This Isn’t The Bottom In California
The Daily Bulletin reports from California. “A total of 119 homes and condominiums were up for auction on Sunday, and all but a handful were scooped off the market at prices far below what they would have fetched just a year ago. The firm that hosted the auction, looked to unload homes from all over the Inland Empire which had reverted to bank ownership during the past year’s market meltdown.”
“A house in Victorville sold for $120,000; in Apple Valley for $101,000; in Rancho Cucamonga for $203,000; in Fontana for $269,000; Moreno Valley for $163,000. Almost all the homes sold Sunday drew values between 15 percent and 30 percent below their listed current prices and even more depreciated from market highs.”
“Others didn’t see the deals they hoped for materialize. Chris and Doreen Huie, who were looking to add to the handful of High Desert houses they own and rent, said the prices the market bore Sunday were on the high side, given that they expect housing to further depress.”
“‘This isn’t the bottom, and the prices today weren’t near the bottom,’ Chris Huie said. ‘We’ll wait, it’s still going down.’”
The LA Times. “Once the properties are turned over to the bank, the lender is motivated to sell them as soon as possible — and often for a reduced price, said Michael Carney, a professor of finance and real estate at Cal Poly Pomona.”
“‘They’ve got money tied up in these houses that’s not generating anything for them,’ Carney said. ‘It’s basically a dead loss.’”
“Susana and Edward Salgado arrived at the auction intending to bid on a four-bedroom Lake Elsinore home for their family of four. ‘We’re tired of renting,’ said Susana Salgado. ‘Homes are going for a great price.’”
“But the couple’s bid of $257,000 was topped at the last second by another offer of $258,000. The Salgados didn’t go higher. ‘We should have bid a little more — I think we would have got it,’ she said. ‘We’re a little disappointed.’”
“The median price for a Southern California home last month was $408,000, down 17.6% from a year earlier and 19.2%, on average, from peaks reached last year, according to DataQuick. And property records show that foreclosures are growing as a proportion of the home sales market. About 33% of Southern California homes sold in February had been foreclosed since January 2007, up from 3.5% of sales a year earlier.”
“‘People see these big signs — ‘Sale: 20% off, 50% off.’ Off what?’ Carney said. ‘We don’t know what the price of housing ought to be. The real price right now is whatever they can sell it for.’”
“Armed with $100 million from Dubai and a refined design plan, officials Monday said construction will finally begin next month on the residential and shopping plaza along Grand Avenue that is considered a linchpin to downtown L.A.’s revitalization.”
“The announcement comes after months of delays and questions about the viability of such a massive development in the midst of L.A.’s real estate slump.”
“In the last year, about a third of all proposed housing developments downtown have been put on hold or canceled. At the meeting Monday, some officials noted downtown’s changing landscape.”
“‘We need to continue to wish ourselves good luck,’ said L.A. County Supervisor Gloria Molina.”
The Tribune. “More than 100 Estate Financial investors gathered Monday in Avila Beach, hoping to find ways to reclaim investments from the troubled company’s real estate loan portfolio estimated at more than $340 million.”
“‘We’ve invested in what are now terribly stressed projects in a terribly stressed time,’ said Jonathan Mielziner of Shell Beach, who said he invested around $650,000 in eight real estate projects through Estate Financial.”
“‘Now the situation’s mushroomed into a nightmare, and people are here trying to find a clear agenda to get this solved,’ he added. ‘If we don’t grab hold of the value that’s left right now, there will be nothing.’”
“The company fueled hundreds of millions of dollars worth of California real estate developments. Those included housing subdivisions, condominiums, hotels and winery projects throughout San Luis Obispo County.”
“Known as ‘hard-money lenders,’ lending companies such as Estate Financial pool private investor money to make high-interest loans to developers. Investors get fractional interests in deeds of trusts secured by property.”
“The Childerses said they have invested about $500,000 in Estate Financial. ‘When we were told by Karen Guth that our money was gone, that was quite a shock, and our first reaction was one of denial,’ Colleen Childers said.”
“President Karen Guth…contended that she is continuing to address the concerns of the Childerses and the other 3,000-plus investors. ‘Yes, in some cases the money is gone. But we are waiting for the projects to be sold, or we’re going to put foreclosure, and they will get their money back,’ Guth said. ‘We are in control of the ship, and we’re working toward the resolution.’”
The Fresno Bee. “Gov. Schwarzenegger came to town Monday to gather support among local officials for his budget reform ideas. ‘The budget, it’s broken, no doubt about it, and we’re facing the consequences like never before,’ Fresno Mayor Alan Autry said in welcoming Schwarzenegger to Fresno.”
“The state is projecting a $14.5 billion shortfall, said H.D. Palmer, a spokesman for the state’s Department of Finance in Sacramento. ‘It’s horrible, terrible’ to cut funds for law enforcement and to fight gangs, Schwarzenegger said. ‘But you can’t give people more money than you have, so I have to make the cuts.’”
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
The Mercury News. “On Sunday, JPMorgan Chase announced that it would acquire Bear Stearns. The ordeal has toppled one financial titan after another. ‘You keep waiting for the other shoe to drop, and it keeps dropping,’ Greg Rosston, deputy director of the Stanford Institute for Economic Policy Research. ‘You have to wonder, ‘Is this Imelda Marcos’ closet?’”
“On Monday, state officials sought reassurance that California will receive $1.3 billion that Bear Stearns owes the state.”
“In a statement Monday, California Treasurer Bill Lockyer said ‘we received verbal assurances today from JPMorgan officials that they will honor Bear’s commitments.’”
The Press Democrat. “Sales of less expensive homes are outpacing costlier residences, helping pull down the median price for a Sonoma County house to $435,000 in February, down 29.7 percent from the peak in summer 2005 and the lowest in five years…according to the latest Press Democrat real estate report.”
“Sellers accepted offers on about twice as many homes under $500,000 in February compared with a year ago. Recent sales activity under a half million dollars reflects the market’s continuing price decline. The county’s median resale price fell for the 20th consecutive month in February when compared with the same month a year earlier.”
“‘Prices got way out of line, there’s no question about that. But they’ve been coming down, and they keep coming down,’ said Ron Wareham, owner of Hurd Real Estate in Santa Rosa.”
“There remains a glut on the market. At the end of February there was a 12-month supply of homes based on the current sales pace. ‘There’s a lot of buyers who are still holding out who may be missing the boat,’ Wareham said.”
“Helping to swell the supply of homes for sale is the steady rise in foreclosed properties lenders put on the market. A record number of Sonoma County residents lost their homes to foreclosure in 2007, and even more are in danger with default notices also at record highs.”
“‘We’re getting five or six listings a week. I’m busier than ever,’ said David Rendino, a residential investment property specialist now working with lenders.”
“Foreclosure sales and homes sold for less than the amount a homeowner owes on the mortgage contribute to the county’s continuing price declines. The median price fell 13 percent from January, when it stood at $500,000.”
“Sonoma County condominium sales fell 26.7 percent over the same period. The typical condo sold for $254,500 in February, a 13 percent decline from $292,000 in January.”
The Santa Cruz Sentinel. “After a bank repossesses a home, Sebastian Frey often gets a call. Frey works at Thunderbird Real Estate in Capitola. Last month, he invited a reporter to join him as he checked on two newly foreclosed properties in the Las Lomas area, just over the Monterey County line.”
“Number 60 Overpass Road, Watsonville, was vacant so there was no need to offer cash for keys. A notice on the door indicated water service had been cut off. Next door, No. 62 Overpass, was empty, too.”
“The next stop was 47 Springpoint Road in Castroville. The home sat on an acre on a quiet dead-end road, behind a gate topped by lion statuettes. A group of mobile homes was on the other side of the road. The thick grass hadn’t been mowed in a while. In the back of the house were dozens of latex paint cans, and an old Jeep with one good tire.”
“This property had been listed for $995,000 in December. The current asking prices: $414,900 for No. 60 Overpass Road and $410,000 for 47 Springpoint Road.”
“‘It’s hard to figure out what these homes are worth,’ Frey said. ‘It’s not a science, it’s an art.’”
“Sales in Watsonville have been slow. So many homes are for sale it would take more than two years to sell that inventory at current sales rates.”
“Currently there are 196 single-family homes in Watsonville on the market. Sales have picked up, he said, counting 23 houses or condos in Watsonville in escrow in the past 30 days.”
“‘I’ll bet 20 of those are REOs,’ he said, using the term for a sale of a bank-owned property after a foreclosure.”
“‘It’s sad for people who want to sell their homes,’ Frey said, mentioning a friend who bought a house in Watsonville for $850,000. ‘There’s a house on his street selling for $600,000. No way he’ll sell for $600K.’”
“‘Most of the foreclosures today are people who bought in 2005,’ Frey said. ‘People were told, ‘Don’t worry, because the value of the your home will increase in a couple of years and you can refinance — or you can sell.’ Those lines were probably said hundreds of times, and it turned out not to be true.’”
“As for those two homes in Monterey County, Frey said he just got an offer on one of them. The offer was less than the asking price.”
“‘Very few people offer the full price,’ he said. ‘I wouldn’t offer the full price. It’s a buyer’s market.’”
“But the couple’s bid of $257,000 was topped at the last second by another offer of $258,000. The Salgados didn’t go higher. ‘We should have bid a little more — I think we would have got it,’ she said. ‘We’re a little disappointed.’”
I think they would receive a rude awakening if they applied for financing. I’m hearing more on bidders are not getting the financing they “thought” they were going to get so the houses are going back for auction.
The Salgados need not shed any tears. 6 months from now they’ll be able to buy the same size house on the same block for $200,000 or less.
There seems to still be a bit of buyer’s frenzy out there. This is suprising to me considering the downbeat headlines about dropping real estate prices that have dominated the front pages for the past several months.
just like there were amateur flippers, there are now amateur vultures.
“Civilians”
YA.
Simple and elligent…er…elegant.
A lady at work says she’s going to Texas to look for a job and some property. I told her I thought she should wait, and she immediately agreed.
Let’s hope this buyers frenzy doesn’t make them really retarded again.
Don’t be disappointed Salgados. The winning bidders are going to wish you had gone the extra $1000 too.
Nothing is more pathetic than a vulture who needs financing.
LOL…how true, how true…
“will work for carrion”
Said Papa vulture to junior “Carrion my wayward son…”
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
Me big strong man. Me know nothing. Duh. What a maroon.
I am truly saddened by the Arnold’s as well.
No one but, oh, people like Ben and his readers. THREE YEARS AGO.
You actually think he’s being sincere?
If the house goes back to auction The SHILL bidder WON!
How can someone not qualify for a house 40%-50% off peak? Isn’t this what the auction company employees are supposed to do, qualify the buyers beforehand?
That’s why no one should bother with auctions right now. Enforce a rule that if you back out, you forfiet your $10k auction disposit.
How much more obvious do they have to be? It’s a shill bidding auction
————–
Most houses sold Sunday are subject to seller’s approval, said Kennedy-Wilson Auction Group President Rhett Winchell, meaning bids deemed too low would be nixed. Winchell wouldn’t say whether some of the prices Sunday would be rejected by the sellers. Winchell did say, however, that the auction market didn’t seem to be letting prices fall shockingly low.
“There remains a glut on the market. At the end of February there was a 12-month supply of homes based on the current sales pace. ‘There’s a lot of buyers who are still holding out who may be missing the boat,’ Wareham said.”
I love it. I think I will continue to miss the boat while there is a 12, 14 and 18-month supply. I will miss the boat for another 20-40%. I am the happiest of boat missers. It is just really really hard to get people to rush onto the Titanic these days…. geez!
I think you misunderstood his meaning. The boat he was referring to was the “Joshua Tree of the Seas”.
ROTFL
Personally, I like the simple name of “SS Joshua Tree.”
A whole new meaning to POSH. Prickly Object shoved… HERE!
Got Popcorn?
Neil
beauty!
This not a video of some 3rd world country……..It’s the US of A.
http://www.youtube.com/watch?v=CnnOOo6tRs8&eurl=http://market-ticker.denninger.net/2008/03/insanity-in-our-capital-markets.html
One of the posters says thats been there for a while and those people are not necessarily homeless because of foreclosures but all circumstances.
They all looked like DNA disasters and substance abusers. Normal, self-respecting people aren’t going to end up in tent camps.
oh, really? go back and read your history of the 1930s.
I saw on the news today that the cops went through the tent city and kicked them all out.
Here is the link http://www.knbc.com/news/15600317/detail.html
Heh, good luck making that stick. Especially when some of the cops are probably gonna wind up the same way, if they’re FBs.
…and meanwhile empty housing inventory is at record levels.
Unlike third world countries, we have the houses, we just cannot seem (anymore) to figure out how to put people in their to stay.
That is probably the number one reason to leave California especially the L.A. area. They just passed a law where you could sleep on the streets anywhere in L.A. County from 9 p.m to 6 a.m once that catches on L.A. won’t be pretty
Source, reference, link please?
http://www.npr.org/templates/story/story.php?storyId=6105364
http://www.signonsandiego.com/news/state/20060919-1817-ca-skidrow.html
The articles that source it say it’s for skid row only. I’m told it’s virtually citywide…it was rejected at first but now it’s accepted practice…
the homeless have been flocking to downtown La Jolla and sleeping on the nice soft grasses and benches, its really pissing off the business owners. If I was homeless I would head there too, nice places to stretch out, enjoy the view of the ocean, etc.
Wow, mrincomestream ,the laws keep changing so fast these days that its mind-blowing .
That law makes sense. Where will all those who have been priced out sleep? As long as they aren’t on private property or trespassing. The streets are public. Besides it’s dangerous for them to sleep due to the gangs.
Send ‘em to Oklahoma where their relatives are from.
Yeah, no one come to visit because you are a deadbeat and always have been.
what is interesting to me is that it takes the BBC to report on this.
i watched CNN for an hour this morning. it broke down like this:
20 minutes: commercials
20 minutes: soft news and chit-chat
10 minutes: hard news
5 minutes: weather
5 minutes: talking about what they would be talking about
can’t we get a station to deliver the following during a one hour period?:
10 minutes: commercials
45 minutes: hard news
5 minutes: soft news and chit-chat
that i would love!
Hint: the USA is quickly becoming a 3rd world country.
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
That is because too many people were drinking at work.
(Drinking Kool-Aid, of course, but the result would have been less damaging if they had consumed alcohol)
Were is the temperance movement when you need one. TOO much drinking occurred in this world.
Will somebody please JT him for us?
“I’ll be back…….”
The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.
I could swear that San Diego was still in CA, and how long has their housing burst been going on? What a doofus.
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
That is because too many people were drinking at work.
Nah…I think all of his advisor’s worked at Bear Stearns.
From the first article:
“But not all the buyers left happy.
Muhammed Mahmud came Sunday with thoughts of getting a good deal on a house for his mother-in-law. He beat the pack on the floor with a bid of $298,000 on a 1,628-square-foot Corona home. But when he was led by auction officials to another room to sign papers, he scoffed at a 5 percent charge levied by Kennedy-Wilson that brought the total to about $314,000.
He pulled out of the purchase.
“I didn’t know about that, and that put me over my limit,” Mahmud said”
Wow, I didn’t know it was so easy to get out of having a winning bid. Something tells me that this is one person that the auction house would have rather had lose.
Today’s auctions are not really auctions the way we know them. The auctioneers don’t disclose everything up front, so there’s no way they can hold you to your bid. They have secret reserves, secret fees, etc. If they made you sign a contract walking in the door, then you’d know what to expect and so would they. Not sure why they’d choose to do it this way, but my opinion is that it’s not time to bid until auctions go back to being legit.
Any bets he was a shill bidder?
“‘Most of the foreclosures today are people who bought in 2005,’ Frey said. ‘People were told, ‘Don’t worry, because the value of the your home will increase in a couple of years and you can refinance — or you can sell.’ Those lines were probably said hundreds of times, and it turned out not to be true.’”
Exactly, these people weren’t conned into mortgages they didn’t understand (as many/most of them are now trying to claim), they knew at the time they’d have to refi in 2 years because their loans would reset to a much higher payment. Now that prices have tanked and they can’t refi they have to go to plan B, the “I was duped into a mortgage I didn’t understand” story.
And more……………..
http://www.youtube.com/watch?v=jmeHiFZUWtE&feature=related
“In the last year, about a third of all proposed housing developments downtown have been put on hold or canceled. At the meeting Monday, some officials noted downtown’s changing landscape.”
“‘We need to continue to wish ourselves good luck,’ said L.A. County Supervisor Gloria Molina.”
That’s it Gloria, just a little luck, another 100,000 “urban pioneers” and tons of cash from the Middle East. After 60 years of failed attempts at a downtown LA comeback, this one’s the winner!
Would someone please explain to me why there is such a fixation with revitalizing downtown areas? If people see no reason to head downtown, you sure can’t make them go.
“Redensification” is actually not a bad idea. It makes cities more efficient, and uses a lot less energy for transportation, if you have places close in town where people can live fairly close to where they work.
I doubt it’s going to work out here in LA, though. They’re only doing half the work - they’re putting up tons of apartments & condos, but not cleaning up the streets and providing a vibrant local retail environment - not boutiques, chain restaurants and tech shops, I mean groceries, drug stores, dry cleaners, and other necessities of daily living.
They seem to think that just putting the housing there will magically make people move downtown. As if $3000 rents and $800K condos are an incentive. Cut those by 3/4, and MAYBE it MIGHT work.
Oh, and they sure aren’t doing anything about the homeless and gang presences downtown, either. Always a plus for “elegant living.”
Besides, people don’t like noisy, polluted living environments. Until recently, I lived in an area near downtown, but not in downtown. That was pretty cool. I kinda like the idea of planned communities because they all have their own little city centers, so people don’t feel like they have to go downtown.
Density preferences are strong and change very slowly. For some time now a significant fraction of the population, around 12-16% of typical metropolitan area inhabitants, prefer to live in dense downtown areas. Far from being a burden, there is every reason to cater to these people. They keep dense areas from becoming unsafe ghost towns at night and they help everyone by using fewer resources. Most people, around 50%, prefer the kind of more suburban edge city kind of density that you have been experiencing. Drawing the lines here is very complex because typical exurban big box developments are much less dense than old style streetcar suburbs or more recent new urbanist construction. Suburban development can be livable and dense and efficient if done properly. The remaining 30% prefer rural and don’t want either city type, though their numbers are dropping.
So the issue, Big V, has absolutely nothing to do with convincing you to move downtown. More, this is about getting the downtown people to go there and to build the towns surrounding downtown dense enough that providing services doesn’t become a near impossible nightmare as it is in exhurban or rural areas.
I guess the term “redensification” sort of throws me off. Downtowns have not historically been a place where people want to live; they have been a place of business. So where does the “re” come from? Perhaps the term refers to the reduction of exurban developments, where people aren’t farming, nor are they reasonably close to civilization.
Yes, exactly. Historically people either lived in a city or out in the country. What we call “suburbs” and “exurbs” these days simply didn’t exist.
Redensification would be reversing the trend of the last 60 years - and yeah, it will take some time to turn around.
“Armed with $100 million from Dubai and a refined design plan, officials Monday said construction will finally begin next month on the residential and shopping plaza along Grand Avenue that is considered a linchpin to downtown L.A.’s revitalization.”
Same old BS about ‘revitalizing’ dwtn. The collapse of Bear sterns/financial meltdowns on wall st will affect some hi-powered LA dwtn financial firms as well. US /worldwide financial credit collapse will reverberate and shake dwtn LA jobs like a sudden slip of one of the several hundred earthquake faults which run thru dwtn.
Combine that with hi paying state jobs and agencies located in dwtn getting the budget-cutting axe. Tons of state/fed agencies located dwtn . The LAUSD last year moved into a pankin-new Hi-rise off 110 fwy: some of those staffers will, or should be, getting the budget axe
Combine all the above with the fixed unalterable age old negatives with dwtn: Barren concrete aspect, homeless, surrounding third world hellholes,warehouse/ fashion districts having aging rotted 100+ yr old decaying industrial buildings reeking of sewer smells, sidewalks reeking of urine and gum, Hi=rises & condos as inviting and difficult of access as guarded pillboxes , ect.
Why not scam naive foreign buyers flush with cash to invest in Dwtn projects. RE developers,the REIC, realtors, brokers, dwtn boosters are basically scammers and conmen anyway, using any agi-prop ploy to get investors to throw money into dubious idiotic projects like building super duper 100 story futuristic blade-runner towers right smack on grand ave over former decaying 100 Yr old crumbing parking lots.
In total agreement. Why would anyone want to live in downtown LA if you have a family? Do you not want to have a backyard for your kids (and dog) for less cost/sq foot in a better, safer neighborhood?
I can understand if it’s Manhattan and you make the bank to support a spacious apartment. But downtown LA?
Downtowns don’t actually need to be noisy or polluted. But they are generally that way.
I’d be a “downtown” person if our downtown was actually worth living in - and I could take mass transit to work. I prefer a fairly dense and, critically, walkable neighborhood (I’m from urban NJ originally) where I can do my domestic business (like groceries, cleaning, hardware, etc.) without driving and safely even after dark.
Some of the downtown developments are quite attractive to me, but there’s no place to shop without driving, and walking at night, except immediately around the Staples Center when there’s an event, doesn’t strike me as safe. So I’ll stay where I am, which fits my requirements nicely.
“Downtowns don’t actually need to be noisy or polluted. But they are generally that way.:
Actually Little tokyo district has that potential to be
that fairly dense and, critically, walkable neighborhood. Thr problem is the homeless concentration is concentrated just south of there. Staples area(South park district) still too raw and just recently built, need time and seasoning, maybe a bit of greenspace.
The area of the proposed grand ave project will IMHO never be a walkable district. At least not a street level but there is an elevated series of connected walkable platforms, ramps connecting Moca ,wells fargo towers,ect. These can be walked all way to the eastern edge where the landmark angels flight stairs will take you down to hill st, a 150-200 ft elvation drop . Lots of little shops, eateries, boutiques on these elevated plazas but not accessible by autos except if u are only dropping off passengers. The grand ave project would i imagine be somehow connected to Moca, WF plaza, arco plazas by a series of connected elevated walkways, with disney hall & west side of grand perhaps connected via elevated pedestrian bridge.
The connectivity and walkabiliy in this grand ave area is all artificialy created, and not easily accessible by auto, only taxi ,bus and futuristic monorail. It would be a closed insular system like universal city walk . Not promising at all except thru billions & billions of mega bucks thrown at it, and even then that natural dwtn ambience will never develop there .
I was having a chat w/ a guy in Spokane who was talking about the “skywalks” on 2nd levels leading from building to building. He called them “honkey tubes” because only the honkeys used them. Not a very viable way to repopulate a downtown. I still giggle about it from time to time.
On another note the gal in the artice talking about needing to keep wishing for luck… My dad had this saying I know all of you have heard, “Wish in one hand, and sh^t in the other. See which one gets filled first.”
I need a nap.
Downtowns, if they’re good, are great areas to live in. I’ll be moving to Vancouver in the summer and I’m only looking to live downtown (I won’t be buying, of course). In fact, I would much prefer to raise a family there than in a suburb.
Be careful where you rent unless your family enjoys rat infested slums that cost you $2000 a month. Vancouver is an awesome city if you know where to live!
Vancouver is a great walking city, but a horrible driving city, so it’s not a bad idea to live near downtown.
My home is a 20 minute walk to my work, which is fantastic. If I had to deal with the traffic, or even the SkyTrain, every day, I would go bonkers.
West End and Strathcona are nice. Downtown Granville area is not nice (especially at night). Yaletown is OK if you don’t mind being around very good looking, rich people all day. If I was moving here for the first time, I would pick Main St. area, West End, Point Grey or the Cambie Street area (the Cambie Street area has been pretty decimated due to construction for the last 2 years, so you might find a really rental around there, actually).
Enjoy Vancouver!
“so you might find a really rental”
really good rental, I mean. Although, maybe there are some really rentals, there, too.
A lot of times it boils down to civic pride. Fresno has been trying to revitalize downtown for decades. When I lived in Fresno in the early 90s, downtown was dangerous and had little to offer other than a few concert venues and the convention center. Also, due to growth patterns, downtown was no longer the center of the city and was a 20minute drive from the nicer parts of town. Whenever I went downtown for a concert, I was always convinced my car would get stolen- it never did.
“At the meeting Monday, some officials noted downtown’s changing landscape.”
Yeah! homeless population keeps on going up and now they have the right to sleep on the streets 9 pm to 6 am. That will realy help condo loft sales in little tokyo. Any residental units/businesses east of Main street is toast. At least the warehouse district is not affected as it was already in a advanced state of decay.
“Would someone please explain to me why there is such a fixation with revitalizing downtown areas? If people see no reason to head downtown, you sure can’t make them go.”
The reason the city civic political hacks are so desperate to revitalize dwtn is because of the image LA dwtn has . The second largest city in US and the nerve center for one of the largest metro regions in the world is in reality a barren concrete tomb about as exciting as a state run mental ward.
Everyone with any perception who has been traveled all over and seen the great capitals and cities of the US & world knows that LA fares way down the list as far as livablity/ scenic beauty/ lack of parks, dirty yellowish air, no. of ragged third work hovels ringing dwtn, nasty brutish feet killing pavements,
Impoverished illegals and lousy homeless derelicts wandering all over dwtn at will, ect. There might be a few cultural atractions here and there but overall LA dwtn simply lacks attraction. Nobody goes into dwtn for culture and entertainment especially at night except for laker games.
A third world metro like Guatemala or Mexico City, for all their impoverished squalor, may actually be more visually appealing and certainly more lively. I would draw the line at comparing LA dwtn to Tijuana though the surrounding inner-ring districts Of LA dwtn do have a tijuana-like flavor.
Does this mean I will have to start wearing those black drapey ‘dejalbas’( sorry don’t know the real term for those drapey black hooded dresses) if I go to the flower market in downtown LA???
“Armed with $100 million from Dubai and a refined design plan, officials Monday said construction will finally begin next month on the residential and shopping plaza along Grand Avenue that is considered a linchpin to downtown L.A.’s revitalization.”
Only if you’re an idiot.
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
Arnold, check your steroid dose…there were plenty of people who saw this coming. Criminy…everyone here on this blog saw this coming 4 years ago. It’s hilarious to see the deer-in-the-headlight comments from the people in charge.
And the finger pointing. That’s funny too.
I tried to post this already, but at risk of tedious repetition, the California Legislative Analyst Office has been providing detailed reports of the structural deficit in California since before the Governor even started to campaign. That drawing most taxes from a shrinking slice of the population would cause a severe drop in revenue was predicted consistently for years. Partisan bickering probably played a stronger role in this mess than anything else, but Arnold was willing to pay the way with bonds until that money stream dried up.
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
Arnold might have the money for police if he would fire these “state officials” who were too obtuse to notice a mania. Is there some reason to keep incompetents on the state payroll?
“‘We’ve invested in what are now terribly stressed projects in a terribly stressed time,’ said Jonathan Mielziner of Shell Beach, who said he invested around $650,000 in eight real estate projects through Estate Financial.”
Between this guy’s losses and the losses of BSC execs and employees, I guess I don’t feel as bad as I did this morning after losing $400.
… Well?
How did you lose $400?
Silly me. I thought the BSC bailout was bad news. Who knew? Then again, with RateCutTuesday the next day I shoulda known betta.
I’m not worried that I won’t make it back. Plus, I’m playing with a smaller budget than most here. Funny money, if you will…
“Known as ‘hard-money lenders,’ lending companies such as Estate Financial pool private investor money to make high-interest loans to developers. Investors get fractional interests in deeds of trusts secured by property.”
So hard money guys are losing or not?
Do they want to dump homes like the banks?
Do they mostly lend to corporations or single home owners?
Some of these folks in SLO County have lost it all. Unfortunately, it is the investors that foreclose on the finance company and they are left, in most cases, with an incomplete project or sometimes just an empty lot - all of the funds drawn out and nothing to show for it. Here on the Central Coast, the hard money guys are mostly lending to local developers.
For a better read on this story,check this out:
http://www.uncoveredslo.com/?id=77&showEntry=1
Thank you S-bear. Scary stuff.
Founder of Ameriquest, large ex-subprime lender, passed away almost at the same time Bear Stearns collasped. The timing is unusual. One firm made the loans the other packaged and sold them. You can only run a scam for so long.
http://www.latimes.com/news/obituaries/la-me-arnall18mar18,1,2989564.story
Yeah, doing a Ken Lay. I guess that’s the latest scam. Hey, if it doesn’t work out, you can always kick the bucket. I guess that’s the ultimate in “walking away”.
These big wigs faking their own deaths is getting old. I imagine Kenny boy and Arnall are sitting out on the private beach as we read this enjoying some frozen drinks w/ umbrellas.
I imagine it too, although I know it is tin foil hat. Or is it?
At any rate, I hate it when these assclowns deprive us of the public spectacle of their take-down. I want a nice, LOOONG, drawn out justice pageant, full of stress, humiliation and nasty, spatting lawyers sucking every bit of flesh off the useless bones of these dorks. Can we exhume the bodies and do it like Weekend at Bernie’s?
Well, since he took all his personal billions with him to Heaven, he’s done us a favor and fought inflation for us by reducing M3!!
Oh wait…
“A notice on the door indicated water service had been cut off. Next door, No. 62 Overpass, was empty, too.”
At such a classy address.
lol
Better than No. 66 Underpass…
Is this a sign that some builders may be coming to their senses?
http://www.mercurynews.com/ci_8616869
Wow. After all the hassles with environmental groups to even get permission to build in the first place!
That many homes surely would have brought prices down even more in San Jose. (They aren’t falling fast enough here IMO).
Coyote Valley is where development projects go to die. It is too far out to be part of San Jose, and the only hope there is for infill development and increased density. Adding mostly low density areas around the fringe is what got San Jose into this mess.
And it’s very hot down there in the summer.
Oh yeah. There has been fighting over Coyote Valley for quite some time with the Mayor(s) and city counsel insisting these ass-clown developers do something other than pave over a pristine area with ass to elbows cookie cutter shit boxes. Now that the gravy train is over and their other crappy developments in the immediate area have stopped selling mid-development they have no choice but give up their proposed rape of a farming area. They just scraped an entire IBM site and now don’t know what they will build on it. I have to laugh heartily.
–
I recall there were some environmental issues, but during boom times developers, or those promising development, invariably win.
I looked at land made available for new development by City of San Jpse for building homes couple of years ago and there was always enough land that was converted or re-zoned to keep developers happy.
Jas
we almost had that here in Carlsbad, we have little farming land left, mostly to grow flowers, quite a sight to behold when in bloom. The plan was to level the flower field and build condos. Good thing the market fell apart.
–
“Developers abruptly drop plan for homes in San Jose’s Coyote Valley”
I was working at Cisco when Cisco bought a huge land parcel (several hundred acres) in Coyote Valley in late 1990s to build a campus. City of San Jose footed some $60M bill in connection with the project.
I predicted then that the campus will never be built. 3 years ago when I went for a hike with friends I saw couple of buildings in the general area but no campus was built when business slumped during early 2000s. I don’t know the current status of that land and I wonder if this housing development was on that piece of land.
Jas
I think Cisco still owns it. Some other high tech companies bought land down there, but nobody did anything with it. The farthest south high tech (around here) is around 85 and 101, there’s a few solar cell places there, and some semiconductor too. Locating there would be a great recruiting draw, nice short commute to relatively lower priced houses in Cambrian, Evergreen, Silver Creek.
Harry Collishaw used to own almost all, if not all, of Coyote Valley. For those that don’t remember he was a prominent developer quite some time ago. He used to own the Paul Masson winery, Twin Creeks sport complex, etc.
Cisco purchased a large parcel of land in North Dallas around the same time. I think its long been sold.
California East Bay HBB Party:
An HBB party will be held this Saturday, March 22nd at 7 PM (NOT at 2 PM) at El Burro (3100 Newpark Mall) in Newark. They have OK food and stuff and they make margaritas. Who wants to go?
Well, I am several hours away, but I am going to check into whether a Bay Area friend can put me up Sat night. Please keep us up to date on this, and my answer will get firmer.
how would we find each other in the place? do we all wear little joshua trees on hats as we enter ?!
I’m gonna bring an HBB sign and a little elephant. Last time, I made reservations under the name “Ben Jones” (innocuous enough), but I was embarrassed to have to tell the waitress that she could take back one of the tables because only 1/2 of the confirmed actually showed up. Oh well, my excuse was that we were celebrating because we had just all gotten our real estate licenses, and that the other agents must have stood us up. Good times, good times.
I think the HBB symbol should be Black Tulips. Tee-shirts with the symbol, jewelry, all kinds of fun stuff. Only problem is I have no graphic skills to create one. Can anyone out there?
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
This is completely irresponsible. The State Legislative Analyst Office has been warning about these problems in detail since before the Governor started his campaign or got anywhere near that public office. California spends more than it takes in, and most of the money coming in is from an increasingly small slice of the population. Arnold filled the gap with bond issues instead of fixing the problem and now it is coming home to roost. Nothing here was unexpected to anyone who did the most basic investigation.
“The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
Ben did……….
Second Try on This One:
An HBB party will be held this Saturday, March 22nd at 7 PM (NOT at 2 PM) at El Burro Mexican joint (3100 Newpark Mall) in Newark. Who wants to go?
Sincerely,
Big V
PS
I promise not to invite Britney
V,
I would love to go, but have a posse event the same morning and then a commitment to a friend up in Citrus Heights. Driving to Newark will be a bit much, I think. Maybe next time.
-M
I’m beginning to think houses in Sacramento/Elk Grove area will crash even more. Let’s say..prices going to $120K - 150K for 2500 Sqft homes. I’m not thinking long term but in the next 12 months or less.
http://sacramento.craigslist.org/rfs/610324807.html
So you are calling for $50-60/foot for perfect condition middle class houses? This sounds cheap considering very few locations today are this cheap, Texas is about the only state with plenty of those affordable houses.
A lot of the housing market in Sacramento and Elk Grove was from Bay Area price refugees— as the BA goes down, they go away.
Median income for the state is around $55K. It’s not quite that high in Sacramento, so when you do the math, the prices don’t seem that unrealistic.
Actually, I’ve already seen a quarter-acre property for under $180K. An outlier, to be sure, but also a sign of times to come.
Note that the property for sale above is a “drug house.” One of the infamous pot houses (there’s 70 or so), no doubt. Hey, does that mean it’s got a really good electrical system?
““Susana and Edward Salgado arrived at the auction intending to bid on a four-bedroom Lake Elsinore home for their family of four. ‘We’re tired of renting,’ said Susana Salgado. ‘Homes are going for a great price.’”
“But the couple’s bid of $257,000 was topped at the last second by another offer of $258,000. The Salgados didn’t go higher. ‘We should have bid a little more — I think we would have got it,’ she said. ‘We’re a little disappointed.’””
Gee, you got saved from catching a falling knife and you are disapointed? Keep renting for less than the cost of owning and realize we aren’t at the bottom!
A house in Victorville sold for $120,000; in Apple Valley for $101,000; in Rancho Cucamonga for $203,000; in Fontana for $269,000; Moreno Valley for $163,000. Almost all the homes sold Sunday drew values between 15 percent and 30 percent below their listed current prices and even more depreciated from market highs.”
Victorville REo fixers are worth $50,000 tops. No home in hi- desert worth over $100,000 :that for a brandnew 4-3 on 1-10 acre lot . U will spend easily $50-70 day in Round Trip commute gas costs out of desert into LA/OC and back. RC seems a decent bid if it is a good part of RC . fontana may be ok if in new hi-end extreme north part off 210 fwy but Fontana can be had even in the good parts for around $200,000.
MV a bit too high unless in one of the very few decent areas which comprise 5% of MV. There is one such area of MV north off 60/10 fwy along pigeon pass rd about a 3-5 mile drive. Spankin new development with a man- made lake , entire area called sunnymead ranch. probably hot as hell in summer but may be only halfway decent development in entire MV.
“We need to continue to wish ourselves good luck,’ said L.A. County Supervisor Gloria Molina.”
Nevermind crunching numbers. You go girl!
For all you sci-fi fans, Arthur C Clarke passed away at the age of 90.
One of my favorite books by him is Childhood’s End.
Great book - Childhood’s End. Picked it up soley on the basis of the title. Led me to many more A. C. Clarke’s books. And then had the pleasure of meeting the gentleman. Great, humble guy.
Talkin about Childhood’s End - is it possible that many years from now we’ll look upon these last few years as our economic Childhood’s End? or simply as End?
“About 33% of Southern California homes sold in February had been foreclosed since January 2007, up from 3.5% of sales a year earlier.”
If I read that right, that’s more than one year from foreclosure until the house is finally sold. That’s quite long. Are lenders finally giving up and realizing that higher prices aren’t coming back any time soon? Will the lag between foreclosure and the next sale begin to shrink?
I sure hope so. But this will mean more knife catchers who in turn will be next to get foreclosed. Still it will keep pushing prices down as fast as prices went up.
“‘We need to continue to wish ourselves good luck,’ said L.A. County Supervisor Gloria Molina.”
Yea…keep telling yourself that…
“‘It’s hard to figure out what these homes are worth,’ Frey said. ‘It’s not a science, it’s an art.’”
A lot of folks are going to find out this the hard way…especially the ones who spent a 100k on granite and stainless steel…
I am falling out of like with granite. It is pretty, but it has been so over done, its boring me. SS is nice for commercial looking fridges (pole handles) and is pratical for stoves (easy clean up), but I’ll buy it smart (pre-owned).
I’ll let someone else take the depreciation, thank you.
I find that my granite clad refrigerator shows finger prints quite a bit, but my stainless steel counter tops are doing just fine.
“Chris and Doreen Huie, who were looking to add to the handful of High Desert houses they own and rent, said the prices the market bore Sunday were on the high side, given that they expect housing to further depress.”
Bingo. Smart money on the sidelines.
http://www.wikileaks.org/wiki/Whistleblower_exposes_insider_trading_program_at_JP_Morgan
Whistleblower exposes insider trading program at JP Morgan
LEGAL INSIDER TRADING IN THREE EASY STEPS, BROUGHT TO YOU BY JP MORGAN AND THE SEC
KEVIN WILSON, MARIA CHRISTINA PADRO, JULIAN ASSANGE & staff
Monday March 17, 2008
A confidential memo obtained by Wikileaks shows that not only has the U.S. Securities and Exchange Commission created an insider trading loophole big enough to drive a truck through, but that Wall Street is taking full advantage of it, establishing ‘how-to’ programs and even client service divisions to help well-heeled clients circumvent insider trading regulations.
Most of us think of insider trading as illegal. It allows those with inside knowledge to tilt the playing field, with the small investors invariably losing to the privileged few. Unfortunately for the small investor, the big boys get to play by different rules, and it has all been made legal, thanks to the SEC.
In 2000 the SEC promulgated Rule 10b5-1. The new Rule was designed to address the confusion caused by a series of court decisions that had left investors uncertain about what constitutes insider trading. Rule 10b5-1 was designed to “clarify” what constitutes illegal insider trading.
Shake …Wow ,your post is really worth reading IMHO . What evidence of a rigged system . If the little guy is always going to have the cards stacked against him ,them why should he play ? I wonder what Wall Street would do if the little guy all of a sudden decided to not play anymore ?
I beginning to notice that a lot of long standing protection law and regulations have been altered in recent years . A lot of laws and regulations were created to begin with because of corruption cycles .
You know if the little guy gets stepped on to much ,than it’s possible that they will lose the taste for the game . How much can the small investor be pushed until they scream UNCLE ?
The state’s budget shortfall took state officials by surprise, Schwarzenegger said. ‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
I saw it Arnold. Way before I left California. Then I found Ben’s great blog and found many others that saw it too. We aren’t in any high positions. Just average people who thought logically. Unlike most of the idiots in the government, mortgage industry, RE, etc that enabled this horrible crisis.
Joshua Tree of the Seas”. - In Albuquerque and surrounding NM area, not Joshua Trees, but lots of Yucca trees. However, they would serve the same purpose and be interchangeable.
And you can eat the yucca root. I wonder if that can be said of JT parts?
I want to contrast the evidence of recent road trips (1) LA to PHX and (2) SLO to San Jose. On (1), I observed the IE to be full full full of billboards advertising new housing complexes. On the 101, though, I passed turn-offs for a lot of places you guys have laughed about, such as Los Banos and Watsonville, and went right through Salinas and Gilroy, but I noticed only one housing-development billboard. I could’ve missed a few, but I just don’t get the idea that that area was being peddled as a retirement haven with the same vigor as IE and Palm Springs. Do I have this wrong?
Los Banos and Salinas were peddled more as cheaper housing for Silicon Valley workers than as retirement places. There was a lot of advertising in San Jose for those places but it has reduced recently.
I don’t think Salinas and Watsonville did not have quite as much development as the places on 5 and 99, like Los Banos, Newman, and Patterson. I’m not sure why, maybe the agricultural land is more productive and hence more valuable.
Los Banos, Patterson and Newman are all on I-5, used to be a much faster commute - depending on where you were heading - than Salinas which is on 101 and Watsonville which is sort of nowhere - freewaywise. Salinas and Watsonville also are impacted by nearby, pricey Monterey bay.
” I could’ve missed a few, but I just don’t get the idea that that area was being peddled as a retirement haven with the same vigor as IE and Palm Springs. Do I have this wrong?”
I have the answer to all those billboards all over the IE. The IE was a big gigantic frolic playpen for the Hb’s to go completely wild. No restrictions on land development , little or no environmental restrictions to plunk down tracts anywhere in the IE. Same for the billboards, the IE has almost zero restrictions on billboards. All those RE billboards you seen along rthe 10 fwy from palm springs to the La county line and along the 15 fwy from telecula to barstow are permitted because the county/ local gov’ts in these regions are in the pockets of the builders. The IE was a completely 100% laisee -faire bulldoze, raze and build zone
in first decade of the 21st century.
The negative environmental consequences of all this unfettered building in the IE will emerge in time,perhaps at the tailend of the bubble period when the entire IE becomes a wasted DMZ zone of foreclosed weedy properties.
“‘No one foresaw the subprime mortgage crisis and the housing market crisis,’ he said.”
Call me No One.
Well, unfortunately, we live in a blameless society today.
And there’s a lot of “dependency” going around.
Nobody’s at fault. No one at all. It’s all random, it just happened.
“No one saw it, least of all us (the government), therefore - what could we do?
That’s right, nothing!”
I am really questioning the fact that the Fed Chairman should have this much power in this type of so-called financial emergency . We already had a Fed Chairman (Greenspan ) who made grave mistakes and kept the interest rates to low for to long .
The thing that is annoying to me is that some of the same people that were incompetent enough to let this housing bubble corruption cycle go this far ,are the same parties that are trying to solve it .
I said the other day that we would have a bull run up on the stock market today . What’s next ? Zig-Zag…Zig-Zag.
sf jack…When you talk about blameless society ,I agree . Has anyone noticed just how blameless this housing correction is becoming ? No blame means no liability .
I
“The thing that is annoying to me is that some of the same people that were incompetent enough to let this housing bubble corruption cycle go this far ,are the same parties that are trying to solve it .”
Wiz…stop it you’re making sense again…
For those of you outside of CA, what is the situation for house sales? Is it uniformly low or variable by neighborhood? I ask because in Silicon Valley it’s hugely variable. Cupertino, Saratoga, Los Altos school districts still sell quickly, often multiple offers. Maybe slightly lower price than last year, but not the 25-50% that is bandied about for the Central Valley. Check out this one:
19332 Brookview Drive, Saratoga. Asking 1.448 for 1999 ok-condition but well laid out square feet. It came on the market on 3/13, and went pending on 3/14.
OTOH other areas take a long time to sell.
So, I’m curious if this is the case elsewhere, or if this area of Silicon Valley is the last place in the US that still is not a buyer’s market.
highly variable here in the Portland (OR) area. At least at this point–we’re a little late to the bubble popping party, so who knows? Right now, there are expensive (1.4, 1.8) homes on the market in my neighborhood, plus new construction.
“On Monday, state officials sought reassurance that California will receive $1.3 billion that Bear Stearns owes the state.”
And you think Morgan underpaid? California is lucky that Bear didn’t go BK.
“‘We need to continue to wish ourselves good luck,’ said L.A. County Supervisor Gloria Molina.”
“and you really are brave Mr Lion,
and mr Tin Man, you have the biggest heart,
and mr scarecrow, you’re my favorite; you really are the smartest of all!”
follow, follow, follow, follow,
follow the yellow brick road…
“A house in Victorville sold for $120,000; in Apple Valley for $101,000; in Rancho Cucamonga for $203,000; in Fontana for $269,000; Moreno Valley for $163,000. Almost all the homes sold Sunday drew values between 15 percent and 30 percent below their listed current prices and even more depreciated from market highs.”
An interesting common theme is that all of those sales sound way overpriced for their respective areas.
Ads:
Sea Ranch Home for LEASE $1700/mo
For Sale: $899,000
Wow this is one of the biggest disparity sell vs. rent ive seen! So this house is really only worth $250k?
That’s nothing, I rent a fairly nice house in Vancouver for $2350 a month. Specuvestor paid $2.2 million loonies for it last year. I have a friend who rents a beautiful place (4000 sq ft) with ocean views for $3000 a month, wishing price: $3.75 million loonies. This is the norm in Vancouver.
i was told to invest with this estate financial,never did…BUT IT IT WONDERFUL TO SEE CENTRAL COAST CALIF REAL ESTATE TANK,yes you can even lose money investing on the coast…..
Estate Financial sounds like a long running program fell apart and turned into fraud. It doesn’t allows start out that way.
With the $14 bill shortfall, teachers being lade off, cops lade off and a general deterioration of all services and infrastructure, people are fleeing the once golden state for greener pastures. job’s are leaving to, SO cal will be like So FL. Just retirees and illegals. too bad…
I know I would not send my kid’s to public school there.
Sellers can take their $500K homes and shove up their collective a$$es…lol..$500K…are they joking in this day and age?