Life Is Never Dull In California
The UCLA Newsroom reports from California. “In its fourth quarterly report of 2007, the UCLA Anderson Forecast holds steadfast to the basic tenet of a forecast they have been making throughout the year, that the national economy is not technically in a recession, nor is there a national recession on the economic horizon. There will be job loss in the construction sector, as well as real estate-related financial services, but not nearly enough to trigger a recession.”
“As part of his no recession forecast, UCLA Anderson Forecast Director Edward Leamer also notes that if declines in housing were going to trigger a recession, they would have done so already. Recessions have traditionally trailed a housing peak by no more than a year; at this point, the business cycle is trailing the housing cycle by seven quarters without a recession.”
The Daily Breeze. “Southern California will likely avoid a recession this year and next despite a grinding slowdown in the housing market, according to the forecast by the Los Angeles County Economic Development Corp.”
“‘It’s a two-track economy. You’ve got housing, finance, the auto industry struggling, but you’ve got other industries growing very slowly,’ said Jack Kyser, chief economist for the LAEDC. ‘We don’t look for housing to recover this year. It’s going to be 2009, so that’s going to be a drag on not only the housing market, but also home furnishing sales, building material sales and government finance, which depends on property taxes.’”
“In 2008, the number of overnight visitors to the county should increase by 1.9 percent to 26.3 million, largely a result of the weak dollar, an expected rise in Chinese visitors and several local attractions such as the new ‘Simpsons’ ride at Universal Studios Hollywood theme park.”
“The housing slowdown hurts on various fronts. ‘It’s terrible, and it’s getting worse every day,’ said Warren Snyder, who co-owns Torrance-based Carriage Realty & American Broker Loans as well as American Credit Repair. ‘People say we’re teetering on a recession. Most of those people who are connected to that type of business are already in a recession. This is just the tip of the iceberg.’”
The Daily News. “‘We feel that overall, Southern California should escape falling into a recession, but you are going to have spot recessions in some areas,’ Kyser said, noting that communities hit hard by the subprime mortgage crisis were particularly vulnerable.”
“‘Life is never dull in Southern California,’ he said.”
“The weakest sector in Kyser’s forecast - and the one getting the most attention - is the struggling residential real estate market. ‘Basically, the housing industry … is in a depression,’ he said. ‘And anything allied to this industry will continue to suffer.’”
“Kristina Theard of Porter Ranch is all too familiar with the crisis. She lost her job early last year in the collapse of mortgage lender New Century Financial Corp. She quit a commercial banking position at the beginning of this month and was at Tuesday’s job fair, sponsored by HireQuest, as part of her aggressive job search.”
“‘By the end of the month I’ll probably know where I will land, but I definitely want to stay away from mortgage management,’ she said.”
The Ventura County Star. “It came out of the blue. Loretta Altman was driving to work at Countrywide Financial Corp. in Simi Valley when she got a phone call from a friend.”
“‘She said, You’ve got boxes at your desk.’ I said, Does that mean …?’ Altman recalled.”
“Her friend confirmed that it meant that she’d been laid off. She went into the office on Madera Road, packed up what she was allowed to take and said her good-byes, leaving with a two-week severance package.”
“Altman said she thinks that she was among about 20 people at her office who lost their jobs Friday.”
“‘It was a complete side-swipe,’ Altman said. When the company went through a round of layoffs in October, people were informed ahead of time that cuts were coming. ‘This one was completely out of the blue,’ she said.”
“A former Countrywide employee who lost his Simi Valley job in October said the process then was very organized. He said it was very different from what he heard happened Friday.”
“The October layoffs occurred shortly after the Calabasas-based mortgage lender announced that it was slashing up to 12,000 jobs companywide because of the housing meltdown. That, combined with a drop in employee morale, inspired Altman, a systems analyst, to start looking for another job.”
“‘I took that as fair warning — start looking now,’ she said. She had received an offer letter for a new job Thursday, so when she got the call Friday, she was thinking: ‘OK, you’re OK, you got the offer letter.’”
“But it hasn’t been that easy. Altman found out Monday that her background check for the new job had been halted because Countrywide provided an incorrect date of hire for her. She said she’s been going in circles with Countrywide to get the issue addressed. She plans to call her attorney.”
“‘I may miss out on a great job because Countrywide refuses to fix this problem,’ she said.”
The Union Tribune. “Would you pay $69,300 for a two-bedroom home in Vista? Or $116,300 for a three-unit apartment building in the Barrio Logan neighborhood of San Diego?”
“Those are the starting bids for a few of the tax-delinquent properties the county plans to auction Friday in its annual effort to recoup unpaid property taxes.”
“Not every deal is as good as it looks. Some properties have tax or bank liens that may exceed the auction sale price and lead to post-purchase headaches for buyers. Still, it’s hard not to be amazed at the rock-bottom opening bids.”
“The two-bedroom home in Vista with an opening bid of $69,300 has a market value of about $335,000, according to an Internet real estate site.”
“The three-unit apartment building in Barrio Logan starts at $116,300, but similar-sized buildings have sold in recent years for $400,000 to $575,000. Zillow estimates its value at $526,000.”
The North County Times. “With an estimated 5,000 properties going into foreclosure by the end of 2008, city officials took action Tuesday to curb blighted yards, unsafe neighborhoods and virtual welcome mats for squatters.”
“The City Council voted unanimously to approve an ordinance that would make banks responsible for the maintenance of properties of which they have taken possession.”
“During the presentation, Linda Mejia, a senior code enforcement officer, told the council that of the 26,283 single-family residences in the city, nearly one out of 23 homes is in foreclosure. By the end of the year, code enforcement officers expect about 5,000 homes will be bank-owned.”
“‘We’re having one of the worst foreclosure rates in the Riverside County,’ she said. ‘It doesn’t matter how beautiful or big your vacant home is, all neighborhoods are vulnerable.’”
“Gary Lupo, a Realtor in Riverside, said cities facing a large number of foreclosures have only themselves to blame. ‘The biggest problem and the whole reason why this occurred is because everybody was greedy,’ Lupo said.”
“He contended that mortgage lenders were greedy in seeking commissions, home buyers were greedy in signing for homes they couldn’t afford and cities such as Murrieta were greedy for the revenues they receive in allowing ‘McMansions’ to be built and sold, referring to vast tracts of large cookie-cutter-style homes.”
“‘You guys approved it,’ he told city officials.”
The Press Enterprise. “One in nine Murrieta homes is either in foreclosure or in the preliminary stages. Many neighborhoods have homes with dying lawns and broken windows. The law is meant to prevent ‘the broken window syndrome,’ where vandals and squatters choose homes to party or live in by finding signs of abandonment.”
“The city can assess as much as $100,000 per parcel or structure that will be tacked on as a tax lien and paid to the city when the property is sold. The program is expected to begin in April. The city’s proposed blight law is a variation of others used in Chula Vista, Orange County and Riverside.”
“Gene Wunderlich, president-elect of the Southwest Riverside County Association of Realtors and an agent in Murrieta, said the association supports the new law.”
“‘Anything the city can do to help keep home values up is beneficial to us,’ he said.”
The Desert Sun. “The First Time Buyer Housing Affordability Index analysis is considered the ‘fundamental measure of housing well-being for first-time buyers in the state,’ according to the California Association of Realtors.”
“New figures show 38 percent of households in the Coachella Valley can afford an entry-level home here…more than at the end of 2006 - when affordability registered at 33 percent.”
“The analysis, released Tuesday, also shows the desert area is more affordable than California overall, where the housing affordability index is up to 33 percent. In the Coachella Valley, a person would have to make a minimum of $57,300 to qualify for a $285,970 entry-level home.”
“Assuming the buyer puts 10 percent down and has an adjustable interest rate of 6.21 percent, officials say that translates into $1,910 monthly payments, including taxes and insurance. That’s mathematically speaking. Real life doesn’t always add up that way.”
“‘Everybody has their own story to tell and everybody who makes $57,300 a year doesn’t necessarily fit into that program,’ said Kurt Handshuh of California Home Loan in Palm Desert. ‘If they have a car payment, or child-support issues, or a credit card payment every month, that drives the price of a house (one can afford) down.’”
“At the height of the market, affordability in the desert was 11 percent to 13 percent.”
“The Coachella Valley relies on the tourism and hospitality industry, and resort jobs don’t always pay enough for employees to afford a house, says Greg Berkemer, executive VP of the California Desert Association of Realtors.”
“‘You’re finding the jobs in the desert won’t allow you to buy in the desert,’ Berkemer said.”
“Entry-level homes in the Coachella Valley are generally considered anything priced under $500,000. Average prices in that market dipped almost 4 percent in 2007 and sales of those homes were down 24 percent from 2006.”
“‘Not everyone at $57,300 can make that work,’ Handshuh said of affording an entry-level home. ‘Not everyone is going to qualify.’”
“Two years after Palm Springs City Council approval, the city’s first new mixed-use project is nearly ready for occupancy. ‘It makes it look like something’s really going on here, finally,’ said Tony Larcombe, owner of Dwight Polen Design in uptown Palm Springs.”
“803 N. Palm Canyon offers Palm Springs its first new retail and housing combination in the uptown/downtown area. ‘People say they can’t wait to come home from work and walk to dinner,’ owner/builder Wally Hrdlicka said Tuesday as he toured the project.”
“There are currently about 20 mixed-use projects approved and in various stages of construction and planning in Palm Springs, according to the city’s Development Projects Update. While these projects are still drawings on paper, 803 N. Palm Canyon will be ready to move into by April, said Hrdlicka. Prices hover around $700,000.”
“Hrdlicka said he sees a predominantly gay market interested in purchasing the townhouses as second homes, as well as yuppie hipsters from Los Angeles. Units facing Palm Canyon Drive, which may be noisier than the homes that face the mountains, will draw a younger clientele, he said.”
“‘They are the ones who stay out at night and are from L.A. and maybe live in a loft already,’ Hrdlicka said.”
‘They are the ones who stay out at night and are from L.A. and maybe live in a loft already,’ Hrdlicka said.’
I don’t know about Palm Springs, but I was in Palm Desert at about 8PM a few years back and it was like a ghost town. A few cars going by, but even most shops were closed.
Palm Springs is usually dead except for Thurs night when they have street fair. Most of the desert is asleep after the early bird specials. Palm Springs has been fighting to get and keep anyone there as opposed to down valley like Palm Desert. There’s no major shopping or huge destination resorts there. And what a joke about affordability in the desert. There’s still very little unless you go way east under $400K. Prices need to go way back down again.
Prices need to drop by 40% more in order to be “affordable” in Palm Springs. The only thing that comes close is living down valley in Mecca, Coachella, or south Indio or the ever lovely Desert Hot Springs, which is where the many ex cons get to. Wonder what that means? about ex cons in Desert Hot Springs? The law states that while on parole, parolees must live within a 2hr drive from their prison. And probation officer.
Guess where DHS sits? yep.
It has its issues.
Even at $57k per yr, there isn’t anything you could afford here in the desert with PITI. $1,900. per mo leaves you with no life, pbj’s and spaghetti all the time. Meat? who needs it.Who could afford it with housing costs here in the desert.
“go way east under $400″ would be the ever lovely Sulphur smelling, fish die off, windy, Salton Sea.
“Even at $57k per yr, there isn’t anything you could afford here in the desert with PITI. $1,900. per mo leaves you with no life, pbj’s and spaghetti all the time.”
I agree why buy and pay 1,900 a month not including maintenence. I am renting for 1,200 a month not much of a incitive to buy?
testing
Nothing in the desert is affordable on the meager $57k per yr.
And Palm Springs/Palm Desert are very very quiet at night.
I think we are supposed to be looking at stars or something in our pools.
Nothing short of “go way east under $400k” is the ever lovely Salton Sea with windy,sulphur smell,fish die off loveliness. Or DHS, where the parolees get let off.
Just spoke with neighbor who wants to buy but was advised not to before 2 yrs. by financial advisor. Must be a poster of the HBB.
It warms my heart that ppl are finally getting some sound advise.
That should be “advice.” One day I’ll figure out how to send messages on my blackberry with more accuracy. I normally dont correct but remember that was someone’s specific pet “peave.”
Probably their pet “peeve” also.
lol!
Has anyone THOUGHT to check these “sleeping” Palm Springs people for a PULSE ?
I don’t know about you guys, but $700,000 for a “second home” loft in Palm Springs doesn’t affordable. I guess they expect “LA Hipsters” to use HELOC money from their primary residences?
I saw an episode of Househunters where this LA couple decided because they couldn’t afford to own a home in LA they would rent in LA and buy a weekend home in Palm Springs. This was of course for their child. Lots of twisted logic and sappy stuff about having “their own dirt”.
You were not in the lofts.
This is for Emmi, just in case she comes on:
Here I am at 2:34 PM responding to last night’s argument. That’s just the type of HBBer I am, I guess.
What makes you seem so trollish is that you’re rehashing old arguments that have already been debunked on this blog, like, AGES ago. It makes more sense to buy at a low price and a high interest rate than it does to buy at a high price and a low interest rate. Why? If interest rates are high, then they will go down later, and you can refinance. If prices are high, then you’re stuck. You can never reprice. On the other hand, if interest rates are low, then they are likely to go up in the future. When that happens, you will have a difficult time selling for what you paid, since your future buyer will be hampered by his/her high rate.
You see, Emmi, your reasoning really is not sound. The argument holds no water.
Besides, you said earlier that a house is not an investment, then switched to say that landlords are rich, and now you’re just building a house, but wait, you have to buy land to build a house, and land is overpriced. If you already own the land, then hopefully you bought it before the bubble hit. If not, then you messed up. You don’t have to defend your bad decision to us. That’s just life.
BTW, we are obviously getting a recession with high inflation. That is what Ben Bernanke and crew have decreed. However, house prices will continue to plummet, and the higher cost of food/energy/etc will only hasten the decline.
It would help us a lot if you would try more to understand how we have come to our point of view before you just hop on here and start posting debunked arguments as if they were brilliant new ideas.
We have a few knife catchers who post here. Someone said they are just trolls trying to cause a stir. If they are for real, they deserve a huge JT where the sun don’t shine. Bye bye money!
Hey I don’t blame them…let them troll. I troll Trulia Voices and try to speak the truth to anyone who asks for advice on buying a home. It’s actually a lot of fun…
I like trolls. It prevents us that must be right about something from feeding on each other.
Trulia.com doesn’t consider that trolling. Do the other users think you are a troll?
A little trollery keeps the dialogue open and that’s what a free society is all about.
Boy, I missed that argument. I would’ve had fun with it, as you all know.
If Emmi can’t fiure that one out on her own, then she’s not a troll, just a stupid b&tch!
Sorry about the missing “g”, but I’m sure all of you, unlike Emmi, could figure that one out on your own.
go, Big V!
We did this in the early ’70s. It’s called “stagflation.”
Big V –
Maybe this was discussed during that banter, but if not it has been in the past:
Buyers are “taking the plunge” now, for…… family. We want to be close to family. We want a yard for the kids now. “We’re really doing this for everyone else”.
Sure.
With a purchase having long term financial consequences, in this case significant long term negative consequences, if you were really thinking what is best for the “family”, you would wait at least 2 more years to see how far and fast this thing plays out. Admit you are buying for yourself. You want to paint the walls, plant your flowers, and …..(drum roll)…. call yourself an owner. This should not be worth several hundred thousand dollars. Foolish “I want it now” behavior.
Mrs. L and I were thinking of our family when we sold all of our properties (not many by the way) between 2003-2005, the last being our own residence. This was done to create a stronger financial position for our family, and if in doing so we rent for 5 or more years, fine.
The one and only positive I see in the “family conscious” buyer today? They didn’t marry my children.
I had a poster on my blog that said I needed to buy a house … for the children.
I’m surprised she used the “if you don’t buy a house, the terrorists win” argument.
Shaking head in disbelief.
Sigh SLO.
Remarks like hers/his can surely get me angry for two seconds.
Is it possible s/he is a Realterrorists?(TM)
Good night Irene!
Leigh
I’m raising three small children in a 2 bedroom condo. Ages 1 3 and 5. Its fairly large 1000+ sq feet with a large master bedroom.
Baby sleeps in master and the kids generally sleep in the other bedroom if they don’t sneak in after a bad dream.
I’m glad I did not buy a home yet they are hard on the equipment. Carpets stained by various spills and other liquids.
Walls drawn on with crayons. Commode stopped with toilet paper and over flowed. Splashing fights in the bathroom.
Also you can’t buy nice furniture or arrange it. Baby proofing a large home with open kitchen is a pain. Not to mention keeping track of the kids.
Bottom line is I’d not look at buying a home until the youngest is over 3 preferably 4-5 years old. Younger than that and its cheaper to rent on maintenance alone.
Gadzooks, glad I am not your LL. I have some feeling that you give us tenants a bad name … but I guess your LL knows about your kids and can take the consequences. No wonder it costs more to get INTO a rental than into a mortgage.
“I’m glad I did not buy a home yet they are hard on the equipment. Carpets stained by various spills and other liquids.”
“Walls drawn on with crayons. Commode stopped with toilet paper and over flowed. Splashing fights in the bathroom.”
Michael, there are places in the home for feeding people, the dining room or kitchen. They also make cups with LIDS for children. You should try them sometime or better yet give them water. Too much juice is bad for kids anyway. It’s fills them up, they don’t eat properly and it’s fattening.
It’s sounds to me like your kids could use some better supervision and discipline. As a mom of three myself I’ve always said you should never have more children than parents because now you are outnumbered.
In my lease it’s stated that if I clog up the plumbing I am responsible.
This is in response to the troll discussion (above), particularly to this statement by Big V:
It would help us a lot if you would try more to understand how we have come to our point of view before you just hop on here and start posting debunked arguments as if they were brilliant new ideas.
I have been reading this blog for a couple of years but I still have a hard time wrapping my head around what “we” believe. I have particular trouble explaining it to other people. To be honest, the reason for that is that I’m probably not as bright as most of you. I have never had a head for numbers or statistics.
Over the years I have visited several churches; their bulletins often have a statement of beliefs on the back page so that everyone knows exactly what they are dealing with. I wish this blog had a similar statement of beliefs. For example:
We, the Housing Bubble Believers, hold this belief to be true: it makes more sense to buy at a low price and a high interest rate than it does to buy at a high price and a low interest rate. Why? If interest rates are high, then they will go down later, and you can refinance. If prices are high, then you’re stuck. You can never reprice. On the other hand, if interest rates are low, then they are likely to go up in the future. When that happens, you will have a difficult time selling for what you paid, since your future buyer will be hampered by his/her high rate.
Now let’s sing Hymn 312………about the man who built his house upon sand.
“Units facing Palm Canyon Drive, which may be noisier than the homes that face the mountains, will draw a younger clientele, he said.”
No, no. It’s the old, deaf people that don’t mind all the street noise. Young people need to sleep at night so they can go to work in the morning. I can’t figure out why all these city planners, developers, mayors, and such still think that there is some weird way to keep the bubble going. Just build apartments on busy streets. That will attract the affluent young people. Yeah right!
I don’t know? You see the latest Jason Bourne movie? What’s up with the sea-sick camera movements anymore? What about the dude that just won American Gladiator? I think he’s half Rooster. It’s stimulating baby, stimulating!!
The first two Bournes were fantastic. The most recent one was nearly unwatchable. I felt ill.
The new wave sea-sick camera movements, revolving closeups, and dark “lighting from the right (or left)” director’s art (not to be confused with actual film enjoyment) is one of my pet “peeves”.
“not to be confused with actual film enjoyment)”
Also not to be confused with skilled filmmaking—it’s all just pointless, empty style substituting for content. Gregg Toland (Orson Welles’s cinematographer for Citizen Kane, and for many other classic Hollywood films) is spinning in his grave.
Ugh, I am so sick of the hand-held, quick-cut, MTV schtick in movies and commericials and…everything. What I wouldn’t give for one long fixed dignified shot, yeah like a Welles movie..
Welles is known for one of the most famous continuous single takes in film—the opening credit sequence of Touch of Evil. Robert Altman spoofed it in The Player.
Currently there are two examples of both: Cloverfied causes motion sickness and Atonement has a wonderful long continuous tracking shot on the beach at Dunkirk.
Check out Children of Men, excellent camera work IMHO the long takes really pull you into the action.
Old people are selectively deaf, like my elderly neighbor who insisted that our new neighbors were playing the loud music even after I told her it was us.
In 2008, the number of overnight visitors to the county should increase by 1.9 percent to 26.3 million, ”
Book em Danno!
Yeah…They are comming for the new Simson ride…
” several local attractions such as the new ‘Simpsons’ ride at Universal Studios Hollywood theme park.”
… well that does it for me .. its the Simpson argument…
As Johnny Cockran said… “if it dont fit you must aquit.”
Lol
When the economy of a state depends on one theme park attraction… Not exactly a positive sign.
And exactly how many foreigners are coming to the US for a ‘Simpson based theme ride?’ Isn’t that show targeted at the US audience?
Got popcorn?
Neil
Actually, the Simpsons are loved around the world, but when they pull that out as saving the LA economy, rather than something like the B1 Bomber, I say turn out the lights, the party’s over!
“…a person would have to make a minimum of $57,300 to qualify for a $285,970 entry-level home. Assuming the buyer puts 10 percent down and has an adjustable interest rate of 6.21 percent, officials say that translates into $1,910 monthly payments, including taxes and insurance. That’s mathematically speaking. Real life doesn’t always add up that way.”
That’s a very interesting mathematics. With this salary, $1,910/month is more that 50% of what the person brings home. Should this person drive a car, have a vacation, have kids?
The Union Tribune. “Would you pay $69,300 for a two-bedroom home in Vista? Or $116,300 for a three-unit apartment building in the Barrio Logan neighborhood of San Diego?”
“Those are the starting bids for a few of the tax-delinquent properties the county plans to auction Friday in its annual effort to recoup unpaid property taxes.”
“Not every deal is as good as it looks. Some properties have tax or bank liens that may exceed the auction sale price and lead to post-purchase headaches for buyers. Still, it’s hard not to be amazed at the rock-bottom opening bids.”
“The two-bedroom home in Vista with an opening bid of $69,300 has a market value of about $335,000, according to an Internet real estate site.”
“The three-unit apartment building in Barrio Logan starts at $116,300, but similar-sized buildings have sold in recent years for $400,000 to $575,000. Zillow estimates its value at $526,000.”
Shill auction anyone?
“The two-bedroom home in Vista with an opening bid of $69,300 has a market value of about $335,000, according to an Internet real estate site.”
Houses in parts of Vista are so rickedy.
Tiny run down shacks in cruddy ‘hoods.
Can someone find a photo of this Vista crapshack?
Some properties have tax or bank liens that may exceed the auction sale price
Nice.
Auction opening bid: $69,300
Tax lien: $100,000
Bank lien (for remaining neg-am + HELOC specuvestor uppaid balance): $300,000
standard auction fee (10%): $46,930
Grand total: 469,300 (if you”re “lucky” enough to be the only bidder): $516,230
Ok, so who wants to be the next auction “winner”? –step right up, folks!
Does California law require you to pay the unpaid mortgage balance upon a tax sale? That is hysterical. The bank should be the only buyer to protect its interest.
AFAIK, tax sale wipes out all but IRS leins.
Tax liens have priority. The bank’s lien will eventually get wiped out. Expect the bank to bid.
Although given the current situation the bank is more likely a pension or other group that purchased a CDO. I imagine the holder of the mortgage has to be notified of the sale. I imagine many just write the whole thing off rather than bid on the property.
dont forget the ” buyers premium ” possibley charged by auction companies. maybe not by govts at tax sales but that 10% extra added to sale price as a buyers privilege(HA!) is just extra profit. Always burned me up the many fees auction companies seem to add to both the buyer and sellers. rediculous!!
Barrio Logan in San Diego like Compton is to LA or Oakland to San Francisco. I guess if your aim is to be a slumlord it’s great.
I can’t imagine how anyone of sound mind paid that much. Actually, now I remember why, it’s close proximity to Petco Park. It was going to be one of those transitional neighborhoods. I recall reading in the union buffoon how the residents of Barrio Logan were not too pleased about being pushed out of the neighborhood.
I can substantiate this. I make $57,000.00 per year. My take home salary every two weeks is just over $1,700.00. I certainly could not afford at mortgage payment more than half of my month salary.
Those numbers are just a joke! What these jokesters do to get thier numbers is run it based on income and housing costs alone. Now FIFA53, you’re figuring this out using take-home pay. That’s not the way it works for qualification (although I agree with your point). A wage earner gets to use pre-tax gross to qualify, not take home. But here’s where those idiots numbers suck the thick one. They assume that the person qualifying has no other debt (not to mention 10% down). The numbers in the quote put the qualifier at a 38% ratio. That 38% is what we call the “front-end” ratio, or the number before all other debt is calculated in. The “back-end” ratio is what the lenders really care about. That’s the biggie for DTI. In order for that qualifier to stay at 38% (which is where you about have to be in todays tight lending) he would have to have no other debt…(are you done laughing yet)… Now, how many SoCal’s do you know that have 10% down and are debt free….(I think most of them are on this blog)….In my experience, at best you’re going to throw at least one $500 car payment and about $150 in credit card payment minimums into the debt pile to get your number, the back-end DTI. That’s why that number, in addition to all the others like it, are such a friggin joke. Absolutely clueless!
groceries?
My wife and I combined make over 3 times what he makes, and that mortgage payment is right about where I’d like to see ours when we finally buy.
Are the Retards touting adjustable rate mtgs again in calculating afordability? That’s how we got in trouble before. Eh? Why no comment on Leaner from Anderson or the stupido Kyser who think we will be on easy street in 2009? NOT In SLO County were not halfway there yet!!!
“The city can assess as much as $100,000 per parcel or structure that will be tacked on as a tax lien and paid to the city when the property is sold. The program is expected to begin in April.”
“Gene Wunderlich, president-elect of the Southwest Riverside County Association of Realtors and an agent in Murrieta, said the association supports the new law.”
“‘Anything the city can do to help keep home values up is beneficial to us,’ he said.”
Yes Gene, that’s really going to keep up home values. Just subtract that $100K from the foreclosure price so that the property will sell, that’ll really help those comp’s. In the meantime how do you purpose to stop prices from falling when every forth house in the neighborhood is vacant and more are being foreclosed as the months go on. Gene, you and your ilk have purchased overpriced pigs in a poke and we are entering the slaughter phase.
Yeah, this is classic - want to see lenders let those properties go at REAL FIRE SALE prices? Fine them 100k if they hold on. This is going to be fun! Maybe I can pick up a rental for cash.
I think it was Hoz that said earlier today that ANYTHING that government does will only make things worse.
Abso-frickin-lutely true.
Hoz rules!
Truth be told, this is large. (with the wind abaft the beam; “a ship sailing large” - wordnet).
Air slow or big badaboooom?
Ya just can’t make this stuff up!
Leigh
Seems to me this new rule might keep banks from actually foreclosing, and thereby drag the process out even longer.
This should serve to further contract credit.
As it forces banks to dump faster to avoid problems; prices will have to drop even faster and farther to attract more investors in an increasingly lean enviroment.
Not to mention they will be wary of getting burned again.
“As part of his no recession forecast, UCLA Anderson Forecast Director Edward Leamer also notes that if declines in housing were going to trigger a recession, they would have done so already. Recessions have traditionally trailed a housing peak by no more than a year; at this point, the business cycle is trailing the housing cycle by seven quarters without a recession.”
This message (from our “bitch”) brought to you by CAR
Can anyone think of a Lamer argument than Leamer’s?
pulleeeezz … I translate this as, “We are already in a recession but mumbo-jumbo has succeeded in hiding it so far, and if we are lucky, mumbo-jumbo will continue to prevail.”
Leamer in freefall: “I ain’t hurt yet, so I guess I can fly.”
Come to think of it, I know what the most obvious part of the mumbo jumbo is: if US GDP were measured in units of gold, Euros, or any of a number of other foreign currencies, the several consecutive quarters of decline would be obvious.
“This message (from our “bitch”) brought to you by CAR ”
LOL!!
The noxious fumes of the LA air have rotted their pea brains. Once you strip away the wanna-be poseurs, you see people who are struggling.
Sh!theads…
Ed Learmer is no schill, but he has a problem. Past recessions were caused by something other than a housing bust. Drop in aircraft demand for exampl. Workers lost jobs, cut spending, eventually were unable to keep up with morgtage, defaults rose and home prices dropped. This time, the housing bubble bust is the cause. Housing demand fell sharply once people began to realize that they could not rise forever, home demand dropped sharply, workers lost joby, prices fell, and morgtage defaults begin to rise before the overall economy moves into recession. The lag between housing and the economy is much shorter because housing itself is the shock leading to recesson. How much shorter? How deep a recession? Nobody really knows because the last time a housing induced recession took place was in the 1920s before our national accounts data were even collected.
All economsits the Anderson group, the Fed, Government, and research institutes are in the dark here. It is a mistake to rely much on past relationships between housing and economic recessiojns to call this one. Expect a lot of “revised” forcasts.
A bubble in my studies always deflates down to the base level that it started at. In this case around 2001.So check the housing prices of that year and you may get a ballpark idea of value at the bottom. We were in the start of a recession then because of the tech boom crashing so the drop in interest rates and the boom in real estate. The bad thing about bubbles is that they never inflate the same bubble again back to back. So real estate may have to wait longer than 2011 because the money is going somewhere else next time. also a recession may drive real estate prices lower than 2001 prices because it just an additional downward pressure on values(loss of jobs,scared people not spending,less mortage money around to bring ALL OF THE HOUSES BACK TO FORMER LEVELS since subprime people are out of the picture and banks are scared to lend to eachother, what do they think about me and you!
“In 2008, the number of overnight visitors to the county should increase by 1.9 percent to 26.3 million, largely a result of the weak dollar, an expected rise in Chinese visitors and several local attractions such as the new ‘Simpsons’ ride at Universal Studios Hollywood theme park.”
So LA is depending on Homer Simpson to save their economy??? I am amazed at this thinking. But then it is LA…
Imagine economic conditions that demanded a toned-down, savings oriented, and generally frugal lifestyle for the lovelies of LA.
They would rather eat their young than toss that cell phone.
DOH?
Homer Simpson was one of the characters in “Day of The Locust”.
“Day of the Loan Cost”?
Takes me back to ‘L.A. Story’ with my favorite, Steve Martin.
“In 2008, the number of overnight visitors to the county should increase by 1.9 percent to 26.3 million, largely a result of the weak dollar, an expected rise in Chinese visitors and several local attractions such as the new ‘Simpsons’ ride at Universal Studios Hollywood theme park.”
OK, so Southern California is pinning its economic hopes on Chinese tourists visiting due to the new Simpsons ride. So what’s everyone worried about?
They got their tickets
http://tinyurl.com/2m3gfy
Boy assessing up to 100k for a empty house is really going to help property values. As the fine climbs the bank has a incentive to unload at any price. This will drive down overall values.
What do you want the bet that the good ole boys on the city council will allow buyers to waive the fee (wink wink). Nice way to get cash flow rentals.
I just hope that Lisa and her snobby know it all attitude doesn’t keep people away.
Got to be honest — my family is coming out from the UK this year (and commenting on the value of the dollar). And yep, they are going to Disneyland. I think there’s a germ of truth in that touted tourism.
They better convert their Pounds quickly or soon it will be 1:1 with the dollar.
For a visit maybe, to buy I don’t think so. Too many nicer places in the world. Many for a lot less dinero.
“Got to be honest — my family is coming out from the UK this year (and commenting on the value of the dollar). And yep, they are going to Disneyland. I think there’s a germ of truth in that touted tourism.”
Went to Disneyland in Anaheim last year with my girlfriend and her 15 y/o son at her urging.
Jesus. Nothing but crowds and crowds of mouth-breathing overweight, dazefaced automatons with their whiney ADHD offspring. I just didn’t get it. Crappy food, rediculous ride lines and truckloads of useless over-priced crap being hawked at every turn.
How in Christ’s name anyone would opt for Disneyland over a nice beach resort or mountain getaway boggles my mind.
Ok, I digress. I guess Disney’s allure is aimed at kids (god forbid they actually do something like learn how to swim, fish, or hike)…
DOC
But But it’s the happiest place on earth !!
Hi Strange,
Ya went to the wrong Disney! Cali is OK…FL is wow!
Took our one and only son to FL Mickey in 94/5.
Never felt so safe in my life. We stayed on grounds, and parked the car for seven blessed days!
I’m the mum nobody wants - obsessive! Meoooooow!
Great son, great vacation.
Would not recommend FL to live, visit with Mickey with child(ren) is great.
Camping, fishing, skiing, canoeing - better than any thrill park!
Best,
Leigh
you are kidding, right? I was down there 2 years ago because my corporation sponsored a conference at the Grand Floridian . I stand by my comment below but will add another category: dimwits.
theme parks and amusement parks attract the morbidly obese, snot-nosed brats, trailer trash, gang members, pedophiles and foreign tourists who have not researched their destinations properly. sad, but true.
“theme parks and amusement parks attract the morbidly obese, snot-nosed brats, trailer trash, gang members, pedophiles and foreign tourists who have not researched their destinations properly. sad, but true.”
Agree 100%. I have done a lot of outdoor adventure/camping /hiking /backpack trips to CA mountains & deserts and what I’ve seen is lots & lots of German tourists, who have a better sense of what constitutes a quality vacation, the thrills and beauties of the outdoors. Am not a big fan of amusement parks or cruises.
You have to go during the week, off season - vastly shorter lines equal a much, much better time.
The wife and I are actually season pass holders - we love it there, but I make a point to avoid holidays and go on a random Tuesday night every so often, quickly jump on a ride or three, and then take off for dinner. Space Mountain still gets me laughing and relaxed every time, without fail, and without the legal risk of other things that accomplish the same result.
When I had a season pass I would go on Tuesdays, as Jim suggests, but right at the opening, which seemed to get me on more rides faster than any early evening time.
We were waiting in passport control in Auckland and there was a 747 load of Chinese from the People’s Republic, behind us in line.
Instead of clutching little red books, they had passports and were wearing the latest in western fashions.
Things change
Lad, I’ve noticed the same thing at popular tourist destinations in Australia - only a few years ago, you could tell staright away the Chinese tourists by their drab, plain, one-size-fits-all clothing. (And don’t forget, there were the wealthy comrades!)
Now, as you say, the brightest and best of western fashion. Of course, they are from where the items are manufactured, so it is still relatively cheap for them. Times change, indeed, and a good thing, I think!
The San Diego current list for Auction on Feb 22
SanDiego county gov
http://tinyurl.com/32lojm
Hoz, thanks for posting the link. I tried to look up the Vista house (934 Raintree Place) on Redfin…sadly, there are no pics except an aerial.
Looks like a lot of timeshares…
“There will be job loss in the construction sector, as well as real estate-related financial services, but not nearly enough to trigger a recession.”
Well it wood appear that you guys/gals are wrong.
http://online.wsj.com/article/SB120347007609178711.html?mod=opinion_main_commentaries
‘would’
http://tinyurl.com/2xauls
“California’s nonpartisan fiscal watchdog on Wednesday said the state’s budget shortfall has grown to $16 billion and offered an unprecedented and competing plan to close the gap by imposing both spending cuts and tax increases.”
“State revenue from all three major sources – personal income taxes, corporate taxes and sales taxes – is coming in below forecast, she said.”
At a minimum, tax revenues are trending lower if not actually declining. But the shills still tell us there won’t be a recession. First, housing prices only go up, now we won’t have a recession. Please make another forecast so I can expect the opposite.
For those here who don’t know, Elizabeth Hill has been damn close to dead on with her forecasts. The Legislative and lobby types dislike her honesty, but she’s been so accurate for so long they just try to ignor her. And given our state finance history, they’ve done that well.
“It came out of the blue. Loretta Altman was driving to work at Countrywide Financial Corp. in Simi Valley when she got a phone call from a friend.”
“‘She said, You’ve got boxes at your desk.’ I said, Does that mean …?’ Altman recalled.”
This story is pure BS. Countrywide filed the MA in September of last year detailing the number to be laid off. Either her supervisor screwed up or she forgot the notice that warned of impending layoffs.
Where is that POS these days? Is the buyout really going to happen?
Ah lovely lass, the world would like to know. There is a large player that bought the stock from $14 down to $9 and they want their money back. Fat chance on that, nevertheless they can delay the closing. On the other side this was a quick fix orchestrated by the Federal Reserve, the thought of it completing was enough to stabilize the banking stocks. Bank of America does not really wish to purchase, but they are prepared to purchase.
My guess - B of A is quietly transferring all the worthwhile assets to the bank and will announce at some point that the purchase of CW has fallen through. This leaving a mostly eaten carcass for the vultures to fight over.
The Ventura County Star announced they were laying off 7 staff members due to low ad revenue. The sunday classifieds only had one page of ads for jobs. The article was obviously written for dramatic effect. my co-workers said that was not unusual.
Maybe she’s being fired for a reason other than downsizing. That could explain why her new employer is backpedaling now.
Of course, it’s just as likely that Countrywide is being obnoxious. Something just sounds hinky about this. Not enough info.
“Gary Lupo, a Realtor in Riverside, said cities facing a large number of foreclosures have only themselves to blame. ‘The biggest problem and the whole reason why this occurred is because everybody was greedy,’ Lupo said.”
“He contended that mortgage lenders were greedy in seeking commissions, home buyers were greedy in signing for homes they couldn’t afford and cities such as Murrieta were greedy for the revenues they receive in allowing ‘McMansions’ to be built and sold, referring to vast tracts of large cookie-cutter-style homes.”
“‘You guys approved it,’ he told city officials.”
I wish more people would tell local gov officials like it is. They did indeed approve mile after mile of craptastic developments that will either become slums and squatter’s havens, or have to be plowed under in the future. Nice to hear a realtor actually speaking out about this.
Oh, newsflash from Florida: One of our interior counties is going to slash impact fees by half for builders. Wonder if they’re going to do the same with taxes. NAH!
I noticed that he didn’t blame realtors for steering clients into unaffordable housing. Because they’re all saints.
If the officials didn’t approve it they would have been called “anti-business.”
Heads up:
I am seeing big price drops in Florida, my home state but only for Port Saint Lucie, Palm Bay, Cape Coral, Ft. Myers, Loxahatchee and a couple other cities. But most other cities remain stubbornly high including Gainesville and Ocala. Other southeast states also remain stubbornly high with very little drops. The way it’s looking to pan out, $50k homes may be available in NW PA(true today) and in the near future, in those forementioned Florida cities. Who would pay $200k elsewhere?
Mister Bye, you have not mentioned a single town in eastern PB county, which IMO is the foreclosure capital of the state. I do know people who are trying to sell property there. It’s true there is nothing for sale in So FL for $50K. Where are the $50K houses in NW PA? and what is the snow depth today?
Thanks, I am trying to take you a little bit seriously - az_lender
That one is the pot calling the kettle black as in characterizing democratic ideas as “socialist”.
I don’t see the connection with the message you are apparently replying to, although I do often characterize various Democratic Party agenda items as “socialist” (not to be confused with democratic-with-a-small-D ideas), i.e., govt engineered redistribution, and/or govt for benefit of the Political Class.
God, I just love that piece on buying in the desert.
“‘Everybody has their own story to tell and everybody who makes $57,300 a year doesn’t necessarily fit into that program,’ said Kurt Handshuh of California Home Loan in Palm Desert. ‘If they have a car payment, or child-support issues, or a credit card payment every month, that drives the price of a house (one can afford) down.’”
Yeah, ’cause, you know, not that many people have car payments and credit cards… and even at this, they are assuming lenders are financing at over 5x DTI!
What’s even funnier is the affordability index - barely over 1/3 of the population can afford an entry level home there - so what proportion can afford the median home?
And even this is “Assuming the buyer puts 10 percent down” - what proportion of desert residents have $50,000 cash to put down on an “entry level” place? Earning 50k?
The people who built and bought in the desert are so, so burnt…
A no debt, 60K wage earner with 10% down?……
BWAH-HA-HA-HA-HA-HA-HA-HA-HA-HA!!!
pure comedy
Like someone here often says: you just can’t make this stuff up! CAR, NAR, UCLA, etc. are all grasping at straws. I think that Ed Leamer guy from the Anderson Forecast just might be retarded. I am sure that Jack Keyser from the LA Econ. Dev. Corp. is. I am so tired of reading their garbage “forecasts” in the media. What ever happened to that uber-dip$hit Gary Watts? Gary Watts, Ed Leamer, and Jack Keyser = 3 Stooges.
Whoa. Do not, I repeat, do not leave out John Husing!! He eclipses all stooges and is the uberstooge. Not too long before the Inland Empire slammed into a brick wall, he strongly asserted that job growth and the location of the IE at the center of the universe would prevent any recession or decline in housing prices.
Yeah, Husing and Watts are two ‘tards in a bag. They definitely take the cake over the academics, who are simply out of touch (speaking as one who works at USC).
But, but: “Hrdlicka said he sees a predominantly gay market interested in purchasing the townhouses as second homes, as well as yuppie hipsters from Los Angeles.”
Everybody knows that gay people and yuppie hipsters are rolling in dough, don’t they? At least that’s the stereotype, isn’t it? Why wouldn’t they buy overpriced condos IN THE MIDDLE OF THE DESERT!!? I know that the weather here in LA is so miserable that I would love to drive 150 miles to a second home in a place that’s hot as a desert during the day. I know a good sunburn always cheers me up, and I love it when it’s so hot outside that I need to huddle indoors around an air conditioner to keep from passing out. But, hey, it’s a dry heat, and we all know that does wonders for your skin. And who would want to grow a garden anyway, when it’s too hot to go outside and enjoy it?
WHAT ARE THEY THINKING? WHAT? EYAAAHHHHHHHH!
[Kinison rant off]
Too right. In my experience, gay guys usually buy old wrecks with good bones in undiscovered places, then use their creativity to fix them up beautifully (cf Ogunquit, Maine), not brand new boring condos in overpriced resorts for the old…
“Everybody knows that gay people and yuppie hipsters are rolling in dough, don’t they? At least that’s the stereotype, isn’t it? Why wouldn’t they buy overpriced condos IN THE MIDDLE OF THE DESERT!!?”
And they’re mixing apples and oranges - they’re giving median income and starter home expense. Regular desert 3/2 homes w/pool that were about $175K before 2000 are still sitting at over $500K in decent neighborhoods in Palm Desert - I’m not even talking country club or gated. And I can certainly tell you the wages have not gone up and all the new jobs created are cheapa*s service jobs.
OT–
This week at the Santa Barbara Housing Bubble Blog: Beach Boy Bruce Johnston’s home finally sells after 17 months on the market. Two other Montecito homes finally sold recently as well — but only after price reductions of 19 and 27 percent.
Saint Barbara
Knife catchers!
I showed my dad about 30 houses in Loxahatchee, FL for under $200k(prices have gone way down) but still overpriced. How much more will they drop? I won’t buy one at current prices even though he wants to help me “afford” it.
How much is house insurance on a $200k house in FL? Haven’t the insurers left the state?
I took some of the photo tours of the other properties. The 15 million dollar ones. Oh My Gawd who can have homes like that? Those were unbelievable. I could not even imagine going out my back door at stepping 150 feet to a sandy beach each and every night. And I would love to know why they are for sale? Where in the world would you go that could be better?
Yeah, but beaches in California are all public. No one is allowed to actually own the beach. That means that people with beach-front houses have to share their yard with anyone who happens to drop by, and at any time too.
You’re right that if people get onto the beach, they have a right to walk anyplace they want. But the super-rich who own waterfront houses in California have done a pretty good job of restricting public access by limiting places for outsiders to park and closing off pathways to the beach that are adjacent to their property. In Malibu, this has been a huge issue. David Geffen has been in a protracted lawsuit about this, attempting to keep people off “his” beach. Wendy McCaw, the evil billionaire owner of the Santa Barbara News Press, has also been in the vanguard of the “keep the riffraff off my beach” movement.
“But the super-rich who own waterfront houses in California have done a pretty good job of restricting public access by limiting places for outsiders to park and closing off pathways to the beach that are adjacent to their property.”
I love those state signs along PCH saying “public access beach” but try finding a place to a park along PCH anywhere. I say that maybe 2 % of pch is available to park right off the highway, and good luck on a summer day.
Public access my as***..
“David Geffen has been in a protracted lawsuit about this, attempting to keep people off “his” beach. Wendy McCaw, the evil billionaire owner of the Santa Barbara News Press, has also been in the vanguard of the “keep the riffraff off my beach” movement”
Am not a communist or anything like that but I would make an aception and have the state emminent domain all those private beach preserves off the sacred Malibu shoreline. My sacred rights to free uninhibited access to the entire precious CA coastline is as important as the right to life, liberty and the pursuit of happiness .
I was driving around Montecito this weekend and saw a bunch of hand-written “for rent” signs taped onto the fence of a big house across the street from Butterfly Beach. Never saw anything like that before in Montecito. It’s the end of the world…
Also, remember when I posted the info about the “fractional ownership opportunity” in my old SB neighborhood, More Mesa Shores? Took a drive there this weekend and saw many yard signs reading: NO FRACTIONAL OWNERSHIP, NO TIME SHARE OWNERSHIP, NO BEACH ASSOCIATION OWNERSHIP, SAVE MORE MESA SHORES! Assume this is in response to the idiot who built the spec house on Austin Road. HOA meeting next week…
“During the presentation, Linda Mejia, a senior code enforcement officer, told the council that of the 26,283 single-family residences in the city, nearly one out of 23 homes is in foreclosure. By the end of the year, code enforcement officers expect about 5,000 homes will be bank-owned.”
Do the math?
Today’s inventory of foreclosed homes 1 in 23 (1,100). Ugly
End of year inventory of foreclosed homes 1 in 5 (5,000). More than just ugly. Should I buy the stock of a bulldozing company?
O/T but a fun story, especially about the new girlfriend.
“The 18,500-square-foot, 103-year-old townhouse at 18 East 68th Street just went on sale for $64 million, the most expensive officially listed house ever in New York. Dazzlingly, the place was sold to developers in 2003 for just $7.6 million, who sold it only last May for $20 million to an investment group managed by the banker Joseph Ingrassia.
How did $7.6 million turn into $20 million and then $64 million? The tenants of the mansion’s 11 apartment units, some elderly and rent-stabilized, were slowly lured away by a sharp 60-something man named Silvio Galterio.”
http://www.observer.com/2008/sale-no-vacancy-inside-emptying-manhattan-s-64-m-mansion
That thing is worth maybe $7m if even that. Listing price is for publicity stunt, no one that rich will buy it.
A fixer upper at 64 mill.
Another O/T but related. “Flea Swarms Cover Neighbors Head To Toe In Central Fla. Community”
“DELTONA, Fla. — Swarms of fleas from an abandoned Central Florida home are spreading throughout a neighborhood, covering some homeowners’ head to toe when they step outside.
“I walked through, into the back yard and walked back into my house and I was covered from head to toe with fleas,” neighbor Leslie Larson said. “The fleas come from the lawn, rats and dogs they didn’t take care of.”
http://www.local6.com/news/15346853/detail.html
This is why I will NEVER own a cat or dog that needs to go outside. My skin overreacts to fleas. Not only do I have the itchy crap, but I get huge welts. One time, at Marine Street Beach (La Jolla) a very fearful mom asked me if I had AIDS. At the time, we lived in home where I finally had to force my husband to use Off every time he went into the yard. We did not have pets but were absolutely inundated with fleas because the neighbor had two dogs who were free to roam but also foxes and other critters visited our yard in the nocturnal hours. What a nightmare.
“‘It was a complete side-swipe,’ Altman said. When the company went through a round of layoffs in October, people were informed ahead of time that cuts were coming. ‘This one was completely out of the blue,’ she said.”
Is she DENSE? *I* could have told her it was coming! Who at Countrywide wouldn’t suspect his or her job was at risk?
She was thinking that she would be ok now that the Super Bowl is over!
The blindsiding/sideswipe meme is very common in this industry. Here’s an example from Tucson:
http://www.azstarnet.com/sn/firstmagnus/
The above company was in trouble for quite some time before its “sudden” collapse last August.
Yes, she is dense. Why are we surprised by this?
“‘I may miss out on a great job because Countrywide refuses to fix this problem,’ she said.”
Hahahaha. Yeah that’s going to work. Sue Countrywide. She’ll need to get in back of the line. It’s right next to the “sue Mozilo” line.
“In the Coachella Valley, a person would have to make a minimum of $57,300 to qualify for a $285,970 entry-level home.”
“Assuming the buyer puts 10 percent down and has an adjustable interest rate of 6.21 percent, officials say that translates into $1,910 monthly payments, including taxes and insurance.”
Sorry, the minimum income required for a $1,910 monthly payment is NOT $57,300! IT IS $81,857. The percent of gross income spent on principal, interest, taxes and insurance (PITI) cannot exceed 28% (see http://www.dunlookin.com/financing.asp as an example). With a monthly income of $57,300, that would make the payment 40% of gross! Who would think that having to pay 40% of your GROSS (i.e. before taxes and other expenses) just for housing is reasonable?
DaveO
This would be the Maximum anyone could possible afford 5 times income with NO car payments NO monthly CC or student loans, NO balloon payments on the plasma or furniture (no interest or payments till 2010)
But he forgot the BIG ONE: SAFE DRIVERS insurance, there is a couple hundred a month you can put toward a mortgage, if you didnt have SR22 high risk insurance.
http://www.avpress.com/n/20/0220_s1.hts
Story about squatters in a purported 800K house.
“QUARTZ HILL - Sheriff’s deputies on Wednesday ousted a family of alleged “squatters” from a house in the community.”
Another attempt to get some HBB’ers to show up at a very important hearing tomorrow at noon. I know it’s difficult with work, kids, etc…but if we can find hours every day to whine on housing bubble blogs, one would think we can find time to write letters and attend hearings where the PTB are suggesting taxpayer bailouts. We need to show numbers; that we’re a foce to be reckoned with. Otherwise, we are no better than the sheeple we rightly denigrate here on the blog.
If this idea passes in San Diego, expect to see the idea spread. More people need to be up in arms about this.
Reinvestment Task Force
Land bank discussion
When: Thursday at noon
Where: 12th floor, San Diego City Hall, 202 C Street
What they are: Land banks are government entities created to acquire, manage, develop and convey foreclosed properties in the best interest of communities. They have been used in the Midwest to take over tax-foreclosed homes in blighted areas, but they may be used for other purposes, such as buying bank-owned foreclosures.
Proponents say land banks can prevent blight and ease downward pressure on home prices. Their aim is to keep foreclosure properties out of the hands of speculators.
http://www.signonsandiego.com/uniontrib/20080217/news_1n17landbank.html
my local
http://www.fcta.org
we shoot back all day
CA renter, I could probably get down to SD by noon tomorrow, as I’m in Claremont now. My question is, if I tried to speak out would I have to pose as a resident of SD county? Hope someone may answer this question tonight… ??
We’ve been gone just a week from the states, and it seems as if things have taken a turn for the worse back home, substantially so.
You’d be hard pressed to know there’s a problem in New Zealand, the press here keeps things on the up high, not the down low.
This probably belongs in the Bit Bucket, but I’ll add it here instead since it’s CA related. Maybe I’m missing something (in fact, I’m sure I am), so please chime in, but here goes my tin foil hypothesis of the day.
I assume some people here have been watching what’s going in Vallejo (the city is talking about BK) and Half Moon Bay (a judgment has been rendered against the city for misappropriating someone’s property by falsely calling it a wetland, a judgment which the city cannot pay, and they are now openly talking about dissolution, though this may be just a scare tactic).
Any idea what this would mean for all the municipal bonds in people’s 401ks? This was supposed to be the “safe” investment for risk intolerant investors, or for balancing out a portfolio with something not as subject to big swings as the stock market. When Vallejo goes BK and Half Moon Bay dissolves, think they won’t be defaulting on any bonds? And how do we think foreign investors will feel about branches of the government here starting to default on their debts? Talk about a rush for the exits - if this gains traction, watch out…
And did the rating agencies rate these bonds? If so, consider the implications of defaults on highly rated municipal instruments for government debt ratings, and the value of municipal bond portfolios even where there are no defaults yet… Remember when Moody’s et al started downgrading CDO instruments? The effect of large scale downgrades of municipal debt on equity in bond-holding investments seems like it could be staggering…
I agree with your conclusions, and I think this is just the beginning. Vallejo has had financial problems for the past 20 years, I think the Vallejo schools are now managed by someone in Sacramento because the Vallejo people could not control their spending. Half Moon Bay has the money to pay it’s bills, I think the City Council should be put in prison for trying to pull off a land grab from some poor man.
If the national government was forced to back up it’s currency with a commodity like gold, it would be forced to default on the trillions $ worth of government bonds.
Looks like the city government of Half Moon Bay created the wetlands by the installation of storm drains:
http://tinyurl.com/27q54y
I’ve been pushing my pension administrator for weeks. They told us that our pension plan was too complicated so they were going to consolidate. He said there was a study that showed having too many choices kept people from participating?? I asked for the study, I still haven’t recieved it but it turns out it was written by Wells Fargo the administrator of the plan. Consolidation meant removing the treasury fund and consolidating into total bond market funds. They also got rid of a lot of other funds amazingly none of these were Wells Fargo funds. I got them to keep the treasury bond fund. I pointed out how worthless AAA ratings are and sent a few articles. I’m working on getting an FDIC insured money market. The Wells Fargo money market is not FDIC insured.
Another tid bit I discoverd is that the Wells Fargo options are collective investment funds not mutual funds, thus they are not subject to the same registration requirements and restrictions as mutual funds. They are not regulated by the SEC. How does this less regulated investment benefit investors I asked, he had no answer. I suggested that these types of investments may be at higher risk of mismanagement and theft. If anyone has any info on these I’d appreciate it I found very little info when I searched.
Why would somebody hold muni bonds in a 401(k)/traditional IRA/SEP? You’d get no tax advantage either now or later, and typically be stuck earning a lower interest rate.
Exactly!
Hmmm. You may be right on that point for 401ks, though I think the issue otherwise still stands, vis-a-vis all the bond mutual funds, money market accounts, etc., and I wouldn’t tend to assume that bond funds buy only corporate bonds. (I could be wrong here though…?)
Then again, here’s another interesting possibility - if you invest 401k money in municipal bonds, shouldn’t the interest, compounded throughout time, be tax free even on deferred withdrawal, such that when you eventually withdraw, you end up only paying tax on the original principal? Say you put $2k in a muni bond through your 401k, versus $1.2k after-tax. When you withdraw, you still have to pay the taxes on the $2k, but in the meantime, the amount of money you were earning tax free interest on was vastly greater, and if the withdrawal is many years later, the tax on the $2k is immaterial compared to all the extra interest you earned by starting with a 67% larger balance. I’m guessing that I’ve got this wrong, but it doesn’t seem like such a terrible idea…? (Assuming, of course, that the government doesn’t change tax rates or rules around the 401k, and that your muni bonds don’t default.
)
“value of municipal bond portfolios ”
—————–
cue the horns for the grand entrance of the newly formed Berkshire Hathaway Assurance muni bond insurance company
Who L.A.C.E.D. the Corp’s kool-aid?
“Southern California will likely avoid a recession this year and next despite a grinding slowdown in the housing market, according to the forecast by the Los Angeles County Economic Development Corp.”
These propaganda think tanks with fancy titles, were born out of Edward Bernays book of pseudo foundations, that are really big corp PR clearing houses. Where bad news get a new spin. They can barely say the “R” word. Will they ever use the “D” word?
Right. Do Not Pass Recession. Go straight to Depression. Do NOT collect income taxes, sales taxes, property taxes, transfer taxes, etc. etc, or experience the economic multiplier of several trillion dollars accross the U.S. year after year, starting last year. When these hare-brained cheerleaders for a no longer existing bull market in real estate finally sober up, it might be late 2009.
Expect at least 8 quarters of NEGATIVE economic “growth”. Oh, and, much more of Cali is already facing bankruptcy; than the L.A.C.E.D. loonies care to recognize.
Did I read that right? Are they seriously pinning their hopes for “no recession” in SoCal on a single new Simpsons ride attraction at Universal??
Hey, the new subs at Disney are pulling a giant crowd, but are they really bringing THAT much money in-state?
Hello all,
I read this blog a lot, and I think it’s great. I like the logical arguments here versus the “they aren’t making anymore land”, “buy now, or be priced out forever”, “Re always goes up”, etc. type arguments.
I’m from Calgary, Canada where our Re has gotten stupid. It seems a lot like California 3 years ago.
Anyhow, I wanted to ask your opinion. My parents are vacationing in Palm Desert California, and are thinking of buying a house. The asking (wishing?) price is $460K, and my father wants to offer $370K. I know nothing about this area. Does anyone know about the area? Typical rents versus prices? Reasons why he shouldn’t buy? Are there big price drops in the future?
Thanks in advance!
The operative word in “Palm Desert” is “Desert”. $370k is way too much. He should not pay more than 100x monthly rent for a house out there. Also be aware that California is close to a panic about water. We don’t have enough of it, and I suspect that the desert areas will be the first to lose service when the situation finally gets to that point.
An immediate intervention is in order. Tell them you have it on good authority that this area has been rated one of the top three potential sites for a dirty nuke.
I was just in Vancouver Canada; real estate there is crazier than California. California no longer holds the title to most expensive real estate. 700k for 5br exurban house in Surrey. New condos everywhere.
Its different in Canada because they are hosting the Olympics, Canada has a more liberal immigration policy allowing in lots of rich Chinese; plus Canada has lots of commodity exports.
700k for a pos in “Slum Surrey”. I would love to know a good way to short the RE market in Vancouver…
I live out here and won’t buy until it gets below $200K. Just because he can get it below the wishing price, doesn’t mean it’s not still overpriced. Palm Desert is really the center of the universe down here and they will only want to be here November - May at latest. There’s so much for rent right now, they could do much better renting.
Thank you all. I cut & pasted your replies and emailed my Pa.
I think they are looking for a place to escape the Canadian winters. I don’t blame them, but I agree renting is probably better.
I have this funny feeling Paulson will be talking with us soon and saying “we are probably going to skirt by and not have a recession”; but will fail to add on the “we will be in a solid depression, recessions are for wusses”.
Me a deflationista
Also bits-buckety, but it’s hard for me to post in the morning:
I see 2 separate factors that could positively influence home prices in certain depressed areas of the country over the next few months to few years.
(1) The rapid rise in grain prices. This could help to drive prices up (relative to the average) in small towns from the Plains and Upper Midwest east to Ohio, and to a lesser extent in the rural south.
(2) A possible win by the Dems in November. This could increase general transfer payments as well as things like subsidies for heating (a transfer payment from ExxonMobil to Mr. Urban Northern Crackhead), thus making it easier for people to occupy older residences in Rust Belt cities in places like the Great Lakes states, helping drive prices up there (relative to the U.S. average).
One can buy DBA , getting on the corn/wheat ride.
Graph from bankrate.com:
http://tinyurl.com/2ypxwp
Even more headwinds for those hoping to buy or refinance with a fixed rate 30 year mortgage…maybe we should encourage people to take out 5/1 interest only ARMS…
Was bored last night and reviewed some homes in communities in my old stomping ground.
Basically found 3 types of sellers in SFL..
1)Foreclosure/Pre
2)Short Sale
3)Desperate
Found communities that you could not even look at below 700K are now selling at $499K(talk about some FB there!!)
Those $1.2 McMansions that are selling are being picked up at $700K or less…
Had to laugh…always like to refer to the FB who bought my home..decided to RENOVATE the bathrooms and pool area..in a home were he is $200K underwater…I guess he thinks that is going to bring up the value!