A Fear Factor In California
The Recordnet reports from California. “In the early days of the housing downturn, home builders tried to pump up sales by offering various buyer incentives. That segued to cutting the base costs to try to attract buyers who were focusing more and more on the price tags. The newest trend is a price guarantee to try to relieve a would-be buyer concerned that the house bought today might sell for less in the future as housing prices ease nationwide.”
“‘This is the latest incarnation of those kinds of things - and one of the more creative,’ said Greg Paquin, president of the Gregory Group. ‘This is the most significant and maybe the one that has the most impact.’”
“And it is largely responsible for doubling sales in recent weeks, said aid Joe Anfuso, Florsheim CEO, who declined to state sales figures. ‘It’s a great selling factor to get the deal closed,’ he said. ‘You’ve got to be creative. We’ve found something that at least makes a buyer feel comfortable making the decision to purchase.’”
“‘There’s a fear factor in buying today,’ Ryland Homes spokeswoman Marya Barlow said. ‘This is a way to bring people off the sidelines and to the closing table - to rebuild their confidence.’”
“She said the price guarantee reflects builder confidence that prices are about as low as they are going to get. ‘Everybody has already cut prices, and I don’t see any more price declines,’ she said.”
From KFSN. “Stockton is the unofficial foreclosure capital of the country, with 6,300 homes in the foreclosure process. Fresno currently has 4,200, Merced 1,300 and Los Banos 1,100. Saturday there was a bi-city effort to help keep some people in their north valley homes.”
“Heather Schaefer attended one of two foreclosure prevention workshops held in Los Banos and Merced Saturday. She moved from Morgan Hill to Los Banos two years ago because of lower home prices.”
“‘We bought the house for $452,000. We basically were put into a loan we couldn’t afford at first. We were told by the broker 6 months after we closed we would be able to re-finance and the payments would go down,’ Schaefer said.”
“She says that didn’t happen and now her payments are hiking from $2,700 a month to $5,100 a month.”
“‘We can barely make the $2,700 and we just started being able to make the $2,700 payment and now they’ve bumped it up effective as of today to $5,100.’”
“Los Banos city leaders say Schaefer’s home, like many others facing foreclosure, is in a newer subdivision.”
“Tommy Jones, Los Banos Mayor, says ‘Those would be the first homes that sold at maybe $400,000 to $450,000, so with the decline, that home is probably only worth $250,000 or $300,000; because some of our homes have had a 50% reduction.’”
The Sacramento Bee. “Take $2 billion away from Sacramento’s homeowners – money they could be spending on cars or plasma TVs or kitchen cabinets – and you begin to understand what the housing slump is doing to the region’s economy. The 25 percent drop in housing prices since 2005 means fewer homeowners are able to borrow against their equity.”
“Across the state, DataQuick said equity extractions fell by $25.36 billion last year. At least one big lender, Countrywide Financial Corp., is cutting off thousands of borrowers who obtained equity lines of credit but whose houses have since sunk in value.”
“Scores of banks that once flooded mailboxes with loan offers are now rejecting homeowners looking for cash or lower rates. It’s the opposite of what happened during the boom.”
“Allen Perez took out a $100,000 equity loan on his Rocklin home in 2005 to install a swimming pool and pay other expenses. But when Perez, who’s now struggling financially, tried to refinance two weeks ago in hopes of lowering his monthly payment, he was turned down.”
“The home is ‘upside down’: He owes $530,000 on a property worth just $465,000. As a result, his family is cutting back on dining out and going to the movies. His two children had to drop out of youth soccer and baseball.”
“‘That’s heartbreaking for a parent,’ said Perez.”
“Judy Jones estimates she’s taken about $165,000 out of her home in the Rosemont area through a series of loans over the past decade. Among other things, she spent it on a new sunroom, a backyard patio, vacations and her beloved khaki-colored Toyota Prius.”
“Her latest loan, a refinance last April, netted her $28,000 cash, most of which went to pay credit card bills. ‘I’ve been living off that for 10 years, off the equity in this house,’ said Jones.”
“No more. Though she still has some equity, Jones said she is having trouble making her payments, is ‘maxed out’ and ‘can never borrow another nickel.’”
“Divorced and on a fixed income, she has recently cut way back on clothing, restaurants and other expenses. She spent just $250 on Christmas gifts, down from her usual $1,000 or so, and jokes that she’s single-handedly slowed the economy.”
“‘You noticed it’s been taking a dive because I haven’t been spending the last couple of months,’ she said.”
The Orange County Register. “It wasn’t so long ago that Orange County developers couldn’t build condos fast enough – and with cheap financing, they could sell them even faster. The market was so lucrative that when they couldn’t build condos from the ground up, developers converted apartments instead.”
“‘You would have had to have huge rent increases for 10 years to get the same return on investment as a condo,’ recalls Delores Conway, director of USC’s Casden Real Estate Economics Forecast.”
“But with sales of all new Orange County residences down nearly 63 percent from January 2007 and sales of existing condos off 39 percent, developers are beginning to reverse course.”
“Apartments – especially high-end rentals – are back. ‘It’s the beginning, perhaps, of a trend,’ Conway says.”
“Emile Haddad, chief investment officer of Lennar Corp., said last week that his company is still weighing whether to convert its A-Town Metro project near Angel Stadium to apartments.”
“To make it financially worthwhile to switch to apartments, developers in most cases must be able to charge rents well above the current $1,676 average. Many rents are closer to $3,000 a month. USC’s Conway doesn’t think that will be a problem.”
“But Walter Hahn, a veteran Orange County real estate economist who has seen the housing market come and go, thinks it may not be as simple as just switching gears from condos to apartments.”
“‘For $3,000 a month, you can buy something today,’ he says. The median Orange County condo price hit $370,000 in early February, down $100,000 from the March 2006 peak.”
“There already are hints that landlords are having more difficulty raising rents. Axiometrics Inc says that rents at the largest Orange County complexes rose just 2.4 percent in the first quarter vs. the same period last year and that they were down 0.5 percent over the third quarter.’”
“Part of that could be the economic slowdown that is pushing more tenants to double up, reducing apartment demand. A shadow rental market of foreclosed properties or homes held by speculators desperate for cash flow may compete for tenants.”
“‘High-end apartments? Not if they are centered around the Platinum Triangle or some other place,’ Hahn says. ‘Even the Irvine Co. had some lease-up problems with part of several hundred units in the Spectrum. It took a while to lease out.’”
“Hahn thinks it could take until 2012 or 2013 for condo prices to return to the point where they will be profitable for developers, but that doesn’t necessarily mean apartments will be the answer.”
“‘It’s probably going to be a soft market would be my guess,’ he says. ‘Vacancies are going to go up, and there’s going to be some pressure on rents.’”
The Press Telegram. “With each passing day, the water gets deeper. And more homeowners are struggling to keep their heads above the water line as dark clouds dump more rain on the housing market. At some point, opportunity should bubble to the surface. But no one knows when.”
“And don’t talk to Michael Carney, executive director of the Real Estate Research Council at California State Polytechnic University, Pomona, about this being a down cycle. That implies a market moving in a circular fashion.”
“He says that all markets move between peaks and troughs, or valleys if you prefer. He peers into this abyss and sees nothing. ‘If you can figure out when the bottom is going to be in home prices, call me. And don’t tell anyone else,’ he said. ‘I really want to know where the trough is.’”
“When you bought your house is important, and so is your financial situation.”
“‘If you can pay your mortgage and still have a job, you’re not upside down,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘And I think people forget that a home is a place to live with tax benefits and not an investment.’”
“If you bought about five years ago, you may be able stay afloat, Kyser said. ‘You still have equity. And even if the price slips (under the purchase price), you’re still OK.’”
“Carney noted that homeowners need to assess their current financial state and make the best bet they can. ‘You could be under water today, but if you are lucky, you won’t be under water tomorrow. Then you have an incentive to wait,’ he said.”
The Bakersfield Californian. “About 50 teenagers and young adults broke into an empty, foreclosed home in southwest Bakersfield Saturday, throwing a raging party and making off with the home’s high-end appliances, according to neighbors.”
“‘They’re all out front, they’re drinking,’ said Scelina Mitchell, who lives across the street from the home.”
“HSBC Bank USA repossessed the home in November, county records show. It sold for $540,000 in 2006, according to First American Real Estate Solutions.”
“Mitchell and her husband, Matt Mitchell, said police simply dispersed the partygoers, and they worry the ‘nonchalant’ response might attract future rabble rousers.”
“‘What I would have liked was at least a reprimand,’ Matt Mitchell said. ‘And a report filed.’ On their normally quiet block, two other homes are in foreclosure, he said.”
“She said the price guarantee reflects builder confidence that prices are about as low as they are going to get. ‘Everybody has already cut prices, and I don’t see any more price declines,’ she said.”
Really? Sounds more like Moral Hazzard again. They realize if they don’t sell the houses, they are bankrupt anyway, even selling the houses, they may be bankrupt, but, they can keep getting wages until the cash flow dies. Hard to collect on a price guarantee from a bankrupt entity. I bet they won’t give you a mortgage and build the contingency into the mortgage.
It really is the latest trick. Anyone hasn’t been able to see that the builders will keep building until prices fall should take notice of this. Now, they are even competing against future price declines!
I think the longest guarantee in the article is 2 or 3 years.
LMAO! Anyone who’d buy based on a guarantee from a builder these days deserves whatever comes. Gawd, I can just hear the stories now. “We thought they’d be here for us. Who ever thought they’d just go bankrupt?”
Notice all they say is that they’ll issue a check. They don’t say that the check won’t bounce.
ROTFL
Old Jeff Foxworthy skit:
You might be a redneck if…
Creditors come to the door demanding payment.
You ask if they’ll take a check…
How can I be out of money if I still have checks left over?
Got Popcorn?
Neil
There were huge runups in prices in Silicon Valley but minimal price drops in the “good” areas now. This is despite the fact that homes prices are not supported by the incomes in the area if one judges by the medians. The only way it is sustainable is if the folks who earn above the median earn twice as much as those who earn near the median. I don’t know the income distribution in the area. Any idea where one can get such data?
Not sure about the data, but a friend of mine who lives out there says the jobs are good and anyone with skills can pick up a good job 6 figures no problem. Said they have a hard time finding good people, but I think that is an issue everywhere.
There are 10,000+ Apple and Google employees with hundreds of thousands of cash from stock options awarded earlier this decade (even with the recent haircuts in AAPL and GOOG).
That’s the demand. The supply is SFH built 1850 through ~1980 (they’re not making any more SFH neighborhoods here, valley’s full).
Starting salary for an experienced “engineer” is $120K.
Same supply/demand reasoning would apply to the local rental market. Therefore, stick with the old 120-150x rent and you’ll see if housing is over-valued.
I’d have to guess that three quarters of those guys already own, so that leaves what, 2500 or so in the market? Hardly enough to prop up prices for all of Silicon Valley. Also, the majority of Google employees these days will have started post-IPO so they’re not necessarily as stinkin’ rich as the previous wave.
There’s a lot of stuff on the market that is just sitting there, not selling. I think we’re at about the same point that LA and Orange County were a year ago, i.e., the calm before the storm. Santa Clara County is already on the Wells Fargo “distressed” list and it has barely even started dropping yet. Give it another six months and we’ll see if it lasts. I doubt it.
The US census site is great for factoids on people, housing and tons of other stuff. There was an article a couple of weeks ago in the SJ Merc about how 66K jobs paying 30K to 80K were lost in the last eight years and how approx. 66K jobs paying less than 30k were created. In that same tiem frame there were approx. 16K, yes ONLY 16K 80K+ jobs created. Somehow I have hard invisioning someone making 120-150K ’settling’ for a circa 1963 3/2 1200sq, “in need of updating” home. There are TONS of these all over the Bay Area.
Thanks to Prop-13, anyone who bought 1850 through 1999 need not sell but have the renter pay his mortgage + hefty, hefty profit.
Note that I am talking MP through LG.
These neighborhoods are amazingly liveable. MLS says there are ~50 homes in Los Altos for sale, minimum price ~$1M. I wouldn’t hold your breath waiting for prices to get back to pre-GOOG levels.
I have seen some prices falling in nice areas, but not by a lot. Even saw a house in Saratoga (Cupertino school) that was open and expected to take offers the next week. Last year it would have sold for ~1.45. This year, no offers, and they have reduced the asking price to $1.39. So things are slower, but not in a crash.
jbunniii, a lot of the engineers own, but would like to move up. Hence the demand. The limiting factor could be the people who can or cannot buy their existing home.
Suzy K, the reasons why someone making 120k would settle for a non-mcmansion:
1. can’t make 120k outside of this area. There are high tech companies outside of Si Valley but not as many. Plus if there is a downturn, the satellite offices are often first to go.
2. It was 65 degrees and sunny this weekend. Midwest was snowy. again. For people that like to go outside, this is worth a lot. I would not trade my small 3/2 for a 4x bigger house in the Midwest simply due to weather. Basically my yard becomes an extension of living space in a way that is not possible in much of the US.
AdamCO, the rental/price ratio has not been 120x-150x for an SFH since at least 1992. It was about 190x in 93 when I rented a place. Now around 300 or so. So, prices could fall. But a lot of people simply have no interest in renting even at this differential.
A Central Valley-style crash is possible, sure, but a big difference is that there are many high paying jobs here which is not the case in the Central Valley.
The breeders of IDIOCRACY just keep spewing out cretins. How on earth could any person with an IQ of 75 or greater put any faith at all in a “guarentee” from a builder?! Just when I thought I’d seen it all…stand by for a new tidal wave of boo-hooing “victims” turning up over the next few years, worthless “guarentees” in hand, bawling that “they broke their promise!”
This morning I watched as Maria Bartiromo interviewed some a–hole from the Mortgage Bankers Association and some heinous looking hag from some California charity to protect “homeowners”. The MBA d-ckhead wanted $150 billion - $200 billion directly dumped into the pockets of the lenders. He applauded the rise on the caps at Fannie and Freddie. Not one word of truth or sense was spoken throughout the spot.
Maria was looking particularly nasty as well. Boy have her looks passed her by. That mouth should be on a hook, not a television set.
Roundhead or Cavalier? Which would she prefer?
Avert eyes!
No words of truth from the frogs! (my apologies to frogs everywhere!)
I’m shocked. The mb’s. are. embrassing.
The word on the street for LO (MBs whatever), if your not Fred or Fan or VA approved to lend, you’re dead in the water.
Another scam to come, another scam to come, and another one, and another one…
Ya just can’t make this stuff up!
Leigh
NYC - I just spit coffee up on the screen. I miss the brutal sarcasm from the east coast. When I talk like that people out here in SC think I’m nuts. Or just mean.
SoCalRugger - you’re just not hanging out with the right people out here in So Cal.
Yep. Many years ago when I bought my car new, I was manipulated (ugh) into buying the extended warranty. i hate myself. Anyway, years later the door hinge fails from metal fatigue, and I ask about the extended warranty. “Oh, that company appears to be out of business. Too bad.”
While it is true that experience is a dear teacher, it is also true that it is a very effective one.
Got a letter yesterday, about how lucky I was to be “chosen” for a great extended-warranty offer. Thought about taking them up on it, since I drive a beat-all-to-hell,’91 Cavalier with over 170K miles on it, and a big rusthole in the drivers’-side floorboard. Think my car is a candidate for an extended warranty?
Whenever the Ford (sigh, yes, Ford) Motor Company offers me a 100,000 warranty on practically everything for some amount of (my) money, I smile politely and say, “No, thank you, I don’t want the warranty, but I’m glad you’re offering, because it means you believe the car will last that long.”
The obvious thing for builders to do is insure their ability to pay-up, even if BK. They could maybe buy a policy from MGIC, or AIG.
Nevermind, they won’t be around either.
Could be a new strategy for the savvy buyer. Since gambling on appreciation and then walking away with the REFI money is over, perhaps now they can gamble on depreciation and take a PUT option pay-off before walking.
I would really like to get my hands on one of those builder guarantees and give it a once over. My guess is there’s loop-holes galore. If any one comes across one, put it up and let’s take a look.
Do you really expect the same idiots who claim they were “put into” adjustable-rate mortgages, will be any more saavy when it comes to reading the fine print on these builder “guarantees”?
The FBs will be “put into” again and again until they learn to stop being FBs. The bottom will happen when there are no more FBs lining up for the treatment.
Why is there in the hand of a fool the purchase price of wisdom, since he has no heart for it?
Because the freakin’ lenders are enabling it. It’s gonna take more than a few thrusts of the JT before they get it.
Alas, twas a rhetorical question.
“Stockton-based Florsheim Homes offers a price guarantee that covers the rest of the calendar year: Buy a home today, and if the builder is selling an identical home for less at year’s end, the home buyer gets a check for the difference.”
Not a lawyer - but I can see at least 3 phrases of concern: “identical home”, “at year’s end”, and “if builder is selling.”
Even if the builders do somehow honor their guarantee, that’s no guarantee that the foreclosures won’t eventually sell for less than them.
“You’ve got to be creative. We’ve found something that at least makes a buyer feel comfortable”
“I do believe it helps people make the decision and pushes them to the signing table,” said Kevin Kimball, senior vice president of KB Home’s Central Valley region.”
Exactly Kevin, what could be more comforting than being pushed to the signing table?
“‘There’s a fear factor in buying today,’ Ryland Homes spokeswoman Marya Barlow said. ‘This is a way to bring people off the sidelines and to the closing table - to rebuild their confidence.”
As an ex-homeowner of a Ryland McMansion, and 18 months of h*ll getting our new home issues fix, they might start with a quality home. We almost got sued my the new owners, for an issue we didn’t even know about. Ryland fixed it (10 year home warranty), but it was a nightmare.
If anybody is interested in new, google the new homeowner’s message boards to get the scoop before you sign.
If builders are “promising” low price guarantees, why not wait for prices to be even lower in a couple years and buy from another builder? People should get the hint that builders secretly know prices are dropping.
Bet theres gonna be plenty of lawsuits and walk aways.
“Hard to collect on a price guarantee from a bankrupt entity.”
Suggestion: Anyone pursuing such a deal should get the builder to front a lump sum purchase of an insurance contract from a (solvent) insurer to cover the risk (assuming this form of insurance even exists!). Don’t rely on builders to provide price guarantees, as this is not a reliable bet for an industry that looks poised to see a spike in future bankruptcies.
P.S. Given that there are home price futures contracts, I personally see no reason that a home price insurance industry should not exist, but I would guess that such insurance would be pretty expensive under current falling-price housing market conditions.
Realtor: I don’t see any more price declines.
Moe: Why? What’s the matter?
Realtor: I’ve got my eyes closed. Nyuk, nyuk, nyuk.
“Hard to collect on a price guarantee from a bankrupt entity. ”
Good point.
DOC
Is your price guarantee any good if the builder goes belly-up?
This just seems like a trick to sell into a falling market.
“What I would have liked was at least a reprimand”
If you’re extra nice maybe they’ll share some of their beer with you.
“What I would have liked was at least a reprimand”
“Dude, you’ve been repped”
“The company guarantees buyers that if the base price drops on a home like theirs before the last home sells in the community, it will issue a check to the buyer for the difference - even if it’s two to three years later.”
Well, what does the builder have to lose? If they don’t sell, they’ll just go bankrupt. Duh.
“Base price”? “Two to three”?
Oh…your check? It’s in the mail! Didn’t get it yet? Keep checking.
How about if a buyer offers the builder a guarantee: sell me the house today for a 20% lower price– and I’ll send you a check if it goes UP in value over the next 3 years. (If you’re still in business.)
That’s actually pretty close to the promises buyers have been making for the past several years (except they didn’t get the discount). “I’ll pay the mortgage if the house goes up in value.” — That’s what ARMs were all about!
If I were a lawyer and for some reason wanted to buy into a specific neighborhood, I’d consider making an offer if the builder would agree to putting say… 50% into an interest-bearing account in escrow. If things fall, then the money would be available immediately. Not that the builders would ever agree to something like this.
Stockton-based Florsheim Homes offers a price guarantee that covers the rest of the calendar year: Buy a home today, and if the builder is selling an identical home for less at year’s end, the home buyer gets a check for the difference.
Yeah cuz if you buy a home it’ll be the only home built this year
But what are the odds that a builder based in Stockton, CA might go bankrupt? I heard housing is set to rebound any day now in Stockton. Bwahahaha. Bunch of stupid m—-fers.
I can see a lot of “wriggle room” with the use of the phrase “an identical home”.
The slightest deviation from the standard floor-plan of the house you are buying, and you will be out of luck.
Just watch the “standard” floor-plans change on a six-monthly basis - a bit bigger here, a bit smaller there, hey look, it’s not identical! Tough luck.
This is just lunacy, and a “confidence” trick using the proper usage of the word “confidence”!
“The home is ‘upside down’: He owes $530,000 on a property worth just $465,000. As a result, his family is cutting back on dining out and going to the movies. His two children had to drop out of youth soccer and baseball.”
“‘That’s heartbreaking for a parent,’ said Perez.”
Sniff. Sob! I hear ya, buddy. But hey, think of it this way. One less soccer player, one less baseball player, that’s a good thing. Maybe your kids can get used to the joys of some sandlot ball.
Right, they can go swim in the damn pool. BTW, have fun paying for that $100k for the next twenty years. Oops, forgot to add in the $75k for the price drop. A FB indeed.
Maybe they can drain the pool and live in it, and rent out the house?
LOL!
~Misstrial
They sure can’t swim in the Perez Family gene pool. It is far too polluted.
How much does little league cost? When I was a kid, it was like twenty bucks a season, basically for the uniform. The coach was one of my teammate’s dads. We were middle class and never ate out and went to the movies at most a couple of times a year. We did not have a pool in the backyard. I went to the muni pool with my friends and then we played touch football in the park. We didn’t need someone to tell us how to have fun. We all walked or took the subway or bus to school; we didn’t get ferried around by ours moms. I lived in a large city, but somehow managed not to get abducted by all the bogey men out there.
“The ant and the grasshopper” keeps going through my head. There’s a few million grasshoppers out there there, in California alone.
That was my thought, to. When my brothers and I were growing up, I doubt that my folks spent more than about $100 a year on us for the non-essentials. We were always out and about and made our own fun. No one hauled us around: that’s why we had bikes and feet. Moreover, we didn’t WANT our parents to know what we were up to.
“We were always out and about and made our own fun. No one hauled us around: that’s why we had bikes and feet. Moreover, we didn’t WANT our parents to know what we were up to. ”
Me too. Those days are GONE.
The MSM has Soccer-Mom/Jane 6packs so freaked out now they won’t let their kids 10 feet from the house w/out supervision. It’s a joke. We used to just ride around town on our bicycles, toss the ball around, fish, have mud/dirt clod fights, fly model airplanes…
Seems these days kids are freakin’ glued to the tube or the Xbox 360 all day. God forbid they’re encouraged to GO OUTSIDE and do something besides school, team sports and the Mall.
Like George Carlin says, “Soccer Mom’s have kid’s lives so hyper-structured, they’re planning “which College” before the kid knows which side of the crib smells like S**t.”
DOC
And we sure the f— didn’t have glass backboards when we played basketball. There is so much that needs to be flushed out of this society that it is not even funny. I say let’s start with all of the backyard basketball courts that have glass backboards. The little f’ers can’t even dribble and they have a glass backboard. Sick!
AHAHA Was reading all of the posts on “what it was like when we were kids”. I thought I was the only one who talks about those times with the kids. I tell my kids all the time what it was like. Two channels, black and white TV, and we we not allowed in the house on the weekends or after church on Sunday. Homework was done after supper but before that we were out on our bikes, rain or shine, but then again so was everyone so there was always someone to play with. We ate meat 3 times a week and it wasnt the good stuff either (anyone ever have a boiled hamhock dinner blagh) unless it was Sunday when we roasted a large chicken or nice piece of beef. We never when out to eat and never went to the movies. (check that we went 4 times James Bond X2,The Posiedin Adventure and the Towering Inferno). I can remember we had 3 cars in my 40 years of knowing my parents. We were middle class and I had a wonderfully happy life as a child. So much so that I don’t splurge on the kids as much as others but plan on starting them off with some money when the get out of school so they can get ahead.
It gives me a warm comfortable feeling when I read the posts on this blog knowing that the world has not gone completely mad.
You’re right - there’s always been something about those private glass backboards that pissed me off. We were lucky to have nets.
“No one hauled us around: that’s why we had bikes and feet. Moreover, we didn’t WANT our parents to know what we were up to.”
Kids know how to have fun if ‘ya let ‘em!
frickin’ pair of skates in 1980 meant anywhere within 5 miles was my playground
good times, good times.
Sign ups are 140.00 plus mandatory fund raisers, plus baseball night, plus “family fun night”, plus new cleats each year. I’ve got two playing this season and the costs as of today are well over 500.00 and we haven’t even had opening day yet.
It’s really chump change. My son is on several sports league and each signup is no more $150.
The parents in this article really put a fast one on their kids. “
“I went to the muni pool with my friends and then we played touch football in the park.”
Well, there’s a little problem with those arrangements these days. Around here anyway, muni pools and parks are mostly full of illegals, their peeing spawn and gangbangers, a problem we didn’t used to have, back in the day.
I was at a nice open air shopping center the other day, and a little boy was asking his mother (a Hispanic woman) if he could go to the bathroom (there weren’t public restrooms in the store), and she told him just to go pee outside.
I wasn’t expecting that.
You think that’s bad — go visit India. They’ll drop a dooker in a field right in front of you.
Fields?
Take any railway line in Bombay early in the morning. You’ll see more dangling w@ngs than you can handle!
come on guys, don’t you know he’s entitled to a pool, eating out, soccer, baseball,, plasma, 10,000 dvds, maybe a gold tooth
The full story says that he is a police officer.
I read the story to my husband.
He said the first thing that went through his head was “oh migod, they let this guy wander around town with a gun. Why would they give someone that stupid a gun and turn him loose?”
RE: Sniff. Sob! I hear ya, buddy. But hey, think of it this way. One less soccer player, one less baseball player, that’s a good thing. Maybe your kids can get used to the joys of some sandlot ball.
Hey Big P~
How about some good ‘ole Florida incentives to get these women to move down your way?
http://www.boston.com/news/nation/articles/2008/03/02/moms_for_more_taxes
Couldn’t his little darlings just take up shaking their fists and jeering at the Foreclosure Short Bus as their new sport? Brats get exercise, doesn’t cost dad a cent. Win-win.
“Her latest loan, a refinance last April, netted her $28,000 cash, most of which went to pay credit card bills. ‘I’ve been living off that for 10 years, off the equity in this house,’ said Jones.”
You know, if she was smart, she would have bought a bigger house and lived frugally, then she could have lived off the equity for the rest of her life.
‘I’ve been living off that for 10 years, off the equity in this house,’ said Jones.”
Uh… how.. Well we knew…
And somehow we’re supposed to have an up-tick in the 2nd half of the year?!? My wife and are realize our favorite areas might not drop in price; so we’re looking in about 15 different RE zones spread over four different municipalities. Yes… we won’t buy for years. But Schadenfreude is addictive.
I’m framing the report one Realtor ™ gave me showing how three of the areas are doing really well. So well that in the lower left corner it notes how recorded sales for the last 30 days (ending 2/27/08, a Thursday print out) show closings down 60% YOY!
I do not claim that is representative of the national market.
Oh… out of the markets where I want to buy… at my ‘optimistic 2008 sales rate,’ my company will help by supplying another 4 to 6 months of inventory via relocations.
Hey, I’m fed up with managing employee retention in bubble markets, its part of the reason I started my own blog.
And yes… old-timers will get to taunt me on the progression of my timeline estimates. I learned, ok!
Got Popcorn?
Neil
If I remember your previous posts correctly, you are planning to relocate a bunch of employees to the least bubbly parts of flyover country. Isn’t that sort of like fighting the last war?
I can think of lots of reasons to leave California, but since I’m in no hurry to buy anything, RE prices are not one of them. Escaping the overspending/overtaxing state government is a much better reason, but results in a list of destination states that is different than the ones I recall you listing.
And it sounds like you are planning to eventually buy in a state where your employer is not present. Are you planning to start your own company, or retire, or ???
I never said *all* the jobs would move. Just enough to matter. Yes, we’re moving jobs to less bubbly areas. Large companies have their own inertia. I am planning to buy where we’re reducing employment. One reason I’m holding off buying is what if we move too many people to have a healthy rate of promotions? So I have another reason to hold off.
Oh… employees have been moving to lower cost of living areas; we’re just now moving our offices to where they want to go. Too many honestly believe they’re priced out forever. Or… They know prices are dropping, but don’t realize how fast, so they want to cash out.
Got Popcorn?
Neil
Having moved from non-bubbly Cincinnati, OH, it kind of makes me wonder why I left. There are a few locales around the country that people think are so special that they’ll live like a bunch of sardines in nasty housing. Then you go out on the weekends and there are so many people trying to enjoy the finite recreational resources that some of the fun is sucked away and all the prices are high.
All the while, in lots of non-bubbly places, an average income earner can enjoy a couple of bedrooms, room for a garden, and weekend-getaways that are neither crowded nor expensive.
I live in super-rural Colorado, so this doesn’t totally apply (the trails are hardly crowded), but it certainly applies to folks I know who went from Cincinnati to the Pacific Northwest, New York, or wherever.
Neil,
The graph looks pretty good and all I have to say is it’s just getting started in Phx.
What’s going to happen once the homes start selling again?
What’s going to happen once the homes start selling again?
Eventually prices will stop dropping… which will halt sales…
So there is actually a period with fast sales and declining prices! Recall, Phoenix has so much surplus inventory even fast sales will keep the inventory turn time high for a long time.
I’m still amazed by Ben’s find at $51/ft^2. Wow!
Got Popcorn?
Neil
I hope SD continues to burn at 3+ percent for the next year — that would be much quicker than I would have thought.
I never predicted a 3% drop rate (I was at 2.5%), so seeing 3.0% to 3.5% is… scary. If it only persists for a few months, its ok. If it continues for a long time… scary.
Got Popcorn?
Neil
I think the answer to your blog’s question about why Miami is burning slower is found in your own comment that the “integral on Miami is huge” — i.e., Miami starting coming down FAIRLY fast a lot sooner than some other places, so its prices are no longer so unrealistic as those in the West.
“said police simply dispersed the partygoers, and they worry the ‘nonchalant’ response might attract future rabble rousers.”
I am not sure if printing the address in the newspaper was a good. idea.
lol
Instead of looking for abandoned warehouses, look for abandoned McMansions. Let the parties begin.
You want the next CA HBB gathering to happen there?
LOL!!
Just drove by this house. Now the a TV station is out there filming. There are 8 houses for sale on this street and I think they have been for sale for months, if not a year.
Like I said crispy, for high income jobs, 1st is Palo Alto, 2nd is Irvine, 3rd is Bakersfried right?
I thought Stockton was third.
This is actually a nice area. Most homes are McMansion style (for Bakersfield) 2500-3,000 sq ft homes with 13-17,000 sq foot lots.
The Bakersfield California indicates the house sold for $540,000, zillow is showing houses on that street for around $300,000. I would expect more parties like this as there is diffiently incentive for mass abandoment by screwed borrowers. The funny thing is the police came twice, talk about brazen. When I went to high school in Bako we just watched the police helicopter go field to field as we could see the search light from miles away, and then when it came close we just moved to another field. Gosh kids these days having brand new homes to party in, boy they got it all, I mean all we had was a field, which I am sure now has houses built on it.
‘You could be under water today, but if you are lucky, you won’t be under water tomorrow. Then you have an incentive to wait,’ he said.”
Well, if I am lucky, maybe I can catch a leprechaun in my back yard and then hold him upside down and beat some gold coins out of him, jingle, jangle, like a wee little cussing Irish pinata. Hooray! Problem solved!
So now, obviously, I have an incentive to sprinkle Lucky Charms on the lawn and then lurk under the rhododendrons clutching a net.*
What IS this?! Yeah, I’m going to go ahead and use ‘luck’ as my investment/planning- for- the- future strategy? This is just craziness.
* Actually, I was going to do that anyway. Why not? This is a pretty Sunday afternoon. And I feel so lucky.
I’ve got some JT saplings that will be put to good use if I catch a leprechaun in my hood. And no, their gold won’t save them. Impish bastards, all of ‘em!
Or itll be easier to buy a lotto ticket. All ya gotta do is figure out a bunch of numbers, the right ones mind you
“Allen Perez a Sacramento police officer. took out a $100,000 equity loan on his Rocklin home in 2005 to install a swimming pool and pay other expenses. But when Perez, who’s now struggling financially, tried to refinance two weeks ago in hopes of lowering his monthly payment, he was turned down.”
“The home is ‘upside down’: He owes $530,000 on a property worth just $465,000. As a result, his family is cutting back on dining out and going to the movies. His two children had to drop out of youth soccer and baseball.”
“‘That’s heartbreaking for a parent,’ said Perez.”
“Judy Jones estimates she’s taken about $165,000 out of her home in the Rosemont area through a series of loans over the past decade. Among other things, she spent it on a new sunroom, a backyard patio, vacations and her beloved khaki-colored Toyota Prius.”
“Her latest loan, a refinance last April, netted her $28,000 cash, most of which went to pay credit card bills. ‘I’ve been living off that for 10 years, off the equity in this house,’ said Jones.”
_____
Reading these endless stories about fools and their spending makes me despair of the intelligence level of the US population.
A police officer with a $530,000 mortgage! Hope his wife has one hell of a job. That needs at least a $150,000 -160,000 income for a 30 year mortgage at 6%.
Swimming pools, patios, sunrooms, cars and vacations…..
The pool does not add to the value of the property. Some people would love it, some hate it and want it gone, and it is expensive to maintain.
Patios - as to adding the property value, figure 10-20% of the cost of materials (Materials - not labor or what a contractor charged.)
Sun room - basic sq ft addition to value. Maybe $50-100 a sq ft.
Vacations? These morons put their home at risk with a mortgage to go on a vacation!
Car - right. Take out a 15, 20 or 30 year loan on something that is going to rust and fall apart before the loan is paid off.
Good experience for the Perez kids. They learn the meaning of “there is not enough money to afford to do XYZ…..” They learn that ‘you can only spend what you earn’. If they lesson takes, they will grow up to be a LOT smarter than their parents.
“A police officer with a $530,000 mortgage”
He could always divert a little narcotics interdiction.
At least one big lender, Countrywide Financial Corp., is cutting off thousands of borrowers who obtained equity lines of credit but whose houses have since sunk in value.”
hey, you’re cutting me off from my “savings account!”
To illustrate how deep this housing bust is, consider the followihg:
1. My former next door neighbor bought his house for 35K in 1992. He used sweat equity to fix it up. It’s mortgaged to the tune of 330K. Similar house up the street is in foreclosure and on the market for 249K.
2. Semi-employed couple who bought my former house paid full price with cash back at closing on 80/20 financing. They also used sweat equity and my guess is that house is work maybe 225K.
3. Folks I bought present house from walked away with 100K in profit. Immediately bought a 350K McMansion with a 250K mortgage. Turned around and HELOC’d 110K out 2 years later. House in now worth maybe the original 350K.
So, that is just one person’s experience. It tells me that there is still a long way to fall and it’s not going to be pretty.
My own “guesstimate” is that we are about 1/3 down the rabbit hold and have another 2/3 to go.
shaping up nicely for a 6 year correction.
remember, never buy a house, do not investigate foreclosures, do not break ground on construction….remember to eat, work, drive, and watch tv….make some long distance phone calls, and drink. Drink deeply to wash away the pain. And smoke like a chimney,not those filtered kind either…roll your own.
And dont use dollars, trade for stuff, like a barter system…it works great, you get stuff you like and all you gotta do is get the other side of the trade to take stuff you think has less value..like old wood or fruit,and veggies from the garden…
cmon guys, its all ball bearings these days.
1/3 the way down and bubble top frothy is already off by 50% in many cases…….nobody is immune from this one.
keep tryin to sniff out the deflation…
Deflation in :
1. Day labor
2. Building supplies
3. Housing
4. Hotels
Anything energy related is seeing high inflation.
I feel for the airlines. Few have a viable business model for $100/bbl oil. That’s making for some great deals on priceline.
Got Popcorn?
Neil
i agree, Im still long oil.
Is there a way for the public to get this information? Going to the country courthouse is an option for me, too.
“Allen Perez took out a $100,000 equity loan on his Rocklin home in 2005 to install a swimming pool and pay other expenses. But when Perez, who’s now struggling financially, tried to refinance two weeks ago in hopes of lowering his monthly payment, he was turned down. The home is ‘upside down’: He owes $530,000 on a property worth just $465,000. As a result, his family is cutting back on dining out and going to the movies. His two children had to drop out of youth soccer and baseball. ‘That’s heartbreaking for a parent,’ said Perez.”
Forget the dark side that your children have a moron for a father. Look on the bright side - your kids have a $100k pool to swim in!
My parents house has a pool and only my mother swims in it. Money pit.
“About 50 teenagers and young adults broke into an empty, foreclosed home in southwest Bakersfield Saturday, throwing a raging party and making off with the home’s high-end appliances, according to neighbors.”
While I would happily round up all these punk kids and give them a good public horse-whipping to speed their rehabilitation, there’s a definite upside to stories like this. The lenders have been way too complacent about all these walkaway properties - now they might have a compelling interest in unloading them as fast as possible for whatever they can get, rather than risk getting them trashed or be subjected to stiff “non-use” fines and taxes (as more and more communities are resorting to).
That house probably just went down another $50k in value. It’s time for lenders to wake up and firesale them!
What is stopping these fools in the lending business from conducting fire sales? Are they expecting this year’s red hot spring sales season to save them?
Come on Prof, you know the answer. They probably don’t have to realize the HUGE loss until it’s sold.
Who knows? Classical denial. At least lenders are fireselling already in parts of Texas($45-60/foot) and Florida($75-120/foot)
They’ve been drinking from the new spiked GSE conforming limit punch bowl. Market takes away their liquor so they go straight to the spiked punch. Look at the chaos - can’t sober up now.
Folks I never understood why people didn’t think there mortgage payments where not going to revert to the full cost of the loan amount. I have several friends who actually believe that all they had to do was refinances their loans to a lower interest rate and there rising payment will have been taken care of. What I could not get them to see was your mortgage payment has to eventually reflect your income . If your loan was $500,000 and your payment started at $2,000, you still need to make enough to cover it when it becomes the full PTI of around $5,000 a month. How the heck can refinances the loan for even more money drop your payment. Your refinances amount now included fees and point along with the cash you take out so the new loan is just that much more out of your ability to pay.. So when Mrs. Schaefer say we where told in six month we could refinances what good was it going to do. The loan was to much for her income we she purchase the home. Refinances is just going to increase her payments. What idiots people are if you can’t afford it now how does refinances to a higher mortgage increase your ability to pay it.. .
They thought house prices will go up forever…
Math is hard. The nice mortgage broker figured it all out for us. He told us we were really smart to take out this loan.
Yeah, “People are smart.” Wasn’t that a tag line for some mortgage refinance commercial for Ditech or something.
The new math: “Joe buys a house for $250,000 for 0% down. He then HELOC’s the house for $275,000. His pool costs $100,000. So how many Hummers will he buy?
Wall Street Lite:
“There’s always going to be one more standing in line to come in and separate people from their money,” he said.
Payday Loan Foes Aim at Car-Title Loans
http://biz.yahoo.com/ap/080302/driven_into_debt.html
Have they figured out a way for people to people to mortgage their kidneys yet? Man, some ex-consumers are really getting desperate. Those terms are INSANE!!!
Hey… you have a decent business plan there…
Got Popcorn?
Neil
Maybe this is a good way to get the “Little People” to use public transportation and solve the Global Warming problem once and for all. They better hope Al Gore doesn’t read this…as he’ll get the government to actually subsidize these lenders.
The other day on Judge Judy, a woman was suing her ex-boyfriend for stealing her (rented) Sony PS3.
Here’s the kicker: she was paying $133 to Rent-A-Center monthly, on an 18 month rental plan. She had 13 months to go at the time of her lawsuit (sans PS3) in front of Judge Judy. For a Sony. PS3. I hope it was rent-to-own, because the ultimate insult would be to have to give it back after that period, after paying for the thing several times over in rental charges.
That’s f***ing disgusting, nothing but legalized loansharking. And what’s this capping interest at 36% cr*p, that’s still way to high.
“As a result, his family is cutting back…His two children had to drop out of youth soccer and baseball…That’s heartbreaking”
Well, if they hadn’t…
No, wait. I’m not even going to bother.
“Carney noted that homeowners need to assess their current financial state and make the best bet they can. ‘You could be under water today, but if you are lucky, you won’t be under water tomorrow. Then you have an incentive to wait,’ he said.”
This guy should be neutered. He is giving homeowners hope. He is really just saying that ‘houses always go up.’ Let these people sell at 2000 prices. We will have lots of action if they do that.
You know those Carneys: “Step right up. Everyone’s a winner. You might be underwater today, but we have a lucky winner right here. Winner, winner, winner!
How can RE in Cali go down?
There goes the rich, gay, asian immigrant loaded with google money theory.
I wish all the underwater homeowners would just step back, toss the keys, and go find a lease.
I could just see BB and HP. Man, it would be a million owner walkout. It seems like thats what happening anyway.
Now where’s my BB gun, so I can shoot at the forclosure vans as they go scavenge.
RE: because some of our homes have had a 50% reduction.’”
Exact loss percentage called here on this blog 2 years ago!
Others to follow!
I posted in another blog and I was among a handful who called for 50% drops. Most people called for 20-25% drops. I honestly think the drops will be worse than most of us had predicted and imagined.
Hey, if I can lose 60% on my dot bombs, ho’owners can too.
1998 prices + 3% pa wage/inflation adjustment sounds about right. This assumes only competent borrowers can get funding.
Your missing the HELOC’s thats the real problem.
“can never borrow another dime”
Reminds me of that scene in Goodfellas where the restauranteur unwisely goes into business with the mob. Soon after, his new partners run up the credit lines buying anything and everything, and selling it at a discount!
What happens in the end? They bust the joint out. Burn it down.
How long will it take before consumer’s lack of spending stops all this inflation? It’s something I am hoping for but It means we all suffa’.
its interesting you think that the American Consumer is in charge of the higher prices for food and energy…
RE: that scene in Goodfellas
I just read some paroled wise-guy interviewing for a local rag,
said “Goodfellas” was most accurate Hollywood portrayal of life in the mob.
How big of an a-hole was the Joe Peschi character?
Yea - he would be a great MB or Realtor ™
http://www.youtube.com/watch?v=o_ff46b58Hk
So I got this email today from a RE Agent located in Sacramento. I emailed him once for some information about a year ago. He responded with a two sentence email. It was worthless. I guess he added my email to his spam list.
“Considering the relationship we’ve had for a long time, you’re already aware of the level of service I provide my clients. That’s why I feel that I’ve earned the opportunity to serve anyone you know who may be looking to buy or sell real estate. I want to help them be as successful as you’ve been!
Please forward my information to your friends and family and have them call or email me today!”
Pay close attention to…”earned” opportunity to serve anyone “I” know who may be looking to buy or sell real estate.
“earned”, “entitled”, “demand!?”, whatever RE dude..
Only if he promises to feed your squirrels
He’s “earned” the opportunity to “service” a Joshua Tree!
“Tommy Jones, Los Banos Mayor, says ‘Those would be the first homes that sold at maybe $400,000 to $450,000, so with the decline, that home is probably only worth $250,000 or $300,000; because some of our homes have had a 50% reduction.’”
That’s a nice start Tommy. But I emphasize “nice start,” because they’re going to drop further in order to align with incomes around the Central Valley. This is Los Banos, after all, not Santa Barbara.
DOC
“Scores of banks that once flooded mailboxes with loan offers are now rejecting homeowners looking for cash or lower rates. It’s the opposite of what happened during the boom.”
The banks are collectively shooting themselves in the foot, as the value of their REO is going to drop like a lead balloon with no buyers in the market.
Was it Mark Twain who said something like, ” A banker is someone who only offers you his umbrella when the sun is shinning”.
Lenders have a real problem on their hands. They have to make loans to stay in business. However, the people that want the loans are mostly people sliding down into the abyss.
If banks sell their REO with 100% financing, they will just end up foreclosing on those over and over with each new FB. Best to liquidate them for *true* market value to qualified buyers with 25% down.
She spent just $250 on Christmas gifts, down from her usual $1,000 or so, and jokes that she’s single-handedly slowed the economy.”
The “me generation” suffers constantly from delusions of grandeur.
Buyers taking a bath in Los Banos. Nice.
I have to drive from Sunnyvale to Fresno once a month or so. Man, Los Banos is one shitehole as you go through the main drag. They can’t build the bypass fast enough for me, but once they do their local economy will tank completely.
Not that Fresno is that great, but it’s got its own version of The Fortress, miles and miles wonderfully leafy green subdivisions from the 50s and 60s with custom homes on big lots that rival anything in Saratoga and Los Gatos. There’s a killer house just north of Shaw that I’ve got my eyes on, 18000 sqft culdesac lot, pool, peaked at $600K last year but if it goes down to $450K I will basically be forced to make an offer on it for $440K. I wouldn’t mind paying $2500/mo for life to live there, provided The Fortress retains its present level of security and comity.
Another week starting, more new highs for gold and silver amid the complete collapse of housing. While it might be tempting for readers of the Housing Bubble Blog to assume that the higher PM prices means they too, are in a bubble; they aren’t. Just as deflating housing prices don’t mean there is no inflation. Deflating housing prices are just reverting back to a more sustainable ratio, to mean incomes. Housing prices had just experienced a rapid inflation of their own. On the other hand; the increase in PM prices is mostly the mirror image of the devaluing dollar. However the devaluing dollar does not increase potential home-buyer incomes. In fact, for much of the U.S., the only tangible effect of Fed policies is that they have LESS spendable income; because of higher energy, food, and imported goods costs, as well as disappearing jobs. So amateur Bubblista sleuths ask how high can PM prices go before they, too, collapse? Answer: versus the dollar; there is theoretically NO LIMIT. This is because there is no limit to how low the dollar can go; because the country is BANKRUPT. There are those who cannot comprehend that the U.S. financial system is now a Mt. Everest of debt that cannot be serviced. If it is just too confusing for them, fine. There are plenty of bankers, governments and investors in the world who do, which is why gold and silver steadily keep making new highs. At the very same time housing prices are falling like a crowbar down a well. Monetary INFLATION during a period of housing cost DEFLATION. No contradiction, no impasse, nothing you can’t understand. Precious metals will be simply unaffordable for most people during the coming Depression.
I doubt Chavez threatening war with Colombia or Israel’s trouble with Gaza’s going to hurt PM in the short term either.
Come to think about it, I’ll bet Chavez does all his saber-rattling just to increase the price of oil. How convenient for him.
There is way too much paper, in the form of currency, bonds, derivatives, etc., in existence for the supply of tangible goods.
The gun was loaded long ago. What we are seeing now is just the beginning of the inevitable result of that loading.
I know this is a bits bucket topic, but I just wanted to touch some of the readers…
I had a shoe-shine boy momment over ther weekend. I was at my usuall after hours beer drinking, adn occasional Oyster bake near the edge of town, and a guy I dont see very often was in attendence.
Local boy, been on a few Alaska fishing outfits for a couple of seasons, but back home in Oregon now…working as a fencer (he installs fences)…anyway, he had his gold coin. He wanted to sell it. I think it was an eagle, as it was on the coin. He wanted 925 for the coin (I thought to myself, god is higher than that)….but WHY WAS HE CARYING AROUND A GOLD COIN TO SELL….. he’s a fencer, been on commercial boats, working slave wages…hard body toll type work….sellin the gold coin.
why would I put this here? A tale to be told…..the voz does not touch gold here, I have no position in the precious.
Thank you Voz.
That’s not a shoe-shine moment. He was SELLING it. If he was telling you how he was ONLY working for gold not dollars. That would be a shoe-shine moment.
you have your shoeshine boys and Ill have mine….gold is money, when its a function of a transaction….I aint a buyer here…make no mistake golds goin up priced in dollars.
unfortunately, my dollars are not headed for gold, golds not a critical must have input…its a conversion, to a percieved input satisfaction.
So, if I understand correctly, your friend was trying to trade what some posters here claim is the only true form of money (gold) for some worthless non-backed fiat paper (dollars)?
Now, ask yourself, just why would he want to do such a thing?
In case anyone care. Nikkei is off another 500 points. Pretty soon it will be below the US market in terms of points. 6 months ago it was about 5,000 points above the US.
down 4% on the open! hmm, EWJ and FXY ought to be a safe straddle.
Calling Dr. Fine, Dr. Howard, Dr. Bernanke!
Calling Dr. Fine, Dr. Howard, Dr. Bernanke!
People say Bernanke has no clue. He has a clue. He knows EXACTLY what he is doing. That doesn’t mean his behavior isn’t reckless. It is completely reckless. Look at who benefits and who gets screwed.
Thought this was interesting as well.
http://www.federalreserve.gov/boarddocs/meetings/2008/20080303/advancedexp.htm
But this is not a normal downturn, subject to normal recovery. Leverage is too extreme. Bank capital is too eroded. Monetary traction eludes the Fed. An “Austrian” purge is under way.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml
I’m not in a hurry to buy a house. House prices need to go down even more in so California. The market has been so overpriced that it’s no where appealing to future buyers. My concern is if I buy now, my house will be worth less in six months and that’s not something I want to risk. Besides, I’m not to sure I want to stay in so California — too many taxes and too crowded with illegals.
I don’t think I want to live in a state that all my taxes go to supporting illegals. Many of my friends have chosen to move out of state and I’m seriously thinking about it too before we start a family.
The one thing that California does have going for it is Prop 13. My mom, having bought in 1981 on a 25yr VA loan, now pays more for her gardner than her property taxes.
…And public education, roads, police protection and fire fighting suffer as a result.
I’m not a big fan of Prop 13 (I think it shouldn’t apply to commercial and rentals) but it certainly makes sense for retirees on fixed incomes. She still pays $100+/mo. After 25+ years I think it’s OK to cap off people’s contributions to The System to maintenance levels — $100/mo certainly covers the local government services my mom is using.
Cali is definitely toast. I got out 15 months ago and enjoy watching the madness from afar (Kauai, HI). People who can, should leave the state and force the corrupt govt to be dismantled by the remaining people who will be out for blood. Illegals will be a huge target and many will leave as the native born will not tolerate their sh!t any more, just to keep the profit margins fat for the upper crust who employ/exploit them.
Fraudster gets to keep his houses.
Heh, his lawyer will end up with them in lieu of fees. Every wonder why lawyers own so much property?
I don’t want to sound like a complainer, but why do my posts take an hour or more (sometimes 2-3 hours) to show up? I’m not a spammer, astroshill, or anything like that. Never have been. I changed my moniker from Home_a_Loan after a year and a half, to commemorate 2008, but that’s all.
It’s easier to have an active discussion when posts don’t take so long to show up.
My comments started showing up immediately after I posted a few times under the same name. If I use another handle, comments will take some time to show up. So, post a few more times and you’ll start getting that instant gratification.
Try clearing cookies. some blogs put a cookie in to prevent posting under multiple names. Clearing the cookies erases the history.
Here’s Ambrose Evans-Pritchard’s column in today’s Telegraph and it’s a must read:
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml
The Federal Reserve’s rescue has failed
Section 13 of the Federal Reserve Act allows the bank - in “exigent circumstances” - to lend money to anybody, and take upon itself the credit risk. It has not done so since the 1930s.
Ultimately the big guns have the means to stop descent into an economic Ice Age. But will they act in time?
“We are becoming increasingly concerned that the authorities in the world do not get it,” said Bernard Connolly, global strategist at Banque AIG.
“The extent of de-leveraging involves a wholesale destruction of credit. The risk is that the ’shadow banking system’ completely collapses,” he said.
For the first time since this Greek tragedy began, I am now really frightened.
An “Austrian” purge is under way.
First, do not panic. This is crucial.
If you have been around before, this is all “old news”. If not, welcome, and start studying.
Cut all extraneous costs. Ruthlessly. With a vengeance.
If you can’t, you’re probably an FB. Lie back and enjoy the r@pe.
Cheerio!
employ depression stategy, pay off any and all debts, plant a garden. hoard money of any kind. dont spend, enjoy very small and non-conspicuos consumption… watch the meltdown.
The voz is not a gambler.
John, life outside of California is a big improvement in my opinion. If more people in CA knew how nice other areas are, they would be leaving in faster droves. Ciao CA. Albuquerque is pretty nice.
There’s a fear factor in buying today,’ Ryland Homes spokeswoman Marya Barlow said. ‘This is a way to bring people off the sidelines and to the closing table - to rebuild their confidence.’”
“She said the price guarantee reflects builder confidence that prices are about as low as they are going to get. ‘Everybody has already cut prices, and I don’t see any more price declines,’ she said.”
Care to put your mouth where your blow hole is?
Yikes! Guy beats up his wife over the high cost of gas.
http://www.local6.com/news/15458791/detail.html
“A 77-year-old man told a deputy he roughed up his 74-year-old wife because he was upset about the high cost of gas for driving her to and from dialysis treatments, according to police.”
10 to 1 the old guy was driving an aging Oldsmobile getting 10mpg. Just like the housing collapse, when oil rockets higher they’ll blame everyone but themselves. It’s always amazed me that I can talk to people until I’m blue in the face about the problems of our oil addiction and very few change. The same reaction I got when I would talk about the housing bubble and the coming collapse. Most people don’t want to think, and they don’t want to hear something that contradicts their sense of reality, or suggests they change their ways. The coming collapse will be the two by four to the head that most people need, unfortunately the rest of us will have to take a beating as well.
Remember talking about people running for the exits of the burning theater about… oh… IIRC 18 months ago?
I think the lack of emergency exits is becoming apparent.
Empirical evidence is that February sales were down quite a bit. A lit exit sign in the middle of a brick wall doesn’t help people escape…
Got Popcorn?
Neil