Many Sellers Are Having Trouble Facing The Facts
The San Francisco Chronicle reports from California. “The developer of the recently opened Eight Orchids condominium mid-rise in Oakland hopes to auction off nearly a third of the units, with some starting bids $300,000 below prior asking prices, as builders struggle to unload new properties in the current housing climate. ‘It tells you it’s a very weak market and the normal selling process is not going well,’ said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley.”
“A complicating factor in Oakland is the number of large condo developments near downtown that have opened or begun selling the past year. Oakland condo developers are only selling a few units per month on average, said Alan Mark, president of the Mark Co.”
“In January, median resale condo prices in Alameda County stood at $360,000, down 19 percent from a year earlier, according to DataQuick. Sales fell 47 percent. The firm doesn’t track new condo sales specifically.”
“The heavily discounted starting bids and auction process itself should reassure people they’re paying the fair market value, said Stuart Gruendl, CEO of BayRock. ‘I have a big pool of buyers, they’re more than tire kickers and now, I’m going to create an event to create some urgency,’ Gruendl said.”
“He added that he isn’t ‘desperate’ to sell or under pressure from his lenders but acknowledged that the market is challenging.”
“The minimum bid for one-bedrooms is $245,000, down from as high as $520,888; two-bedrooms will start at $325,000, down from as high as $630,888; and three-bedrooms will begin at $475,000, discounted from as much as $805,888.”
“There is no ’secret reserve,’ meaning any unit that receives at least the minimum offer will go to the bidder.”
The LA Times. “As the housing slump worsened last fall, Don Dale struggled to find buyers for the $900,000 houses he was selling for Shea Homes in the hills of Aliso Viejo. Then in January, Shea slashed prices to about $750,000. Dale sold nine in one day.”
“‘If there is value, there are buyers,’ Dale said.”
“Stuck with excess inventory, builders throughout California are beginning to offer steep discounts on new homes, sometimes at a loss. Centex Corp. is touting the ‘greatest prices in years’ in its ads. In San Bernardino County, builder Van Daele Homes is advertising 35% discounts.”
“‘Builders don’t have the luxury of waiting another year for the market to turn — they need the cash flow now,’ said Patrick S. Duffy, principal of a consultant to home builders. ‘It’s better for them to take 90 cents on the dollar today than to risk no cash flow at all because they’re not selling any houses.’”
“Carlos Vega spent an afternoon last week driving to sales offices for newly built subdivisions in the hills of Rancho Cucamonga, where five builders have projects. Vega said he had made several offers but hadn’t yet committed to anything because the rival builders keep topping one another’s deals.”
“One builder, he said, offered to sell him a model home, complete with landscaping and designer furnishings, at a price Vega estimated was about 20% below what the property would have fetched a few months ago.”
“‘They’re throwing me offers left and right,’ said Vega.”
“In Victorville, new houses built by KB Home are selling for about 33% less than they did two years ago because of the combination of price cuts and size reductions, CEO Jeffrey Mezger said at a conference last week.”
“In the Riverside County suburb of Lake Elsinore last week, a saleswoman at one housing development that had cut prices recalled getting a visit from a field representative from a rival firm that had kept prices level.”
“The saleswoman, who declined to give her name because she was not authorized to speak for the company, said her counterpart asked for a price list. The reason: The rival hoped to persuade her corporate headquarters to make similar trims.”
“If there is any grumbling about price cuts, it’s from people selling their own homes. In Lake Elsinore, for instance, more than 100 resale homes are listed in the $300,000-to-$400,000 range. For that price, buyers can get a brand-new model that has been freshly discounted.”
“Jack Lloyd has been trying to sell his Palmdale house for nearly a year. He’s cut the asking price several times, and he’s now seeking $285,000 — down from the original $425,000.”
“But Lloyd isn’t hopeful, noting that new houses in nearby developments are $240,000. ‘Who’s going to buy mine?’ he asked. ‘Sure, you have to put in carpet, put in the lawn in those, but is that going to cost you 40 grand? I don’t think so.’”
“‘Many of the home sellers are having trouble facing the facts,’ said Lancaster real estate agent James Baker. ‘The best prices are not on the privately owned houses, they’re from the builders and the banks.’”
The Contra Costa Times. “Ruby Aldana-Bonite said she believes the new agreement by Fannie Mae and Freddie Mac to only buy mortgages with independent appraisals could help ‘keep everybody’s noses clean.’”
“‘A lot of times, orders would be dangled in front of you, ‘If you come in at this value, we have more work for you,’ she said. ‘It’s not right.’”
“Aldana-Bonite, of Benicia-based Aldana-Bonite Appraisals, said that although she favored the new rule, there would be few changes for independent real estate appraisers.”
“‘Banks have already gotten rid of in-house appraisers now and are now using a third party,’ she said. ‘And that’s good if they’re not getting that pressure from the loan officer and you’re not pressured or leaned toward a certain value.’”
“Rob Denton, owner of Denton Valuation in Walnut Creek, said that ‘appraisal shopping,’ or when mortgage brokers and loan agents called multiple appraisers to find one who agreed to their price, was common in the housing boom.”
“‘The feds are suggesting that when you are prompted by a broker to reach a certain value, those people should be reported,’ he said. ‘But there doesn’t seem to be any clearinghouse for doing that. … We’re not going to accept work under those premises, but there are no avenues for corrections.’”
The Press Enterprise. “In a move to help people buy homes and refinance out of unaffordable mortgages, the Federal Housing Administration today will raise the limits for one year on FHA-insured mortgages.”
“Housing and mortgage experts said that while the new availability of FHA mortgages will not cure the housing crisis, it is a step in the right direction. It will not, however, help a homeowners who owe more than their houses are worth.”
“John Marcell, a California Association of Mortgage Brokers official who lobbied to have the FHA ceiling raised, said the Inland median price reflects an effort to minimize the impact of a burst of distress home sales by homeowners unable to afford their mortgages and by lenders. These sellers have been willing to accept ‘fire sale’ prices, he said.”
“Will Herring, government affairs chairman for the Inland Empire chapter of California Association of Mortgage Brokers, cautioned that the new ceiling will not help the many families who owe more money on their house than it is worth and will not be able to refinance with FHA, Fannie Mae or Freddie Mac.”
“‘Everyone who wants to refinance cannot refinance because they are upside down,’ he said.”
“‘Every little bit helps, but it is not going to clear up the issues overhanging the housing and mortgage markets,’ said Greg McBride, senior financial analyst at Bankrate.com.”
“McBride said one obstacle is that houses are still too expensive for many first-time buyers. And refinancing is not an option for people who don’t earn enough to stay in their homes, he said, adding, ‘… The only way they can afford the payments is if you made the payments for them.’”
The Voice of San Diego. “Karen Turk was laid off from her job at an escrow company in July. And before her second pink slip came in October from the escrow company she moved to. And before December, when she was laid off again from a third escrow company.”
“Turk’s not alone. A 20-year veteran of the escrow business, she guesses 98 percent of the people she’s worked with have been laid off and thrust into a burgeoning pool of job-seekers. Every month, San Diego loses more high-paying jobs, especially those tied to real estate.”
“‘I can count the ones who are left on one hand,’ Turk said of her friends in the real estate industry. ‘This is all they’ve ever done. You’re thinking, ‘What do I do now? How do I recreate myself?’”
“‘Some of the people who are losing their jobs, they might be segueing into those other jobs,’ said Gary Moss, labor market information specialist for the San Diego Workforce Partnership. ‘But as a viable option, with a comparable salary, it’ll be a stretch for most people.’”
“Thousands of out-of-work San Diegans need help now. Middle-aged, single-career workers like Turk need considerable training to even think about making the kind of money they were making before. She said managers like her were making between $70,000 and $100,000.”
“‘I’ve already resigned myself that if I make half of the $75,000 I’ll be happy,’ she said. ‘For someone in your 50s, in your early 50s, it’s readjusting your entire lifestyle.’”
“Turk is learning computer skills and hopes to begin night classes to become a medical assistant. Even the way she knows how to look for jobs — the newspaper — has changed since the last time she went job-hunting, decades ago, she said.”
“‘If they’re not buying homes, people still get sick, they get colds and chicken pox,’ she said. ‘I wonder, will I go back in the housing market again? I don’t want to do this again.’”
“Alan Gin, economist at the University of San Diego, said he’s ratcheting down his optimism from earlier months, but still holds the region won’t experience a technical recession with negative job growth.”
“With local universities churning out thousands of degreed professionals every year, Gin theorized some San Diegans have taken a job with less pay to live here. It’s like Tony Gwynn sticking with the Padres, he said.”
“‘It’s the San Diego discount,’ he said. ‘In a pure sense, as an economist, you think, ‘Well, if it’s making people happy then it’s OK.’ But you have this problem where people might be happy, but they’d be happier if they were paid better.’”
http://money.cnn.com/2008/03/06/news/exec_comp/index.htm?cnn=yes
I wonder if hearings will be on CNBC live.
In the end it will make no difference, they will take the hot seat and listen to the clowns on the panel. Walk away with all the dough they got and the D.C. panel can say they are deeply disturbed (which they are, mentally ) they will make some stern statements about never again etc… Set up a new over sight committee higher dozens more at the taxpayers expense, and the beat goes on.
Where’s Ted Kazinsky ?
Kaczinsky’s left his 10 X 12 unheated cabin in Lincoln, MT for prison in Colorado, where he gets heat and three squares, library and internet access. Doing life without (supposedly) parole.
At the SuperMax in Florence, Colorado.
There’s a bunch of potential UnaRealtors out there…
the big executives at these firms could get big payouts when their firms lost billions because…..they can. let’s face it. money rules this country. how many of these congressmen and senators play golf with these guys? that’s a rhetorical question.
you get pay if you guess wrong; you get bigger pay if you guess right; once you’re a big cat, you’re set for life. what’s new?
From the article:
“Three chief executives with ties to the mortgage crisis were paid $460 million over five years, according to a congressional report issued Thursday…The memo states that the three companies combined lost more than $20 billion in the last two quarters of 2007, as investments related to subprime mortgages fell apart. Meanwhile, the stock of Citigroup, Merrill Lynch and Countrywide declined drastically…The committee is also expected to look at how the compensation and severance packages of Mozilo, O’Neal and Prince were set and approved by their respective boards…In many cases, the consultants hired to advise on executive pay were simultaneously receiving millions of dollars from the corporate executives whose compensation they were supposed to assess…”
Something smells a little rotten. Oh, that’s right, it’s business as usual in the U.S. My bad.
I’ll be honest here.. thanks to Ben’s blog, I was introduced to CFC last year.. soooo, I looked it up and saw my first picture of the “tan man” Angelo.. the very next day, I shorted the POS company and the man without doing any further research.. a 21st century carpetbagger.. there’s a whole lot of them today.. problem is, there are even more willing buyers of their BS..
A mere pittance I say, a mere pittance!
I’d laugh if it were funny.
Not!
Leigh
Bantering, didn’t you buy a house in 2007? How’s it going?
‘It’s better for them to take 90 cents on the dollar today than to risk no cash flow at all because they’re not selling any houses.’
.90 on the dollar! What in the hell is wrong with these buyers? Were they born yesterday? They have to be young or stupid, or both. Perhaps old and retarded? I remember the 80’s correction and this one is going to be one whale of a lot bigger. These nuts that are falling for this urgency crap are going to be the next round of the screwed. Oh well live and learn!
This mentality is similar in Eureka, Cal. I’ve been seeing more home sales over the past several months, and a look at the county records post-sale indicates most of these idiot buyers are paying only $5-15K less than the asking price.
But, another blow for the Realtors (R): Humboldt county was somehow left out of the raised conforming loan limits; even though it costs more here than any of the Central Valley counties, Sacramento included. I expect the Humboldt Association of Realtors to appeal that one.
“Some of the people who are losing their jobs, they might be segueing into those other jobs…”
Will there be other jobs? I work in corporate travel and we have already been given the word to tighten our belts as our clients are cutting back on transactions. With the economy shifting down, it will be a bit more difficult to transition into a good paying job.
I was thinking about how the bay area believes they are immune to a downturn, but what happens when Fortune 500 companies tighten their belts and start putting off software and hardware upgrades to conserve cash. How about the financial jobs in SFO- are they going to hold up as the financial mess unravels?
This is the hardest part, but yes, I think there will be jobs. Problem is, it may take a while. When oil went bust in Texas, at first people hung on thinking it would rebound. Then reality started setting in and the entire economy had to reorganize. But, within 7 years or so, things were starting to hum again.
I like to point out that there were people that got into work that took advantage of the bust and did quite well. Every day, I see articles of RE woe where some realtor says they are having the best year of their career - selling foreclosures. There’s all kinds of opportunity in a bust.
There’s all kinds of opportunity in a bust.
Absolutely! My father (born 1928) always said that at the hight of the depression unemployment was 25% which meant that 75% had jobs! For the folks with gumption there will always be a money making opportunity.
Agreed. I’d tighten belts sooner rather than later.
Nah. Who wants to wear a belt? I vote for sweat pants and letting your gut expand.
And for special occasions get yerself some Sans-a-belts!
“For the folks with gumption there will always be a money making opportunity.”
Employment with family supporting income and health insurance means technology skills.
Jobs in the depression? Yes, but an uncle earned 15 cents an hour with two PTC (now SEPTA) tokens and lunch for his work in a hospital laundry.
Low pay even for the 30’s.
IMO, whether or not there will be jobs is not the concern, but rather will the jobs pay enough. Unless some serious wage inflation happens real soon, there’s going to be problems. This is true even if housing drops considerably. At this point if you can’t make credit flow like the Missippi, then the whole thing collapses.
They don’t pay enough now.
Only if your lifestyle is so inflated that you can’t see how to cut it down. I was ruthless about cutting costs about a year ago.
Then, I cut to the bone starting Jan. (not that I need even bother; just a “thought” exercise.)
You are going to be pleasantly surprised which ones you can and can’t live without. It was a mind-opening experience even for an exceedingly conservative ol’ fogey like me.
What all didja cut? Any imaginative new strategies I could pick up on? My favorite thing in the world is fiddling around figuring out how to keep every last bit of my tiny pile of money.
Well, the biggest money saver for me was leaving NYC. That cut my taxes, rent, utility, insurance and food bills by quite a bit!
Also, learn to cook. You can spend an awful lot of money on even mid-tier ‘casual dining’ restaurants, and $5 for breakfast per day will add up.
Buy decent coffee and make it yourself. One indulgence of mine was the Cappresso coffeemaker with integrated burr grinder, it makes far better coffee than the bubbling tar you’d get at Starf–ks, and it costs well less than half the price (and it’s better for the environment, no paper cups and plastic lids). You laugh, but 3 cups of coffee at about $2 each per day adds up.
Get an efficient beater and insure it minimally. Or better, a motorcycle!
I learned a lot of this stuff the hard way after a few unemployment stints that ruined my credit, drained my savings and 3 out of my 5 401ks between 2001 and 2006. I’ll be rebuilding for quite awhile, but I’m definitely wiser for the experience. And I always tell my nephews.. ABC: Adversity Builds Character..
And now you are touching on the real problem coming up ex-nnvmtgbrkr . What is going to replace the income producing aspect of the housing bubble and when are people going to get cost of living raises to even keep their standard of living even the same . What new jobs or new production is going to replace the housing related industries ?
Cherry picking jobs aren’t going to cut it ,(not to demean cherry -pickers ).
“The minimum bid for one-bedrooms is $245,000, down from as high as $520,888; two-bedrooms will start at $325,000, down from as high as $630,888; and three-bedrooms will begin at $475,000, discounted from as much as $805,888.”
“There is no ’secret reserve,’ meaning any unit that receives at least the minimum offer will go to the bidder.”
NO SECRET reserve?
PPPPsssssst - the secret is to know your commodity?
HAR!
Leigh
-no secret reserve
-must bid at least minimum offer
Huh??
Unemployement is already up in the Bay Area — from 4.9 to 5.1%. I already notice a lightening of traffic on the freeway. The mess is definitely beginning here, we are not immune. Although today’s Merc seems to think that Cupertino, Los Altos, etc. are.
–
“Although today’s Merc seems to think that Cupertino, Los Altos, etc. are.”
Only as along as the local tech Scams were going up, up and up. Now, they are going down, down and down. I noticed a big jump in Palo Alto listings today compared with two days ago. This may be the harbinger of tough times ahead. Let us see if GOOG goes below $400 and AAPL below $100 and they stay there for few months.
Silly.con Valley has lived by Scam Options and will die by Scam Options. My prediction is that it will become a hellhole once depression begins. There would be no more third bubble in tech Scams for years.
Jas
I’d bet against the Silly Valley too.
Filled with people who have NO chance whatsover of making what they are currently making for 30 years. Not a chance in hell.
no doubt about it. nuthin but uneducated rednecks in sillycon valley. that area’s goin into the toilet.
Uhh, well, Los Gatos is a pretty nice place to live. If the Valley goes to hell (as it seems to every decade or so), I am ready to jump in when house prices get a bit better.
But having grown up in Cupertino, I doubt the place will fall apart. There is this drumbeat that everything will fall apart….and yet it keeps managing to be a great place to live–except for housing prices. Plenty of people who think Saratoga, Los Gatos, PA etc. are wonderful places to live and will move there if prices fall. But maybe I’m biased. It is just sort of funny to read another obituary. I think I have lived through 3 of them now.
Hello, I have friends and family there. Fourth generation native Californians and other good people. And you are? Who paid for the roads, schools, churches etc??? It is not just a today thing, this is bigger than most know. Information is what we are all trying to absorb or impart. Hope you can get there.
it’s amusing that having 100 or so years of family ties makes you “native.”
Isn’t Cupertino almost entirely Chinese these days? Also, the combined populations of Saratoga and Los Gatos is about 60,000, rather a small slice of the broader Silicon Valley. Also, contrary to the belief of the locals, NOT everybody wants to live in a rustic setting.
If you don’t want to live in a rustic setting, feel free to move to a rustic setting and turn it into an urban setting. But do not then snort derisively at the poor saps who just spent the last ten years watching their world get wrecked by you and your urban tribe who will just move the hell out and go on to destroy new pastures. Can’t you conduct your nomadic slash and burn lifestyles stealthily, without pointing and hooting at the helpless yokels you leave behind in the places you ruin? Or that’s too much to ask? It’s no fun if you can’t laugh at people whose horizons you sprawled on and took away?
Many tasks taken over by Indian operations?
Exactly. Well spoken.
The LA Times. “As the housing slump worsened last fall, Don Dale struggled to find buyers for the $900,000 houses he was selling for Shea Homes in the hills of Aliso Viejo. Then in January, Shea slashed prices to about $750,000. Dale sold nine in one day.”
“‘If there is value, there are buyers,’ Dale said.”
Correction…there are suckers .
There are some 3500+ sf homes in Aliso Viejo, and it is a very nice place in general, but $750K?
Yep, all these sellers are still playing in bubble dollars.
The truth is that these properties have to go back to the banks where they can be written off via a US bailout, and then put back on the market to sell for non-bubble dollars.The quickest will be the unbuilt housing lots. The land will be re-sold at a fraction of the bubble values, and builders will be able to make a profit selling at realistic prices with a cheaper labor pool, and some lower materials. It will take time, but in the end, anyone still thinking in Bubble dollar terms is going to get screwed!
I am familiar w/that area. At 3.5K sq. ft., those houses w/probably the postage size lot should be going for no more than 300K, dep. on the inside/upgrades, etc.
Are those the new homes on Glenwood where the golf course was (or, I guess, part of the course remains)? Or the townhouse looking ones on Aliso Creek near Enterprise?
Just accept there will be knife catchers. Every month homes will sell. It will not ever stop (that’s a good thing). So if anyone is willing to be the best value, they will sell. Often being only 2% or 3% below the market is enough to generate strong interest. Good. That is smart salesmanship.
Eventually the market will rebound. We all know that. Its just a question of how low the bottom is and when.
Got Popcorn?
Neil
My love and I want to purchase…wood shop!
Garden!
Love the air popped kernals - can we say…
In the market?
Leigh
Hovaninian lowered prices on 3200 sq ft homes, in Bakersfield, north of hwy 178 to $200k and they camped out in droves and sold out. Plenty of buyers still out there.Just lower the price!!
“‘I have a big pool of buyers, they’re more than tire kickers and now, I’m going to create an event to create some urgency,’ Gruendl said.”
******
Urgency is not going to matter if few can find the cash or financing.
My apologies, but I’m guessing the spigot for downtown Oakland condos is starting to run dry.
Falling down?
http://www.kfi640.com/cc-common/news/sections/newsarticle.html?feed=153218&article=3373186
LAPD scratching their heads over skyrocketing murder rates.
“Falling down?”
Dude, I just saw that movie again last weekend. Bleaker than bleak. In LA’s case, though, I wouldn’t be surprised if murder rates had a lot to do with the devil spawn gang activity, no matter what the law enforcement mouthpieces say. This gang stuff is no joke, it has spread like a cancer throughout the country.
Agreed on the gang issues, however, that guy in winnetka that killed his family and the S.W.A.T. guy a do nothing loser. He was a gangsta wannabe aparently.
Something set him off, could it have been his dad telling him he had to get a job?
I just seem to get the feeling that there is a ramping up of the murder/suicide thing these last few months. It will get worse before it gets better, and one does not want to find oneself between a desperate man or woman and their perceived salvation.
Watch your backs HBBers, especially in the metros.
If you own a house in big city America, you are stuck.
If you are renting, there’s still time to get away…
I was just now reading a chick article about emotions, instead of working, and now I’m thinking that I might be bi-polar, you know the one, with super happy ‘peaks’ and then super miserable ‘troughs’, up and down, up and down and you should load yourself up with expensive pills. If I am, then so far I’ve only been up the super happy ‘peak’, so if I AM bi-polar, shoooot–when the ‘trough’ kicks in, then the next 20 years or so are gonna be a real b*tch, for me and for the rest of western Washington.
But then I thought, maybe I’m not on a manic peak, maybe it’s just I enjoy watching people get their just deserts, because that’s really funny. And there is NO shortage of stupid people getting their just desserts. Okay, time to laugh merrily!
Roses are red
violets are blue
I’m schizophrenic
and I am too!
Hey Hoz…….that’s a keeper
Thanks, Hoz. I haven’t heard that since the mid-1980’s.
If you’re not paranoid, you’re not being realistic.
Me, paranoid???
Yeah, well, you’d be paranoid too, if everybody else was out to kill you.
I go to a football game and I know they’re talking about me in the huddle.
Rats! Rats drive me crazy…
I was crazy once…locked me up in a rubber room.
There were rats in that room…
Rats?! Rats drive me crazy…
I was crazy once…locked me up in a rubber room.
There were rats in that room…Rats!?
Ok, long time reader, 1st time poster….strange 1st post, but hello to you all.
OG - If you were really “bipolar,” you would definitely call it manic-depressive, like what it really is and like Hendrix did, so no worries. Who ever heard of people having poles? (Of course, I’m a little old-fashioned - to me “alcoholism” for dypsopmania is even a little too clinical.)
May I rant on? Why do we need the word “caregiver”? Somebody said it on NPR 10 years ago and explained that since you “give care” the word really should be caregiver instead of caretaker, and then within a couple months everybody just goes along, as if “taking care” of someone isn’t a perfectly-good idiomatic expression. Screw it, the person’s still a caretaker in my book - that worked for 200 years perfectly well, and is a more pleasing term to my ear. What’s next, undergiver? Well, you give the body to the ground, you don’t take it - why should it be called an undertaker? Let’s just get rid of the all the melodious, idiomatic expressions in the language and replace them with politically correct, non-offensive, vanilla language as defined by government workers!
Thanks - rant off.
I think your possibly apocryphal NPR person parsed the wore “take” incorrectly and thereby was making a malinformed point.
FWIW, that was an actual event, the beginning of the word “caregiver” in the public domain. I listened to it, cringing. A triumph of mindless literalism over euphoniousness. Happened fairly recently - probably closer to 5 than 10 years ago, now that I think about it.
Sorry: dypsomania, not dypsopmania. And cringing should probably be cringeing.
Cringeing? nope. Cringing, judging, barging, bulging, fudging, forging, avenging, bilging…the penultimate g in these cases always retaining its “J” sound from the root word
They keep the “e” in Britain, though. Weirdos.
Cool. I too am confused at times by the changing vernacular. But I have been told I am probably slyxdecic.
Get over it.
Why would you want to be friends/lovers/acquaintances with a “normal” person? Didn’t those people buy all those houses at the peak with no fundamentals in mind?
I cackle regularly these days, incidentally. I am told I am retarded, etc. I just cackle some more, and point at my bank account. Then, I rock back and forth (well, that part is exercise!)
mental illness is FUNNY!
Psychologists claim that one in four has a form of mental illness. So take a look at three of your friends and if they appear normal, what does that
do for you?
I’m pretty sure you’re being sarcastic. Whether you are or not,
a serious mental illness is hell on earth for those afflicted, and their loved ones.
Rising Foreclosures was Katie Couric’s lead story ….
White house claims it helped a MILLION homeowners…….huh?
dj, it was also Brian Williams’ lead story on NBC and boy, was it grim. It also mentioned how, for the first time in the 45 years they’ve been tracking the data, people have more debt than equity in their homes. Of course, where was Bellowing Brian when the bubble was inflating? Grinning about the increase in housing sales, as I recall. What a completely worthless mouthpiece.
Should we be so surprised? As a country, at every level, we are flat busted. I am so grateful to be out of debt, as most of us on this board are, because by the looks of things we are lucky if is the bottom of the 1st inning. This massive debt bubble is going to unqind the likes of which no one has ever seen and/or tell how it will work itself out.
BTW, the equity stat is not 45 years, it is from 1945, the end of WWII. In other words, 68 years before we finally ran a negative equity, nationwide.
So to summarize in my little college bluebook…
-Savings is negative
-Home equity is negative
-People are now starting to dip into 401(K) moneys
THERE IS NOTHING LEFT.
GAME OVER.
Got (no) debt?
Meant to say, 63 years since 1945.
Oops! Way tired. Mus t ge t s leep.
The federal reserve flow of funds was just released this afternoon, it is ugly. That is where 1945 was picked up. We have not had this little equity in housing since 1945.
I posted link to the pdf in Bits bucket.
And this counts as inflation, Hoz?
C’mon, you’re older than I am.
FPSS
Wait until you calc China’s current account surplus for January that will put some hair on you. :>) ( I won’t tell you what I got, but it is a preliminary way over, over, over $40B - so I am rechecking this weekend).
Buy what China buys.
Actually, there is a LOT left, but the top 5% have 80% of it.
When credit locks up, the man with cash is king. That top 5% are eagerly waiting for the metaphoric firesales.
The excess of housing debt over housing equity is interesting, but kind of an arbitrary milepost. It does not mean there is “nothing” left, it does not mean the total equity is negative. Lots of people own their homes outright. However, the debt incurred by others (all put together) exceeds the total equity now (not the total valuation, which is debt PLUS equity). There will probably not come a time when there is “nothing” left, or a total negative equity. That’s because foreclosures and auctions will happen at some rate that prevents individuals from owing (say) 150% of their home values, while those who own their houses outright will mostly continue to do so.
They helped a million homeowners by delaying foreclosure for 30 days. My bet is most of them end up losing their homes anyways.
AHAHAHAHahahahahHAHAHAHAHAAAaaa!! U r weird Olympiagal. Who do you usually write for, i will subscribe?
Fitch Warns May Downgrade $160B Of Alt-A Transactions
Dow Jones Newswires - March 06, 2008 6:11 PM ET
DOW JONES NEWSWIRES
In an extensive review of bonds backed by near-prime mortgages, Fitch Ratings warned Thursday that it may downgrade $160 billion of securities whose credit quality has been deteriorating rapidly.
The review involves 417 securities backed by so-called Alternative-A loans, which generally are made to buyers with good credit but aren’t considered prime for reasons including a lack of full documentation. Fitch expects to complete the review by the end of April.
The move is a clear reminder that trouble in mortgages has spread beyond subprime. Shares in Thornburg Mortgage (TMA) lost more than half their value Thursday, after the company said a missed margin call - forced by a drop in the value of bonds backed by Alt-A loans - triggered defaults on its borrowings.
“Accelerating home price declines partly due to the recent dramatic contraction in the non-agency mortgage origination and securitization markets has been the primary catalyst of the Alt-A performance downturn,” said Glenn Costello, a managing director and co-head of residential mortgage-backed securities at Fitch. “This development has effectively eliminated the option to sell or refinance a home for many borrowers.”
Fannie Mae economist Molly Boesel said Tuesday that Alt-A loans could replace subprime loans as Wall Street’s next headache since many Alt-A borrowers owe more on their loans than their houses are worth. However, she put the timeframe for Alt-A issues to emerge at sometime in 2010.
Fitch said serious delinquency levels for Alt-A loans made between 2005 and 2007 have been rising rapidly in recent months. Of the fixed-rate Alt-A loans made in 2006, 8.6% are seriously delinquent, with payments at least 60 days overdue. For adjustable rate Alt-A loans that year, the rate is 13.6%. While that’s below the 27% delinquency rate for 2006 subprime loans, it’s well above the 1-2% rate for Alt-A loans in transactions rated by Fitch.
Bad underwriting and fraud likely are boosting the default rate, Fitch said. The less-strict paperwork requirements for Alt-A loans paved the way for aggressive lending to the less creditworthy and emboldened borrowers to exaggerate their financial stability.
Fitch’s review assumes that home prices will fall by 25%, adjusted for inflation, from their peak in 2006.
Think that might mean it’s time to buy the dip?
(sorry PB)
was that clam or French onion?
It is a little late to downgrade when they are trading at a 40% discount.
The downgrade via the rear vision mirror
Oh, I LIKE this article. It smells like shoe.
Downey Savings has the most Alt-A loans than any of the S&Ls. When will it crash? Oh, it already has! Pile on, pile on, pile on!!! hehehehehehe.
Wasn’t the CEO of TMA on Cramer’s show saying they were well capitalized and would be well positioned to profit from competition being eliminated?
Looks like they are about to be part of the list of casualties.
“‘Every little bit helps, but it is not going to clear up the issues overhanging the housing and mortgage markets,’ said Greg McBride, senior financial analyst at Bankrate.com.”
How is it again that setting a GSE conforming loan limit at a level that a vanishingly small share of Americans should even consider as affordable, given their household income and wealth, is supposed to help, even a little bit? Everyone I know who can afford a home that requires a $730,000 loan is also quite comfortably housed already.
Hey, the realtors in SF think it may eventually help them out:
http://www.sfhomeblog.com/blog.html
I read “housed” as “hosed”, and I think it flowed much better that way.
In Victorville, new houses built by KB Home are selling for about 33% less than they did two years ago because of the combination of price cuts and size reductions, CEO Jeffrey Mezger said at a conference last week.
Aaaand there goes your ‘price guarantee’ they touted. Size reduction = not a comparable house. So if you blew 900k on a 3k sqft house, and they’re selling new construction of 2.4k sq ft houses at 500k, you’re still boned. But luckily you got that price guarantee! You can frame it, hang it up on the wall, and seethe in rage for the next 20 years every time you pass it.
Oh ,so that’s how the builders are getting around to old “price guarantee” they were toughing . What creeps .
I knew they would do that- I was thinking that they would change the floorplans and options enough so they would not be considered comps. Example, the “Monterey” floorplan would be renamed as the “Mendocino” (glossy floorplan names completely made up).
Don’t worry SF:
Some lawyer will sue saying the price guarantee was not on the total price but on the price per sq. ft.
That 2.4ksq ft @$300sq ft should be $720,000 …I want my $180k BACK!
—————————————————
‘price guarantee’ they touted. Size reduction = not a comparable house.
Yup, and you’d better hope they don’t go bankupt before you do.
Does someone really know what the guarantee is about? How do they pay you back the $100k you will lose over this year? Cash refund? Not going to happen! They will buy it back from you?
Ever heard of the lady with properties in Florida and California and said none of her properties had lost value?
Until they’re sold, how does she know?
The big banks are doing this right now. They call them level 3 assets and just guesstimate a value using a scary-accurate model.
I have a lowballing question. I’m in St. Louis and have my eyes on a 170k house that’s been on the market for many months. I’m not going anywhere near that price. When making a lowball offer is it better to offer well below what you’re willing to pay and work your way up or give a take it or leave it offer near the top end of what you’re willing to pay. Thanks to you guys I saved over the past few years when everyone was saying buy and I’m sitting on a large chunk of cash that’s now being eaten by inflation. St. Louis is down 0-10% yoy and I’m expecting the same this year.
Offer what you think the bottom price will be. They won’t give it to you for that, but offer it any way.
Tim,
You can easily go in 30% the offering price. Hopefully they will counter instead of telling you to get lost. Have your preapproval ready so they take offer seriously.
Will the real Tim please stand up, please stand up. During the peak you had to worry about a seller rejecting your offer and accepting another. Those days are gone in most areas. I wouldnt worry about insulting anyone, never give them your max right away. You will always wonder what you could have got. There will be many, many more opportunties in the next few years. I have no doubt that homes will be cheaper next year. Why not buy then?
Hmm, we all have our own ways of doing things. I would be more inclined to make a “take it or leave it” offer, which might be 125x present likely monthly rent.
That’s also the way I buy cars.
If you aren’t embarrassed by your first offer, it’s too much. LOL.
They’re asking 350k for those condos in Oakland… which means they were 650k originally? These condos are in Chinatown in an area that’s not in anyway remarkable. 350k? No thanks. I think I’ll pass.
Bernanke (and the Fed) have only 2 options-
1] Screw over the FIRE companies. aka Let Banks fail, let MBSes (CDOs, ABCPs etc) find their real value. Then recapitalize the system- Reboot the system.
2] Screw the rest of the US economy. Either through high inflation, stagnation or acting they are doing something.
Option 1] requires courage and option 2] requires a estate in south america. Though option 1] is more desirable for almost everyone, I have a nagging suspicion that option 2] is being tried out.
I vote for option 2. Seguro que, hell yes!
“The developer of the recently opened Eight Orchids condominium mid-rise in Oakland hopes to auction off nearly a third of the units, with some starting bids $300,000 below prior asking prices”
He added that he isn’t ‘desperate’ to sell or under pressure from his lenders but acknowledged that the market is challenging.”
“The minimum bid for one-bedrooms is $245,000, down from as high as $520,888;”
Hey moron, why don’t you raise the original price to $1 million for one-bedroom?
This is Oakland we are talking about right? The gettho of the Bay Area? Where crime and homicide runs among the highest for metros? Where houses sold for well under $200k even in 2002?
“This is Oakland we are talking about right? The gettho of the Bay Area? Where crime and homicide runs among the highest for metros?”
Building condos in downtown Oakland reminds me of Soylent Green.
–
Big jump in listing in Palo Alto, a red hot market for quite some time, from 44 to 60 in juts two days. I don’t know when the listings were 50 or higher.
I have been expecting decline in demand in Silly.con Valley due to sharp drop in GOOG and AAPL this year.
Jas
Good. Once Palo Alto prices stop hiding their declines, I will take a trip to old PA and start laughing in the faces of all those self-professed “geeks” who have mistakenly been thinking that I might date them.
I like this blog.
Then you know they were poseurs, yes? Real geeks don’t have time for ‘dating’, or ‘hygiene’, or any sort of ‘contact’ with ‘humans’.. Too busy hacking code, cabling up systems, or grinding for epic lewtz..
“A complicating factor in Oakland is the number of large condo developments near downtown that have opened or begun selling the past year. Oakland condo developers are only selling a few units per month on average, said Alan Mark, president of the Mark Co.”
So, let me understand this. In many towns there were supposed to be more condos coming onto the market in one year than were sold in 10 normal years. And this didn’t have anyone concerned but us worry warts? Someone gave out all those building permits, the # of permits issued was public knowledge. I guess I’m just cynical anymore, but this is easy stuff, no e^x or dv/dt or anything more complicated than number of permits issued vs historical sales data.
With all due respect to e^x and dv/dt, I will repeat my story of the newly-hired Caltech assistant prof of planetary science who asked me five years ago whether to take out a fixed rate mortgage or a (then-cheaper) ARM. My advice: fixed. His subsequent choice: fixed. He was just lucky I was around, right?!?
The Voice of San Diego. “Karen Turk was laid off from her job at an escrow company in July. And before her second pink slip came in October from the escrow company she moved to. And before December, when she was laid off again from a third escrow company.”
Hey Karen, why don’t you apply to another escrow company. Your track records great!!
Another person that did not save up there bubble dollars!
oh yeah, she counts her 401K as her short term emergency money!
Good going sparky!
I have a friend in Long Beach Ca that has been in escrow for about 30 years. In January of this year she only opened one escrow. The company she is with has laid of 70% of the staff and has reduced hours and benefits. Thankfully she can qualify for SS benefits in a few months or she would in real trouble. I am also seeing between a 40% and 50 % discount on prices on homes in North Long Beach ,an area that would make Oakland look good. All were purchased with 100% finacing and are either short pays or bank owned.
Seen a new development on Newport Blvd 92627 this morning, like 6 mini mcmansions crammed into a lot. They were asking like 800k a couple months ago, now big FOR LEASE sign is up. I don’t recall seeing that on new construction around here before?
The smartest guy in town is the one who parks his old RV in the empty driveways of these places, with an unobtrusive orange cord running into their electric… one step ahead of the law and the angry real-estate harpie. Ah that’s the life.
LOL!!
–
“Jack Lloyd has been trying to sell his Palmdale house for nearly a year. He’s cut the asking price several times, and he’s now seeking $285,000 — down from the original $425,000.”
A perfect example of falling behind the curve. It happens in all markets. The concept of selling (or buying) at the market price is foreign to most home sellers, it seems.
Jas
“…It’s the San Diego discount…”
Mr. Alan Gin
“Sorry there is no food on the table”, Mary told her kids starvingly. “It’s the San Diego discount”.
We don’t have as cool a vocab, usually Lars says “no money, lef m’wallet at home”. I’ll have to tell him about the San Diego discount tonight.
I don’t know which one p*sses me off more “the San Diego discount” or “the Sunshine Tax.”
One vote for the Sunshine Tax here. Blech.
I’m happy here though, so that’s enough for me.
Mr. Alan Gin….spoken like a true ‘lifer’ in SD. Buddy you just don’t know any better. The weather just isn’t THAT great to make up for all the downsides of living and working there
–
Many in Silly.con Valley have been making similar claims about the weather and the geography but I have been telling them that weather doesn’t pay the bills. And how many high-income earners have time to enjoy the weather?
Jas
Sure can use a san diego coupon!
Hey, maybe with the new bailout being tossed around…
Oh, that’s nothing. I’m from San Diego, so I’ve heard ‘em all. Have you ever heard of the San Diego barking spider?
Hoz, always look back….Im talking to you. and you walk away, sigh
I got tired and could not play worth crap!
I did not walk out- I ran!
the region won’t experience a technical recession with negative job growth…With local universities churning out thousands of degreed professionals every year, Gin theorized some San Diegans have taken a job with less pay to live here.
And how are these low-paid grads going to power the economy on whatever paltry money they have left over after sky-high SD rents or mortgages? You end up with reasonable unemployment numbers, but a slothful economy.
I see this being a race to the bottom for RE, a sort of reverse ‘keeping up with the Jones’, the hallway discussions turning to ‘how much did your house drop this week’ and ‘is this the optimal point for me to stop paying on my mortgage ?’
‘is this the optimal…’ — good one! LOL
A Few Good Houses…Part ll
Jessep: You want answers?
Kaffee: I want the truth!
Jessep: You can’t handle the truth! The housing market SUCKS !
You want me on that retaining wall.
You need me on that retaining wall………
–
“‘Many of the home sellers are having trouble facing the facts,’ said Lancaster real estate agent James Baker. ‘The best prices are not on the privately owned houses, they’re from the builders and the banks.’”
And both have a huge inventory to unload!
There is a huge backlog of homes permitted but not yet started by the builders because of the slowdown in construction. Permits would have to drop another 50% after falling 50% already.
The only thing that would clear the inventory, new as well as resale, and bring it to “normal” is price reduction, maybe 30-50% from here, no?
Jas
Jas:
How about saying to the Chinese, Indians, Russians, come on buy a house in America just 50% down and we will give you a green card?
It will bring hundreds of billions $$ back to America, and clear up inventory.
been there, done that. in 10 years the Speaker of the California Assembly in Sacramento will be a pro-Chinese windbag who will put Antonio Villaraigosa and Fabio Nunez to shame.
–
“Every month, San Diego loses more high-paying jobs, especially those tied to real estate.”
You mean inflated paying jobs, Miss Turk? After the current refi boom is over, in 6-12 months, those who lose jobs in real estate and financing will have tough time in the job market due to the recession, which I believe will be severe and longer lasting than the last two recessions.
Jas
But she’s training to be a medical assistant! Yea, I bet she thinks that will save her lifestyle. My wife is a Physician Assistant, her office starts the medical assistants at $10/hr most of them make about $12/hr. Better get used to living on $24k a year there Miss Turk!
–
“Alan Gin, economist at the University of San Diego, said he’s ratcheting down his optimism from earlier months, but still holds the region won’t experience a technical recession with negative job growth.”
Not only SD is already in “technical recession,” Dr. Gin, and “negative job growth” usually happens several months after the “technical recession” begins. Why can’t you get you facts right? I would be surprised if the employment is not already declining.
Jas
when Jas post here, and its been a while….not good. This is the next leg down.
and its been a while
yes it has
“The minimum bid for one-bedrooms is $245,000, down from as high as $520,888; two-bedrooms will start at $325,000, down from as high as $630,888; and three-bedrooms will begin at $475,000, discounted from as much as $805,888.”
“There is no ’secret reserve,’ meaning any unit that receives at least the minimum offer will go to the bidder.”
With minimum bids like that (on a 1BDM apartment, no less), who needs a secret reserve? The fact they went out of their way to mention ‘no secret reserve’ also tells me someone’s been reading the bubble blogs ;-).
http://www.latimes.com/classified/realestate/la-re-foreclosed6mar06.pg,0,1134026.photogallery
In looking at these 6 photos the overall average decline in wishing price is 25%. Some of these areas I’m familliar with even with those 25% price drops they still won’t sell actually I’m utterly baffled that they sold for what they did. Those prices need to drop at least another 40% to become viable options. Looking at this just made me realize we have a long way to go in this slide and it’s just beginning.
Yup, those “reduced” prices are still waaay over the top. The hangover from the bubble binge is going to set new records for pain and duration. The Electric Kool-Aid was some nasty stuff, and the FBs are going to be twitching and having flashbacks for far longer than anyone will believe.
Add up the funny money that vaporized between those previous sales and what the properties will likely go for, and pretty soon you’re talking about a big number. Multiply by the umpteen thousand properties just like those six, and you’ll probably get a number about the size of a small country’s GDP, right here in LA. Poof!
As I opined at the very beginning, the more prices fall, the more expensive they will seem.
Prices are never high until there is no realistic possibility of reselling quickly at a higher price. Then, the fundamentals come into focus, slowly at first, but more clearly day-by-day.
Sorry, I was following the wrong thread. Here’s my big comment:
One of the major lessons that this housing bubble has taught me is that our political system seems to have been purposefully designed to prevent those in office from doing anything very quickly. They can pass regulations, which help to prevent future debacles, but they have very little ability to interfere with debacles as they are happening. People like to gripe about it but, IMHO, it’s actually pretty smart. It prevents the administration of hair-brained cures to acute diarrhea that are bound only to induce chronic bleeding.
define emergency rate cuts.
Yeah, but the Federal Reserve is not a part of the government. It’s a private entity, like the GSEs.
That’s the beauty of our system: It pits the bastards against each other.
check this out: members of the House of Representatives are elected every two years, but members of the Senate are elected every SIX years.
Although I appreciate Ben’s blog very much, each day I get more disgusted with what I read and have come to understand..
Let’s recap the RE machine’s contribution to society, shall we..
First, the low hangers… unprecedented foreclosures and bankruptcies across the country, unprecedented fraud from Wall Street to main street, lost life’s savings and ruined financial credits for hundreds of thousands of homeowners/FB’s (or is it already in the millions?), dollar crashing to all-time lows, gold approaching $1000/once, oil exceeding $100/bbl, massive increases in stress in the average household, run down and abandoned neighborhoods and communities scattered across the US, taxpayer bailout proposals disguised as BS Washington relief programs, lectures to the middle class on “profiteering and speculating” by the ex-head of GS (Paulson), and, of course, tent cities.. and, of course, more fraud..
A few second tier contributions… increases in divorces and suicides, dumbing down of our students from science / math to RE / mortgage lending for a quick-easy buck careers, educational reality TV w/flip this or that house and OC housewives, massive red ink on the budget books of towns, cites and states across the US, increases in pet abandonment and abuse, life coaches, image coaches, shoe and purse coaches, pet therapists, boob and botex jobs, and, of course, more fraud..
Okay, I’ll stop there.. and yes, I attribute all of it to the RE industry / machine and the fallout of the bubble and all the BS that went along with creating it and now the unwinding of it..
Greenie had to bankrupt us to save us… from the Dot-com bust.
I hear Bernake is going to lower rates again at the next FED meeting? But nobody else is lowering because of inflation?
The FED is clueless on how to measure inflation… I’ve thought for some time that Greenspan’s FED lowered rates during a time that will be looked at (or should be looked at) as the most inflationary period in US History… but, then again, the price of a loaf of bread was holding okay during that time.. what a joke..
Look at the price of oil–that’s a good index of true inflation. The strong dollar is history.
(sarcasm)
The FED has a clue. They will soon realize that excluding “housing” costs from the inflation calculations was a “mistake” and then add housing back into the inflation numbers and recalculate the “true” “real” inflation with housing included since Jan 1 2006 and thus the numbers will prove that there is no inflation at all. And thus there is no problem dropping the rates even further.
(/sarcasm)
I can see why you’re mad.
I live in an area which is still going up. Amazingly, no one sees loosened credit as an underlying reason for the rise. Even though you can point out to them concrete things, like: amortization periods have gone from 25 to 40 (even 50 years), or downpayment criteria has dropped from 20% to 5% to 0%, or stated income loans are now way more acceptable, etc. (all the stuff everyone here already knows).
Fundamentals aren’t as fun as anecdotes and that is really what people respond to. Until we have local anecdotes about realty that aren’t positive, facts and figures are useless, in social terms. Our benchmark SFH went up to over 900,000 today and everyone is excited for a 1M benchmark.
Some people like to blame poor math skills for this mess, but how about critical thinking? It is a natural instinct to follow the herd. However, people can be taught to think for themselves (Phillip Zimbardo, who designed the Stanford Prison experiment put out a book about this recently, I think).
Given how dangerous a mob mentality is, you’d think we could do more to protect ourselves against it. Now we are dealing with a financial mob mentality. Formal debating and critical thinking should be a part of everyone’s basic education.
San Fran will have it’s day … make no mistake about it.. the financial markets are crumbling.. Look at the latest earnings report of Redwood Trust (a Bay Area heavyweight REIT).. (loss of $39+ / share )..
Oh, San Fran? That’s down like 11% from peak. You should check the Case-Shiller index, ella.
I’m in Vancouver. Our prices are still going up, but so is our inventory. However, when people feel a bit nervous about prices here falling, they always say, “San Francisco is still going up, right”? Or New York. We think quite highly of ourselves
Things are still going up here in Montreal, too. I think we are just following the States, a year or two behind. Our housing prices resemble the famous Shiller curve, though the bubble didn’t ascend quite as much.
NR
Apparently, Shiller called us (Vancouver) the bubbliest city. But we’re not on his index.
The problem with Case-Shiller is that it covers much more than SF. And doesn’t cover Silicon Valley. So, big downturns in the outlying areas can pull the CS index down even if SF is flat.
Sure, SF probably will go down, but CS doesn’t really prove it. It seems like the lowest areas went up the most, and the outlying areas had the most new construction. Within SF, or within Silicon Valley, there was not much new SFH construction, which limits supply. Plus with $4 gas people become more interested in a close-in 1600 ft house on a 5000 lot vs a far-out 3000 ft house on a 10k lot.
Sure, I’m saying “It’s different here” but in some ways it is.
Half of San Francisco already have 20% median price drops. It’s the other “desirable” half with 1M-5M houses that’s keeping the prices seemingly flat.
Well said ,great summary matthew . The moral of the story is “don’t fu–k with real estate “. Messing with shelter and using it to generate fake unearned funds was evil . Shelter is as necessary as food.
Isn’t it interesting how the market makers in effect took away the American Dream of homeownership by making it into a short term investment ,rather than it being shelter and a long term investment .
So many people were priced out of the market ,way back in even 2002 ,but the cheerleaders kept the ball rolling with their greed ,lies ,and faulty fraudulent lending .I have never seen anything like it . All these clowns that allowed this to happen should be fired (maybe thrown in jail) ,yet we are allowing the same clowns to try to solve all the problems in this situation . Does anybody think that we are going to get anything but retarded CYA types of answers from these clowns. In fact they are trying to pass the burden to us all . These a-holes can’t even admit what happened ,let alone come up with the proper remedies . Sorry ,rant off ,your summary reminded me of the evils I knew were going to happen when TSHTF.
That’s odd, matthew, I am thinking math will get more respect as a result of this bust. Of course there will be silly prescriptions for personal finance courses in HS, which may be nearly useless, but in the homes of the literate, innumeracy will be less fashionable than it has been these past several decades.
Yes, math and science will come back in vogue.. thank bloody god.. I made a mention of the shift from math / science to the easy buck careers because that’s just what was happening up to a year ago.. I knew the problem was real when my 16 y/o daughter asked me a few years ago.. “hey dad, why don’t you get into Real Estate and make better bank ?”.. that’s the mindset that the RE machine helped create…
You forgot the 2 trillion $ Iraq war. Every day of it 50,000 more people could have been on medicaid or sent to university for free… but no, we just waste it in the Babylonian black hole.
The macabre meets the surrealistic absurd.
This was linked in an e-mail sent by one of our local Used House Salespeople (bold is mine):
Subject: NEW HUD LIMITS ARE ANNOUNCED—-ALMOST READY TO ORIGINATE!!!
Importance: High
Hi everyone,
I’m excited to announce HUD’s new conforming loan limits for California. Talk about a “SHOT IN THE ARM” for our market!! The real play, however, is the FHA loan limits—flexibility in ratios, credit, downpayment and appraisals!! ROCK N ROLL…More information will be coming out as to how it will be priced and underwritten. Good Selling…danny v
————————-
Un-f**ing believable. They rejoice because FBs can now dig themselves deeper in debt. Sounds good to me.
BTW…totally O/T, but for those who homeschool, seems the govt doesn’t like the fact that HS’ers don’t want their kids fed the govt (corporate) doctrine. Parents might get in the way of the govt’s indoctrination of the sheeple.
“In obedience to the constitutional mandate to bring about a general diffusion of
knowledge and intelligence, the Legislature, over the years, enacted a series of laws.
A primary purpose of the educational system is to train school children in good
citizenship, patriotism and loyalty to the state and the nation as a means of protecting
the public welfare.
http://209.85.173.104/search?q=cache:Jejyh04wbVgJ:www.courtinfo.ca.gov/opinions/documents/B192878.PDF+%E2%80%9CIn+obedience+to+the+constitutional+mandate+to+bring+about+a+general+diffusion+of&hl=en&ct=clnk&cd=1&gl=us&ie=UTF-8
In honor of his dubiousness, i’ve just ordered a Gin & tonic @ the bar in Stewart Island…
Nazdrovia!
“Alan Gin, economist at the University of San Diego, said he’s ratcheting down his optimism from earlier months, but still holds the region won’t experience a technical recession with negative job growth.”
cheers.
had two mechanics from the Inland Empire walk into the shop in the past two days……the California Exodus is on…..you may not want to come home.
A covered call seller story:
“Incidentally, I just sold some March calls on SKF today that I had bought 2-3 weeks ago. I was surprised to find options listed–derivatives on a derivative, but ironically, the second derivative might be more sound”
define financial mania
Financial Mania is
Dubai allowing loans to be made in dollars so that customers can play the foreign currency markets.
Mrs. Watanabe making more trading currencies than her husband did as senior VP of Toyota motors. Unfortunately she did not tell her husband so Japan confiscated most of the money as penalty for failing to report on taxes.
The US dollar dropping 8% in less than 10 weeks (3% against the Euro).
wow, so much bad news today in housing and financials. there’s no way i feel like buying stocks given how bad the financials did today. the job’s number is tomorrow. i figure birth-death will add 120k jobs, so it might print positive. but i’m hearing more talk about a fed emergency cut if the number is bad. hmmmm, i most likely will hold my nose and buy them in the pre-open.
we’ll alert the media
??????
i’m stuck in a broken down airplane in Honolulu on it’s way to Guam. It is sweltering hot as AC isn’t effectivess. Just want to thank y’all for the laughs.
It still beats being stuck in Houston…
Have they cut rates yet
?
Fannie has released guidelines for the new “Jumbo-Conforming” loans. Dunno how many FBs actually qualify for them, or how low the rates will be. Are they still going to have separate rates for conforming and jumbo-conforming?
The Fannie info:
https://www.efanniemae.com/sf/mortgageproducts/pdf/jumbomatrix.pdf
Walking a lot of miles and thinking all the while…
What good is a navy, (as in one of San Diego’s biggest cash cows) when your adversaries can easily figure out where your ships are on the high seas, via satellite, and then missile?
Like the old submariners say, “there are 2 kinds of ships, submarines and targets”
Goodbye Fleet Enema…
You gotta pierce the 100 mile bubble around the CG…it’s not as simple as point-and-click yet. You need to put a lot of missiles on axis and everything’s moving the whole time. Also, there’s the balloon payment due when you succeed: payable in nuetrons (several doublings worth).
Nah, it’ll be simpler for Ahmed and Qui-Chen to simply pull the pink slips on PACFLT. Maybe Dog is interested in a little repo work?
Sandy Eggo will devolve into another port-of-call (it’s almost there now) but will survive. You can almost make out the green-pole district today…
The point is to generate lots of lucrative contracts for building military hardware. By the time it becomes too obvious that the force is unsuitable and grossly vulnerable, the money has already been spent.
The US Navy (surface, air and subsurface) rule… thank bloody god for them..
As an ex Navy guy, I think the Navy needs a 50% cut in budget.
We have 3 carriers on station, one in each of the major areas of operation… Pacific, Atlantic and Indian.
But, carriers do a 6 month out, 12 months in rotation. So, for the 3 on station, we need 9. Add a couple more just in case….
11 active carriers.
And, for each carrier group we actually need a dozen or so ships. Cruisers (22 active), destroyers (58-ish active), frigates(30 active), tenders.
Oh… subs…Balistic missle = 14… WHY?????
Fast attack = 26 Los Angeles… best subs in the world until we built the 3 sea wolf and and 4 Virginia… with 3 more Virginia under construction or planned.
For what? To sink the enemy ships that the enemy doesn’t have?
Oh, and then the real useful ships. The Amphibious ships. The ships that can actually put guys in boots into enemy territory and support them.
8 LHD and 3 LHA (I was on LHA1 USS Tarawa) The floating helo pads for the Mariens.
17 LPD, heavy lifters for getting lots of guys ashore.
12 LSD, samller LPD
In my opinion, we could cut it to 6 carriers with 2 on station. Cut half the remaing surface fleet except the gators. Also, half the attack subs and all the balistic missle boats. Silos are SO much more efficient.
In my opinion, we could cut it to 6 carriers with 2 on station. Cut half the remaing surface fleet except the gators. Also, half the attack subs and all the balistic missle boats. Silos are SO much more efficient.
But silos are not terribly mobile :/ I sleep pretty soundly knowing that a single boomer can annihilate almost any nation on this planet (except our own), and can do so at any time while parked just off the enemy’s continental shelf.
As for the surface fleet, I figure I’d probably agree, especially since we spend all this money guaranteeing ‘freedom of the seas’ for foreign trade. I say pull back all presence from Korea, Japan and Germany as well and let the little ingrates start to sweat.
You can get 9 to 10% interest on your money, in c.d.’s from major banks, here in New Zealand…
What in the world do they do with it?
Nobody’s buying any houses anymore, and who do you lend it out to @ 12-13%?
Good question ,what are the banks doing with the money ? Does New Zealand have anything like FDIC insurance on these accounts?
Congress adds 160 billion, Citibank aloan takes 45 billion away
March 6 (Bloomberg) — Citigroup Inc., the fourth-largest U.S. home lender by new loan volume, plans to pare its U.S. residential unit’s mortgage and home-equity holdings by about $45 billion, or 20 percent, over the next year.
The Citigroup division will decrease its total holdings mainly by making fewer loans that can’t be sold,
March 6 (HBB) — az_lender, the fourth-smallest U.S. home lender by new loan volume, plans to pare her U.S. residential unit’s mortgage and home-equity holdings by about 10 percent over the next year. But she announced a similar plan last year, and it ended up going the opposite direction. She needs to learn how to say no, no, and no again. This year she hopes to reduce her holdings by simple amortization and perhaps losing her checkbook
damn the luck! I was just going to apply to you for a $147.56 HELOC for an extension awning to cover my mustang on blocks besides the doublewide, AZ_ Lender. Or maybe even one o’ them tuff sheds to hold my grow lights …er, I mean lawn tools.
Hmm, even az_lender’s loans usually have a few more digits. Heck, the county recorder charges fourteen dollars. So, No! No! and No! again. Thanks for the practice!
am I the only one who notices the increased level of “snarkiness” on this blog?
I’ve noticed myself getting much snarkier. I used to be real polite, mostly because I didn’t know anything. Nowadayz I’m all slang and telling people off and stuff. Sho nuff!
Is the inflation wave cresting, is that a deflationary whirlpool??
http://news.yahoo.com/s/bw/20080306/bs_bw/0811b4075000203841;_ylt=AgzSkjP_pl2X6OMphNX1EVOs0NUE
Who the heck spends $250k on a one bedroom condo when the market is collapsing and there thousands of places up for sale? Is that still considered an entry level price in America? Does that mean an entry level salary is 100k?
If this bubble (ponzi scheme, pyramid scheme, credit fraud) in housing were a bubble in, say , Cabbage Patch Kids or something marginally saner like Internet stocks again, would we be having any debates about solutions? Would we propose bailing out any of the morons who lost money? By morons, I mean everyone from low IQ buyers to supposedly hhigh IQ bankers and traders.
Why not just mandate a per square foot price for real estate based on average values from 2005-2006 and then have those go up five percent every year. Any house or condo which is unsold at the end of three months is either bought by the government or demolished. Mortgage rates are fixed at 3% a year no matter what your income. Borrowing is allowed for up to ten times income, stated or otherwise. In the event of a default, there is no recourse and no change to buyer’s credit history.
And wages also have to go up 10% a year. Food has to stay stable. Everyone gets a free car and ten weeks vacation. And a poney. And a magic ring which makes you invisible when you want. And a magical wallet which keeps refilling endlessly new dollars.
Oh, we already have that magic wallet? That’s why we are in this crisis to begin with? Ok, sorry.