It’s No Longer An Extraordinary Situation In California
The Times Herald reports from California. “Most homes for sale in Solano County are classified as “distressed,” which likely means a change is coming to the area, real estate experts said Friday. ‘This is the first time in my 20 years in the industry that the distressed properties are driving the market,’ said Beth Brittenbach of Vallejo’s Century 21 Schutjer Realty. ‘They are putting downward pressure on prices and have created what seems like the beginning of an accelerated buyers’ market.’”
“‘As of March 26, there were 3,892 residential properties of all types and price ranges countywide on the market or under contract, Brittenbach said. Of those, 1,319 (34 percent) were listed as foreclosures and 1,056 (27 percent) are listed as short sales.”
“‘Many of the short sales will never go through because the owners won’t qualify, the bank will take so long to respond that the interested buyer will disappear, or the agent has set a list price that is unrealistic and not acceptable to the bank,’ Brittenbach said. ‘But they do give us a hint of what is to come when those homes in distress are foreclosed upon and become (bank-owned).’”
“Trying to sell a non-distressed home will likely be difficult for a while, Brittenbach said.”
“‘Individuals can’t compete with the banks,’ she said. ‘People will have to be willing to deal, to give the buyers credit. They may be surprised to see how much the market has changed. We advise anyone who doesn’t have to sell their home right now, to wait.’”
The Monterey County Herald. “In 2005, when a group of developers started looking to buy the Mahara Townhouse apartment complex in Monterey for a condominium conversion, the condo market was hot. The median price for a condo in Monterey had reached $585,000, and, on average, condo units were selling in just 28 days.”
“By the time the deal closed a year later, those same condos were taking twice as long to sell, while the median price had dropped to $440,000. And more than twice as many condo listings were on the market.”
“After investing $10 million into renovations, the developers are only three-quarters of the way through the work, four months past their initial target date for completion of the project. Overly cautious buyers and the collapse of the subprime lending markets have left nearly half of the newly remodeled condos sitting vacant.”
“So April 13, 41 units at Cypress Park Monterey Bay — including some furnished model units — are going on the auction block. Minimum bids start at $225,000 for a one-bedroom, one-bath 551-square-foot condo; the largest units — two bedrooms, one bath and 920 square feet — have starting bids of $265,000.”
“Previous pricing for those same units ranged from $335,990 to $479,990.”
“Forrest Corral, owner of Cypress Park Monterey Bay, said that letting buyers determine the market value of the properties is a better option than waiting — and hoping — for sales to pick up.”
“Those unsold units are costing money — to the tune of $10,000 a month, said Corral — and infringing on the ability to complete the final phase of renovations.”
“‘The market is in disequilibrium,’ said Ken Stevens, CEO of the company handling the auction. ‘The developer is essentially trusting the market to bid the property up to where they feel is appropriate.’”
“‘We’re basically trying to sell a year’s worth of inventory in a day,’ he said, ’so I think, clearly, the buyers are going to get a good buy.’”
“‘It may bring buyers in that wouldn’t normally buy here and, all of a sudden, everything will change,’ said Bob Chorney of Pacific Home Lending. ‘That’s going to shake things up big-time so far as the market is concerned, because it’s going to establish comparables that are going to shake up all the other appraisals.’”
“Agent Joy Jacobs said she expects to see a ripple effect pushing condo prices down as a result of the auction. ‘The way condos are priced now, you can go down the road to Seaside and get a full house for that price,’ said Jacobs. ‘We need to get prices down.’”
“Craig Anapol, an agent in Carmel, has tried to steer some first-time homebuyers toward condos, but dropping single-family home prices in some communities have made some of those lower-end properties more enticing in buyers’ minds, he said.”
“Last week, 177 single-family homes were on the MLS in Seaside and, of those, about 20 properties had dropped under $300,000. One 650-square-foot house had even dropped to $149,000, he said.”
“‘Those are prices that are cheaper than the condos,’ said Anapol. ‘If all those 41 sell, it will have a domino effect and other condo prices will fall in the county.’”
“The Cypress Park condo auction isn’t the only auction Accelerated Marketing Partners is handling in Monterey County. The company was scheduled to auction off 22 new single-family homes in the Tuscany at Monte Bella development in Salinas on Saturday. Minimum bids on those properties were starting at $295,000, compared to previous asking prices of more than $800,000.”
“Carmel appraiser Alex Hale said the market has changed the way appraisers look at the current market. Rather than disregarding distress sales as irregularities, as they used to do, these days it would be impossible to avoid them when establishing comparable market prices.”
“‘With so many houses on the market, and so many foreclosures, and auctions for foreclosure properties and banks selling foreclosed properties, it’s no longer an extraordinary situation,’ said Hale. ‘It’s the market.’”
“He and many other appraisers are looking back over a shorter time span — three months as opposed to six months or even a year — because it would be too hard to adjust for rapidly changing economic conditions, he said.”
The Whittier Daily News. “Standing at his second-story bedroom window, Gilbert Campos looks out at a lot of dirt. An empty cement swimming pool and unfinished recreation center lie tauntingly in his line of sight. He said he waited 12 years to buy a Rosedale home and finally moved in Sept. 18, and although he does not regret the move, he and many other residents are frustrated.”
“‘I went to Houston on a business trip, and when I came back everyone was gone,’ he said. ‘They promised us (the construction) would be done in February of this year and here we are, still waiting.’”
“Campos, his wife and infant daughter are one of about 60 families that have moved into what will be the 1,250-home Rosedale development in northeast Azusa. But since mid-January, officials said, two of Rosedale’s four builders have stopped construction.” “Officials attributed the halt to a faltering housing market that has plagued the overall economy.”
“‘The economy always comes back, the pendulum always reverses, but the tough part for (the residents) and the developer is that wait,’ said Tom Adams, owner of 21st Century Adams & Barnes in Monrovia. ‘They’re living, to some degree, in a no-man’s land.’”
“Campos said he and many residents are frustrated with the lack of amenities and progress, coupled with high HOA fees. He said nearly all his neighbors have children who have nowhere to play.”
“‘There are supposed to be nine parks,’ he said. ‘We don’t even have one park.’”
“‘It’s affecting everybody in residential construction,’ said Azusa City Manager Fran Delach. ‘Right now a lot of builders are having trouble getting money from their lenders to continue.’”
“‘Prices are down substantially, inventory is up and interest rates are down,’ Adams said. ‘You can buy the same house that a couple of years ago (cost) at least 20 percent more.’”
The Recordnet. “The Central Valley Association of Realtors, a trade group covering Stanislaus County and much of San Joaquin County, was expecting a huge membership loss this year as more and more agents dropped out of the sales market.”
“But instead of an expected drop from 2,900 to 1,700 year to year, the association has seen membership shrivel to about 1,200. Cliff Coler, the group’s interim chief executive officer, said declining membership and revenue have meant a cutback in staff from 13 to four.”
“‘Some of the numbers hit us in the face like a cold bucket of ice water,’ said Karl Enzmann, Realtors group president-elect.”
The Press Enterprise. “Massive jumps in payments on home loans and an economy that’s taking a beating are creating work for auto repossessors, say those who lend money on vehicles.”
“Tom Kontos VP of Adesa Analytical Services, which owns auto auctions in Mira Loma and San Diego. He said repossessions are up about 15 percent from last year.”
“‘In part it’s a thing you’d naturally see because of an economic slowdown,’ Kontos said. ‘But there are some unique aspects to this economic cycle related to subprime financing.’”
“He said some borrowers find themselves without enough money to make payments on both their home and their car. ‘There are cases where people say the lesser of the two evils is (to default on) the car.’”
“‘A lot of the people who are now delinquent have never been delinquent in their life,’ said Gene Shabinaw, senior VP of lending at Arrowhead Credit Union in San Bernardino. ‘And, frankly, they’re afraid to talk about it.’”
“He said the real estate meltdown is also leading to repossessions in other ways, such as borrowers who lose their jobs in related industries.”
“He said while all types of vehicles are being repossessed, the rate of repossession seems to be highest among gas-guzzling pickups and SUVs, some purchased by people employed in construction or other fields.”
The North County Times. “As some real estate agents struggle and mortgage brokers close up shop, one real estate industry is booming: foreclosure advice.”
“The proliferation of foreclosure companies has troubled some housing advocates, who point to government-sponsored agencies that provide the same services free.”
“‘It’s motivated by greed and desperation,’ said Daniel Scott, director of an Oceanside nonprofit that provides assistance to families facing foreclosure. ‘People are desperate for something that sounds like it will help them, and people who are greedy look to benefit from it.’”
“Over the last three months, banks purchased almost 4,000 foreclosed homes in San Diego County, a 250 percent increase from the same time a year earlier, according to a Discovery Bay tracking service. And in February alone, more than 3,000 homes received notices of default, the first step in the foreclosure process.”
“Ernesto Castillo said he could not keep up after the interest rate on his adjustable mortgage jumped and his payments increased by $1,200 a month to $4,700. Castillo decided to let his Florida home fall into foreclosure and move to Chula Vista as a renter.”
“It takes about one month to secure an appointment with Community HousingWorks. Adelina Enriquez, the sole counselor, has file cabinets stuffed with hundreds of folders for the cases she juggles. She said she spends at least an hour simply transcribing information from the 60 voice mails she gets every day.”
“‘It’s very intense. Can you imagine a 60-year-old man crying on the chair in front of you? That’s stressful,’ Enriquez said. ‘In the beginning, I didn’t know what to do.’”
“Enriquez said she counseled 215 families in the first six months she was assigned to the job. Of those, she kept 28 families out of foreclosure by modifying the loan, she said.”
“Castillo now rents in Chula Vista and is working to repair his credit so he can eventually buy another home. He said he owed too much to even consider a loan modification.”
“‘It was an emotional roller coaster. We bought a home, put in a pool and had the American Dream,’ Castillo said. ‘But it’s life. Now, we’re getting our credit fixed.’”
I was talking to a couple liberal friends of mine here in California. I expected them to be all for this stupid bailout Hilliary is proposing. Instead they were furious and as angry as people on this housing bubble list. I am going to have to send them the link to this site.
Fecaltime!
never fear the gop may drop trou too
McCain - HOLD FAST
gop 49% socialist and DNC 61%
roughly
I am hearing unreal stories out of CA. I had always guessed but the facts are coming out really clearly.
Please do tell!
Along those lines, does anyone have any info on what down payments are currently being required in CA (to the extent there is any uniformity)? I have heard rumors of 20%+, but is that across the board, or for certain categories of borrowers, certain geographic locations, etc.?
I saw Wells Fargo is at 15% in California. May as well close up shop, until the bottom of the ladder can afford a down payment on starter homes, the market isn’t going to move, its going to take a long time @15% for people to save up enough of a down payment. Of course this only means home prices in California will continue to fall.
’stupid bailout ‘
The Bailout Plan will have plenty of ‘Pork’
- 500 million dollars for state ‘Bike Paths’
- $5000 coupons for new autos (to kick start auto loans / purchases)
- 80 Billion for California ‘Low Income’
- 40 Billion for California Hespanic homeowners
- 10 Billion for ‘Green House’ gas study
blah blah blah
Our Liberal US Senators Feinstein and Boxer will lead the charge.
Only plans I’ve seen are for $30 billion, a drop in the economic bucket. Not an great idea and it won’t happen, but it uis an election year.
BTW - Bushie’s Fed has already given much more than that out to corporations in the last few weeks, $30 billion just to cover the Bear Stearns blowup.
‘Only plans I’ve seen are for $30 billion’
- Sorry, Bloomberg reported 400 billion…heres Barneys gig-
To spur bankers to action, Frank and other Democrats are working on legislation that would allow the FHA to insure an additional $300 billion in mortgages on which lenders have agreed to accept partial losses. Under Frank’s proposal, the new loan could be worth no more than 85 percent of the home’s current appraised value.
- We need the majority of this money here in California, because we’re so cool.
people who don’t vote GOP are stupid.
Yeah, tell that to most of the Midwest who pretty much got their economic clock cleaned by the GOP while being distracted by the side shows.
Abortion. AAAAH. Gays. OOOOH.
Oh wait, where are the jobs?
Believe, and the Lord will provide.
“What’s the Matter with Kansas” by Thomas Frank. Conversationally written with enough solid factual basis to be convincing. Worth the price or worth a trip to the library.
Frank’s thesis is that middle America is tricked into voting against its economic interest because Republican positions on social issues are closer to their values.
Of course, this presumes that Democratic economic prescriptions (protectionism, high taxation, extensive regulation, litigation-friendly tort system) actually work. Which is debatable. The statist/corporatist Democratic approach seems to presume the country is divided between large corporations and peasant-like employees. In fact, middle America contains plenty of latter-day “yeoman farmers” — small businesspeople — who suffer disproportionately from regulatory burdens designed for large corporations with fat overhead budgets.
Not surprisingly, it’s often the case that large corporations either support, or only halfheartedly oppose, additional regulation of their industries. It insulates them against competition from upstarts, for whom the regulatory/litigation burden tends to constitute a greater percentage of overall revenues.
I agree and I must say, you have a way with words! I should further say, you have a wicked sense of humor!
The only difference between the two parties is one will stick their tongue in your ear while their pouring the coals to you.
The other one wont.
Everybody needs to smell the coffee.
Mike
We didn’t leave the Republican Party, it left us. Both parties suck.
Can you really say that with a straight face after the last 7 years of GWB with half borrow and spend congress.
Only an idiot would think that the GOP is still the party of fiscal responsibility. Thanks to Bush, the national debt has never been larger, consumer protections have never been weaker, and the economy has never been worse (at least not in my lifetime).
Yeah, I’m so stupid that I don’t want tax money funding a war to occupy a country that never attacked us, I don’t want to support a party whose ‘hands-off’ attitude toward banking and business regulation created this housing bubble, I don’t want to support a party which wants to pass laws to put my minister in jail, I don’t want to vote for a party that wants to give more tax breaks to the ultra-rich while our health care system goes to heck, and I’m so stupid that I don’t want to support a party that would rather borrow and spend our way into bankruptcy than invest in public education, ’cause fully-funded public schools might actually help some black or brown kids. Yeah, I guess I’m stupid.
Sorry, missed three very important words. Should be “…than *raise taxes to* invest in public education…”
Spend a buck on education now, save four bucks on jails later….
Sorry, it doesn’t work this way. The more we spend on school, the bigger the crimes. Look at all the Wall St. crooks: top shelf edumacation for the largest world-wide con game ever recorded by man.
Education doesn’t tame the wicked spirit, the rod does. We’re a few generations behind the curve now…
Word on the streets (and on this blog),
Biggest bang for the dollar may be X the administrators, let teachers do what they do (teach), and keep politicians OUT of the process (like they’re smart- HAR).
Wow, that’s one run on sentence (OOPS).
Anger stage - grrr…
(Not against you),
Leigh
One of the biggest problems in public education right now is that @sshole Eli Broad, the Gates Foundation and the various other wealthy advocates of privatizing public education and charter schools.
No the problem is teachers unions. School voucher programs would go a long way to righting the ship.
You hit the nail on the head, Leigh!
As with most publicly-funded entities (and many private ones), school districts tend to be too top-heavy.
A couple of decades ago, it was reported that LA Unified’s superintendent’s **driver** was paid around $90K — this was in the 80s, I believe.
Malibu, although I have almost always voted Repulican, I have to agree with much of what you say. BUT, here are some disagreements: (1) the housing bubble is mainly a result of a Clinton-era tax change, enabling flippers repeatedly to evade cap gain tax; (2) proportional tax burden on the “ultra-rich” increased slightly under Bush tax cuts–the main beneficiaries were in the $30K-$150K group; (3) the big problem with “our health care system” is that it is already required to provide emergency care to all those who cannot or will not pay.
(1) the housing BUBBLE is entirely due to the low interest rates priming the pump and the multitude of suicide loans that were taken out
(2) unfounded assertion given the massive cuts in capital gains rates
(3) emergency care to indigents even isn’t in the top 10 of problems with our health care system, such as it is..
sheez.
Actually it was the Republican Congress who wrote the bill and Clinton who signed it.
The current GOP aint conservative: they’re a bunch of crooks – crony capitalists — masquerading as freemarketeers. Socialism for the rich and well-connected. Well, excluding Ron Paul.
Or they’re a bunch of bible-thumpin’ Dixiecrats. They can go return to the Democratic party as far as I care.
“people who don’t vote GOP are stupid.”
Pass the peace pipe. You have had enough.
CHILIDOGGG:
The GOP is what got us into this mess. I haven’t read an intelligent post from you yet.
re: “People who don’t vote GOP are stupid”.
Are you forgetting which party put this country in this huge mess! Total Republican rule has got this country into a war that is a total quagmire and doubled the national debt in 8 short years.
Also be aware that I am a proud DEMOCRAT and like BOTH Obama (first) and Hillary (second) and am firmly AGAINST ANY BAILOUT! Personal responsibility for stupid financial decisions is important. I don’t remember any call for a national pool of the financial gains made in property from the years of 1997 through mid 2007.
I support economically most of the views on this blog. I however am against blaming illegal immigrants and the Democrats for social ills. The social ills are the responsibility of EVERYONE who resides in this country and chooses to turn a blind eye to doing what is right!
There you go, now you know my leaning!!!!
^ what he said. I will vote Libertarian or Whacko if the Dems do something (really) stupid wrt housing bailouts by November, however.
When are people like you going to stand up and tell Hillary and Obama to cut the bailout nonsense? Nobody said illegal immigrants are at fault for all of the social ills. They are only a big part of the problem.
PS - I’m an independent so nobody listens to people like me. All we do is decide elections.
Re: “When are people like you going to stand up and tell Hillary and Obama to cut the bailout nonsense?”
Well unfortunately no one gave me the job of campaign advisor. All I can do is send emails to their campaign, email my senators, local newspapers and last but not least BLOGS!!!
The problem in this country is the big corporate lobbyists. They buy the politicians that will serve their business interests best.
You’ll find that a lot of Democratic voters have an aneurysm when they find out that there are plans being floated to “save” six-figure earners who mortgaged their houses to they could send little Drew or Jennifer to Princeton or so they could “invest” in RE.
Jennifer? That is too conventional for today’s soccer moms. Try Hannah, Brittany, or Fayerosa.
Dear God! There’s really someone named “Fayerosa”? Please tell me you made that up!
Nope. It is a true one!
“Castillo now rents in Chula Vista and is working to repair his credit so he can eventually buy another home. He said he owed too much to even consider a loan modification.”
Looks like Castillo can’t wait for round two, where he will be a knife catcher.
Cinch
Here’s where the stories always get milky. They bought the house and then added the pool - my bet is with a HELOC or refi. Prior to those loans, the house might have been affordable and without exotic loan. Many of the boom money was refi from people that had homes long term, paid off or just increasing in the boom. I bet a bunch of them would have been fine if they had left well enough alone.
Agreed. I think newspapers ought to establish a program in which journalists sit in on depositions in litigation. They might learn a thing or two about the art of the follow-up question.
“So, Mr. McScrewed, you took out a $200,000 HELOC. You say it was to “pay off some bills and buy your wife a new van. Let’s see. A gold-plated Sienna comes in at less than $40,000. Just what kind of ‘bills’ did you have that added up to $160,000?”
(Mr. McScrewed hems and haws)
“You didn’t happen to put $100,000 down as five different down payments on five Phoenix spec homes, did you?”
The incentives to default on mortgages keeps getting better and better.
First it’s the IRS forgiving taxes on forgiven debt.
Now the new proposals to reduce the principal on loan balances. If your a FB with a $500,000 mortgage, stop making payments and try to get the principal balance reduced to say $400,000. That’s $100,000 plus interest for 30yrs, you save. That’s a lot of incentive to default. If your neighbor did it and can now sell for $100,000 less, that puts pressure on other neighbors to do the same. How fair is this to other people who are dutifully paying there mortgage? Responsible people who are paying their mortgages, should be outraged. The irresponsible are profiting from their irresponsibility. I’d be outraged if my neighbor got his loan balance reduced and I still had to pay the full amount of mine. If this somehow goes through, the amount of the reduction should come out of any profit on the future sale of the property, and be returned to taxes payers for providing the new loan guarantee. It’s about time tax payers stood to benefit from these schemes.
Outraged to say the least. I watch a lot of Law & Order and while that’s all TV fiction, I gotta admit people seem to get whacked for a lot less than $100,000 on TV. It might take a nutjob, and a nutjob might be one in a million, but how many million are going to lose at least $100,000 before this is done?
I said it before - when I buy a house, my housewarming gift to myself will be a legal handgun. I hope I never use it.
when I finally get my SFH I GOTTA make a secret safe room off the bedroom, somehow.
Problem with keeping a gun is that chances are higher that you’ll lose it in a burglary rather than being in the right place at the right time to arm yourself. Unless you have a studio apartment or something.
You don’t have one already? I have two and plan to buy a rifle. When things get rough, you can’t count on the cops to protect you because they’ll be at home protecting their own family. Just look at the LA riots and New Orleans.
There is little doubt in my mind this–along with many other bailout proposals which haven’t even been proposed yet–will be passed.
Even though I’m a renter, and I am pissed off by all this, I would be even more so if I were a homeowner who had lived within my means and paid off my mortgage. Something nobody wants to talk about with these bailouts is what happens in a year when the property drops another $100K? Will the loan balance continually be reduced? Also, what about people who HELOC’d themselves? Are they eligible too? What about flippers? My guess is that a fairly restrictive measure will get passed initially, but within a few months, more liberal measures will get passed. The funny thing is that all of these measures are meant to keep deadbeats in houses they can’t afford. Shouldn’t incentives be given to those who never contributed to this mess, like a $50K tax credit to current renters to buy a house? That way Barney & Dodd could preserve home prices to some extent (which is their intended goal), and give an incentive to fence sitters to jump in. Me…I’m going to keep waiting. These plans will only slow down the crash, not stop it. People around Humboldt county California are still very eager to buy…if they can get a loan, they’ll pay whatever price. When this mentality ends–after house prices have dropped another 50%–then it may be an appropriate time to buy.
the only problem with this is it would reinflate housing prices if every responsible renter got 50K, I say just let the market work the excesses off on their own, as long as rent are this cheap for such great places to live why bother with a house.
My plan is to just give every taxpayer a $10,000 check each year for the next 3 years. At least it will be fair to everyone. Those of us who did not speculate or borrow to the hilt will have some money to spend or invest as we please. Those who are in debt can use that money to pay off some of it. It would add roughly $1T to the national deficit each year, but that’s going to happen anyways with these failed bailouts. Those who still can’t afford their mortgage payments after the boost in income should not be living there. The 3 years should give people time to plan their next move.
Have ‘em pay taxes, up front, on that $100K that just got put in their pocket. That’ll stop this fast.
btw, I’m confident that any “bailout” program will be nothing but hot air that flies away on the wind. By the time you weed out the refi’s/fraud/second homes etc, there’s nobody left to qualify.
I predict a lot of “programs” will get major media attention, but will help only a few hundred or thousand homeowners.
“I’d be outraged if my neighbor got his loan balance reduced and I still had to pay the full amount of mine.”
Yep. Why can’t we just reset everyone back to zero like “Fight Club” without the destructive explosions? At least that’s more fair.
Even if we did all go back to zero, the current FBs would be underwater again in five years. An irresponsible idiot won’t change his ways.
Dateline-Eastlake. . . Not uncommon now for clients to report 10 foreclosures on their streets. It’s also interesting to see that, less & less, clients no longer come in looking for options to keep the home. They now say “let ‘em eat wood”.
Ben- you told me you’ve seen the end of this movie before and it ain’t pretty. Man, were you right.
Thanks for the updates, BK!
Castillo better save for 20 years, but by then only 20% minimum downpayment will be accepted. Easy credit will be GONE in 5 years.
Easy credit has gone bye-bye right now. What the hell are you talking about?
There are still a few crazy loans left. Its not as easy 2005, but credit hasn’t returned to normal yet. I’m as a bear; but easy credit is like the undead. It just won’t die.
By 2009 it will be gone… and in any rational market there would never be a trace of the suicide loans.
5 years? No. Easy credit is dying a rapid death. But vestiges of it will need to be killed off through the year.
Got Popcorn?
Neil
wife + i are looking at moving closer to my work if we can sell our house at 10% to 15% below our purchase price in summer 2005 (which seems unlikely at present). she called a loan officer a few days ago to see what we would qualify for, and it blew me away. $350k for a second property even if we KEEP our current house w/ a $210k mortgage, and $650k if we sell the existing one. the loan officers are still playing games with rent equivalence on primary residences to make this work.
i asked her what kind of crazy bank would lend us that much money. that’s waaaay over 3x annual income for us, but i guess we look like a “good risk” given our credit history and lack of debt apart from our (single 30y fixed) home mortgage. yeeesh, at least out in VA there’s still crazy people lending money.
“He and many other appraisers are looking back over a shorter time span — three months as opposed to six months or even a year — because it would be too hard to adjust for rapidly changing economic conditions, he said.”
Why do we need appraisers again? I wonder who are more useless and clueless: stock analysts or appraisers?
Cinch
San Diego January Case-Shiller write up.
http://piggington.com/january_case_shiller_hpi
Nice write-up.
It’s interesting to see the decline broken down by price ranges. I found myself wishing he had broken out the really expensive houses, like $1 million++, to see if that would confirm my suspicion that the really expensive stuff is moving even less. I find it hard to believe that the housing bubble was mostly about inexpensive houses, but that what the decline data seem to be saying at this point in time. Yet the prices of expensive houses did run up radically - but only a little less than 100% compared to 170% as shown in the third graph on the Piggington site. Of course, that’s just San Diego, maybe it was different elsewhere.
Considering all the short sales and REO’s in the 500-800K range that I’ve been seeing, there’s no doubt in my mind that houses above that are being hit as well. This ain’t just a poor man’s bubble.
It is interesting to translate those percentage declines from the peak into home equity losses in dollar terms. Rough estimates of the current list prices for the middle of the lowest 1/3 (17th percentile), middle 1/3 (50th percentile) and upper 1/3 (83rd percentile) of the SD SFR used home list price distributions are currently $325K, $475K and $900K, respectively (very rough estimates, mind you!). Now if these homes fell from the peak in the amounts indicated in Rich’s analysis (say 33%, 28% and 21% for rough estimates), then the respective dollar losses on “typical” low-, medium- and high-priced SFRs would have been approximately
325*.33/(1-.33) = $160K (33% off the bubble top of roughly $485K)
475*.28/(1-.28) = $185K (28% off the bubble peak of roughly $660K)
900*.21/(1-.21) = $239K (21% off the bubble peak of roughly $1139K)
Take home message: Though realtors have been known to advise buyers to purchase the largest, most expensive home they can afford (or at least get a loan to buy), you would have lost more money by buying a more expensive home at the bubble peak.
“Though realtors have been known to advise buyers to purchase the largest, most expensive home they can afford (or at least get a loan to buy)”
For the past few decades, especially in the niftier areas of California, this has (at least upon first glance) appeared to have been a fairly sound strategy. I have been wondering lately, though, if this strategy is likely to pay off in the next couple of decades, even assuming one manages to buy near the nadir of the ongoing price crash. I say this for three reasons: 1) demographic factors (e.g. the baby boom generation becoming net sellers); and 2) a strong anti-real estate sentiment that could last longer than might be expected; and 3) the possibility that the War on Savers and the current preference for holding riskier assets (over more conservative choices) could continue for an indeterminate length of time.
Holding McMansions in the wake of a building glut = holding the riskiest of assets
Doing my own version (i.e. digging through the tax records), I see a similar pattern in NoVA: the cheapest went up by the greatest percent.
At one point, I fit a simple regression comparing 1998 prices to peak prices (or was it 2000?) that accounted for over 90% of the variance. The equation was interesting: take the 1998 price, add $50k, and then double that.
So, a $100k condo sold for $300k at the peak, a very nice 5+br house that went for $500k would sell for $1.1mil at the peak.
Interestingly, houses rose in price first, followed by townhouses, and then condos. The houses went up at a steady 10-15% (still way higher than inflation), while the condos had to play catchup, going up at over 20% a year, and eventually overtaking houses.
“‘Individuals can’t compete with the banks,’ she said. ‘People will have to be willing to deal, to give the buyers credit.
WOW
This reminds me of the 70s, If you wanted to sell your house back then, the seller had to finance the buyer.
Of course this won’t work for THE FOLKS UNDER WATER, but will help retiring Boomers who have eqity.
Here in our neck of the woods we called those “Vendor Take-Back Mortgages.”
IS IT WORTH MAKING AN OFFER FOR SHORT SALE? HOUSES HERE ARE SELLING AROUND 250-300k RANGE WHICH USED TO SELL FOR 400k IN 2006. IS THERE A FORMULA BANK LOOKS AT FOR SHORT SALE. WHAT IF I MAKE AN OFFER FOR 200K ON A HOUSE THAT WAS BOUGHT FOR 450K IN 2007? WILL THE BANK ACCEPT IT OR SLEEP ON IT. THE PLACE IS 70 MILES FROM DC AND IS CALLED MARTINSBURG, WV. THESE ARE 4000 SQ. FT. HOUSES AND WERE BUILT BY DAN RYAN, RYAN AND DREES.
Not sure that it really matters what it once sold for.We all know those numbers were cooked.Is there value there?Do you think the hosue is worh what they are asking?
The realtors ay that this is DC suburbs and 70% people living here in Martinsburg commute to DC or NoVa.
“Individuals can’t compete with the banks”
Right, as sellers, they can’t.
As lenders, they can. And should. So many of us blog about investment choices. Your neighbor’s house may be a fine piece of collateral. I still get better bucks and more security from my loan biz than from any publicly-available securities. True, there is a small amount of work required. Not much at all.
I was puzzled by this quote:
‘Individuals can’t compete with the banks,’ she said. ‘People will have to be willing to deal, to give the buyers credit.
Whilst there are obviously a few individuals like az_lender out there who have the wherewithal to lend, what would-be house seller in today’s market has two nickels to rub together, let alone enough capital to provide a loan to a potential buyer?
And even if they are in a position to do so, they’re creating a new FB with the sale, and if you show me an FB I’ll show you an FL (f’d lender) at the other end of the transaction. Seems like a default is almost “in the bag.” And unless the seller plans to finance the entire thing for the buyer, they will presumably be the SECOND mortgage holder, hence unlikely to recover anything when the buyer defaults.
Please enlighten me if I’m missing some magic bullet here.
“We advise anyone who doesn’t have to sell their home right now, to wait.’”
There it is again — but wait for WHAT? Isn’t even an individual who just WANTS to sell better off dumping his house now than waiting for it to depreciate more? House salespeople may have a reason to control the size of the inventory, but individual sellers need to find an exit if they can.
This idiotic advice is given by real estate agents on a regular basis. When you are holding a depreciating asset the last thing that you want to do is wait. No one would give advice like this on any other asset class, for some reason when it comes to real estate many take complete leave of their senses.
They have a fantasy that real estate prices will rebound to their current levels in a couple of years. That comes from listening to fairy tales spun by the NAR.
Why don’t any of these optimists ever explain what’s going to fuel this next boom they’re counting on? And they have to be planning on another BOOM, because flat –or normal, slow appreciation — ain’t gonna be enough to make up for the big hit they’ll be taking up front.
This is terrible advice. It will be years, possibly decades before sellers again have the opportunity to get the kind of prices we see today. OK, prices may be down from 2005, but sellers are still commanding very high prices for properties. Now is a great time to sell and a terrible time to buy. Not as good a time to sell as 2005, and not as bad a time to buy, but still definitely a sellers market.
“‘The economy always comes back, the pendulum always reverses, but the tough part for (the residents) and the developer is that wait,’ said Tom Adams, owner of 21st Century Adams & Barnes in Monrovia.
I’m mainly a lurker. I often read the blog, but don’t comment much. However, today I will give my two cents. The economy is not coming back this time. It’s over. Finito. How do I know this? Look at the array of crisis that are all hitting at once:
Energy Crisis: Oil will reach $150 next year and then $200 in 2010. Shortages will arrive in 2010. Not a pretty picture!
Credit Crisis: The major commercial and investment banks are already insolvent on paper. They are exposed to losses well over their capitalization. This means one thing: a huge curtailment of credit to consumers and businesses.
Housing Crisis: Prices have to go down at least 35% to reach the inflation adjusted historical mean. This means that millions of mortgages will be under water. This means that in addition to the 3+ million foreclosures that will occur for people who cannot afford their mortgage, another 5+ million will simply walk (jingle mail will be a big story next year). This means that inventory levels will not allow price increases for at least 5 years, and probably never!
Food Crisis: This one goes with the energy crisis, but it will affect all of us. It takes 10 calories of energy to produce 1 calorie of food energy. No more cheap energy, means less food and more expensive food. Remember the movie Soylent Green, where strawberries were rare? Well, we are not the far away from a similar scenario. Ready to pay $10 for a Cantalop? Or $2 for a tomato?
Jobs Crisis: Soon the unemployment rate will be going up at an increasing rate (after the mass layoff begin by corporate America). This will impossible to stop as there will not be a job engine. Once city, state, and county governments begin layoffs we are screwed.
Dollar Crisis: It’s only a matter of time until the Federal Government defaults on their $10 trillion dollar debt. The dollar is toast. When this happens, only bad things are going to happen to housing prices.
Okay, you want a timeline? We have two more years of relative prosperity. In 2010 it hits the fan and all of these scenarios begin to unfold.
What does this mean to housing prices? You ain’t seen nothing yet. Any buyer today is not getting a good deal. I don’t care what they pay. How low can it go? The national median is around $200,000 today. It will be $150,000 by the end of 2010. But it won’t stop there. It will be down to $100,000 by 2012. And once it bottoms, it just gets worse. Many neighborhoods will simply be abandoned. You can have a home for free!
Got Silver?
Newager23
Pretty much my opinion also. Your missing that retiring baby boomers will be in full swing by this point. For those that still have equity downsizing makes sense since its the relative prices that are important. Lets say they have 50% equity in a 5/3-4/2 house worth 200k that can downsize to a nice 2-3 bedroom condo for 100k so relative price changes are ok for downsizing boomers.
if you move to Detroit you can have a house for free today.
Jeez I better get those tomatoes and cantalopes in the ground then, eh?
Right, because if the price of tomatoes is $2 each, and everybody is sitting around unemployed, then clearly nobody is going to even think of planting extra. Or hiring trained cyclists to do door to door delivery.
The economy will survive - it always does. A little extra walking wouldn’t hurt the american waistline one iota.
Maybe we won’t be throwing away hundreds of millions of pounds of food each year. Maybe we can start carpooling. Maybe people will stop buying giant SUV’s and running their A/C when it’s 70 degrees outside. There’s no doubt that bad times are coming, but it’s not the end of the world. Maybe our military won’t be spread all over the globe anymore. Maybe we’ll stop giving tens of billions away in foreign aid and take care of our own.
Argentina and Brazil defaulted on their debt and they are alive and kicking.
The amounts we give in foreign aid are not even 1% of the federal budget. It is peanuts. Taking care of our own would be easy–spend the money we are blowing in Iraq in the U.S.
dude if that stuff happens everyone here is f’ed anyway.
so, newager 23, you are saying that humans have suddenly lost the ability to adapt and that all trends continue in the same direction?
A few more things I’d like to add to pile in on the doom:
1) We only have about 4 billion years of stable energy from the sun left. After that, all bets are off.
2) It’s only a matter of time before we “get together” with a large comet-like object descending from the Oort cloud. (Not the pansy, low-velocity asteroids tracked in the Kuiper belt, like Apophis. Those are pussies.) Most of the large Oort cloud objects are unknown because of their very long orbital periods and very large orbit sizes (mostly outside Pluto, more than 5 billion miles away). They are much faster than the Kuiper belt asteroids and there will be little warning if one is headed towards us.
3) At any moment we could suffer the fate of being too close to one of the events leading to gamma ray bursts. We don’t even know exactly what causes them, but collisions of black holes is one idea. Suffice it to say, though that if one of these events occurs we’d really like it to not be in the same corner of the galaxy as us. Too close, and not only are we all dead, but all traces that humanity ever existed could be vaporized without so much as a warning shot. Not sure what I’d pay for a condo box after such an event, but for sure I ain’t gonna be paying the HOA dues!
Hope everybody has a nice day!
“Ready to pay $10 for a Cantalop? Or $2 for a tomato?”
Nothing a backyard garden can’t fix. ‘Course, with developers reducing backyards into glorified patios, that’s out of the question for a lot of new homes.
Update from the front lines:
Mexico:
Went to TJ last week. Place was dead. The locals rolled out the Red Carpet. Ate breakfast at La Fonda overlooking the beach had eggs and bacon for about $ 3.00. Ensenada was dead as well except for the weekend boaters from the 3 day LA-Ensenada cruse. Want to see how bad it can get. Go between TJ and Ensenada and see many “beach front” homes with graffiti all over them you can count: Better bring an Abacus because you’re going to have to push over the beads over often.
Mexico is OK if you are not intimidated by Police and Federalizes carrying M-16s with a 100 round clip. At 1:00 in the morning ate at a fast food place along with the Federalizes with masks over their heads and M-16. Guys were very nice and polite, but don’t take picture of them. Saw one ex-tough guy who “resisted” arrest in TJ. He was not a pretty sight. Beat up pretty bad. This guy will never go to Mexico again. Hit on Mexican Police office you just hit the whole police dept. Gave him $10 to try and get back to US.
So Cal:
So Cal Business Park I work in is dead. Many small companies closing or moving out. Last week as I was working, I felt like the guy in I am Legend. I was the only one with a roll up door working. It was/is scary to be in a business park and see no one. Side note: Two years ago I tried to get rent commercial property, the rental house told me to call back each month. The rental company had a very bad attitude. When I rented a few month ago, they gave me a list of places to see and pick. (I was looking in the 1000 sq. foot area as this is prime property for small business). If you watch commercial property look at the small areas to see how things are going.
A new club in an upscale area near Countrywide’s H.Q. just shut down. Place had a big crowd on Saturday and Sunday. Word is investors pulled the plug after one year. Near Countrywide’s offices many night clubs opened. Will be interesting to see how may more shut down.
Restaurant business is off based on local observations. Also, many more people driving “hoopties” around town (look it up). I like to see people in hoopties, reminds me of the day when I drove a hooptie. See a lot more people walking as well, especially teenagers. Is that SUV getting expensive to drive!
Misc:
Was in Florida at a home show (EHX) and the show was very slow. Many electricians looking to go into low voltage work, certified electricians looking to get into non- certified work. Sorry boys this boat has already sailed!
Will be at the Security show in Las Vegas this week. Not expecting a good show, but the hope is security needs will go up as the economy goes down. Technology is changing fast in security due to POV (Power over Video) or POI (Power over Internet). For Hoz and TXchick. This technology will make it much easier to install security system.
Word is prices are going up in Taiwan and China. Expect 6-7% price increased from Taiwan manufactures. They are really surprised at how low the dollar is! (Home Depot and Loews watch out. Most tools are made in Taiwan) and warning/sending information about expectations that the dollar will go lower.
I apologize in advance to all the grammar Nazis for any misspelled works, incorrect commas, etc. as it is my day off and I am typing for fun and not work! But, please feel free to correct any errors you may find so I can learn and do better in the future.
A great read, simi.
Hey Simi, what’s the name of the club that went out near CW?
Thanks for the local observations.
Bamboo? In same complex as Canyon Club.
Calabassas is the city?
Simi I think the all out 2-6 hour gun battles with fully automatic weapons and kidnappings is keeping the tourists away just as much as the economic slump. I know people who have been going down there for decades, some even Mexicans, who won’t venture down there any more. I’m sure the new Passport requirements don’t help.
Glad to hear La Fonda is lowering their prices I stopped going there when they started charging close to $30 for a lobster dinner, you are better off stopping in Puerto Nuevo proper at Sandra’s the lobster and everything else on the menu is easily half the price of La Fonda and equally as good. Just don’t leave anything of value in your trunk, you know those little kids who are walking around the parking lots when you park, they are the same little guys who will promply crowbar open your trunk looking for goods about 10 minutes after you leave, its happened to every single person I know.
The Cypress Park condo conversion isn’t the only one in trouble in Monterey. Another, Footprints by the Bay, has stopped construction after the first phase, and the ones they have done are sitting unsold. They’re trying to rent them out again, at about $1,800/mo, vs a sales price of $500K. Sorry, but that works out to a 120X sales price of around $250K.
They’re also going to be running into REO competition in Salinas, Watsonville, and Marina.
I have a friend, who against my advice, bought a SFH in Carmel Valley (not the San Diego one, the one near Monterey) in mid 2006 for $750K. It was about 1200 square feet but was near a lake. Something tells me that it wouldn’t sell for anywhere near that now? Is anyone familiar enough with that area to hazard a current guess? I spoke to another friend who is looking at buying in nearby Seaside a starter for around $300K. That is about 40% lower than they were in 2005, and pretty comparable to prices for similar homes in Eureka (which says that Eureka is probably the most overpriced market in California).
Monterey county Carmel Valley, Carmel Highlands, and Camel-by-the-Sea are primarily retirement areas. The median owner is somewhere around 60 years old and literally 15-20% of the houses are empty (owners often have multiple houses).
Because the upscale retirement market is less sensitive than other areas in the Monterey area, I don’t think a dramatic crash is in the cards. Pacific Grove is partly retirement and partly middle class. Monterey proper has retirement, middle class and working class, while Seaside is primarily working class (and ghetto).
Still, Carmel Valley houses sold for around $400K just 5 years ago so the writing is on the wall. I think prices will slowly inch down in that area rather than crash hard, as they have done in Seaside, Salinas, and Monterey condos.
The Seaside houses are mostly 1950s or earlier, small and often 2/1 or 3/1. Ten to fifteen years ago it was ghetto, but the absurd prices seem to have caused the old residents to sell and it’s improved from what it was. It’s still no prize, but there aren’t as many window bars as there used to be.
The big Seaside Highlands subdivision of McMansions has about a dozen for sale. In 2005/2006 they were going for 900K plus. They start at around $800K now, and I’ve been seeing a few foreclosures ripple through there. Some forlorn souls are trying to rent for about $3K/Mo, which puts market value at maybe $400-500K if you’re generous.
I notice that “The Design Center” in Seaside (maybe Sand City) is putting some urban mid-rise 4-4 story condos on the market at $800K+ for 2/2s. That’s completely insane. It’s in a light industrial area full of car repair shops, and the light industrial area is in Seaside, miles from downtown Monterey.
Salinas has about a thousand (!) notices of default pending, in addition to several hundred foreclosures already on the books. That’s going to be a slaughter. I think the North Salinas houses will drop from the peak mid-600’s to about $300K in a couple years. There’s already a ton of stuff in the 400’s.
I just googled Cypress Park and it’s behind Safeway/strip malls at the Del Rey Oaks border and toward the airport. That area is just OK and I’d think twice about living there (way too many apartments nearby). I’d never consider buying there.
Footprints on the Bay deserves to crash and burn. The out-of-town Lyon Homes bought out a large but run down mom-and-pop apartment complex and put lipstick on the pig. The first few buildings got the standard granite/stainless treatment, new paint, and some new bike racks–but they’ll also sell the non-upgraded units.
FotB shifted to trying to sell the units fully furnished to rich out-of-towners who can (rent them out to) lose only a few hundred dollars per month and stay there a couple weeks a year. The trouble with the plan is that FotB is in a quiet forested area 2-3 miles from anything interesting to tourists. Motels nearby go for $150 per night in peak season. Any tourist willing to pay $1.5K-$3K for a short-term furnished rental could easily find something near the beach.
Wow, they’re trying to sell the unimproved apartments as well? That takes some nerve. It’s pretty implausible for the units to be rented out to vacationers if they expect any sort of occupancy rate.
I don’t think the weekender owner/2nd home market is going to be doing very well for the next few years.
Wait for What.. Wait for a miracle .. or wait for a few years for the recovery.
Or take a huge loss because you want to sell now?
Sure, we’d like to see everyone sell quickly and force prices down to afordability, but that aint gonna happen.
People will resist taking a loss to their dying breath. They will use all their power and inventiveness to avoid the loss.. they’ll use every means at their disposal to delay the inevitable.
This includes everyone from the govt. to Wall street/Main street to banks/lenders/builders to FBs.. They will all resist tooth and nail.
So, grab some popcorn and try to relax and enjoy the show.. it’ll be a long one.
The trouble with the “long show” isn’t the wait, to my mind, but the waste - the homes going to irrecoverable ruin because no one is forced to bear the full weight of the loss over the short term. The “bailout” needed is a fist that will relentlessly pound down on the purse string holders and decision makers who are right now just playing for time. Sad that this is the only thing that the otherwise fiscally clueless McCain has right, on pure instinct I suppose - and he’ll PAY for it, poor sap. You EVIL man, saying it will best help people if actions have actual, unavoidable consequences.
I grew up in San Francisco and would love to go home again, but that’s as much about a time as a place. I do think even the toniest communities in Calif MUST become affordable again. Not that it’s so relevant to me (suburban mom become remarkably disenchanted with “edgy”), but California has come back from other crisises, and there are always some brave souls up to the challenge of rebuilding out of bedlam…
Note to KC: I’d rent to someone in foreclosure. A landlord needs to be a businessperson and a businessperson can relate to pragmatism - give up the underwater house, stay cash positive, keep current on the rent because You Can Be Evicted. Practical realities. Better the prospective tenant should try and rent out his white elephant? Maybe still foreclose and make that tenant’s problems his own? (Obligatory call for debtor’s prison here. I’ll second the call, just as soon as our nation’s justice system puts Andrew Mozillo in some deep, dark hole.)
I’m afraid you’re right. But I will NOT support any political action that bails out people in hock to their eyeballs to support a lifestyle they can’t afford at the expense of people who saved $$ and lived within their means.
I may support modest bailouts as long as they’re restricted to people who can demonstrate that they didn’t lie about their incomes or assets on their mortgage application. That narrows the potential bailout pool in California to what, about 5 households? I guess we can manage that.
The irony with these bail out plans is that they are all meant to sustain the high property prices. This is only good for the banks and Wall Street gang, but couched in terms of “helping” J6P. If the weasels in the gov had any wits about them they would realize that by accelerating the decline in property values back to the mean the net result would be more disposable spending funneled into the broader economy by J6P rather than the hedgies bonuses. I say make the lenders take the hit, let the borrowers lose those overpriced/over mortgaged McMansions, and let the cost of housing drop like a rock sooner rather than later.
But in all reality this will not be the case. Our esteemed ripresentatives care not for us, but for the banksters and fraudsters on Wall St. And like joey said above none of these folks, not the FBs will let prices drop willingly. They have already spent the phantom profits they convinced themselves they would make and they MUST hold out for that day when the magic price genie returns. Cargo Cult, plain and simple.
“‘It may bring buyers in that wouldn’t normally buy here and, all of a sudden, everything will change,’ said Bob Chorney of Pacific Home Lending. ‘That’s going to shake things up big-time so far as the market is concerned, because it’s going to establish comparables that are going to shake up all the other appraisals.’”
Arguably, there was nothing more harmful nor laced with greed than the converted condo market. How ironic it would be if the collapse of that market and distressed sales of converted condos led some markets back down to true affordability, not the false affordability touted by backers of converted condos. Maybe there will be small pockets of justice as this all unwinds.
Condos were always the last thing anyone wanted. In the last slump here the condos for sale just sat there. Condos were for losers. Is the retirement of the boomers supposed to change all that? They sound like a good idea for old people, until you think about the HOA fees and liability for deadbeats in your building. We’re still going through our condo bubble here.
“Craig Anapol, an agent in Carmel, has tried to steer some first-time homebuyers toward condos, but dropping single-family home prices in some communities have made some of those lower-end properties more enticing in buyers’ minds, he said.”
“Ernesto Castillo said he could not keep up after the interest rate on his adjustable mortgage jumped and his payments increased by $1,200 a month to $4,700. Castillo decided to let his Florida home fall into foreclosure and move to Chula Vista as a renter.”
Curious what it took for this guy to get a rental and what he rented? I wouldn’t rent to someone who was in foreclosure.
“Curious what it took for this guy to get a rental and what he rented? I wouldn’t rent to someone who was in foreclosure.”
In the not too distant future, I’m thinking CONgress will mandate that foreclosures will be stricken from credit reports. Calls from the left will say that these “poor” people can’t find shelter because of being victims of credit reporting. I’m still waiting for CONgress to enact a one-time $100K direct deposit to anyone who bought a house in the last three years and felt like they paid too much. Quite honestly, while I’m not a fan of the tax refund scheme, I’m very surprised it wasn’t limited to just homemoaners.
Well, it was limited to people who don’t make very much money, so I guess a disproportionate number of homeowners would be included in that number.
“‘There are supposed to be nine parks,’ he said. ‘We don’t even have one park.’”
Here’s a solution that might work: Get a bunch of neighbors and spend a few weekends planting grass and pitching in as a group on some playground equipment in an area where one of the parks was proposed for development. Install it yourselves. Send the bill to the developer and if they declare bankruptcy, get the city to seize the parkland in the ensuing sell off. Have the HOA take over maintenance.
I don’t know if everyone discussed it already but Philly is apparently stopping foreclosures.
How will that work out with people suddenly living rent free everywhere?
If you timed it right you could be looking at living rent free for more than a year.
yeah Im suprised that there are not alot of comments about this yet. No one will be able to buy a house in philly now, I doubt any lenders will put up the money.
hmm.. very uncool kneejerk reaction by the politicians..
The Philadelphia Experiment #2 where, instead of a Destroyer suddenly disappearing, people’s credit history is invisible.
My prediction is that no businesses will sell anything in Philly unless it’s a cash sale.
I read that this was a nonbinding agreement passed by City Hall and enforced by the Sherrif. That did not make a lot of sense to me.
The sheriff is the one who evicts the homedebtors. No sheriff participation, no eviction. It’s similar to the SF police department’s policy to put small-time marijuana infractions as their lowest priority, which effectively means no enforcement. SF hasn’t the power to legalize marijuana, but the effect is the same, more or less.
Non-binding or not, enforced or not, the shadow of doubt now covers that city.
Just as in SF where a prospective employer would be wise to do drug testing, in Philly, a contractor would be smart to wait 9 months and then research county records (or get paid cash upfront, which is probably illegal) before taking a job.
As of now, who can be sure if any home in Philly is actually owned by the apparent owner? And, every homeowner’s creditworthiness is questionable.
Nothing good will come of this. You lawyer-types are welcomed to chime in and knowledgably opine as to if the 14th Ammendment is being stepped on or not. It is, imho.
Equal protection means equal enforcement.. citywide and statewide if not nationwide.
I would think that there’s a strong case for an injunction to issue mandating that the Sheriff perform the duty of his office.
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‘They are putting downward pressure on prices and have created what seems like the beginning of an accelerated buyers’ market.’
Translation: “the beginning of an accelerated” price decline. We are learning more and more about Realt-whore-speak.
Jas
“‘It’s very intense. Can you imagine a 60-year-old man crying on the chair in front of you? That’s stressful,’ Enriquez said. ‘In the beginning, I didn’t know what to do.’”
_____________________________________________
No, stressful would be a naked 60 year old in a bathtub muddying the waters so to speak and not having the strength to lift him out of that plight.
This message brought to you by the providers of Long Term Care Insurance.
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Rents are falling in some areas.
Went to visit my son. He used to rent a house, 3+2.5, in Simi Valley. The rent in December 2004 was $1900. His old neighbor (who had bought a bigger home at a stiff price last year) called and begged my son to rent his house (nearly identical) for $1600. My son likes where he is renting now so he is not interested.
Jas
Jas:
When is Simi Valley, drive thru Long Canyon and all the new development. Easy to spot a $1 million foreclosure just look for the no drape, brown lawn, weed infested front yard!
Yes even this is happening in the Safest City is the US.
One upside of the foreclosure fad: all the brown lawns mean that water consumption is down, and during a multi-year drought no less! It’s great news actually.
Record Surge in Food Stamps Nationwide… 1 in 8 in Michigan now on Food Stamps…
http://www.nytimes.com/2008/03/31/us/31foodstamps.html?hp
The examples in Seaside are incredible examples of bubble correction. Seaside is near Monterey and has been accurately described in this thread as a very come as you are working class kind of place.
The quote says;’s also
“Craig Anapol, an agent in Carmel, has tried to steer some first-time homebuyers toward condos, but dropping single-family home prices in some communities have made some of those lower-end properties more enticing in buyers’ minds, he said.”
“Last week, 177 single-family homes were on the MLS in Seaside and, of those, about 20 properties had dropped under $300,000. One 650-square-foot house had even dropped to $149,000, he said.”
The house he is talking about might be 1288 Darwin Street. Is that the perfect address or what? Bought for $87k in 1995 the Zestimates went over $550k and now are crashing back down. The make me move price is $125k. The value curve looks like a snake that swallowed an elephant. There are other notable examples around as well. The low end of the market is really a mess.
“Tuscany at Monte Bella development in Salinas on Saturday. Minimum bids on those properties were starting at $295,000, compared to previous asking prices of more than $800,000.”
These houses are butt ugly and abut the ghetto on the east side of town. They have a huge percentage of ‘affordable house’ loans mixed into the development. I haven’t checked the crime rate in the area or gang activity but I’m sure it’s high.
How bad are the gangs in the north part of town? The last time I tried to look at the Salinas crime map it was down. That area seems like it would be within commute range of Silicon Valley if you really had to.
Go to foreclosure.com, select preforeclosure and Salinas, and you get 36 pages of active notice of defaults–891 entries–on top of 383 active foreclosures. That’s just astounding for a town of maybe 150K. Over 3% of all the housing units in the town (including rentals) are in foreclosure or NOD. It’s over 6% if you include only owner-occupied houses.
Does anyone know how the Tuscany auction went? I wonder if the minimum bids were met.
Moved to a retirement mobilehome park in Marina Ca. 18 months ago. About 8 miles from Monterey Ca. Tri-level house we looked at 18 months ago for sale for 775k down the street from where we bought was last listed for 489k last month. Went for auction last Thursday with min 50k bid for openers. Origially sold 2 years ago for 705k. Don’t know results yet on auction.
“‘It was an emotional roller coaster. We bought a home, put in a pool and had the American Dream,’ Castillo said. ‘But it’s life. Now, we’re getting our credit fixed.’”
Wrong. The American dream is actually having net assets, not being leveraged to the hilt. How can this person be such a moron?