What They Need Is Money In California
The Associated Press reports on California. “An overflow crowd piled into the Merced Civic Center, spilling out of the main auditorium, into the halls and down the stairs. Everyone brought paperwork. the sum of their financial lives and wreckage of their American Dream. Organizers of the Merced fair had worried that attendance would suffer from too little notice; instead, they were overwhelmed by the response.”
“That same day, another 200 mobbed a fair in Los Banos, an old farming city of 35,000 residents, also in Merced County. Five percent of Los Banos’ 10,000 houses have already foreclosed and another five percent are expected to foreclose in the coming months, said Rep. Dennis Cardoza, whose district includes much of the Valley.”
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
“The median home price in Merced County in January was $215,000, down 33.8 percent from a year earlier, according to DataQuick. In some towns in the county, such as Atwater, housing values have dropped 50 percent, officials said.”
“‘We’re three payments behind, which they told us here is not that terrible,’ said Elizabeth Gomez. ‘If we can’t hold on, we’re lost.’”
“Most families had similar tales of woe. One couple said the same broker who had written their loan in 2005 promising he would help them refinance it to a 30-year fixed rate when the teaser rate of two percent expired refused to take their calls. Their mortgage on a $300,000 house mushroomed from about $900 to over $2,000.”
The Recordnet. “A measure to address one byproduct of the housing market’s collapse - the overgrown yards, stagnant swimming pools and general disrepair of an increasing stock of vacant houses - was removed Tuesday from the City Council’s agenda, referred to the council’s legislative panel for review.”
“‘The real estate lobby is going nuts,’ said Stockton’s Property Management Experts Inc.’s Terry Hull Sr.. ‘This is just a classic case of not doing things carefully.’”
“In north Stockton, retired school clerical worker Shirley Kabatt said broken fences and unkept lawns at vacant houses near her home have lessened the value of her house and the appearance of her neighborhood.”
“‘This is my investment,’ she said. ‘Something has got to be done.’”
“In a report, the city estimated nearly 10,000 Stockton homes are in various stages of financial distress or foreclosure.”
The Santa Cruz Sentinel. “If you’re among the 250 homeowners in Santa Cruz County who got a default notice in January or February for not paying your mortgage, the headlines announcing counseling services are tantalizing.”
“But $180 million in federal money and another $8 million in state grants to hire counselors have been earmarked for other locales, so little help is close at hand. Even if more counselors were available, Mary Mackenzie James isn’t sure that would help overextended borrowers keep their homes.”
“‘People are in crisis,” said James, who oversees the Housing Authority of Santa Cruz County. ‘What they need is money. Deferred-interest loans, that’s what they need, not advice.’”
“American Dream Realty acquired a competitor, Network Alliance, on Monday, creating the largest locally owned real estate company in the county. Two smaller real estate firms closed some of their offices.”
“In each case, it’s about survival in a real estate market being squeezed by plummeting sales. February sales statistics aren’t available yet but in January only 66 homes sold, the lowest monthly total in a decade.”
“‘I think more mergers are likely as companies and agents streamline overhead to survive this slowdown,’ said Tai Boutell of Santa Cruz Home Finance. ‘There simply are not enough transactions today to support the number of lenders and Realtors that the active market of the past two to three years created.’”
The Orange County Register. “During the past four months, liens, lawsuits and land repossessions have been piling up against SunCal Companies, the family-run business that’s behind such developments as Marblehead Coastal in San Clemente and the failed attempt to build 1,500 homes in the Disney resort.”
“A SunCal spokesman said the land developer is being plagued by the same problems besetting other developers: a housing slump that’s curbed sales and crimped prices, often on land bought during the height of the last housing boom.”
“‘Many of our projects are very good. Others are in markets that have been hit harder in this downturn,’ said David Soyka, SunCal’s senior VP of public affairs. ‘Like any developer and builder, we’re facing financial challenges.’”
“Bill’s Sweeping Service of Orange, for example, held off filing a claim even though SunCal owed the firm $25,000 since July. For two years, the sweeping servicekept the streets clean around SunCal’s Del Rio project in Orange as trucks hauled in dirt to convert an old gravel pit into home sites. Then, the company suddenly stopped paying.”
“‘For 1 ½ years, they paid like clockwork,’ said Mark Carter, president of Bill’s Sweeping Service. ‘Then when things got tough, they clammed up. … We had to hound them (to get paid).’”
“Land developers, who convert raw land into developable lots, are suffering because cash-strapped homebuilding firms have stopped buying home sites, experts said. That’s especially tough on developers who relied on financing to buy land since their carrying costs are eating them up.”
“‘It’s a very challenging time for them,’ said Steve Cochrane, the California economic analyst for Moody’s Economy.com. ‘Right now, it’s sit and wait for the bottom. … If it doesn’t come back in a year or two, you’ve got to find some other way to keep going.’”
“Zwirn Special Opportunities Fund, which had lent SunCal $75 million, repossessed a north Santa Ana apartment building on Monday after no one made the minimum $49 million bid. Two other properties in Tustin, including an apartment building where SunCal planned to build its three-story Hampton Village condos, are scheduled to be auctioned off on Thursday.”
“‘Because of the market conditions, we decided not to pursue the property,”‘ said Soyka.”
“Like many public builders, SunCal is in the process of asking its subcontractors to help it absorb the effects of the national building industry downturn, Soyka said. ‘Some of these subcontractors are cooperating, and some have, regrettably, filed suit.’”
“Soyka said work also has slowed down on at three other projects in the state. Work has slowed on bridge construction at the Marblehead Coastal development, he said, as well as on SunCal’s McAllister Ranch development near downtown Bakersfield, where contractors and suppliers have filed $2.2 million worth of liens, he said.”
“Soyka said McAllister Ranch no longer is on an ‘accelerated construction schedule,’ adding: ‘With the cyclical conditions of the housing market, it has become necessary to adjust our timelines.’”
The Voice of San Diego. “In December, I heard the County Assessor’s Office was slammed under property owners’ requests for tax reassessments. The influx continues, apparently. I chatted this morning with Jeff Olson, a colleague of Assistant County Assessor David Butler. The office has received 3,200 applications since Jan. 1.”
“‘We’re getting about a hundred a day,’ Olson said. ‘We’re anticipating receiving about 10,000 requests” before the May 30 deadline, which marks the end of the tax year.’”
The Gazette. “The combination of the strong Canadian dollar and plummeting real estate prices in the U.S. due to the sub-prime mortgage disaster has made buying property feasible again, especially in Florida and California where home prices had risen dramatically in recent years.”
“In California, resales of single-family homes have dropped more than 23% in each of the past two years and are forecast to keep dropping until 2009, according to the California Association of Realtors.”
“‘We have some way to go until the bottom,’ agrees San Diego realty company owner Marc Carpenter. ‘We’ve never seen such a spike in the amount of foreclosure activity. It’s shocking.’”
“His foreclosure listings went from zero to 275 in two years. He sees Canadians coming to pick up condos selling for 30% to 40% off peak prices. ‘It’s great for our economy,’ he says. ‘We need foreign investment here.’”
The County Sun. “Inland Empire auto dealerships appear to be driving the wrong way lately, with slumping sales and some filing for bankruptcy or closing down. Sales at auto dealerships in Claremont, Ontario and Pomona have slowed, and a Loma Linda Saturn dealership announced Monday it would close its doors.”
“An automobile dealership that has been in business since 1966 in San Bernardino demonstrated just how tough the times are by filing for bankruptcy.”
“Greg Heath, VP at Ontario-based Mark Christopher automotive dealerships, said sales are down about 25 percent compared with last year. ‘It’s not only on the sales end but the service end, too,’ Heath said. ‘People are just holding onto their money.’”
“The hardships local auto dealers are experiencing is another sign of an impending recession, Redlands-based regional economist John Husing said.”
“‘Next to housing, the most expensive thing people buy is cars,’ he said. ‘If the economy is slowing down, people are feeling bad. If gas is sky high, then they feel even worse. This is not the time that they go out and buy a car.’”
“Peter Welch, president of the California Motor Car Dealers Association, said the subprime mortgage crisis is also to blame. ‘Anytime you have a slowdown in the housing industry, other industries suffer,’ he said. ‘It’s just a sign of the (economic) times we’re in.’”
“In economic times as skittish as these, it’s the little luxuries that fall from favor first. Robin Olsen, a Phelan resident and public school teacher, has forgone about 4 ounces of her daily honey latte at Starbucks, saving nearly a dollar per fill-up by downsizing.”
“Standing outside a Starbucks and gas station on Monday afternoon, staring at two types of gasoline whose prices keep climbing, Olsen said economic insecurity is the order of the day.”
“‘It’s not much, but it adds up,’ Olsen said. ‘The state budget is making education go out of style. And with housing prices going down and gas prices going up, I think more about every dollar we spend.’”
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago. ‘We’re here because we have a gift card,’ said Pam Sanicola, a furniture saleswoman, while sipping a pricey java on a University Parkway Starbucks Coffee patio.”
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
This is what burns me up. Politicians fail to recognize — or intentionally misstate — the situation.
Were all of these people “homeless” before they got their 120 percent LTV, neg-am, exotic loan? No, they were RENTERS. And they will now be renters again.
Every bailout proposal says we have to “keep people in their homes.” But how come they never mention that an all-time record percentage of those homes are already vacant?
What does that tell you? That for every family who’s being “thrown out of their home,” a speculator/flipper is happily letting his failed investment go into foreclosure.
That is, maybe half of the people the gov’t is going to try to save don’t want to be saved, and many of the others can’t be saved. Let them go back to renting and let’s get on with it.
Not only are they renters - they’re renters who just spent the last 6-9 months in their existing house RENT FREE, by not paying their mortgage. Speaking as a renter who’ll get evicted by month two if he tried that - NO SYMPATHY.
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
Losing your house doesn’t automatically equate to homelessness. Most can move to cheaper digs, i.e. apartments, that were their logical abodes in the first place. Others can stay with friends and family until they get back on their feet. You have to be a truly pathetic loser to end up homeless in this country.
They don`t deserve anything. Let them eat it. They thought they were all big time operators, getting something for nothing, using “other people`s money”. Now it`s tough sh*t time!!!
I also say tough sh-t to the coffee houses they over-built ,and I say tough sh-t to any business that doesn’t work in a contracting market .
Americans need to get productive again ,and that doesn’t involve building more houses or pumping up businesses that could only survive if people have money to blow . The issue is to get new jobs for the unemployed in businesses that are needed in the upcoming decade .I’m sorry if people are losing their jobs because the businesses or luxury products they were selling are no longer needed ,but that’s life .
Anybody watch Buy Me on HGTV on Monday? It featured an idiot who HELOC’d her old house to the tune of $80,000 to fund a doggy clothing store. Oddly enough, she couldn’t sell enough chichuahua hats and weiner dog sweaters to stay in business. Then this genius put her house for sale, priced it way too high because “I’m not just going to give it away” and “I need $XX to pay my debts” and capped off her stupidity by turning down a very good offer. She ended up selling for $24,000 less than the good offer and was last seen moving into a dump and crying about her $30,000 in debts.
““‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said.”
More like 5 percent of the city becoming renters. The other half of the foreclosures are no doubt Bay Area speculators.
>>>>“‘This is my investment,’ she said. ‘Something has got to be done.’”
I’m so sick and tired of hearing people like her, and Big Ben Bernake that think ’someone’ has to do something. Do this, let the market correct your greedy bish . And this idea of Ben’s to have banks rewrite the principal due, um how does one come up with a fair valuation in a declining market. And lets say the market shows some kind of recovery, then what? Do these people start cashing in their equity again or even sell the house for a profit down the road?
Struggling home owners is what the media calls these people. Most of those in trouble were speculators, everyone in the US was in housing in one way or another, smug and self righteous.
GAG !!
“Something has got to be done.” What is keeping you from *doing* it? It’s time to saddle up your mower, “investor,” and ride out. Why aren’t there armies of the pioneers of the new suburbs out every weekend fearlessly draining abandoned pools and clipping abandoned lawns?
I went to Merced to visit some friends on my way to the wine country. We drove buy 3 repo men with their haulers getting ready for a night’s work.
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
How do you sleep at night after spewing such BS, Congressman Cardoza?
Give me a break….as if these people won’t just move in with relatives, out of the city, or find rentals.
By Cardoza’s definition, all the renters and out of town speculators are also “homeless”. So by his definition, it is probably more like 40-50% of the city is already “homeless”.
“In north Stockton, retired school clerical worker Shirley Kabatt said broken fences and unkept lawns at vacant houses near her home have lessened the value of her house and the appearance of her neighborhood.”
“‘This is my investment,’ she said. ‘Something has got to be done.’”
Yeah, one of my “investments” (a stock) went down today too. Something has to be done. Y’all get right on that, okay? (kidding!)
In her book, Renovating Woman, Allegra Bennett talks about a crummy-looking lawn next to hers. After many months of grumbling and grousing about it not being her responsibility, she fired up her lawn mower and cut the grass next door.
Sometimes, you just have to do that. In my own neighborhood, I frequently invite myself onto neighbors’ yards and right-of-ways so I can pick up the trash that would otherwise sit there. I’ve also been known to pull weeds on their sides of the fence so that they don’t come over onto my property.
And it never occurs to them that their lawn mower works just as well on that unkempt lawn, someone else should take care of the problem.
This is exactly the attitude that we on this blog get so upset about. This is MINE, therefore it is more important than EVERYONE ELSE’S. Doesn’t this woman realize that I have mine too? Everyone has theirs. Not everyone’s mine can be more important than all the other mines out there.
Hey Kabatt: Screw your investments. My investments were made with the underestanding that the basic foundation of our system would not be changed in such a way as to make them all fundamentally stupid in their new context. Personally, I think that’s more important than whether or not you will be allowed to lose money on your latest ill-researched gamble. If we turn everything upside down just to make things right with you, then we will all starve. All of us!
So grab a hammer and a lawn mower. It’s good exercise.
WOW Shirley, cant YOU move you fat butt and mow the lawn?
I would if my “investment” was at stake!
Since time immemorial people have viewed their homes as long-term shelter, not “investments.” As sanity returns, I suspect “investment” will mean much more than monetary return; namely, a decent, established neighborhood and home with a hospitable and safe character.
“They” just bought, hook line and sinker, the bs that Visa/MC, AMEX , Wall Street and GW and Madison Ave= MSM kept putting out there, and the crapola in mags that show our “celebs’ and how much money they are spending. Of course “we” all want to keep up with the Jones’. But many of us didn’t buy the hype. Others got sucked into the vortex of RE and THINGS oblivion.
Sort of like that movie, Tornadoe or some such name, where they ran into barn and held onto pipes in order to not be blown awayyyyyyyyyyyyyyyyy But they had to run out of Barn with swinging sharp implements called adj loans etc…
what irks me is if this person is so angry about the law, why don’t YOU go out and cut it, everyone is looking for a handout and no one wants to pull themselves up by the boot straps and get to work. “I want to live in a nice community, “
“Their mortgage on a $300,000 house mushroomed from about $900 to over $2,000.”
OK this one cheeses me off. A 30/fixed @ 6.0@ is a just about a P&I of $1800. That is completely reasonable. Are they whining because they won’t fix their rate at 2% or 3%?
This reporter could not have picked a worse couple to highlight.
But Jane…
You’re arguing that J6P should be able to do 3rd grade math. (Or was that 2nd grade?) It just shows how bad the lending practices were over the last five years.
Oil up… dollar weak (but holding), and we have a severe credit crunch.
Now… sometime later this year the MSM will recycle those 2003 articles, the few that there were, about how we are (were) employing far too many salespeople.
I do not celebrate the pain we’re going to see… but it appears we have to have a recession every 15 to 17 years to teach certain important life lessons. Cest la vie. This one… Well, let’s just say TJ and I have had friendly offline debates between the “D” and the “R.”
I still think “R.” But the “D risk” keeps growing for they want to buy more blankets to help ward off the chill rather than spending on antibiotics…
Got Popcorn?
Neil
I guess what I find egregious is that they were freeloading off the bank at 2% (damn cheap money) and now that it’s adjusted to about 6% (figuring that the $2000 is PITI), they want sympathy?
It’s as if the reporter saw the first number and the second number and said to himself ‘wow that is a big jump”, not having a clue that high 5% or low 6% on a loan is completely flipping normal? How many people out there with ARMs going into 11% and even 14% would kill to find themselves with a loan payment at 6%?
This is the clearest case I’ve run across in a long time where the FBs could not afford the house, not ever. Nothing short of giving them 50% of the purchase price to buy down the loan will bring them back to $900 a month.
I celebrate it daily…
I have a friend who lives in Stockton and yes they are underwater” glub glub.” He was tellling me that Stockton has one of the highest high school dropout rates in the state. Is that true?
Your 2% teaser rate expired? Cry me a river
Maybe the lender should just reduce the principle until we get them back to their $900 payment. What? Sounds ridiculously idiotic? Tell it to our Fed chairman.
lol
And people wonder why the MBS market is so weak.
Cities proposing to cut the interest rate and then suddenly the municipal markets plummet… Its going to be interesting watching certain states actually operate on a cash flow basis…
Got Popcorn?
Neil
Air popped baaaaaaaaaaaaaaaaby!
Not butter, no salt.
Leigh
WTH’s the pt of that? Butter is sunshine from cows! C’mon, just try a tiny bit. A teeeeeeeny weeeeeny little teaspoon? Mmmmm, doesn’t it smell nice?
…
All right, fine, be that way. If egregiously unpleasant “healthy” snacks bring you joy, pour on some cod liver oil and celery seed. But you just can’t eat saltless air popped corn; you might as well tuck into a bowl of those cornstarch packing peanuts.
LOL I like mine with olive oil, garlic salt, pepper, and a bit of chili powder..
Bernanke is a disgrace.
It all depends on area/region of the country and the local incomes, rent equivalent and income taxes.
By some measure even in coastal parts 300K is somewhat reasonable… but in Texas its unaffordable.
You have to back in that people have been using their home as retirement. So they are looking at what they need to retire vs
what the home is worth.
OK I get this … its Merced… so 300K is unreasonable.
No ! 300K for the shacks there, I would pass on.
If you know about Merced you would understand 2,000
mortgage is unaffordable for the vast majority of people
there. There just isnt any employers that would pay that
much.
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
Not homeless, just debt free. Jeez, overhype much.
What will eventually happen is people will get foreclosed, and then rent some other foreclosure down the street for half their old mortgage. Noone is going to become homeless.
Yeah, I don’t own a home either so I guess I “homeless”. What is am is “houseless”, which is just fine with me. Some of these morons need to filter what they say. Just because a person loses their home, it doesn’t mean that they will be living on the streets. They will simply rent, and I presume, be much happier.
Hey now….
Most will even be better off from a monthly cash flow perspective. Who knows, the extra money in former FB’s pockets may be what’s keeping the rest of the economy from totally crashing.
I’ve made that argument, on a few occasions. Without having the huge interest payments to service, each month, FB’s will have more money to spend on goods and services. This foreclosure crisis will ultimately free up a lot of income to be spent in the economy, instead of going to pay interest to lenders. Businesses other than lenders will be the beneficiaries.
90% were probably “investment” properties anyway…
I’d worry if 10% of the entire city was apartmentless.
Or Condo’s…er -
Wiiiiipouttttttttttttttttttttttttttttttttttttttttt!
Snark,
Leigh (j/k)
I guess renting doesn’t become an option.
They can’t sleep under the bridge, cos I don’t think there’s any actual moving water there.
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago
Good Times.
Any time you meet a payment.
Good Times.
Any time you need a friend.
Good Times.
Any time you’re out from under.
Not getting hastled, not getting hustled.
Keepin’ your head above water,
Making a wave when you can.
Temporary lay offs.
Good Times.
Easy credit rip offs.
Good Times.
Scratchin’ and surviving.
Good Times.
Hangin in a chow line
Good Times.
Ain’t we lucky we got ‘em
Good Times.
Starbucks in financial distress.
Berneke should call a special meeting with congress to fix this. Vouchers for Latte’s should be mailed out before the next election. Our very economic survival depends on it. We should write some articles to the msm about the poor citizens who have been victimized and can no longer afford high priced coffee.
The end is near, not only are people being thrown into the street for not paying their mortgage, but some people are having to go without with Starbucks coffee.
Oh, no, they only buy a 4 oz. smaller size. They don’t go without. (I do, every day… coffee at work is free.)
I actually spend money on my PEETS coffee even though my work has ok coffee. I know, i know, how wasteful (!) but, being an angry renter(tm), i can afford luxuries as coffee … and savings > 10% of my money … and not worrying about the house i live in minght eventually rot away in the rain ….
A comrade in coffee - We drink Peets Major D at home. Worth every penny.
I must be a freak, as I’m perfectly contented with my morning cup of Maxwell House. On the rare occassions when I drink really good coffee, that makes it a special treat.
Well as overroasted as starbucks is, no wonder their main trade is frappamochacuppafoam with some coffee added.
Heh, I burr grind and brew 8 cups of Contra Cafe each morning, for pennies a day… My last Cappresso coffeemaker did the same for 6 years reliably, until I upgraded to the unit with a thermos carafe (so I wouldn’t burn the coffee or set the house on fire by leaving the burner on), hope to get at least another 6 years out of this one..
Speaking of End is Near… yesterday in grocery store, stopped to view fronts of magazines and retiree who works part time vending mags, said the ‘rapture is nigh’… good gawd, what have I stood next to… and she went on and on…I had to leave. She said the wealthy will inherit it all.
I dont’ church at all for last 15 yrs, although brought up strictly, and I thought it was the “meek shall inherit the earth”..
NUT JOBS are out in force.
Glad I was in grocery story if rapture is nigh, as I would have reading materials, pbj and much more food for awhile. LOL
“Most families had similar tales of woe…”
While it’s sad that so many people are faced with an incredible amount of financial stress due to the bubble, I don’t feel that sorry for them. How many of these people, just a few years ago, were bragging about their financial successes due to the bubble and loose lending? Life was good when the trough was full and people felt good about their own financial prowess as they bought homes priced at 10 times their income and sucked the equity from their homes to finance increasingly lavish lifestyles.
A reasonable person, at the time, should have realized that this party could not continue, especially in areas like the San Joaquin Valley where median incomes lag the rest of the state. I nearly jumped into the party (in Idaho) but realized that the market was a house of cards and we could not afford a house at the inflated prices of a few years ago. I found the blog and became a convert.
Anyways, these poor saps who are losing their homes because it has become a sudden realization that 3/2 starter homes in places like Los Banos, Merced, and Fresno should not cost $350k-$450k are not being honest with themselves. Heck, they should not cost more than $150k in many of these areas. Where were people going to work to pay the mortgage? Days harvesting grapes and then work the nightshift at the fruit cannery?
Rant over
places like Los Banos, Merced, and Fresno should not cost $350k-$450k
Central Valley native myself and it was not too long ago that houses in these price ranges were for the doctor and lawyer types exclusively.
Yup- I remember by cousing bragging about buying a house in West Fresno for $300k with $30k in “free upgrades”- this was a starter home for him. In his mind, he got the bargain of a lifetime. I remember when $300k put you in some of the best areas of Fresno.
Hey Brandon:
Nice to have such rich cousins making a six figure salary to afford such luxury.
LOL
I was haunting the Fresno MLS in late 2001 . . . saw a nice 16k corner lot custom home one block off Van Ness Ext. listed for $300K. Sold early 2002 for $270K.
It was really only a few years ago that houses on the SF peninsula were in that range. They will be again, in a few years.
Los Banos? Try 80k. Most people who live there come from Mexico, whether legal or not, have very little education (likely illiterate), and have little/no understanding of the US economic, legal, and political systems. Los Banos is the ugliest of ugly cities and it stinks. I drove through there during harvest season, and learned that the farmers there still burn their scrap, and they’re not shy about throwing in an old bookshelf here and a shredded tire there. The air is literally unbreathable for several months of the year.
For those deluded into thinking they can live in Los Banos and telecommute to Silicon Valley or San Franciso, good luck with that. Who do you think will be axed first when the company undergoes lay-offs? They guy who is occasionally seen wandering the building and can barely be heard over the telecom at meetings, or the guy who is known to the group, with pictures of his little babies up on his screensaver and a fun sense of humor?
No, Los Banos is not a community in which a person would willingly choose to live.
Well, you have to wonder about a town with the name ” Los Banos”, which means “Bathroom” in Spanish… right?
More like “the baths”.
Yep, If it was El bano, it would be bathroom. Los banos are the baths. Like a spring bath, or hot springs bath, and so on, but its still funny to have heard from white people saying its name like it was something exotic!
Its a bathroom community, not a bedroom community. 80K is about right!
“Well, you have to wonder about a town with the name ” Los Banos”, which means “Bathroom” in Spanish… right? ”
No problem, if that offends–they could always move north to “LARD” (Manteca, CA).
DOC
I imagine the Mantecans prefer the alternative meaning of “butter.”
I hope your not saying that those who live in San Francisco or in Silicon Valley are anymore smarter. If you did
I would take issue with that. The fools that paid 800K and more to live in a $200K home in Cupertino isnt anymore smarter or luckier than those who purchased a $400K San Banos that sold for $80K a decade earlier. In either case both dont know economics or finance very well
After all only 5% of the current homeowners in either SF or SV can afford their own home today. They too will see prices fall..
Yes, prices will fall all over. My point was that $150 k is too much for Los Banos.
I agree…
Are you sure about that, ThomasPS?
I know *plenty* of couples (developers, consultants, professors, lawyers, doctors, investment bankers, …) where each person makes a six-figure income. At the least their household income is $250K, making an $600-700K place perfectly within reach for them.
I realize the median household income in most Silicon Valley towns is in the $50-100K range. But I suspect the folks above the median by and large make a heck of alot more. If you think this is false, please point me to statistics.
Thanks in advance for any information.
Translation: “It’s different here”?
Everything you said applied equally to Orange County and San Diego. Look at what is happening to their prices! Silicon Valley is next.
He didnt say that “its different here/now”…thats just what you want to believe he said — your OCD script.I think he said that higher income residents prop up values in the better neighborhoods. Dangerous to generalize … as demonstarted by the data that says (contrary to your broad brush statement ) that in OC the houses in the flats , N County or newer S county areas may be down on psf basis by 10-20% BUT many high end coastal zips prices are actually up.
One of the true stories of this bust…the rich will get richer , they will continue to buy or keep the better houses in the better neighborhoods, those prices will hold better than the rest —-and the middle class will continue to drift down, and so will their neighborhoods
A quick googleearth of Los Banos shows that it’s surrounded by sprawling tracts of oversized homes. Who the hell would buy a mcmansion in that place? It’s an 80 mile commute to San Jose, the closest big city with a decent number of jobs that might pay enough for one of those oversized tract-boxes.
You may recall that Cisco was going to move its HQ from SV down to Gonzales to escape the high costs. That didnt happen either.
Loch ness monster, Yeti, UFOs, why builders over built…
no one really know…its a mystery…
Good rant.
“Where were people going to work to pay the mortgage? Days harvesting grapes and then work the nightshift at the fruit cannery? ”
Just for a couple years before the teaser resets–until they flipped that baby for a cool 100k+ profit!! Or not…
Now picture that battleaxe from “weakest link”…
“You are a FB, Goodbye!”
DOC
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago. ”
Imagine that. There’s an actual limit to the amount of overpriced coffee beverages people will consume. Who would have thought people would ever cut back on something like that?
And how many times have you heard financial writers telling you to skip the high-priced latte so you can have more money to save for your retirement or some other long-term goal?
Went into a Starbucks once, quite a few years ago. After looking at the prices I walked back out.
I had a hot chocolate today, venti, $3.20 Seems fair enough.
Tee hee - $3.20 for a hot chocolate. If you’re ever in VT, I’ll make you a better one for much cheaper (and sugar free to boot!).
Sheesh, just bough a box of fabulous “Swiss Miss” hot chocolate for $1.99. Makes 10 cups @ 20 cents a cup, and it’s great.
I don’t like Starbucks, but the idea that people are going to make a big impact in their financial situation by cutting back on the daily latte is the very definition of “penny wise, pound foolish.” The same people think nothing of blowing $30k on a car, $100 per month for cable TV, $800k for a house. Oh wait, scratch that last one - they use someone else’s money for that.
RE: Went into a Starbucks once, quite a few years ago. After looking at the prices I walked back out.
Yup me too. Never could undertand the appeal.
I’ll pour my own for a $1.00 the local Mobil Mart.
Not a big Starbucks drinker myself - I just buy quality green beans and roast and brew my own coffee - but before I did that I used to do the $1.00 gas station coffee as well…until I saw a news report on contaminates in gas station coffee. Not really sure why, but apparently in most of the gas stations they tested there was way too many impurities/per million in most gas stations’ coffee.
Same here. If/when my teenage daughter wants a Starbucks, she pays for it herself. I refuse to do so. The 99 cent French Vanilla at the Speedway gas station is good enough for me.
Speaking as an old fart who remembers what coffee used to be like in the US, don’t knock Starbucks. If it weren’t for them selling all those high-priced lattes, there wouldn’t have been pressure on the cheap coffee places to bring their coffee up from “ghastly” to “drinkable”.
Hey grumpy- you’re right about the Starbuck’s mystique affecting the quality of many of the vendors in a positive way. My Shipley’s cup of Jo satifies just fine. The ambiance is great too- all the small town locals come in and share the gossip. Good stuff.
That and it takes 10 minutes just to get a cup of coffee. Oh, and I’ll take a “MEDIUM” house please.
I don’t drink coffee. In fact, I have few vices primarily because I’m selfish with my money. I figure why try it cuzz I might like it.
I don’t drink coffee either. But I’ll confess to having a weakness for my home-brewed green sun tea. (I buy the tea leaves in bulk at the local food co-op. Costs next to nothing.)
No dissin’ the coffee! (I’m an addict.)
Normally TJMax has poor artificial coffees, but a week ago they somehow had a batch of good stuff (poor sales?).
I’m stocked for months! (But I’ll keep buying on sale.)
Got… coffee?
Neil
But I’ll confess to having a weakness for my home-brewed green sun tea.(I buy the tea leaves in bulk at the local food co-op. Costs next to nothing.)
I don’t think it is tea.
Trader Joe’s has some killer coffee for around $5 or $6 bucks a can. The South American blends in particular.
Alright you coffee junkies
“…White people all need Starbucks, Second Cup or Coffee Bean. They are also fond of saying “you do NOT want to see me before I get my morning coffee.” White guys will also call it anything but coffee: “rocket fuel,” “java,” “joe,” “black gold,” and so forth. It’s pretty garbage all around.
If you want to go for extra points - white people really love FAIR TRADE coffee, because paying the extra $2 means they are making a difference.”
Stuff White People Like #1
Hoz told a funny!
I like the coffee wars. Let’s talk about politics next.
Hoz - 25th hour
Java da Hut here!
Black bean, Texas gold!
Chort,
Leigh
Don’t drink the Starbucks lots of reasons, one of which is
” I want the small size” and they give you the rant about Tall, Venti blah blah blah. Just give me the dang small one. PULEEZE.
LOL
My favorite? Venti(TM) is trademarked.
F that S. Make mine homeground and brewed (don’t really have the patience for roasting, truth be told)..
I stopped going after realizing how marked up their black coffee is - $1.75 for grande! Also, it was not always that good- Tullys is better. Now I sip Sam’s Club coffee at home and then drink the free trash coffee we have at work. At SBUX, you are paying mostly for the ambiance and image.
I am a big coffee drinker until noon and have been for 40 years. Starbucks has nothing that I will drink. Even their mildest brew tastes like warmed over bad breath to me.
“Even their mildest brew tastes like warmed over bad breath to me. ”
That’s one of the downers of coffee IMO…
Coffee will turn mild morning breath instantly into full-on s**t breath–and the drinkers are so jacked and rambling, they don’t care. My new Java-luvin’ Supervisor is attractive, but smells like she’s farting instead of talking…I try to stay at least 5 feet away when she’s on a caffeine ramble-fest. Sad…her fart-breath ruins my fantasies…
George Carlin: “Anybody can have bad breath Marge, but you could knock a buzzard off a sh**twagon!”
DOC
DOC LOL
That and smokers.. Crap for breath. Jeeze, would rather have morning breath breathing at me, than coffee/cig breath.
LOL
If they have to close stores after selling $4 coffee for YEARS they are uber retarded. Last time my buddy calc’d the cost he came up with 26 cents for a cup of latte-te-da. So where did the money go? I’ll puke if someone says share holders, cause we all know they get to share about 5% of the profit tops.
Amen. Buy a Keurig nad use those coffe pods. A coffee a day pays for the machine in a month.
ok, so now coffee sales are hurting along with the casual dining restaurants, what’s the next consumer domino to fall?
The fancy delis inside the supermarkets? Whole Paycheck Foods?
Whole Paycheck Foods?
Very funny
Second! Very funny!
Went to WholePaycheckFoods in London on Saturday (biz) and with the US dollar in the toilet, not only did I need a loan to get outa there but … I couldn’t believe how crowded it was. Never been in before, so it was kind of a ‘field trip’. You know, just to say, beentheredonethat!
Got the handled bag for free that says Wholefood London.
Proof. hahaha
If you know any teenagers, ask them where they no longer go. That is the next domino to fall.
*cough*recordstores*cough*
And bookstores, too.
Those went toast a while ago. That is why Amazon is going into the wine business.
The only reason my kids go into a bookstore is to look for me.
Comment by Blano
2008-03-05 18:40:55
The only reason my kids go into a bookstore is to look for me.
Funny, Blano.
Funny and sad Blano.
I love bookstores.
I love bookstores. Bookstore prices? not so much. OTOH when I’m looking for paperbacks or remainders, or when my B&N membership brings the price down to lower than Amazon + shipping, it’s worth the 10 miles of driving to my nearest store..
(and Borders website is complete garbage compared to B&N, where I can find out whether a particular book is actually in the store before I get in the car or on the bike!!)
Very good point. My 19-year-old was hooked on some kind of frothy thing at Starbucks. Now that the kid is stuck having to pay half her expenses, that’s the end of it. She brews tea (and makes oatmeal, for that matter) with the hot water tap in her dorm room.
If a latte is going to send someone to the poorhouse, then they’ve got some serious financial problems. People love to harp on what a “waste of money” places like Starbucks are. But really, it’s just entertainment. It’s no different than dining out, or buying unnecessary things like beer or wine, or going to the movies. People just need to develop a budget and stick to it. IMO, the idea of never spending a dollar on anything enjoyable sounds like a waste of a life to me. After all, you can’t take it with you.
“After all, you can’t take it with you. ”
But you can’t go anywhere without it either!
Can’t imagine going to the buck for plain coffe, but for an espresso or no fat latte maybe once every couple of weeks, it’s not a big expense. If $3 is going to bust the budget, you’ve got bigger problems than coffee.
Everyone deserves a treat on occasion. But there are folks who buy two or more a day. That’s $15 extra bucks a week, $780 a year, or 1.5% of the average American’s yearly pay. An what else do they treat themselves to? How many hundreds on cable TV extras, cell phone extras, treats at the grocery store?
When we have a national negative savings rate, treats should be suspect.
Since food prices keep going up we never know what the new price is going to be. That is the x factor.
When will we know when its safe to come out?
Call me when it’s over.
Song for the night:
Would you like to ride in my beautiful balloon?
Up up and away in my beautiful , my beautiful balloon.
Annie’s Drygoods and Haircuts.
Lentils and crew cuts.
Bean’s and Bang Trims.
“or buying unnecessary things like beer or wine”
WTF? That is just plain crazy talk right there. Coffee can get flushed right down the toilet for all I care, but beer? Wine? Madness, sheer madness.
‘What they need is money. Deferred-interest loans, that’s what they need, not advice.’”
You’re an idiot. The advice they so richly need is drop the pretense you can afford the Santa Cruz area or that a few years of delay will save your dream homes. Santa Cruz got wildly overpriced like every other damn beach town in America and now prices are dropping. They need more hokey loans like they need a hole in the head.
They need more money, as in more free money. They got that with the teaser rate, and for some weird reason are not getting any more. Isn’t this supposed to be a free country ? Free market, free speech etc. How can anyone be denied the right to free money ?
–
Loans on what? Your good name? Or, your stupid brain??
Time for these people to get out of the Fantasy Land.
Jas
No, they need lower prices. Few people get this; easy credit, rate freezes, stupidity forgiveness, etc. will not help these people in the long run. If the homeowners need more money to stay in their homes, maybe they should get a 2nd job picking strawberries or selling corndogs on the boardwalk.
Lower prices are the new “affordability product.”
But what these people NEED is to understand that this is not the end of the world. A foreclosure is not the end of your life. I mean it sucks, but nobody died. So you’ll be renting for the forseeable future. And without access to credit, you’ll be forced to live within your means, a skill SOME of have mastered without being forced to. It will be a learning experience.
What they needed was common sense and an amortization table.
Of course they needed both back in 2002. Better late then never.
The median income in Santa Cruz is something like 60k. It’s very much a blue collar town that would be pretty broke but for tourism and the army of UC students that come here to spend their parent’s cash.
As a resident looking to buy in about five years, all I can say is let it crash.
–
“The median home price in Merced County in January was $215,000, down 33.8 percent from a year earlier, according to DataQuick.”
It is down 43.4% from the peak price of $380K. We are close to the 50% mark that many people had hard time imagining.
The next are Yolo County and Sacramento County, where prices are down 40%+ and 35%%+ from the peak prices.
Jas
Jas:
How far down from peak is Bay Area proper?
Somewhat less than 15% - but it varies wildly by property type and location.
East San Jose - down 25% or more. Santa Clara, down by about 10% (but high end properties are flat). Palo Alto, Saratoga, Los Altos - still climbing, but not for long.
Folks still think it’s different here. It’s different alright, but not the way they’re thinking - it’s worse than most of the US, since so many properties were bought on neg-am loans.
In the neighborhood I’d like to live, the houses cost $800k, but the average family income is about $100k. It won’t end well - for them. Me, I’ve got my 20% down already, and it gets to be a bigger percentage every day, since I’ve saved it in gold coins.
–
In townships will fewer than 100 sales a month the monthly data vary too much to get a good calculation of decline from the peak.
BTW, with GOOG and AAPL down 40% from the peak juts 2-3 months ago the high-end towns are going to feel the effects in the coming months.
Jas
In many ways, high end real estate is very stock market dependent.
$104 oil changes everything. Suddenly that delayed expansion of the Chicago rail system, Sunset corridor, and a few other freight rail projects really matter.
Got Popcorn?
Neil
Gas in desert..$3.41 + reg.
Going uP.
What about San Fran proper. City.???
Anything, bueller bueller
Elevator going up or down?$$
$$
$$
$$ ???
–
San Francisco -10.8%
Santa Clara County -11.9%
San Mateo County -17.0%
Santa Cruz County -26.6%
Jas
Do you have Alameda?
–
Alameda Co -20.0%
Contra Costa Co. -23.3%
Jas
Depends–the biggest drops are in the low end, while the high end is still in denial. I think the high end can hold out a bit longer.
Monterey county is on the “severely distressed” list for foreclosures now. It’s going to get marked down to double secret distressed by the end of the year.
I saw a house in Saratoga that planned to take offers the next week. 3 weeks later they have reduced prices.
OTOH I have seen several other houses go within one week.
In Los Altos, the cheapest livable house is listed at about 1.65. Below that its 1400 ft 1950 originals on busy streets.
The GOOG and AAPL effect may change this. But I do know many people (including me) who want to live there if prices fall a bit. And there were no big housing tract developments, so the supply of SFH is pretty much fixed. Sure there’s a few new SFH here and there, but only a handful and nothing like the big developments in Orange County, or even San Ramon.
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago.”
You mean burnt foul tasting coffee at high prices is going out of style ?
Psst…Peets !!!!!!
Exactly. As a NWer who is supposed to shun all things California, I’ll go to Peets before SBUX. Medium Americano is my game. SBUX uses 3 shots against Peets 2 shots and still tastes watered down.
In N’ Out still sucks though!
Agree, In N’ Out wildly over rated. Soggy Cold Fries , slow service. Big with teenagers with no taste.
When they came to Tucson, it was if the Second Coming had arrived. The place was so overrun with business it was tying up traffic.
Yes, terrible french fries…in fact, the worst.
huh? When I go back to my old grad school, their In and Out has absolutely the best fries (animal style). Always super fresh. So it must be a local quality control problem. Yea… like everywhere else they won’t salt, but no biggie.
And as I type this I’m dying for carbs (back on the South Beach diet…).
Got Popcorn?
Neil
‘Course I miss the bil ol’ steak fries that they used to have at Roy Rogers….
And as I type this I’m dying for carbs (back on the South Beach diet…).
You’ll make it through induction (again, I assume). Don’t give in to the Dark Side!!!
You *do* know that you can request that your fries be cooked ‘x’ number of seconds - as soggy or as crisp as you like ‘em. Try that at the neighborhood McDonalds…..
Most people LOVE In-n-out (myself included) because it is pretty good food for a reasonable price. Slow? You bet. Better than most other FF joints? Apparently, since there are always cars backed up into the street waiting.
When Californians stop going to In-n-out, then we are in trouble indeed…
Trader Joes Yam fries. yum.
I have to admit, I love Mac’s french fries.
Never, ever had cold soggy fries at the Out. In fact they are one of the only chains that cuts fresh potatoes for all the fries. We like the off menu items. Daughter insists on going on way from airport when she returns from east coast - gotta have those animal fries.
If you’re ever in Atlanta, try the Varsity, next door to Ga Tech.
Tell them you want them well done and they will be crunchier.(In-n-Out)
As a former tech alumni, I can definitely say that the Varsity is terrible and highly overrated. I did not know anyone that was not a tourist who went there, I only ever did when people were in town and were told they had to try it (for some reason).
As an Atlantan, I can say that the Varsity sucks. I don’t know how they stay open! But some people seem to like it. I imagine it’s like that chemical in Chemistry where some people genetically cannot taste it. Depends on your taste receptors IMO..
Peets is an OLD-TIME Berkeley coffeehouse, been around 25 years before SBUX existed.
What I meant was, in spite of being a NWer, I’d choose the forbidden Californian fruit of Peets over SBUX anyday.
Psst Peets and Caffino
Merrill closing home lending unit.
Speaking of the Santa Cruz area, does anyone have a sense of what the market is like in Capitola? Seems like homes are moving and prices have held in, but I’m a long way away…
Oh the Real Estate agents are smiling widely and lying through their teeth that prices aren’t dropping but they are, lots for sale and nothing selling. Capitola/Aptos/Santa Cruz etc are nothing more than long commutes to Silicon Valley Jobs.
Capitola is great, unique little town! But only if you don’t work for a living and don’t mind gray skies.
True - go north a mile into Live Oak, and the weather is better. But SC/Capitola/Aptos/Soquel is for young surfer folks who rent, and work nights. Did it myself for ten years.
Is the Shadowbrook Restaurant still there? Does its cable car still operate?
MacAttack,
Just got back from Capitola. A beautiful day. Yes the Shadowbrook Restaurant is still there and yes the cable car still operates.
Santa Cruz has been in free fall for about a year. Even the DataQuick numbers show that.
Check out http://www.viewfromsiliconvalley.com/id156.html with weekly RE data. It does not look like, that it gets better.
“‘We’re getting about a hundred a day,’ Olson said. ‘We’re anticipating receiving about 10,000 requests” before the May 30 deadline, which marks the end of the tax year.’”
Not any more. This article just got the rest to appeal, except for the absentee owners. What to do for tax revenue? I suppose they’ll raise vehicle stickers again, sales tax, probably increase utility taxes and other BS to keep the coffers filled.
–
“In a report, the city estimated nearly 10,000 Stockton homes are in various stages of financial distress or foreclosure.”
Among cities, Stockton leads with 42.6% decline from the peak. I don’t know what would stop the price decline in such places.
In the five CA metros tracked by Radar Logic the prices in January were declining at 2.5-5% a month rate.
Jas
“A SunCal spokesman said the land developer is being plagued by the same problems besetting other developers: a housing slump that’s curbed sales and crimped prices, often on land bought during the height of the last housing boom.”
It’s a good thing they’re not making anymore land. I’d hate to see developers get snookered into buying more of it during the next land rush bubble.
Mostly on topic:
An old Motorola site in south Chandler is being redeveloped into a small industrial park. Rumor has it that several California tech businesses are planning to relocate there. Very near the brand new $3 billion Intel fab.
Ben’s headline is “What They Need Is Money In California”… add to that jobs, lower taxes, less regulation, a massive change in government, more middle class taxpayers, less lower class taxusers, etc, etc. The Golden State is looking more and more like 14k plating over pig iron.
Hi az_owner:
Can you please tell me what taxes in CA are high? Property tax is only 1%. I heard some lady on NPR a while back say that the average CA’s tax bill every year is on par with the nation. Also, I don’t know to what regulation you refer. I have noticed that a lot of our laws have gone unenforced since Bush took over, but I definitely don’t want to get rid of environmental protections, worker protections, and the like.
I know what you’re saying about high costs, but the truth is that people don’t want to live in Arizona, so I guess it will always be more expensive here. Yes, lower-paid manufacturing jobs will probably not stay here, but the intelligentsia will.
The only threat I see right now to California’s success over the next decade or so is more cuts to the education budget. CA used to be # 2 in the nation for academic achievement in public schools. Now it’s # 48. That decline parallels cuts in education spending. There are plenty of people here making plenty of money; there’s no reason we can’t scrape up enough to pay for public education. After all, it’s the education that has allowed us all to earn so much money, right?
Taxes too high, you say? No way. We need to increase our property-tax revenue by about 100% to secure our future. There are a lot of ways we could shore up Prop 13 to accomplish that.
How about 10% state income tax and 8.25% sales tax and Santa Monica charges 4% of *gross* business income if you’re a professional or pretty much anything but a automobile dealership? Not to mention the nuisance fees, like taxes on telephone, water, sewer, electricity, natural gas, cable, gasoline, and now data service. And don’t get me started on assessment districts, Mellos-Roos, etc. Californians already pay up big time to live here.
Don’t all states have fees and such? I don’t think it’s true that Californians pay higher-than-average taxes.
NEWS FL@@@SH!!!! Florida has no state income tax!!! Come on down and gitcherseff a condominiummmmm!
Delaware has 5.95% income tax, low property tax, and no sales tax.
As far as activities go, well, at least it’s close to Philadelphia!
I just went to the CA Franchise Board website, and figured out that our personal state tax, based on our income, is just under 7%. Our income is considerably above average for the state. Doesn’t seem so bad, especially when property tax is only 1%. I guess sales tax gets pretty high in some counties, though (8.25%).
What are taxes like elsewhere?
Another thing to consider is that living in an unincorporated county area can drastically reduce taxation and fees. Many locations have small unincorporated areas around. There is no town to raise taxes, and the minimal demands such areas make usually mean drastically lower utility and service fees. Most such areas also have Brown Act local councils or have the option to form them. These enable local democratic governance with minimal overhead.
Uhh - California income taxes are around 10% for most middle class taxpayers. Add in the crap they try to pull to get non-Cal income (retirees, out-of-state spouses, etc), the sales taxes of 7% + local sales taxes up to 8%, the car taxes (yearly reg fees + state gas tax 32cents/gal), then, yes, California residents are one of the most heavily taxed in the country.
Number 12 according to these dudes
http://www.taxfoundation.org/news/show/335.html
Never believe a list when you can’t locate the methodology they used to come up with thier numbers. Since the sales tax in CA is 7+% and the top marginal tax rate of 9.3% kicks in at 43K, I find it hard to believe that the tax burden is on 11%. For anyone making a living wage and consuming the marginal tax rate in CA is 17+%. Kind of high if you ask me.
If you look at the study, states from about 10 to 40 are about the same. The top 5 states have a much higher tax rate, the bottom 5 are much lower. Alaska wins due to distributing oil money. So, the tax burden is not that bad here. Income tax and sales tax are high. Property tax rate is low, and if you live in the same place for a while it’s effectively extremely low since the appraisal doesn’t go up. Also there’s no city income tax. That can be quite a bit in other states, 4% or more.
Why is spending per student low? My uninformed guess is that CA has a higher-than-average number of young people as a %age of the population. Hence the same amount of money becomes less per person. Also, some of the studies include cost of living in the calculation. Spending $6k/year in CA is not the same as spending $6k/year in the Midwest. This is a higher cost now, but could pay off in the future as these folks enter the workforce. Or could fail if they move to other areas or are not qualified for jobs so we have to hire H1Bs anyhow.
I don’t think living in an unincorporated area is that much cheaper in CA. The big difference from other states is that there’s no city income tax in CA. The property tax is generally not city based - it is based on school, vector control, county, and other districts that are not related to the city. There may be a parcel tax of $500 or so per city but that’s not that significant vs overall property tax of 1%. This is true at least in the unincorporated areas of Silicon Valley. If you compare San Jose to unincorporated areas in the Central Valley or farther north then it may be different. Even then, the prop tax rate is basically 1% everywhere, with local additions. The highest I’ve seen in SiValley is about 1.2%, which is not that much more.
“CA used to be # 2 in the nation for academic achievement in public schools. Now it’s # 48. That decline parallels cuts in education spending.”
That’s funny, because I keep looking at education budgets from years past, and each year’s budget seems quite a bit bigger than the last. Where are these cuts?
I suspect the changes in California’s demographic profile have a lot more to do with lower student achievement than any (nonexistent) cuts in education spending. We spend more per student each year, and steadily shrink class sizes (I remember doing fine in classes with 25-30 students in the seventies), and yet achievement either falls or stagnates.
Since you can’t blame the funding, you can either blame the teachers (and their unions) or the raw material they work with. Pick one.
Teachers unions. Once you are in, school districts can’t fire the poor teachers if they wanted to, no accountability. Most teachers I know my age are heavy alcoholics and drug abusers. “Those who can’t, teach”
Hmmm…small-minded comment, Mike.
Not all teachers are alkies or “non-doers” like your friends.
–
“His foreclosure listings went from zero to 275 in two years. He sees Canadians coming to pick up condos selling for 30% to 40% off peak prices. ‘It’s great for our economy,’ he says. ‘We need foreign investment here.’”
I thought that foreigners were buying condos in downtown SD during the boom times. Looks like there must be an endless supply of foreign buyers and they seem to be buying in many states.
Jas
And evidently they don’t keep up with the news. My CFO informed me that Europeans are busy buying up because of the rate of exchange. I’m guessing not all Europeans are stupid though - I know our housing market is big news over there and their’s is definitely now duplicating.
If Europeans want to cash in on the exchange rate (presumably because they believe the dollar will regain its value), then why don’t they just buy dollars? By buying real estate, they take two risks: currency risk and RE risk. I don’t think I buy this bull about foreign investors saving the US.
–
Foreign buyers are not known for their smarts! Money burning hole in the pocket seems to be the problem for some who found themselves in right place at the right time. As they say, easy come easy go.
Jas
Someone needs to remind eager Realtors that there are rather fewer Canadians than there are Americans.
How Canadians (all six of them, is it?) are going to absorb all the inventory 300 million Americans can’t, is a little bit of a mystery, eh.
“Canada, America’s Hat”
One of these stories really hits home (not going to say which).
“The hardships local auto dealers are experiencing is another sign of an impending recession, Redlands-based regional economist John Husing said.”
“The hardships local auto dealers are experiencing is another sign of an impending recession, Redlands-based regional economist John Husing said.”
Impending, Dr. Husing? How about in recession for the last 6 months?
Jas
Dr. Husing, same guy who said that will never happen in the IE.
I wonder if any reporter will try to get these economist to admit that they were wrong.
“His foreclosure listings went from zero to 275 in two years. He sees Canadians coming to pick up condos selling for 30% to 40% off peak prices. ‘It’s great for our economy,’ he says. ‘We need foreign investment here.’”
I had hoped that Downtown San Diego’s condo boom and crash would turn it into a nice, vibrant, middle class area, if not quite the luxury enclave its boosters sought. Instead, looks like it might be a dead, empty area held for speculation by those living out of the country, like Venice, Italy.
Generally these overseas investors are willing to either let the property foreclose or sell at any price. So they are not very good knife catchers. Watch the English start unloading Spanish condo’s soon.
Foreign knife catchers will not turn out in greater number than domestic knife catchers. They can still do math, right?
Eh, they’ll be able to get their loans from BMO, Eh?
That’s what I was wondering - where are they going to get financing?
I’d assume using the bubble equity in their Canadian homes.
So probably the Canadian home itself is collateral.
In general this is how speculators in CA invested other states.
Ugh! If Canadians are using their own home equity to buy CA houses, then I’m afraid the US will once again eat the entire world. How stoooopid can an investor possibly be? BTW, I heard Canada uses the same “.ca” as California does for web addresses. Is that true?
I don’t know anything about California, but Ontario is almost within spitting distance, and yes, the “ca” is used by the “eh” crowd across the border.
So what do they use in Ontario, California?
I’m just saying that holding property in a another country is something you would probably walk away from pretty quick if you had financial problems. When I lived in china I had a new harley setting in storage back in the states. Getting out of that payment when I had problems was a easy decision.
I sold it and payed off the loan but you see the point.
Because even if it IS a recourse loan, it’s got to be real hard to get a difficiency judgement against somebody in a foreign country.
OT–
The Santa Barbara REIC is throwing a hissy fit over the news that the South Coast’s new GSA conforming loan limits will be based on median home prices for the entire county — which includes not just the tony South Coast but lower-priced North County (Santa Maria, Lompoc, et al.) as well. See, for example, this local local e-newspaper commentary, crafted by a local title company representative.
This week at the Santa Barbara Housing Bubble Blog: a puff piece, mainly for locals and dancing queens, about the Neverland Ranch foreclosure. (Jacko has until March 11 to cure his delinquency; otherwise, his Los Olivos sandbox goes to public auction on the 19th.) Enjoy.
Saint Barbara
“Santa Barbara REIC is throwing a hissy fit over the news that the South Coast’s new GSA conforming loan limits”
Santa Barbara is filled with rich people, and rich people don’t need to finance, they can use cash if they must, so Santa Barbara is immune to credit tightening.
At least that’s what everyone tells me. It must be nice to be immune.
Well it’s certainly true that rich people don’t need to finance. But I think that we’ll agree that we’re going to weed the actual rich from those who THINK they’re rich.
Not only that, but rich people are just like everyone else in that they WILL finance just to get something better than what they could have bought with cash. All the movie stars and sporting greats have mortgages.
I am having a heated email discussion with my bro in So Cal today. Thought I would share, he writes:
I will bet you my house, my house will never be 525k [he is in Dan Point on the hill, a peek a boo ocean view but a 6000 sq ft lot, 1800 sq ft house from the 50's and a great view of your neighbor's yard and utility poles]. Especially if yours is 400k!!!!!!!!!!!! [Im in Santa Fe,NM] Sad fact is location, location, location. People will always pay more for an older house in a great location than a newer house in the middle of Timbuktu [he doesnt travel much]. My square footage price will never equal your square footage price. Sure it’s nice to look at tumbleweeds and have extra unusable land for scrap wood. Fact is there are only so many places in the US that you can get a view of the ocean and people will pay up the wazoo for it [see FL]. People pay premiums for “peakaboo views.” In Talega, they are stinkin 10 miles away and can’t tell whether its ocean or fog. As you know, this isn’t a new phenomenon. From several windows, I can see people on the beach [ he has great eyesight as they are 3/4 mile away], waves breaking, sail boats, sun rise, moon glistening off water, etc. I’m not selling to average income buyer. My house is fricken “white water view.” Search that on realtor.com! Also, Dana Point is completely redoing the harbor and making the downtown sweet. Newport Beach, Laguna Beach, Corona Del Mar – all have killer downtowns. Prices have never been cheap. You are high! My house will be $2M in 2018. [lol! those OC'rs are so sensitive!]
“Just smile and wave, boys, just smile and wave.” - the penguins from the movie “Madagascar”
There are no jobs in Dana Point, which is why Dana Point has always been inexpensive compared to Del Mar and the like.
Older houses are NOT more desirable than younger ones because the young ones aren’t falling apart. Younger ones require fewer repairs and do not need modernization.
Dana point is not any nicer today than it was in 2001, so the niceness of the place cannot explain the change in prices.
Your bro says he is not selling to the average-income buyer. Wrong. He’s selling to the average-income buyer for his area. If his area is more desirable, then the average income of people living there will be higher. House prices in an area are always predicated on the average income of people who live there. Has he compared the cost of buying to the cost of renting an equivalent house? That oughta shut down all this desirability and income talk.
Please tell your brother for me that he is right. Dana Point will always be more expensive than Santa Fe. Unfortunately, prices in Santa Fe are on their way down, and prices in Dana Point are on their way down as well. Dana Point next year will still be more expensive than Santa Fe, but will less expensive than Dana Point is this year.
‘Younger ones require fewer repairs and do not need modernization.’
Hmmm? I’ve been hearing, locally, about all sorts of very new and utterly craptastically created houses. Subdivisions 2 years old where most of the houses have cracked foundations, etc. Of course, this was in Lacey, WA. Which is where Satan goes to poo, ’cause he doesn’t want to make a stinky next to His throne.
Dana Point 92624 $721,250 1.6% 3 -57.1%
Dana Point 92629 $707,000 -11.6% 10 -67.7%
Sales are only off 60% - 70%.
Not like that’s a big deal, or anything.
As they say in Dana Point…
‘No worries, brah!”
–
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago. ‘We’re here because we have a gift card,’ said Pam Sanicola, a furniture saleswoman, while sipping a pricey java on a University Parkway Starbucks Coffee patio.”
BTW, on business TV they were warning people about gift certificates because many of the businesses/stores are going bankrupt and the gift is gone. I can’t understand why Americans don’t give cash rather than gift certificates. 99%+ of my gifts to family and friends have been gold coins of various denomination. I gave a tenth to my neighbor’s daughter on her eleventh b’day last month.
Jas
The particular American habit of not just doling out cash drives this American crazy.
What it boils down to is that cash is “impersonal”, like somehow getting a gift card while you are out at the supermarket (yep, they are that easy to acquire) is more “personal” than going to the bank and handing out notes you can spend anywhere. If I ever became mistress of the universe, 3/4 of the gift giving occasions would be nixed and we’d lose the whole “but if they really loved me they would have gotten something I probably wouldn’t have liked and collected dust on the shelf because, you know, they invested the time to *shop* for it” attitude.
*sigh* The Chinese have it correct: money wrapped in red paper envelopes is the perfect gift for any occasion. (Please feel free to send to Vermontgal at any time.
)
Looks like I’m in the wrong state. I need to meet a Vermontergal!
‘…money wrapped in red paper envelopes is the perfect gift for any occasion.’
Red is a lucky color. Another fiscally responsible thing I like about the Chinese is the concept of sending assets on to the afterlife by burning paper replicas. Not of this wasteful Viking crap about burning the real ships. What’s a ghost gonna do with a REAL burned up ship? When it’s evidently so easy to fool them by burning up a fake paper ship? I had a Chinese room-mate in college for a bit. Of course, they were probably lying to me. And anyway, maybe Chinese ghosts are just more credulous than Scandinavian ghosts.
Maybe it’s just that Scandinavian ghosts aren’t wussy ethereal floaty beings that go “boo” and that’s it. The ghosts mentioned in the Sagas tend to be really horrific undead flesh-and-bone creatures that try very hard to hack you apart with whatever’s handy.
I wouldn’t want to risk pissing one of those guys off with a gift of a cheesy knock-off paper boat. Here, have the ship. Just head off to Valholl and lemme alone.
I have some AWESOME news! I just received in the mail today two VIP tickets to a “Flip and Grow Rich” seminar! They’re valued at $249 each! It says it’s a once in a lifetime event! Oh, but there are actually four different southern California conferences to choose from, so that would make it more like a four-times in a lifetime opportunity. I’m invited to be Armando Montelongo’s personal VIP guest. I feel so special! Did any of you get these? Probably not, ’cause the envelope was hand-addressed and everything. Hmmm… I wonder what this scanning bar along the bottom of the envelope is for… probably just from the post office or something. Anyway, I’m reading the tickets here and it looks like, while Armando Montelongo is the one inviting me, 2 of his personal mentors are actually doing the “training”. I get a free lunch, too. I wonder if Armando will be there. I also get a ‘Real Estate Flipping Machine’ cd! I can’t wait. I Hope to see some of you there! Look for me. I’ll be the one wearing the Mr. Housing Bubble t-shirt.
I heard that, but I won’t pay their “small shipping charge.” Might just call the 800 number, just to pull their chain a bit.
“Armando Montelongo’s personal VIP guest”
Ewww, why did you mention that name…now I have to take a shower to clean off that icky slimy feeling I get when i see his name mentioned.
And I bet Ginger could beat his wife in a cat fight.
LOL! Put them for sale on eBay with no reserve and see how much they’re worth. Then report your earnings back to Armando and friends.
“That same day, another 200 mobbed a fair in Los Banos, an old farming city of 35,000 residents, also in Merced County.
Well that’s nice, at least these folks got to take their family to a ‘fair’ over the weekend. At no charge, and educational also.
This whole friking mess is turning into a three ring circus…
In Ring One we have the NAR doing their “Housing is a great investment” disappearing act.
In Ring Two we have Congress doing their “Pandering to their Constituents” juggling act.
AND in the Center Ring we have the grand clown himself Ben Bernanke doing his “Keeping the banking system from collapsing” high wire act.
What an f-ing joke….I don’t feel bad for any of the people who jumped in and bought into all hype and are now overwhelmed with debt because they weren’t smart enough to do the math…
I guess I picked a bad week to quit sniffing glue…
OT… This fellow must be looking to be throw overboard by his breather en.
“I consider the perception that the Fed is pursuing a cheap-money strategy,” commented Dallas Fed President Richard Fisher in a speech yesterday, “to be a paramount risk to the long-term welfare of the U.S. economy.”
For his part, Fisher is officially tapped out. He pledged he will heretofore urge his Fed brethren to stop cutting rates.
“We cannot,” he said, “in my opinion, confidently assume that slower U.S. economic growth will quell U.S. inflation and, more important, keep inflationary expectations anchored. Containing inflation is the purpose of the ship I crew for, and if a temporary economic slowdown is what we must endure while we achieve that purpose, then it is, in my opinion, a burden we must bear, however politically inconvenient
–
Fisher said that the market will take whatever we give! He was hinting that the Fed is pandering to the financial markets, including the Scam Market. Is he right or what.
Jas
“That’s especially tough on developers who relied on financing to buy land since their carrying costs are eating them up.”
Looks like the previous owners, of the land bought by developers, will be able to buy it back for pennies on the dollar.
Yeah, but all those streets shure do get in the way of plowing.
“‘This is my investment,’ she said. ‘Something has got to be done.’”
Then go do it!!!
‘Something has to be done.’
Sure, why not?! I want an -insert item out of my affordability range here-, something has to be done!!!! I’m gonna throw a tantrum if I don’t get it.
Please, please: Somebody administer a Joshua Tree treatment (’Putting the Tree in Treatment!!’ or a bass slapping.
yeah, I caught that one. What about a house as a place to live, what a concept, eh?
This “investment” mantra makes me ill. I watched Senator Gasbag Dodd today on the floor of Congress, practically weeping over people losing their homes. One of his lines was how awful it was that the equity in their homes was disappearing, when they’d worked hard for it all their lives. What a crock.
Well buying as opposed to renting IS the classic investment decision, comparing current capital with future returns. “Buy low and sell high” is the rule for speculators. “Get a good P/E ratio” is the rule for investors. “Pay too much in the first place,” is no rule for investment.
It is if you’re going to be priced out forever!
This entire housing debacle can be reduced down to a few key points:
1. The complete failure of the education system in this country
2. The complete failure of our government to regulate
3. The complete failure of the media to report the truth
You eliminate any one of these and the bubble doesn’t go nearly as far as it did.
Im not so sure thats they are all complete failures.
Education:
Why are we producing so many of the best doctors, lawyers, and scientists, of course these are next exports.
Government Regulation:
The lack of regulation is showing many of the signs of fettered Capitalism, thats what it does. Think velocity of money as its relating to the Commodity complex.
Truth Reporting:
What number the dictatorships populace get to seek and exchange information in this format?
Oh, I aint sayin we dont have some failures, just not complete. The USA has many incomplete failures, thats called progress.
Even if you assume that our education system is a complete failure, education in and of itself does not solve every social ill or create character in people.
Many highly educated people heavily invested in the bubble and/or blind to it’s existence and are deeply in debt (even though they “know better”)
On the other hand, one of the most financially responsible people I know barely has a high school diploma. Education is not a “solve all” proposition, much like increased government regulation does not always (often? ever?) have the desired effects.
The problem with regulation is that the regulators are never as smart as the cream of the regulatee crop.
If you’ve got a good head for finance, which do you choose: The government job where you top out at $120K even if you get really, really good at drafting regulations designed to address the last round of financial chicanery, or the job where you get million-dollar bonuses for dreaming up new financial “products” that are structured so they slip through the regulatory net?
It’s a hopeless game. The regulators can never hope to keep up — unless they go whole-hog Soviet on us and shut down financial markets completely. But that’s kinda like napalming the village to save it.
4. Humans’ inate greed.
Oops, that’s innate.
1. The complete failure of the education system in this country
I don’t know many that understand how the system works.Even people who took economics classes. Highschool should really have courses on basic investing and understanding how the FED/gov/buisness works.
2. The complete failure of our government to regulate
- Rolling back regulation
- Cutting funding for the SEC
- Fighting states who tried to roll back preditory lending practices.
- Allowing the rating agencies conflicts of interest to persist
- Little regulation of securitization.
3. The complete failure of the media to report the truth
- I’d throw in consolidation of the media - TV,radio,and local paper often have the same owners and same news stories.
3. continued- consolidation, yep, and then there’s the fact that the NAR bought up all the real estate column space in all the newspapers.
Newspaper space can be created by adding more, profitable space. No one buys it “all” up.
“‘People are in crisis,” said James, who oversees the Housing Authority of Santa Cruz County. ‘What they need is money. Deferred-interest loans, that’s what they need, not advice.’”
Wrong. What they need is to face the consequences of their own foolish decisions and entitlement mentality. The school of hard knocks will make for some lasting lessons learned, at least for some of these ‘tards.
“Starbucks, the uber-coffee chain, has announced it will close 100 stores due to sluggish sales, an unheard-of development just a few years ago.”
Good riddance. You know things are out of whack when a retail chain is built around coffee. It’s just freakin’ coffee!!
Looks like it’s back to “Folger’s” and “Yuban” for Joe and Jane 6pack.
DOC
I like those coffees. Of course, I like Community Coffee better, but that is because I’m from Louisiana.
Roidy
I went over to a Starbucks blog to see if anyone was talking about real estate….. and found this sad story:
“CRESTWOOD — The man who was run over by a car while trying to stop thieves from stealing a Starbucks tip jar died this morning. And police have no solid leads to report in finding the couple who did it. Roger Kreutz, 54, died about 1:30 a.m. today at St. Anthony’s Medical Center in south St. Louis County — two days after he was run over outside the Crestwood Starbucks. A $20,000 reward has been posted — half by Starbucks and half by an anonymous donor…..”
My guess is a young investor FB couple were a tip jar short of a successful flip. The case will be cracked when the duo is unable to resist the allure of the 20k and turn themselves in.
I pulled a few numbers for my local Livermore,CA area and things are really starting to fall of a cliff and the sense of residential panic is setting in nicely.
The number of homes sold in the 94550/1 zips for January totaled a whopping 6!, three of which were former foreclosures with significant (35-40% off their peaks) reductions. To put this in context the average monthly sales for the past several quarters is as follows (note that these are monthly averages within each quarter not for the whole quarter):
Q4 ‘07 - 23
Q3 ‘07 - 99
Q2 ‘07 - 121
Q1 ‘07 - 109
Q4 ‘06 - 127
Q3 ‘06 - 138
Q2 ‘06 - 147
Q1 ‘06 - 121
We’re still only about 15% off the median peak prices but is definitely showing an acceleration in the past two quarters which is encouraging.
I still find it hilarious how Realtors still try and spin a positive side with complete BS data. There are currently (Jan ‘08) 453 active listings, and the Realtors are quoting that there is only just over 7 mths backlog. They arrive at this by using the number of homes that are currently under contract (63) however the number of pending has been at this level for several months (obviously those that are in contingencies with selling their own home before completing, which, if there is a chain of more than 2 is likely to never happen in the foreseeable future). So based on the real data I make it that we have more like 75mths of backlogged inventory! Scary. It’s amazing how one can spin data in which ever way they see fit. And some are still buying the BS, although speaking with neighbor and friend FB’s I sense they are also starting to see the light.
Question (and probably too late to be answered):
What is the current conversion rate of pendings to closings? We know its down? But for the homes that went pending in November, how many are closed?
Also those sales rates are scary. The housing bulls like to note that inventory hasn’t yet gone high in ‘nice areas.’ True. It usually doesn’t spike up for a bit and in many nice areas it starts to shoot up a week before school lets out and keeps increasing through the summer (but the rate slows down).
Got Popcorn?
Neil
Orange County developer (Suncal) lays a $75 million dollar egg in Bakersfield:
http://bakersfieldbubble.blogspot.com
“‘You’re talking 10 percent of an entire city becoming homeless,’ Cardoza said. ‘I don’t know how much worse things can get.’”
I didn’t realize they passed an ordinance preventing people from Renting.