the area. There are some very nice homes with lots of character but in the summer it gets oppressively HOT and SMOGGY).
Here’s a nice one: http://losangeles.craigslist.org/sgv/apa/558693983.html
Never even heard of La Canada til now. Had to mapquest it to even find it. How can their market be stable when Pasadena is down like 12%? But I hear it’s a great time to buy….have a look at this, guys:
http://blogs.wsj.com/developments/2008/01/29/nar-campaign-touts-real-estate-as-a-great-investment/
I’m seriously surprised the NAR still has the gall to run this kind of campaign given everything that’s going on. Somebody should sue them for misrepresentation. Oh, wait…
Based on the ad that wittbelle provided, I’d have to say that La Canada is La Burnt Toast. A house like that would probably sell for $1.2 million, but rents for only $2700/mo? Does not compute!
This reminds me of the Star Trek episode where the crew was being held captive by this A-hole that had created a society of female androids. It was Spock who saved the day when he observed one of the androids self-destructing in response to something she/it could not understand. Spock decided that the crew should get together and begin acting out a scene from some play. Because acting is a totally illogical thing to do, the androids were stumped. They just couldn’t figure out, so they all started chanting “Does not compute, does not compute”, then they all blew up. That’s what’s happening to me right now.
LOL it reminds me of those people I know who mate for recreation. It doesn’t compute but I won’t self destruct as this doesn’t compute either lol.
WTF?
La Canada Flintridge 91011 10 $1,258 3.1%
There are some really nice homes up there in LC, which is snuggled up against the mountains immediately northwest of Pasadena. Best thing about it is that there are plenty of pine trees up there along the streets and in most of the yards, creating a sort of alpine ambience.
The owners might feel smug up there in their little isolated muntainside community, but the bubble/credit/recession pop is national/worldwide and has to do with easy credit availablity/easy loan s which are shriveling up . Only 10 homes sold last month in LC, and the market will continue to be in deep freeze.
Pasadena fell 30% and it has areas just as nice and hi-end as LC , so expect LC to fall as well.
Pasadena’s hardest-hit areas are, no doubt in the ghetto areas, (roughly Lincoln south to the freeway east to Lake, north to Altadena). Lots of run down older homes, even King’s Manor (the housing project), home of Ray Ray, the drug dealer. You would not want to have your car break down after dark in certain parts of Pasadena.
The earlier CL post of wittbelle was to La Crescenta. La Canada has one of the best school systems in California, so does demand some premium pricing over surrounding areas.
Here is a more typical listing: $3700 for 3 bd
http://losangeles.craigslist.org/sgv/apa/553916872.html
However, prices in La Canada went sky high, and like everywhere else, need to come back to reality. That house probably would be listed for about $1M, so the buy/rent disparity is about 2 to 1 still.
Also for those in the know, La Canada-Flintridge is divided with an internal snobbery, such that the older part, Flintridge, carries more, such that someone living in Flintridge will usually object vehemently if accused of living in LC.
Big V:
That sure brings back memories. I think that Star Trek was Harvey Denton Mudd.
Nice inspirational poster of that episode here (”Don’t hate the player, Hate the game”)
http://tinyurl.com/oq8ds
Comment by wittbelle
2008-01-31 16:15:18
. . . around $3K for a large family home . . .
Here’s a nice one: http://losangeles.craigslist.org/sgv/apa/558693983.html
That’s a large family home? Thirteen hundred square feet? LOL!
“Dear McDonalds Corporation,
I have spotted a delightful and charming Big Mac sandwich at your local wonderful restaurant across the street from Grand Central Station. I believe the sandwich and I would be a very good match. I am hungry and it is sitting under a heat lamp getting old. In a few more minutes it will need to be thrown away per your corporate policy. This seems an indignity to which no sandwich should be subjected. Please find it in your heart to join the two of us in culinary matrimony. My stomach would be most grateful and pleased. To demonstrate my servility I will go out to Lexington Ave., drop my pants, and howl at the moon. I believe this would signal my great commitment to giving those two all beef patties, lettuce, pickles and special sauce on a sesame seed bun the best home possible. Please accept my humility as I off $6.29 for the combo meal even though the posted price is a mere $6.09.
Your Humble and Hungry Buyer,
NYCityBoy”
That doesn’t seem any sillier than writing to some dumba$$ homeowner.
Classic. Good stuff.
“along with a nice letter to the owners of why they wanted the home”…
I will NEVER be able to wrap my brain around that kind of mind set… Never! It’s a house, bricks, sticks, plastic. I was surely born in the wrong century.
No kidding.
When I finally go looking for a house to LIVE in in a few years or whatever, I think I’ll demand that the sellers write a letter about why they want *me* to buy their house.
Well, if you told me that I *had* to pick a place to live out there in the east armpit of the Valley, I would certainly choose La Canada / Flintridge over Glendale, Pasadena, etc. It’s up above the worst of the smog, has nice views, and there are some cool old estates up there.
Now, fire insurance is a bit of an issue…
And the area is overpriced, like everything else.
La Cañada smug reaches and occasionally exceeds that of San Francisco’s. Flintridge smug is off the charts.
Is that a hybrid? Good for you!
Thaaaaaanks!
Oh yeah..La Canada has ALOT of dumb biatches driving around in huge SUVs…what a waste of resources.
Ex MIL lives on the Pasadena side of the arroyo. In the early am you can see clearly across the canyon. As the day goes on, the smog line moves up so that by about 2 PM it’s like being in the clouds except it’s actually smog. It used to be lovely up there like it used to be lovely up on the streets of Coldwater or Laurel Canyon - funky canyon houses - until the mcmansions came in.
I lived in La Canada in the 1980s. It is very very smoggy. And very hot in the summer.
Just checked. There are 80 single family homes for sale in La Canada. 22 are under $1 million. Of those 22, one is an reo and 4 are advertised as “reduced”.
80 homes is a lot for that pocket. So there are 78 buyers willing and able to purchase a home for more than $1 million in La Canada? Ummmm… don’t think so.
See for yourselves -> http://itech.rapmls.com/
“Consumptive”? We’re sickly now?
Consumption was an old fangled way of saying one was wasting away, because of tuberculosis.
Our later-day meaning is the same, but because of shopping.
Some woman was driving down the road in a Thunderbird with vanity plates: TB4LULU
My GF says, “Talk about your conspicuous consumption…”
I don’t get it. “Tuberculosis for Lulu”? That is probably what all of her neighbors are wishing for.
Believe it or not, most people do not wish terminal illnesses upon their neighbors. outside of NY anyway.
Most people just won’t admit it.
You are so right, NYC. I particularly don’t wish bad on people - I only wish they get what they deserve - no point bringing bad karma back on myself.
God help me if I ever get what I deserve because I am pretty darn happy with what I have now and I am sure what I deserve would be a whole lot less.
Oh Lord, hear our prayer:
“Mercy for us, and justice for everyone else!”
What is a LuLu?
Haha!
Hows about conspicuous tuberculosis?
conspiculosis?
LMAO!
“Now that the standards have changed, potential borrowers have to demonstrate that they can pay the loan back.”
Am I the only one that laughed at that one?
You beat me to it, but yeah, it was quite hilarious!
But c’mon, even if you can’t pay the loan back, the government “can’t just let stuff happen to people.”
“Now that the standards have changed, the skank wants to see the $100 before she goes down.”
you mean debt is a poor substitute for income ?
I’m not sure what their point was - like it’s a bad thing? Alot of the people that want to point blame at the banks and have them tighten up standards will change their tune real quick when they figure out that leaves less people as potential buyers. Even if people want to continueto be as stupid and attempt to buy houses they can’t afford, they won’t be able to get a loan.
La Canada is OK but all the plankton are dead. It will take a while before it spreads there.
Great to watch slow time constants in real life.
We are getting into the second leg down with the medians begining to drop. First stage was transactions fall and medians rise due to rich people still buying. Now its going to dominated by distressed sales and increasing inventory. So the median swings negative.
Then buyers/sellers will really begin to question “What is the value of owning a home?”
I wonder how much fear is out there? Not much yet. Banks are nowhere near capitulation yet either.
Are the majority of homes in LC bought Before the great escalation? Is that why there is still a pocket? “it is different here’
Otherwise, wouldn’t there be More foreclosures in La Canada LC
just like anywhere else?
The median price can’t change until a house is sold. If there are few houses for sale, then it will appear that the median isn’t changing. However, because price ratios between adjacent neighborhoods will never get truly out of whack, each successive sale will bring Les Canadians closer and closer to the ground.
If there are a lot of potential sellers in the area who have equity and wish to “wait it out”, then you can benefit from renting a house in the area for cheap. Of course, a high population of renters will also help to bring down property values.
IMHO it’s because La Canada was always a higher end area so it was expensive, relatively speaking, before the boom. There’s probably few there with subprimes loans.
..yeah… right.
Ackman Devoured 140,000 Pages Challenging MBIA Rating (Update1)
“He has spoken out publicly about it, approached regulators, talked to the media,” says David Einhorn, 39, head of New York-based Greenlight Capital LLC, who also has wagered against MBIA. “He’s not more right today than he was five years ago that MBIA was never AAA.”
Are rating agencies a load of crap?
http://www.bloomberg.com/apps/news?pid=20601109&sid=a7.NpGwa19TY&refer=home
Nice work, Einhorn…he’s also the poker player from the World Sereies…
http://www.cardplayer.com/poker-news/article/2995/david-einhorn-donates-all-659-730-wsop-winnings
Einhorn - That moron rode New Century to ZERO!
Einhorn - That moron rode New Century to ZERO!
Is he kin to Ira.
Well, that’s all good…he can stick to poker and shorting the bond insurers…
Einhorn and Finkel…Finkel and Einhorn…He didn’t have time to hide Mr. Winky!
Einhorn and Finkel…Finkel and Einhorn…He didn’t have time to hide Mr. Winky!
http://youtube.com/watch?v=XjxllaD-QJM
Glad to see I wasn’t the only one thinking about Lois when I saw the name Einhorn.
“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”
Oh, it’s gonna blow up all right.
And that somethign would be????? Significantly lower (like 40% off) prices maybe?
if sen. Dodd gets his way it just might lossen up at the cost of the taxpayers!
Does anyone actually take him seriously? I always get the feeling he’s being tolerated.
Cut your price in half. That might loosen it up a bit. The only thing the dam’s holding back, barely, is an epic flood of foreclosures. The sales that follow are beyond the horizon.
Brennan said. ‘Something has got to loosen up.’
I am quite sure a strong laxative is on the way and ‘things’ will loosen right up. Grab your boots.
“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”
Mr. Brennan the Chinese have a saying:’ Be careful what you wish for you just might get it’ ; unfortunately I don’t think you have an inkling what is about to come your way.
Good grief. he bought the place 21 YEARS ago. And he’s underwater. Apply the M-80.
A cherry bomb underwater in the toilet, gives you more bang for the buck.
Old school. I love it!
It is far from over: http://www.cnbc.com/id/22933893
Good God st Dodd is a looney
Yes, he is. Whether it does one whit of good or not, I emailed the Senate Banking Committe via their website to express my outrage. My outrage may not be as loud as the cries of those who find themselves with no equity or negative equity, but for the record my email it there.
It’s not just California either.
It’s official. We now have a “Weekend at Bernie’s” economy, with the Fed and Congress playing the part of the two guys desperately trying to keep the corpse moving around just long enough for the next plot point to happen.
Problem is, it’s starting to smell and get a touch of rigor mortis….
Here’s my idea for a new reality TV show: “Weekend at Bernanke’s.” Oh wait, it’s already being broadcast - it’s called “the news.”
I say get out of debt, grab some popcorn and twizzlers and enjoy the show!
I’m with Neil….
“Weekend at Bernanke’s.”
LOL.
Pure genuis.
I agree. Great metaphor Seattle!
Be careful or he’ll heli-drop a cash bomb on you.
Very nice. You win.
Thanks guys! I would love to do a parody based on that! Maybe the Stockmania guy can get the ball rolling…..
I’m pretty good with Barbies…
http://youtube.com/user/wittbelle
“Now that the standards have changed, potential borrowers have to demonstrate that they can pay the loan back.”
Those heartless bastards! They have no right!
Yeah, the NERVE of them!
Who would have thunk it “the concept of being able to pay back a loan” My God, what next!
“‘We’re looking at tax returns and pay stubs, things that were not looked at as much prior to August,’ Friedman said.”
What? I actually have to be employed to buy a house. Ah Crap. I better start working on my resume. I think McDonalds in hiring down the street.
They’re looking at what? PAY STUBS!?!?!
You have got to be kidding me.
He says they’re looking at them - he’s not saying they’re paying any attention to them.
“‘We’re looking at tax returns and pay stubs, things that were not looked at as much prior to August,’ Friedman said.”
And doesn’t that just sum it up perfectly.
Man, the way some of these guy talk, you’d think that 2-3 yrs. tax returns, some paystubs, and an actual boss you can vouch for your employment is too much to ask for what, the largest purchase 95% of the population will ever freakin’ make?
Housing has become nothing more than used car lots. Hate to say it, but that is what it has become!
yrs and yrs ago, I mean yrs ago..80’s one had to jump through multiple hoops and show multiple pay stubs and give phone #s of where you worked etc for them to Confirm long before you got the keys. Lots of hoops.
Lots to put down, lots to close, and near perfect credit and NO credit card balances.. Sheesh. pisses me off that so many slipped through that big San Andreas Fault Line to make a bundle and get away with it.
I bought my first place in ‘92 and remember the experience vividly. If you were a virgin when you started that process you weren’t still one when you finished.
I remember the loan officer being horrified I had like $390 on my credit card despite the record being that I paid it off entirely every month.
I think ill stick to buying a house in cash and keep my virginity!
Bye fl., I would not be too scared of credit. You seem young from your previous post. Just use commen sense and you will be ok. I know you have talked about moving in the near furture, well this might be a good time in the next year or two. Get a 15 year loan and don`t get loans for all the BS things in life and you will be fine.
Lane
I’m as tight as they come, but if you buy low in 1 to 2 years and interest rates are still around 5.5% or less, which is a net rate of 3.5% or less after the tax deduction assuming you have sufficient taxable income, even I think that you can make a higher return investing elsewhere once the recession/depression is over. Housing is about the only thing I would ever buy on credit though.
When I bought my house in ‘94, not only did I get the full financial proctological exam, but I remember wearin’ my best suit to the meeting. Getting a loan then was one of those rites of passage to adulthood. Ten years later I started hearing that you could puke on the loan officer and no one would skip a beat.
Don’t forget having to get a term life insurance policy to cover the entire amount of the mortgage, and assigning the benefit of that policy to the mortgagee for the duration of the loan.
All loans and credit cards had to be zeroed as a pre-condition - and not from the mortgage advance, either! You had to pay these down 100%, as well as pony up 20% deposit. The banksters ran a tight ship.
Great days, the early 80’s!
Years ago? How about 1996 when we bought our first place.
–
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
This is frickin unbelievable. What world does this woman live in?
Price is down 27.5% from the peak and volume is 1/3-1/2. Another one of it is different in my area crowd.
Jas
She’s talking out of both sides of her mouth.
“‘If they’d been more realistic on the price it probably would have sold by now,’ Haynes explained.”
So, it’s different in La Canada? How?
Her mouth is not where she’s talking from.
Congrats lady, you’ve discovered an Island of complete morons disconnected from reality. This isn’t the area that refuses to pay taxes for fire protection is it ?
We can call UCLA Medical Center and see if they ahve an extra bed. This lady LC sounds delusional.
It’s the Housing Market Deflation.
By William H. Gross
Thursday, January 31, 2008
A good article.
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/30/AR2008013003211.html?sub=AR
“Preventing home prices from declining even further is job No. 1 for monetary and fiscal authorities.”
So, we’re going to hand out $50K down payments and 25% wage increases to anyone willing to buy a house?
HERE IS A DIME…. BUY A CLUE…. People can’t afford houses at this price, and even if they could,why would they bother when they can rent for WAY less??????
These dingbats that call for stopping the slide in house prices need to take econ 101. Huge excess in supply, near total absence of demand, and prices way above support levels.
Talk of keeping prices from falling given those market conditions is like talk of trying to keep the sun from rising tomorrow.
Uh, I’m pretty sure Gross has taken Econ 101. They generally don’t hand you a trillion dollars to manage without that class…
And every time I see him on TV I can tell he is the type of guy you just feel you have to punch.
According to Mr. Alan Greenspan, the housing market would stabilize if the 300,000 in unsold new homes were removed from the market.
If the federal government were to screw this picayune $600/ and instead were to buy the unsold 300,000 for $400K each. It would be a lot less. And then the government could move all the homeless out of the cities into these future dumps and clean up 2 problems.
Please do not take this seriously, it is merely to point out the ridiculousness of the current governmental policies.
Hi Hoz,
what’s your take on the Monolines?
Hi Luvs,
I have a spec position and IT IS SUITABLE FOR ME MYSELF AND I. If I am wrong, it will cost me at least 50% of what I made in January. I do not think I am wrong - the risk reward ratio is correct, but ….
So please don’t ask me about the monolines anymore. I really do not think it is advisable for many other individuals. When playing in the takeunder/bancruptcy/takeover market, rumors and risk are rampant.
Ok,
my interest is solely based on the damage that might be caused should they blow up. My thinking is this could be an “oh sh*t moment”
It very well could be, it could also be the salvation for the banks upon survival. There are a lot of elephants playing both sides of these stocks. One side is wrong. If wrong, when it goes, there may be limited opportunity to get out.
“According to Mr. Alan Greenspan, the housing market would stabilize if the 300,000 in unsold new homes were removed from the market.”
Then the govt is going about this all wrong! I say launch the F-15’s and take out about 300,000 homes. Hey, whadda you know - a sudden reduction in inventory.
I like your solution!
Actually that might cost more than just buying them.
But not nearly as much fun.
HaHa!
This is a Leigh original (fell from frustrated lip into the ears of my frustration), “Buy a vowel and solve the effing puzzle!”
I’ve heard it since then, but honestly thought I coined it!
LOL,
Leigh
Eagle ’tis!
To civilization I go! With my Snooker cue in hand and beered breath, Jeep Wrangler w/ 35″ tires to crush the stalled imports - I still have 5 hrs left!
Hoz baaaby,
(Ex-no room!)
Hubby got quite a snicker of da snooker!
Knickerbockers?
Leigh
Fix the closet lock. Insert hubby turn key!
Otto Ludwig Piffl: Is everybody in this world corrupt?
Peripetchikoff: I don’t know everybody.
Ah…
The great Billy Wilder~
Yes, the only solution is housing deflation. Homes are simply not worth what they’ve been selling for. In the bubble hey day, the homes in my neighborhood were selling just shy of $1 million. At that time I thought, if I had $1 million cash, I would be god d@mned if I would by any of these pieces of sh!t. And I still wonder who bought the homes around here that did sell at that time, how much money they brought to the table, what their monthly income was, and, if they were indeed, legitimately able to afford a $1million home, why the hell they didn’t buy a well, constructed, aesthetically pleasing one somewhere other than Bakersfield-by-the-Sea? Talk about stupid!
RE: homes in my neighborhood were selling just shy of $1 million.
Dead elephants in a land of declining standards of living.
Here’s a real gem in that Bill Gross article:
“What’s needed is not just $600 checks that will flow into Wal-Mart (and then to the Chinese) but an expanded Federal Housing Administration program offering below-market, 30-year mortgage refinancings with minimal down payments, which the private market and Bernanke cannot provide. Republican orthodoxy seems so intent on curtailing the past abuses of Fannie Mae and Freddie Mac that some politicians are looking past a government agency solution in their own back yard. Housing and our finance-based market mania got us into this mess. Housing and government-based financial solutions must begin to get us out of it.”
So wait: We got into this mess by giving people easy money with no down payments. So to get out of this mess, we go back to easy money with minimal down payments?
There is a plethora of hair-of-the-dog cures getting proposed these days…
Gross is sitting on huge MBS positions. This guys rhetoric is totally self serving.
Gross must be sitting on a spike.
“This year, foreclosures will continue to swell the for-sale inventory throughout this year, but sales are finally on the upswing, said Larry Matos, broker based in Modesto.”
Anyone who is waiting this out and is disheartened by seeing upticks in sales needs to relax. Now that we’ve seen some market capitulation your gonna see this happen all the way to the bottom. At each leg of the drop you’ll see a whole new batch of knife-catchers jumping in. It’s normal and to be expected. Hey, like it has been said many times before, we need these guys to set the new comps.
” … we need these guys to set the new comps.”
And to keep the system lubricated with fresh capital.
The juxtaposition of the words “lubricated” and “capital” conjure up all sorts of images. Nahhh, we won’t go there.
How many gallons of Pennzoil needed for a Joshua Tree?
Nothing to worry about. There will always be clueless people who choose to listen to their realtor, because they are still considered ‘experts’. Its a shame, but most people only scan the headlines……….so then they pay with their ignorance when the value of their home drops.
Even REOs (which go back to the bank after failing to sell at auction) are counted as “sales”.
Sheep Thrils
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
“‘A year ago, people would leave gifts on the front door step, give their children away, anything to get the owner to sell them the home they wanted. Now, it’s not run off of emotion so much,’ she said.”
Jake: [fakes accent] How much for the little girl? How much for the women?
Father: What?
Jake: Your women. I want to buy your women. The little girl, your daughters… sell them to me. Sell me your children.
–
““And that brings the total number of foreclosure filings in California for the year, to more than 2.2 million.”
Does this sound right? Looks very high to me.
Jas
I think that’s the total number the CAR was predicting for the entire bust. Ha Ha. We’re in what inning again? 3? By the time we get to the end of the game, the number will be closer to 10 million.
Google blows up.
Tx, I hope February is half as nice as January. I love blizzards.
‘Investors are particularly concerned about Google’s participation in a U.S government auction of a prized piece of the airwaves that will cost the winning bidder at least $4.6 billion’
Where have I heard this before?
Cramton [1995]: “Money Out of Thin Air: The Nationwide Narrowband PCS Auction,” Journal of Economics and Management Strategy, 4, 267-343.
–
Not to brag, I have a big short position in GOOG (well, I was stupid and early, but finally have been on the right track). I had ton of GOPOT (mar’08 400 puts). It was 50c on 12/31/07 and was $7.2-7.5 last week. I sold half of it and I will sell the remaining half tomorrow. I will keep the Jan’09 puts.
Today, I sold some naked Jan’10 900 Calls and Jan’10 300 Puts.
Jas
Modesty was never your long suit.
–
Nor it is yours. Your strong suit seems to be responses like above. It is obvious that you don’t like me. Feel free to take shots.
Jas
Selling naked is a great way to make consistant coin in the options market; got to have a big bank account though and a correspondingly big set of balls.
can be a bit like picking up nickels in front of steamrollers. works really really well…until it doesn’t. almost daring a black swan to show up.
Aw, come on, it’s just a search engine. But wait! It’s more! It’s got my Gmail! Oh, no!
“Beginning in the fourth quarter, asset managers of repossessed houses began to aggressively cut prices, putting them more in line with the market, he said. ‘They’re not as unrealistic as they were last year,’ Matos said. ‘We saw a fundamental change.’”
Had some time this morning and checked out condo prices on themls.com in Los Angeles - basically West LA to north of Downtown. Noted that there were 1 bedrooms for under $200k and even some 2 bedrooms under $300K. Almost all of the low prices were either short sales or bank owned. This in contrast to six months ago when the banks were selling in the middle of current pricing. It also appears that sellers needing to sell are moving down to bank level.
What the other sellers may not be getting is that these lower prices are bringing down comps. So even if they do get their wishing price, it may not appraise. Which means the buyers either back out, come to the table with a larger down payment, or the sellers lower their asking price to get the property sold.
So glad I sold in October 2006.
I remember checking the MLS and seeing 800 square feet 1/1 shacks, some with bars on windows selling for around $400k. Those shouldn’t even cost $100k
Take a real estate tour with LAinvestorgirl. She will show you all of the places in L.A. where prices can never go down.
Last post I saw from LAIG she was sniffing around in Ventura. If she bought anything there, she’s probably down 15-20% by now. I could never figure out why she had so little patience. All I can figure is Electric Kool-Aid Flashbacks.
That realtwhore was a spammer who got banned. I hope the houses she speculated on will bleed her dry!
A while back, I believe it was Hoz who told us that the banks are required to mark their assets to market by the 3rd week of January. Now that they are no longer allowed to hold phantom assets on their books, it looks like they’re incentivized to actually sell them.
“George Tribble is the former president of the California Association of Mortgage Brokers. He says approval delays by lenders are understandable.”
I ‘member the Star Trek episode
“The trouble with Tribbles”
I like Realty trac’s foreclosure page
nice map.
http://tinyurl.com/36uhjx
blue areas may indicate no activity. period
That’s sad. Looks like the whole state of California is in foreclosure.
I just spent way too much time staring at that map. Thanks for the link.
Update from dorkville…er…Palo Alto.
Seems the Googlies are learning a harsh lesson - expect the “exercise and hold” retards to start sweating.
And we have officially entered into the “angry” denial stage. In the Spring, mabe a few will begin to realize that their ugly 3/2’s (but its on a hill in San Carlos…) are only worth 50% of what they paid for them? Nah!
The Alt Tax rules will kill them with this strategy.
“Coldwell Banker Grupe, Stockton”
——————-
just brainstorming here, hire some hot babe agents and change the name to Coldwell Banker Grope. Do the foreclosure tour in a party bus with tinted windows and an open bar.
You can dress up a word, but it’s still Stockton.
How about a pole? Can’t forget that!
“Welcome to the foreclosure bus tour. For $20, potential buyers will tour and bid on as many as 10 homes in just under four hours — all of them at fire sale [very low] prices.”
One man’s fire sale is another man’s rip off. I would be that latter man.
“Now, you sense a meanness around the abandoned swimming pools of Riverside County.”
Put people that were struggling to get by in the best homes in which they’ve ever lived. Then have that “taken away” from them a year or two later with them left in the worst financial shape of their lives.
I don’t suppose there might be a whole lot of anger to go with that “meanness”?
The NYT crowd probably doesn’t around on the real web much. We’ve been hooting it up at these fools for years.
BTW, what ever happened to that NYT RE blog? Ha!
The RE blog was a marketing tool, featuring the joys of appreciating RE. When the market tanked so completely that even the NYTimes noticed (last spring some time) the blog was canceled without notice.
Jumbo $hrimp are fished out.
“It’s difficult, but not impossible, to get a jumbo loan, Ventura County mortgage brokers say. ‘They’re available, but they are harder to qualify for,’ said Scott Friedman, a mortgage broker in Camarillo. ‘Prior to August, if you had good credit and any equity, you could probably get a jumbo loan.’”
‘Prior to August, if you had good credit and any equity, you could probably get a jumbo loan.’
Let’s rephrase that: Prior to August, if you had a pulse you could definitely get a jumbo loan.
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
Fantasy Island…..new episode:
Boss….Boss….The Plane…The Plane !
Ahhh yes my friend Tattoo. We have a guest…. Ms Carey Haynes, Realtor in La Cañada Flintridge. She desires to live in a place where prices and sales don’t appear to be affected by national, or local trends…..so we will give her this wish.
A fun auction to go to (the real deal) is the L.A. County Public Administrator Auction, in not-so lovely Pico Rivera.
It’s held once a month and should you die in the city of angles w/o heirs, this is where your worldly possessions get auctioned off.
We call it “the dead peoples auction”
About 10 years ago, Herve Villechaize’s stuff appeared there, and I still regret not buying his exercycle that was built for a midget. It sold for $200.
That’s the funniest thing posted here all day.
I sent this letter to Feinstein and Boxer. You all should do the same thing. This is getting ridiculous.
Dear Senator Feinstein:
I recently sent you a letter explaining why it would be disasterous to allow the government-sponsored mortgage agencies to take on mortgage loans for up to 10x median income. I hope you read that letter and understood it. This letter is to explain why it would be wrong to use $25 billion of taxpayer money to buy bad mortgages from banks and allow irresponsible debtors to keep the houses that they never could afford to begin with.
Right now, houses in the United States (and many other countries around the globe) are terribly overpriced. Today’s prices were only temporarily enabled by the insane lending that banks engaged in once mortgages became securitized as a matter of course. Now that the pyramid scheme has run its course, house prices are declining to their natural, healthy levels. They are becoming more affordable, and that’s great news! Because affordability is returning all on its own, there’s really nothing that you need to do.
Senator Dodd’s hair-brained scheme will only serve to artificially prop up the housing market, thereby keeping home ownership out of reach for today’s young families. It will lock in ownership and false profits for those irresponsible people who gambled on the market and lost. It will also increase my taxes and decrease public services, making it even more impossible for me to escape from this perpetual trap of renting and secure a stabe financial future for myeself. This is even more important when you consider the possibility that my generation will receive tragically insufficient support from the Social Security Administration. My generation and our children may never recover if you rob us of our ability to purchase houses with the wages we earn.
Please do all you can to prevent Senator Dodd from succeeding with his plan to buy other people’s houses with my money.
Dear Big V
Much as I agree with your sentiments. Politicians have only one job in life. That job is to get reelected.
Any program that might prevent a congress person or senator or city garbage collector from getting reelected is not going anywhere but the bin.
When you write such a beautiful letter, the Senator reads
“My opponent deliberately held back funds that would have kept hundreds of these people in their houses and actively worked to have your friends and neighbors foreclosed.”
Hoz:
I understand what you’re saying, but our reps have to know that many (most?) of us will not vote for them if they screw us over. Why do we on this blog always assume that the rest of the world agrees with the likes of Dodd? After seeing 60 Minutes the other day, I am even more convinced that the public does not/will not support any taxpayer-funded bail out. We have to make sure that our legislators know that. Now get out there and clog that inbox.
The situation is hopeless, but not serious.
Remember politicians are the lowest common denominator.
And Senator Boxer would have to be found in bed with a live page or a dead economist to miss out on getting re-elected.
She really doesn’t care what her constituents think, she’s on a mission and knows what’s best for us proles.
Rates are down but closing are not happening - I WAS WRONG!!
http://mortgage.freedomblogging.com/2008/01/31/loan-production-dismal/
I have two words to say about refinancing: Closing Costs. They can run into the thousands of dollars.
I hate to say I told you so Crisp, but…..
Did you see the comments below the article. It’s like I said, lots of phone calls, lots of apps taken, hours of processing, and…….end result no loan closed. That’s why in the days ahead reports that show high volume applications or loan locks mean absolutely nothing. Those poor bastards will be lucky to do one deal for every twenty apps taken.
Go easy on me with the JT!
What were you wrong on, recap please.
RE: Rates are down but closing are not happening - I WAS WRONG!!
Can’t push the appraisals thru if the appraiser is noting declining neighborhood values, and marketing times over 6 months.
Plus with very few current sales you can bet the comparables are nothing any underwriter is going to accept.
It’s a nightmare.
Oh lord, stuck in Stockton with the foreclosure blues, again
“‘We’re seeing a steady stream of foreclosure listings,’ said Jerry Abbott, president and co-owner of Coldwell Banker Grupe, Stockton. ‘We’re not seeing any let-up in it at all. We’ve still got a lot in the pipeline. It’s going to be a tough two years.’”
“As prices dip and California soars to the top of the list in the nation for real estate foreclosures, Realtors in this little hamlet are holding their collective breath for ‘the other shoe to drop’ — but, as yet, prices and sales don’t appear to be affected by national, or local trends, said Carey Haynes, Realtor in La Cañada Flintridge.”
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
My aunt’s house in Calgary, Canada sold in a hurry last week, do you suppose that people in La Cañada think their houses are still quite salable, because of word association?
600K in Ventura…jeesh…
I am continually amazed that Ventura has held up so well.
Could we take a quick poll to see what folks think is a reasonable median for Ventura given historical #’s, salaries, jobs, and that it is indeed a nice place to live. (I rent a place there but am moving to mid-city LA, again renting)
I would go with 380K, and I think I am being a bit generous.
They’re priced out of Santa Brabara
4-5x median income. Not a penny more.
Ventura is such a sh!t hole! I say $300K. There’s some real rough patches…
Comment by marionsucks
2008-01-31 16:24:22
Nyc You are way off. Seriously You could build a 3/2/1 1200 sf with a garage for about 65k, by a builder right now.
People seriously don’t know how much it costs to build a house. I’m getting ready to start a web site, just so people can know what actually goes into building a home and where the money goes.
Lot, Septic, well don’t need to be replaced in a fire. And with concrete You can reuse slab and maybe even walls. Do most of the work myself and I could rebuild a 1200 sf house for 20K.
My comment: I had an idea how cheap houses can be built but this cheap? That is surprising! Will the cost savings also reflect in mobile homes? Ive noticed brand new mobile homes cost $30 to $40 a square foot, there was little or no price difference before the bubble, during the bubble and now. But with CBS houses getting cheaper and cheaper to build, there won’t be any point in mobile homes. I used to want a mobile home because a used one was $30k vs. $300k for the same size CBS house. The disparity was absolutely shocking! That $300k house could fall to $80k then the disparity won’t be so big anymore.
Ive noticed in Texas you can get a brand new house with lot for $45 to $70/foot, so this should give us an idea what to expect elsewhere. Are construction costs in CA much higher or is it just the land?
Let us know what your website will be. I am interested in building a (small) house.
I’m intersted too.
Sellers aren’t dropping prices, but builders and raw materials sure have. And land isn’t really that expensive.
“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”
Well, ma’am, you see, when a VP like yourself comes to Milain to do business, it’s customary for the company to send a gal up to the room, compliments of Great Lakes Feed & Grain. And, well.. since you’re a gal, the company sent me - Fred Garvin, Male Prostitute.
“Riverside County recorded 57,241 foreclosure actions in 2007, including notices of default, foreclosure and trustee sales, and bank repossession, said RealtyTrac. That was up 228 percent from the previous year and 827 percent from 2005.”
Wouldn’t you like to see more stats that not only compare yoy from last year but also the year before? I don’t often see them stated in msm reports, and they are really more astounding than the already mindboggling numbers usually reported.
That was Jas’ point a couple years ago. I think he’s been keeping track. I sort of perused his website a bit, but I don’t think he regularly publishes the numbers. He occasionally posts them here.
It’s funny that “lower end” is now $100k to $200k. I would need $40k to $75k annual salary and 20% down to afford those homes. What is the median per person salary in those locations? Even if it’s $40k, this barely gets you into a $100k house and you need $20k down at that. I do not consider those prices reasonable if they were much cheaper before the bubble. My dad bought an upper middle class house(3777 living sf) in West Palm Beach on an acreage lot(with pool and tennis court) for $225k back in 1995. He sold his middle class 5/3 2300 sf house for $105k.
Wages in 1995 were almost the same as wages today and the cost of living was much lower due to cheaper gas and food. Nowdays essentals take a bigger chunk out of wages, leaving less available for houses. I honestly think a $100k house today isn’t any easier to afford than a $100k house before the bubble.
I also want to thank you Jetson for your replies. So it’s all those new jobs that’s making house prices in the southeast permanently higher. You are saying whatever houses cost won’t drop much, if at all? Guess ill be staying in the rust belt forever as I can neither afford a $150k house nor do I want to pay that when it’s so much cheaper in the rust belt and let those people move out, I don’t like overcrowded towns, too much crime and traffic.
Think the subprime problems are all but over?
On Thursday, credit rating agency Moody’s Investors Services raised its assumptions for losses on loans backing subprime mortgages by as much as 85% in response to deteriorating performance.
“We see delinquencies still going up, not having reached a plateau,” said Nicolas Weill, Moody’s chief credit officer.
The credit-rating agency projected losses in 2006 subprime loans would range between 14.0% and 18.0% of the amount invested. In October, Moody’s had projected losses of 6.5% to 15.0%.
Well added that there are also more concerns by the Moody’s economists on the potential for higher unemployment and recession, as well as home-price declines.
The revised estimates will likely result in new downgrades of 2006 subprime residential mortgage-backed securities.
Moody’s report comes one day after Standard & Poor’s said banks are bracing for a new chapter in the unfolding story of their mortgage problems.
NOW INTRODUCING>
Alt-A, OptionARM, Prime, Vehicles, Credit Cards, Commercial RE Paper, Farm Loans, and Student Loans.
Coming to a bank near you shortly.
‘“We see delinquencies still going up, not having reached a plateau,” said Nicolas Weill, Moody’s chief credit officer.’
Much like real estate circa 2005 and before, credit delinquency estimates always go up.
Either we have the most poorly managed financial institutions in the world or these guys are just playing dumb. I’m pretty sure they know exactly what’s coming down the pike only they continually act surprised. Gimme a friggin’ break.
That’s funny, I don’t remember having kool-aid forced upon me…
“It’s obvious what we were thinking, all of us – homeowners, appraisers, brokers, buyers, bankers. We were all in on the bet.”
“It’s obvious what we were thinking, all of us – homeowners, appraisers, brokers, buyers, bankers. We were all in on the bet.”
Kool-aid drinkers and Heloc raisers
“‘It’s a different buyer here, and a different world,’ Haynes said. ‘We’re a separate entity, like an island. We don’t feel the things other cities do. We’re a different animal.’”
Sounds freakish… do they practice bestiality and ritual sacrifice in LC?
Hahahahahahahahaha
Heeheeheeheeheehee
Hohohohohohohohoho
What a hoot that Haynes fellow is!! Price INcreases will be contained to La Canada/Flintridge, everyone!!
Why do realtors feel they need to say this crap to stay in business? Am I the only person that would like to deal with a realtor that says things such as “This area is freaking toast and we are headed into a recession. I can’t guarantee prices wont fall much further, they may, but I will certainly do my best to help you in getting the best deal possible on a short sale or foreclosure. Let’s show them the data and play hard ball.” Anything else in condescending.
Good point Tim, but the reality is that most realtors are idiot who have become used to doing very little for large paychecks. They see the decline in home values as a direct assault on their paychecks. Back in 2005 in my area, you only had to close a handful of deals per year to exceed the earning power of your neighbors. When home prices decline in bubble areas by over 60% (book it), they will need to work much harder and sell more homes to keep pace with the wage-an-hour neighbors, and this fact terrifies them.
The World’s Number One FB…Walks…
Harry Macklowe, who borrowed 7.6billion, to pay 6.8billion for 7 nyc office buildings he bought from Sam Zell a year ago, with a 50million downpayment, is giving the buildings back to the bank and walking…Somewhere, Sam Zell is laughing like a tiny madman.
Another $7 Billion Rogue Trader?
The banks made the mistake loaning him billions. Only $50m downpayment? LOL
RE: Harry Macklowe, who borrowed 7.6billion
Man, how’d you like to be the commercial appraiser who punched the ticket for that dude’s ride!
Hope his E&O is paid up.
From the bubble years you get from the NY SUN, 2006
“A Booming Real Estate Market Gives Harry Macklowe the Last Laugh”
By DAVID LOMBINO
Staff Reporter of the Sun
December 11, 2006
From the bubble bust years you get, Reuters 2008
NEW YORK (Reuters) - Real estate titan Harry Macklowe has reached a tentative agreement to turn over effective control of 7 Manhattan office buildings to Deutsche Bank (DBKGn.DE: Quote, Profile, Research), the Wall Street Journal reported on its Web site on Thursday, citing unnamed sources.
Macklowe had borrowed $5.8 billion from Deutsche Bank to acquire the buildings last year and had not found a way to refinance that debt, due on Feb. 9, the Journal reported.
Macklowe also has a $1.2 billion loan from Fortress Investment Group (FIG.N: Quote, Profile, Research) due on Feb. 9
I didn’t know they did subprime loans on office buildings too.
Unbelievable. That rat bastard made $750 million. And he wasn’t the only one. Banks are going to eat enormous losses and those of us who thought it wise to be fiscally prudent and not spend more than we make will pay for this through higher interest rates. So much for waiting and saving and being responsible. I’m incensed.
They won’t eat massive losses. Christopher Dodd is going to borrow 20 Billion to refinance this garbage and buy them at full face value from the finance firms. So what happens if they default? The U.S. taxpayer eats it while the banks made all the profits.
I think Senator Dodds has figured out that all the foreclosures can’t be bought by qualified buyers in this market . They can’t change the guidelines of financing to much with the Government loans ,so what else can be done ? The whole idea is to change who the bag holders are on these SIV’s and CDO’s IMHO .Senator Dodds might be ahead of the group in knowing that the only way to try to save the Investment houses/lender ship is for the taxpayers to buy all the bum loans/homes .
When you hear members of the Senate or Congress coming up with ideas that seem far-fetched and bizarre ,you know that they perceive what the real problem is . To me, it’s always been a issue on how to pass the mess to the taxpayers ,or at least part of the mess to the taxpayers .
I think it might be a huge conflict of interest for the government to buy up property so the gamblers don’t fail . It seem to me like the plan is to break up the grand loss into thirds, being the taxpayers pay a third ,the lenders pay 1/3 ,and the borrowers and investors pay 1/3.
I don’t like what I’m thinking and I hope that I am wrong ,…..but .
I think a lot of communities are pretending like they are not going to be sucked into this tornado. There was an article in our local paper today about the desirability of this area keeping it above the fray, (kinda’ like LC). But homes here are not selling. And prices are coming down. And there have been quite a few defaults/foreclosures. I wonder how many more people will be effected as the home prices drop even more and more people are upside down and maybe need to sell because of a job change or job loss or family situation… As this thing drags on, will people that were not sub-primers find themselves having to walk away?
Yes.
volker endorses obama?
http://blogs.wsj.com/economics/2008/01/31/volcker-i-endorse-obama/
“I think there needs to be something to light a fuse and blow up the dam that’s stopping the market from flowing,’ Brennan said. ‘Something has got to loosen up.’”
You mean something like lowering your asking price down to what the market will bear?