An Illustration Of What Is Not Going On In California
The Marin Independent Journal reports from California. “The median price of a single-family home last month was $862,500, down from $965,000 a year earlier, and just 110 single-family homes were sold - about half as many as the 218 sold in March 2007, DataQuick reported. Sales totals ‘were easily the slowest March in Marin,’ said John Karevoll, a DataQuick analyst, who noted the research firm’s records date back to 1988.”
“‘This is a pitifully low sales count is more of an illustration of what is not going on, rather than what is going on,’ Karevoll said, noting March figures were a record low for the Bay Area as well.”
“‘Sellers are still trying to overprice their homes and nobody is falling for it any more,’ said real estate agent Celine von May.”
“The county’s inventory of 1,401 homes for sale is up from the 1,087 properties on the market at this time last year, said Levi Swift, president of the Marin Association of Realtors.”
“Buyers remain hesitant, Swift said. ‘They want to make sure they’re not catching a falling knife.’”
“The 213 properties in default in March is up 14 percent from February and 167 percent from a year ago, according to ForeclosureRadar.”
Bay Area Newsgroup. “Economist Christopher Thornberg said that prices falling across the coastal Bay Area is the last part of the housing bubble bursting. Unfortunately, that area has been most resistant to the idea that their values may drop.”
“‘It’s not only Marin and San Mateo counties having this illusion that it won’t happen to them, it’s also Newport Beach,’ Thornberg said.”
“Instead, Thornberg said that the first signs of the housing bubble started in inland areas and are slowly moving outwards to the Pacific. ‘You can’t have plummeting prices in San Joaquin and East Contra Costa counties that don’t affect Western Contra Costa and Alameda counties,’ he said. ‘And you can’t have plummeting prices in Alameda and Contra Costa counties that don’t affect San Mateo and Marin.’”
“Foreclosures have become a larger part of the market in the Bay Area, making up 76.2 percent of home sales in San Joaquin County, 49.7 percent in Solano, 26.1 percent in Alameda and 12.3 percent in San Mateo.”
“Kari Clouse, a certified mortgage planning specialist in Benicia, said that although government-sponsored loans now exist, their terms aren’t very attractive. Still, without 10 percent down, most potential buyers won’t be able to afford a home.”
“‘Right now you need more money down and we live in a state where people don’t save,’ Clouse said.”
“‘People don’t have the money to get these jumbo loans,’ she said. ‘Who has 10 to 20 percent down on a $500,000 to $700,000 house?’”
From ABC 7 News. “The Bay Area was suppose to get some relief when Congress redefined conforming loans in high cost regions. Experts say lending polices are simply unpredictable.”
“Doug Jones has been in the mortgage business for 40 years. ‘I’ve seen higher interest rates but I’ve never seen such instability and where even the banks don’t know what they’re going to do tomorrow,’ said Jones.’Today, I can start down a road with a customer and that loan may not be there next week.’”
“‘We certainly thought if it was at the conforming rate, you could get a six percent loan for what was considered a jumbo loan in the past that we thought it would help stimulate the housing market and that hasn’t happened yet,’ said Cathy Warshawsky from Bay Area Loan.”
“In Rachel Zamora’s case the lender required a second appraisal on her refinance application. It came in $150,000 dollars less then the first appraisal.”
“‘That means we can’t do all the things we planned to do. It’s just a shock to find out your home isn’t worth what it used to be and it dropped so much,’ said refinance applicant Rachel Zamora.”
The San Francisco Chronicle. “The more foreclosures that sold in a county, the faster its prices plummeted. For instance, 44.7 percent of the March sales in Contra Costa County were foreclosures and the median price there fell by about a third to $409,000 from $614,500 a year ago, according to DataQuick.”
“Richard Lee, a Realtor in Dublin, told the story of one listing that exemplifies how home values are spiraling down. On Aug. 15, he placed a San Leandro two-bedroom, one-bathroom home on the market. Initially he listed it at $499,950, which he said was exactly in line with what comparable homes in the neighborhood had sold for in midsummer. But the house did not draw any offers.”
“As the weeks and months have gone by, he has continued to drop the price. The home received some offers around $300,000 but because it was a short sale, the bank had the final say and it did not accept those offers. As of Tuesday, the price was down to $229,950, more than a 50 percent reduction.”
“Mona Koussa, a Realtor in San Ramon, agreed that foreclosure sales hurt values. ‘It’s tremendous downward pressure’ on price, she said.”
“‘It’s very frustrating if a seller is trying to do a regular sale that’s not in this subprime mess to have to compete with a property that did get caught in the subprime mess (and foreclosed upon). I tell folks (in high-foreclosure areas), if you don’t have to sell, take it off the market, rent it out and wait a couple of years until the market swings back up again,’ Koussa said.”
The Mercury News. “The Silicon Valley housing market got walloped in March, as median prices fell sharply and sales hit record lows for the month.”
“Despite high hopes for change, rates for large loans have remained stubbornly high, thwarting some sales. Still, at least buyers now know what to expect of loan rates, said Lisa Blaylock, a Coldwell Banker agent in San Jose.”
“‘Two months ago, we were still in limbo with what was going to happen with lending,’ she said. ‘Now, we’re not waiting for something to happen.’”
“Marc McIsaac put his nicely remodeled, four-bedroom South San Jose home on the market for $726,000 in February using Web sites. He since has dropped the price by $20,000. He said most of the potential buyers who have contacted him are looking for fire-sale deals for investment purposes.”
“‘The first question out of their mouth is: ‘Is this a bank-owned or short sale?’ he said. ‘You know they’re not necessarily interested in buying your house as a family or whatever.’”
“He and his wife don’t really need to move, he said, though they had been hoping to. ‘We might pull it off and wait awhile,’ he said.”
The Sacramento Bee. “Here’s one thing you can take from the latest housing statistics: The $250,000 house is where it’s at. In fact, you can easily buy for less. Almost half the new and existing homes that closed escrow during March in Sacramento County sold for $247,000 or less, according to DataQuick.”
“That’s the lowest median sales price in Sacramento County since May 2003. Yuba County saw median sales prices fall below $200,000 for the first time since January 2004. The Sacramento Association of Realtors also reported that homes priced under $180,000 accounted for 23.3 percent of March sales in Sacramento County and West Sacramento.”
“These numbers confirm the obvious: After more than 15,000 foreclosures since January of last year in the capital region, bank repossessions have become the house of choice for investors and first-time buyers.”
“Bank-owned homes now account for more than half of real estate sales in El Dorado, Placer, Sacramento and Yolo counties, said Mike Lyon, head of Sacramento-based Lyon Real Estate.”
“DataQuick reported Thursday that 2,522 buyers closed escrow during March in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. That was up from 2,162 closings during February, but it wasn’t the usual spring leap.”
“DataQuick analyst Andrew LePage said that like most of California, the Sacramento market saw ‘about half the increase we usually do between February and March. You’re supposed to burst out of the winter doldrums, not merely accelerate,’ he said.”
“John and Toni Daniels of Sacramento are among those who scored a foreclosure deal. ‘Ours is a Countrywide repo,’ said John Daniels, now in escrow for a house in Elk Grove priced below $250,000.”
“Their 1,935-square-foot purchase with a three-car garage, pool and spa was once priced at almost $400,000, said Daniels.”
The Desert Sun. “More than 1,200 Coachella Valley properties were in some stage of foreclosure in March, according to RealtyTrac. That’s more than double the 532 desert homes that were in foreclosure a year ago. And it’s a 28 percent jump from February’s figures.”
“Mike Capizzi…the sales and marketing director of the Pacific Auction Exchange in Indian Wells said about 85 percent of the franchise’s business now involves foreclosures.”
“Capizzi said he expects to see even more auctions in coming months as summer nears, when Coachella Valley home sales are historically slow. ‘It seems every house we show or sell is somehow bank-related,’ Capizzi said.”
The Daily Pilot. “Throughout the region, many Realtors and lenders said they had seen a leap in customers as housing costs fell and buyers who had been priced out of the market were finally able to close.”
“The numbers for March, though, show another bleak month for the home industry in Southern California.”
“The research firm DataQuick, which has compiled home statistics since 1988, declared Tuesday that Southland home sales were slower last month than in any March in the last two decades.” ‘The number of homes sold dropped 41.4% across the region and 46.9% in Orange County from the same month a year ago.”
“Newport-Mesa, for the most part, was no exception. In four of the eight ZIP codes in Newport Beach and Costa Mesa, sales fell even more steeply from a year ago than the Orange County average.”
“‘You’ve got everyone that’s reading the news and everyone’s freaked out,’ said Steve Jones, a Westside developer who has tried for months to sell the last two condominiums in his 1.7 Ocean complex. ‘What I keep telling people is that this is when you can get a deal. This is when people are willing to negotiate.’”
The North County Times. “Home builders requested the fewest number of permits on record during the first quarter of the year. The number of permits fell to 926 units in the first quarter, down 63.6 percent from the same period last year, according to a report by the Construction Industry Research Board.”
“It was the lowest first quarter number since the board started recording data in 1988, before the county’s last housing recession in the early 1990s. March’s figures were by far the worst this year, with builders requesting permits for just 193 units, an 83.7 percent drop-off from a year ago.”
“Permits are generally considered a forward-looking assessment of the housing market because it takes builders up to a year or two to finish construction after first requesting the permit.”
“During the previous housing recession in the early ’90s, home sales began to recover about one year after building permits hit a low point. Prices, however, did not recover for four years.”
“As inventory has flooded the market, builders have pulled back because new homes are more expensive and they are struggling to compete with deeply discounted foreclosures, analysts said.”
“Though a low in permits preceded by four years the turnaround of San Diego County’s previous housing recession, some analysts said this recession, which began with falling prices in November 2005, will be shorter because prices and sales have declined at much sharper rates.”
“Other analysts and economists disagree, saying the market still has two or three more years of decline before recovery.”
“Including March home sales, monthly sales for San Diego County have been lower than the year before for the last 45 months, according to DataQuick.”
The Bakersfield Californian. “The turmoil in the real estate industry has claimed another casualty, this time engulfing a high-profile Bakersfield home loan officer. Robert Russo, who advertised as ‘Bakersfield’s Refi Guy,’ filed for Chapter 13 personal bankruptcy on March 26.”
“‘I cornered myself in that market of refi and it’s gone,’ Russo, said.”
“Russo’s bankruptcy attorney, Phillip Gillet, said he consults with financially strapped mortgage brokers, real estate agents and those who work in construction on an almost daily basis.”
“Many of those in the mortgage industry, where commissions are typically lower than those earned by real estate agents, are struggling with the diminished volume of loans, said Brian Dawson, president of a Bakersfield residential mortgage company.”
“‘The market turned off, and the business turned off so fast, and it just caught people,’ Dawson said.”
“Russo’s employer, Home Savings Mortgage, filed for bankruptcy last year, leaving him with a heap of unpaid advertising bills — an expense he once shared with the company. ‘They left me hanging,’ Russo said.”
The Fresno Bee. “The downturn in the economy has put a wrinkle in the cosmetic surgery industry. Plastic surgeons say they’ve noticed fewer people opting for face-lifts and other elective procedures in recent months as more Americans struggle to pay mortgages and dole out more money for fuel and food.”
“‘People don’t have as much money. They don’t have the disposable income,’ said Dr. Campbell Waldrop, a Fresno surgeon who specializes in eyelid and cosmetic surgery.”
“Dr. Thomas Mitts, who practices in Fresno and Visalia, said he used to have customers booked two and three months in advance. Now, it’s weeks.”
“Even in Beverly Hills, where plastic surgery is rampant, surgeons feel the pinch. Dr. John A. Grossman, a plastic surgeon for 30 years in Beverly Hills, said this is the first time he’s noticed ‘a buckling down.’ He said he’s gone from being booked six months in advance to three months.”
“Michael McGuire, a Los Angeles surgeon, said cosmetic surgery is locally driven and that patients living in areas struggling with high housing costs, foreclosures and high unemployment are not likely to shell out money on luxury items.”
“McGuire said it’s difficult to tell how long the slump will last. But he said no matter what, there will always be a market for plastic surgery.”
“‘We all love beauty,’ he said. ‘It does make the world a better place.’”
Silicone floods the marketplace, pricing drops!
In a recession, the need for Bubbles & Jiggles should go up not down.
They should go up and down and up and down
Fact: Because HELOC/refi/closing cost-kickback money was used for many of the breast implants of the past 7-10 years, any bailout is essentially the taxpayers paying for new boobs. Or am I missing something?
Well, the world likes beauty …
Or was that booty?
c) all of the above
All right, all right,
The minds must get out of the gutter and above the belt.
say, if it weren’t for gutter minds we would not be here.:)
So much for the notion that prices would be sticky on the way down.
Well, the seat of their pants certainly seem to be sticky on the way down.
Depends sales should skyrocket. Buy KMB stock before you are priced out forever!!!
Um, I bought KMB a couple years ago in anticipation of the Baby Boomers retiring in growing numbers, and needing Depends.
Ahead of the curve for the wrong reasons, I guess.
“Oops, I crapped my pants”
A great SNL skit IMO.
Depends on who you ask……pretty crappy joke IMO
i thought crappy was a fish.
“‘We all love beauty,’ he said. ‘It does make the world a better place.’”
If you like duck lip. This is the industry that decorates the world with David Gest, Liza Minelli, Michael Jackson and Jocelyn Wildenstein.
Maybe there should be more social pressure to act more mature rather than to appear less mature.
“Maybe there should be more social pressure to act more mature rather than to appear less mature.”
Well said, ella.
They don’t really appear less mature, they just look like clowns.
As my old boss always said, beauty is only skin deep when you’re ugly its to the GD bone.
Just remember, you can drink an ugly girl pretty, but you can’t drink a fat girl thin!!! hehehehehehehe
“If you like duck lip. This is the industry that decorates the world with David Gest, Liza Minelli, Michael Jackson and Jocelyn Wildenstein.”
And ruined Steven Tyler.
“Instead, Thornberg said that the first signs of the housing bubble started in inland areas and are slowly moving outwards to the Pacific. ‘You can’t have plummeting prices in San Joaquin and East Contra Costa counties that don’t affect Western Contra Costa and Alameda counties,’ he said. ‘And you can’t have plummeting prices in Alameda and Contra Costa counties that don’t affect San Mateo and Marin.’”
This tsunami is highly unusual, in that it is moving from inland out towards the coast.
Said a different way.
All real estate is NOT local. The correct phrase is that ALL real estate is relative.
The best places to live in/around will always cost more than the worst places. But the differential between the prices is the whole ballgame.
If prices drop 30% in Burlingame (a very nice town on the Peninsula in the SF Bay Area), home prices will be effected in Menlo Park.
There will be a lag, but it will happen.
Thornberg points to coming declines in coastal areas near SF and LA, says nothing about central coast…although many old people here buy for cash, I think gas prices alone will put the kibosh on these schemes where people buy a second home in Cayucos or Cambria and hope to pay the taxes out of vacation-rental income. And, not all the elderly cash buyers stay here till death. One friend is about to move southward to be near kids; another speaks hopefully about cashing out the seaview house to pay for the nursing home care (good luck with that). A third friend, an FB, told me yesterday - and I think I posted yesterday - that next year might be a time to sell. I said this year would be better than next year, which would be better than the year after that. The ARM resets in 2011, so head-in-the-sand approach won’t work.
“‘People don’t have the money to get these jumbo loans,’ she said. ‘Who has 10 to 20 percent down on a $500,000 to $700,000 house?’”
Sounds to me like the gubmint better make sure at least some knifecatchers have the opportunity to buy with less than 10 pct down.
‘Who has 10 to 20 percent down on a $500,000 to $700,000 house?’”
Ummm, people who can actually AFFORD a 500K - 700K house, that’s who!
Buy this man a double-double whisky.
After that, let the JT show begin!
Figure it will be messy, so I’ve got my poncho, rain hat and one of those NBA faceguards so I can sit up close and personal. Kinda like “sniffers row”.
and diet Coke.
… and opera glasses!
That’s right Big V, no booze for me. Goin’ on 8 years now. You think I’m out of control now, you should’a seen me back then. Back then I’d JT the easter bunny just for being cute.
I wonder what the statistics are on how many $500k - 700k homes are on the market in California (or are coming on the market), and how many people can afford them. Seems like an awful lot of homes are on the market in that price range. I’m also curious how many people have $100,000 -$200,000 to plunk down on a deposit.
Yeah, you know it’s bad when the OC Register breaks down properties by value, and the lowest value is $0-$500K for a SFR. Prices here are still ridiculously high, but they’re getting better.
I’ve been crunching some numbers this week. It seems that the number of households in Orange County who make over $200,000 per year — the bare minimum, IMO, if you’re going to afford an $800,000 house — is about 50,000.
There are 50,000 houses in Newport Beach and Laguna Beach alone, the great majority of which are priced over $800,000. ($850,000 gets you a 1950s-vintage 3/2 on a busy arterial street several miles from the beach in NB.)
So who’s going to buy all the luxury houses in Coto de Caza, Nellie Gail, Bear Brand, Lemon/Cowan Heights, Shady Canyon, Turtle Rock, Huntington Harbor, Dana Point, Covenant Hills, etc., etc.? Not to mention all the thoroughly ordinary houses with “luxury” prices everywhere else in the county.
We are in the process of selling a house in Oakdale right now. (Escrow should close by early next week!) It was a modest established neighborhood right next to a river, built in the 80s. I could see signs of a slow down all last year, when “average” homes were advertising for the upper 300s, and weren’t moving. (One 2000 sf home on our block was advertising for $399k just last year, and is now priced just above $250k.) We put our house up in December and priced it just below $300k hoping for a quick sale, but it wasn’t enough. From January to March a slew of forclosures and new homes came on the market. These are in nice new developments, 2500 sf or more (ours was only 1600 sf), new everything (carpet and linoleum was worn in ours), nice large kitchen (ours was old), jetted tubs (only a shower in our master bath) –many of these homes are priced between $275-299k. I was upset when we got an offer for $250k, but now we feel lucky. The fact is that even $250 is realistically high for our home. And a realistic price for those nice new 2500 sf homes is probably below $250k. A lot of people talk about us reaching bottom soon. But I don’t think so. When the crappiest house on the block was selling for over $300k a couple years ago, it made no sense. In the last 4-5 years the price of the average house price has been inconsistent with average earnings.
I want to comment, too, on the sale experience. We had two people interested in our house in January who were approved for 100% financed loans. The person who is buying our how now only has less than 7% down, and they nearly had the loan yanked a week ago. My guess is that there are NOT that many people out there who can put down a 20% downpayment even for a $250k home. And again, as prices keep dropping, we’ll have more people who bought at the top forclosing as the value of their homes becomes inconsistent with the mortgage they’re paying.
We’re looking in the Sacramento area. And I think prices are still too high. “Average” homes are still priced in the upper $300 - 400s.
Ugh… Well, let’s do some math here (never seems to be a strong point for all these idiots).
If you’re buying a 600K home, you’re household income should be ~200K/yr. Saving 60K, although no small feat, when you’re making 200K year is not all that difficult; depending on you’re lifestyle is should take 1-2 years before you have 60K+ to put down on the new home.
The problem is, when you’re making 60K a year, it takes a really, really, really, long time to save up 60K.
Again, the entire problem here is that the “idea” of buying a 600K home is really something ONLY for the high income. It’s NOT something that you do when you work a mid-level job; if you don’t have 2 people making 100K, it’s really out of reach.
The other problem is that there are VERY few households that fall into that income category, hence, the housing bubble!
Bullsh1t!!!
I made $25K for years and years, and I had $60K in the bank in six years time. Admittedly, I might be a freak and made wise bets but there was no leverage involved.
Incidentally, I don’t recall ever “wanting” anything. If anything, my friends and I had a wild time. We cooked together every weekend, and drank wine (yeah, it helped to know a few tricks there), and threw some wicked fun parties. It worked because we pooled our resources, and we knew how to cook, and this was in a relatively expensive place for that salary — Chicago.
So I call bullsh1t on you!
6 years is a long time.
You saved almost 40% of your nearly-poverty-level income?? Criminy, that’s truly amazing. When I was making that much here in L.A. in the ’90s, that 40% went to rent.
Chicago is cheaper than LA, and I did say some of that was luck, and we were all single or DINK anyway.
However, we knew every trick in the book.
We knew all the happy hours, and the half prices, and the free pool all night with “three pitcher” places, and the midnight theatres for $3. We knew all the ethnic groceries, and shopped there.
We made friends with our regular haunts, and they’d cut us some slack, and we’d convince our bosses to toss the office parties their way.
We cajoled and charmed our way into being friends with the bar-owners, and the wine merchants, and the restaurant owners (Incidentally, this is a trick that works in every single place in every single country I have ever lived in.)
What we didn’t have were fancy vacations jetting off to ski in the Andes. Our vacations were local, or even just partying in town. We had picnics on the lake in summer not eating at the latest chi-chi restaurant. We barbecued on our back porches (a veritable Chicago institution!) and we made our own martinis.
And we had a freakin’ hell of a good time!
Ah yeah, good college times. And afterwards for a little while. After graduation I was to go in the Army, orders got screwed up, had to wait 5-6 months. I had a $1000 in my pocket, so like any normal college kid with free time and a little money, I headed for the beaches. WOW, what a time and experience that was. I still look back on that as one of the best times of my life.
I think you’ve called Shenanigans without real support. Michael Fink said “The problem is, when you’re making 60K a year, it takes a really, really, really, long time to save up 60K”. This is certainly true for even thrifty families. The bizarre circumstance of a $25k-making-kid saving as much by rooming and scrimping doesn’t negate Michael’s point.
Then don’t have kids in your 20’s. Wait. Or don’t have kids at all.
Life is a choice. You can pick whatever you like.
What you don’t get to do is pick your expectations a priori, and then say, well, can’t do it on that one.
If you let society set your expectations (and most people do,) you’re gonna get screwed bigtime everytime.
And many of my friends went on to have kids in their 30’s, and they made a crapload more by then too. The early savings has done more to contribute to their childrens’ financial well-being than anything else I know. And we’re all still the same inspite of most of us living on the two coasts.
Whatever.
people reading this blog need to have kids- early, often and lots of them. Look at what is happening to the gene pool. Please!– do it for your country.
I think you can pack that idea up.
Lets get this straight, you grossed 25k a year, after 30% tax that is around 14k a year, net. 14k x 6 years = 84k You say you kept 60k of that. So basically you lived off of 24k in 6 years. Thats 4k a year. I’m sorry but I see some serious bull crap.
Well, tax on $25k is not 30%, it’s like 15%. Also, he says he “got lucky”, which means he either made extra money on top of his paycheck with investments, or was a drug dealer, or had support from mom/dad, or had a wife/GF who helped pay bills.
None of the last three, I assure you.
Pay was roughly $1700 a month IIRC. $400 went to rent (Chicago is cheap, and I had a roommate.) $700 paid for everything else, and $600 was saved.
600 * 12 * 6 = $43,200.
$60K is not too far with being right on investments (Yeah, yeah, there were IRA’s and sh*t, and all that bullcrap but the basics are correct.)
Please! I pulled out my old Excel sheet before I wrote that post to make sure.
IMO, the focus should not be on how much you make but on one’s prospect on maintaining his positive cash flow. In today’s economy there are a lot of factors that can deteriorate one’s cash flow. As long as you work for a salary for someone else your cash flow will always be in imminent danger. In todays economy the PTB’s want a long term commitment, as in buying a house, and in return only offer quarterly loyalty. Sooooo, buying a house, IMO, is a negative, given the preceding facts.
I’ve been arguing this FOREVER (even before I encountered this blog.)
That’s why I think 3x income is too aggressive.
I’d even go so far as to argue buying a house is a total waste of time if you want a career but I think that’s a controversial statement even on the HBB.
And that becomes truer and truer the more and more you make. I think 3X income is reasonable if you’re making near the median for an area and you have a good education. That should be a pretty replacable job.
However, when you’re making 3X the median income?? That should be an indication that you need to be MORE conservative, not less, when it comes to buying a home. If you’re making 150K a year; you HAVE to assume that if you lose your job it is going to take a long time (if ever) to replace that position. That’s a good reason to use a LOWER multiple of income for determining your max affordable home.
40K jobs are easy to find. 200K jobs are NOT easy to find..
Agreed.
We are completely and utterly simpatico even though I busted your chops up there.
Been there, done that; been unemployed for six months. People asked, “Aren’t you worried about your finances?”, and I said, “No”, and then their heads exploded.
I think Michael is right on here. I’m reasonably sure it would take a good deal of time to replace the income from my current job. Right now I live on about 1/3, taxes 1/3, save 1/3. I’ve hit a few saving 1/2 years, but that’s getting up there.
The trick is low overhead and little debt. You can work less time or less hard and just enjoy life. Focus on simple pleasures - not everything has to be the latest and greatest or top of the line.
very true
“The problem is, when you’re making 60K a year, it takes a really, really, really, long time to save up 60K.”
Let’s flip over the napkin: rent for a 3/2 ranch going for $1200+/mo, a family car for $600+/mo, health insurance for a family of four at $1000+/mo, and state college at $20k/yr/student. Food, dental, glasses, clothes, etc., cost a bundle too. You’re right, Joe Sixpack with two kids and a wife can’t save a nickle. In fact they’re going deeper in the hole each month.
BTW, $60k/yr is about $1,900-net every two weeks. Game over!
“In Rachel Zamora’s case the lender required a second appraisal on her refinance application. It came in $150,000 dollars less then the first appraisal.”
Sounds to me like there is a pretty good case here for legalizing appraisal fraud. How else are you going to keep the appraisals on these falling knives propped up towards the $729,000 conforming loan limit for coastal bubble zones?
Didn’t we read about Rachel Zamora a few years ago?
Sounds like a really bad porn name.
What would be a good porn name?
Pussy Galore.
Anything with “Kitty” or “Tiffany” in it.
Cobra Verde.
Sorry, Ouro, sorry! Coudn’t resist that.
Or something with ‘Sassy’ before it……like ‘Sassy Samone’…..or ‘Sassy Hilary’….no… that won’t work.
What about “Big V”?
meatsocket
Tom Cruise
Tawnee or Tawnye.
A good porn-star name generator is to use your middle name as your first name, and have your last name be the street you grew up on.
Jonas Costamesa, at your service.
woody long, dick nasty, laurel canyon, skye, dick rambone, sunny daye, tiffany mynx, bunny bleu, seka, honey wilder, …
Thomas, you almost got it right! The ultimate porn-name generator is the name of your first dog, and the name of the street you grew up on.
Works a treat!!
Maybe you’re thinking of Richie Sambora?? Do I have that name right??
I thought I remembered that name, too…
The cool thing is that there is no camaraderie in the appraisal biz. It’s each man for himself, and if you got a chance to take out a fellow by turning him in, you take it. If the follow-up appraisal was a review appraisal, he no doubt knew the details of the first appraisal. Reviewers are notorious for turning in the bad guys.
‘Who has 10 to 20 percent down on a $500,000 to $700,000 house?’”
I do, and so do a lot of folks on the blog I’d bet. But the kind of folks who save money don’t like throwing it away on fantastically overpriced homes. The spendthrifts have already done their spending.
Ditto.
Do you want to see some magic? Watch as my 20% downpayment becomes 40% as that $700K house comes down in price to $350K. Isn’t it magical how the savvy buyer makes more “skin” appear? We need more skin! We need more skin!
I believe the phrase is, “Skin to Win”.
Yes, it is very, very nice to watch my downpayment growing so quickly (percentage-wise).
Yep, that’s my position. Ironic that many of those that can afford to buy are the least likely to until prices return to historic norms versus rents/incomes.
I can, but why would I throw my money away by owning? I keep hoarding up assets with a positive cash flow.
Ditto here, too. We could make a 20% down payment on a $700k home, and still have money to spare. But it seems the more money we save and invest, the more I like to have saved and invested. I’m hoping to buy a really nice house in a couple years –one that our kids will grow up in. But we prefer living just below our means, rather than just above. So we’re waiting for our savings to go up and house prices to go down.
“March’s figures were by far the worst this year, with builders requesting permits for just 193 units, an 83.7 percent drop-off from a year ago.”
If this number nudges much closer to 0, I will feel compelled to call a bottom, as the number of permit requests clearly cannot drop below 0.
Sure it can.
You just apply for permits to blow houses up.
BWAHAHAHHAHAHAHHHHHHHHHHHHHHH!!!
Which is exactly what they ARE doing in Youngstown, Ohio (somebody posted the link to that CNN story earlier this week).
Good point; then there are always bulldozers, a useful piece of equipment for making the number of housing starts go towards the negative direction.
“Russo’s employer, Home Savings Mortgage, filed for bankruptcy last year, leaving him with a heap of unpaid advertising bills — an expense he once shared with the company. ‘They left me hanging,’ Russo said.”
Bet that there are a lot of people you screwed that would just LOVE to pull your feet and Finish the Job
Wouldn’t you rather watch him twitch?
Nah…I’d rather properly finish the hanging than have him Whine us to Death.
Although, “twitching breaks” between a few leg pulls could prove somewhat entertaining and satisfying to some of his refi “marks”
“‘It’s very frustrating if a seller is trying to do a regular sale that’s not in this subprime mess to have to compete with a property that did get caught in the subprime mess (and foreclosed upon). I tell folks (in high-foreclosure areas), if you don’t have to sell, take it off the market, rent it out and wait a couple of years until the market swings back up again,’ [Mona] Koussa said.”
And what exactly is their response to your suggestion?
“Gee Mona, that sounds like a great idea, I’ll just make up the difference between my higher mortgage payment, and the rent I’ll receive by raiding my 401(k). Does that make sense to you Mona? Also, I’ll make sure and pay for all the maintenance for the next two years too. Maybe I should use those pretend check things my credit card company sends me each month to pay for that. Does that sound like a sound financial plan to you Mona? Then after the two years my home will be worth way more than today, right Mona?”
“He and his wife don’t really need to move, he said, though they had been hoping to. ‘We might pull it off and wait awhile,’ he said.”
Yeah, these idiots who are just selling for the sake of selling are completely brainless. Unless you MUST move for a job or sick parent or something else compelling, just STAY PUT!
The addiction to changing houses every couple years is particularly bad in California. A lot of these folks are gonna have to go cold turkey.
If they’re above water, they should sell now.
What’s so funny is these same people tell renters that they should buy to give themselves “stability”. I rent, and I move less often than these chuckleheads.
It is really hard with all this noise to know what is going on. I really need a way to cancel this shit out. As a possible solution, I am going to take my Case-Shiller chart, add median price, and current interest rates, and then chart it. This way I can see:
Case-Shiller Index
Inflation (where prices should be)
Median Prices
Current Mortgage Rates
Average Monthly Payment (assuming some % down)
I think all of this information combined (and charted) will be quite informative.
“It is really hard with all this noise to know what is going on.”
Ok think of it as outside noise verses inside noise.
Outside noise is the economy and all that.
Inside noise is the regular personal stuff.
I think reading this blog has melded it all into one loud noise.
We need a housing raft so we can relax while we swim upstream.
If you are trying to figure out where we are going, that could be useful.
I am simply going to watch Case-Shiller and wait to look in earnest to buy a place when prices have stopped falling in my neck of the woods for several months in a row. Until then, I have better ways to spend my free time.
Yeah, that is pretty much what I do now, but I think the extra data might help and it only takes a few minutes each month to enter. I might even smooth the numbers a bit to factor out the noise. Maybe a 3-6 month moving average.
(From the NC Times article):
“During the previous housing recession in the early ’90s, home sales began to recover about one year after building permits hit a low point. Prices, however, did not recover for four years.”
Since permits have not yet hit a low point (or perhaps just did), I guess we can expect prices to bottom out in four years or so (2012)?
That would be my expectation.
I’ve had this discussion with people all the time who say the market has bottomed. I draw a major distinction between bottoming in volume, and bottoming in prices.
I think that in some markets, we have already passed the bottom in volume. Within 12 months nationally, I think we’ll see a clear trend of new housing starts increasing again.
Prices will take a lot longer.
Absolutely, I think you’re right on the mark. Housing starts will go back up again in the near future and everyone will start to cry “recovery”. What they don’t realize is that the builders can put these homes up at 50% of the cost that those who bought at the peak paid. The builders will lead the charge to the bottom as they can much more quickly adjust their costs (primarily land) as the market falls apart.
So the builders will put up more McCookiecutters out in the desert where land is cheap? And where there are already too many houses? Who is going to buy these houses? That doesn’t sound like a business plan to me…
Don’t get me wrong. Builders are not going to build speculatively, throwing up big houses on cheap land with the hope of selling them.
In many subdivisions across the country, homebuilding activity slowed to a crawl starting 6-12 months ago. Believe it or not, there are individual subdivisions out there where builders have sold all their standing inventory, and they have re-designed homes to be smaller, with lower specifications (no granite, no hardwoods…think formica and linoleum) to meet the market on price.
They are now building to order in these subdivisions. Every month that goes by, there are more of these subdivisions, and less standing inventory.
So, they’re not going to start throwing up 3,000 square foot McCookiecutters speculatively in Cathedral City, CA. But they are going to build-to-order a 2,100 square foot home in Reno, NV.
Because of standing inventory and the need to slash prices far below cost to reduce debt, there was no building-to-order going on. Now, what I am seeing in some markets are builders building-to-order at lower prices, and guaranteeing that they won’t drop prices to new buyers.
If we’re not yet at the bottom for housing starts, we’re damn close to it. A bottom on volume isn’t far off, especially as banks are forced to unload property by regulators.
But when people do yell ‘recovery’ and they are believed, then prices start to go up again!
Assuming that you’re not being sarcastic, there are a couple of problems with that:
1. Prices can’t go up if people can’t afford to buy the home with real debt underwriting; and
2. New home prices are going to be so far below what re-sales are expecting, that people with ARMs adjusting for the next several years are not going to be able to sell their homes for the debt they expect. We are going to see homebuilders increase volume at a time when re-sale inventory is still high with foreclosures increasing, resale volume low, and new homes sales picking up.
No, the reasons for this crash are different than the reasons for the last crash, so the two will not closely parallel eachother.
Are you suggesting prices will not bottom by 2012 — more like the Japanese 20-year slide?
That could very well be the case–except this time around, there are lots of ARMs that are going to force prices down quickly–it is hard for a servicer to bury the mortgage for years and ignore the fundamental problem. Financial institutions in Japan refused to face their problems, which prolonged the pain. We’ll get through it faster, but perhaps not as fast as in the early 1990’s.
At this point, I’m starting to think they will bottom closer to 2010. At first, I thought the bailouts would slow things down, but that doesn’t seem to be happening. The stock market is on crack, of course, but people just keep walking away and it is HILARIOUS.
Oh well. We don’t have to have the year pegged just yet. We can wait and see, no prob.
History may well prove you right, if the current 25 pct annualized rate of price decline continues for a couple more years or even accelerates towards the overshot bottom. For illustration, here are the price declines for 1, 2, 3 and 4 years worth of 25 pct YOY declines:
((1-0.25)^1-1)*100 = -25 pct
((1-0.25)^2-1)*100 = -43.75 pct
((1-0.25)^3-1)*100 = -57.8 pct
((1-0.25)^4-1)*100 = -68.36 pct
“Marc McIsaac put his nicely remodeled, four-bedroom South San Jose home on the market for $726,000 in February using Web sites. He since has dropped the price by $20,000. He said most of the potential buyers who have contacted him are looking for fire-sale deals for investment purposes.”
None and I mean NONE of these houses make any sense as an “Investment”, The median incomes in Silicon Valley do not support these prices as rentals let alone as single family owned. The valley’s go-go days are long gone and there is nothing to support higher prices in the future.
“‘The first question out of their mouth is: ‘Is this a bank-owned or short sale?’ he said. ‘You know they’re not necessarily interested in buying your house as a family or whatever.’”
While the specuvestors are still circling, the market is not bottoming.
I’m looking forward to the day when ordinary people can buy a house that they can afford for the purpose of living in it. But first, the specuvestors must be flushed out.
I agree. That was the most stupid statement I’ve heard today.
‘”You’re not going to be building if no one is buying,” he said. “The challenge, though, is … will we have the product for people to buy or to rent when indeed the market improves? And it’s very likely that there will not be enough supply to cater to that demand.”
Connal echoed that concern, saying there will be a housing shortage when the market does return.’
I guess he is talking about the return of flippers who invest in seventeen houses at a time?
This guy must have a memory of about 3 years, or think that homes are like items on a grocery store shelf.
Historically, it is very common for builders to build-to-order and on a very limited basis, build speculatively. The whole “walk into a subdivision on Saturday and move in on Tuesday” phenomenon only happens in white hot markets.
‘We all love beauty,’ he said. ‘It does make the world a better place.’
So does affordable housing prices. But try telling that to Frank & Dodd.
I tell folks (in high-foreclosure areas), if you don’t have to sell, take it off the market, rent it out and wait a couple of years until the market swings back up again,’ Koussa said.”
A couple years from now, down at the homeless shelter, there are going to be some hellacious altercations when Koussa comes face to face with the FBs she gave that bad advice to.
To show you how resistant Humboldt county is, check this out:
http://www.zillow.com/HomeDetails.htm?zprop=18832741
A house in a decent neighborhood. The flipper bought it in Dec. 06 (at which time the market was clearly crashing in other parts of California). He paid $325K for it; it is now on the market for $335K. My guess is that someone will buy it for $315-325K given what recent homes have been selling for. People here refuse to believe there is a housing bubble.
Aw, don’t look so down in the face, Ants. Things will turn around, you’ll see. Pretty soon, you and I will be dancing in the blood in the streets in Humboldt County, in Saratoga, in New York. We’ll be dancing and singing and you’ll buck up then.
Or is it “long in the face”? Long in the face.
BTW there is no city called “Saratoga” in NY…
Sure there is…from wiki….
Saratoga Race Course is a famous horse-racing track in Saratoga Springs, New York, United States. It opened on August 3, 1863, and is the oldest organized sporting venue of any kind in the United States.
I’m talking about Saratoga, CA. My intention was to list a few holdout cities commonly discussed on this blog.
Saratoga Springs, or Saratoga for short.
In CA.
“bank repossessions have become the house of choice”
Really? You know it’s funny when you look on C/L for say LV and a posting says;
*NOT* a short-sale/REO
That’s right Marin, this isn’t going on. Marin is high end. All old people. This CANNOT be going on. Please move along.
Didn’t Leslie Appleton-Young say that “…Declines in housing prices in Marin will happen over my dead body…” about a year ago? Hmm…
Yes, didn’t she say “double-digit declines”? Looks like over 10% to me.
“I have heard the eternal doorman knocking at my door;
And in short, I was afraid.”
Googled the quote:
“It’s God’s country, what can I say,” Leslie Appleton-Young, chief economist for the California Association of Realtors, told an audience of agents Tuesday in Terra Linda. “When is the 30 percent decline in Marin County’s market going to happen? Not in my lifetime.”
Well, we’re more than a third the way there…with plenty more to come!!!!
So she must be dead?
Could be - haven’t heard much from her lately. In fact, haven’t heard from many of the birdbrains lately. Where’s Yun these days?
“He and his wife don’t really need to move, he said, though they had been hoping to. ‘We might pull it off and wait awhile,’ he said
They don’t call it Silly Con Valley for nothing…huh Marc ?
Good to see that “hope” is still alive as an investment strategy!
Dumb and Dumber
Banker - “The home received some offers around $300,000 but because it was a short sale, the bank had the final say and it did not accept those offers. As of Tuesday, the price was down to $229,950 …”
Delusional House Owner - “ … put his nicely remodeled, four-bedroom South San Jose home on the market for $726,000 in February … has dropped the price by $20,000 … You know they’re not necessarily interested in buying your house as a family or whatever.” [He thought that a less than 3% drop in asking price would do the trick. By the way, does his family come with the house? Maybe that's why it hasn't sold - more mouths to feed.]
Funny things, those sellers. The guy thinks that $20k is a lot of money (enough to make a difference in the buyer’s life). On the other hand, he considers $706k to be affordable. If I have enough $$ to buy a $706k house, then I am not going to freak out over $20k.
Yeah, because you should make that much money in a month if you can really afford the 700k home. Again, just putting things in perspective, you’re absolutely right of course.. What’s 20K when you’re making the kind of money necessary to buy a 3/4 of a million dollar home.
“‘Right now you need more money down and we live in a state where people don’t save,’ Clouse said.”
—————-
Classic stuff.
Since i still haven’t figured out how to put a line through a word on here (and the few explanations haven’t helped), just cross out “state” and insert “country.”
Put <strike> on one side of the word or words and </strike> on the other side…?
Thanks!!
When you click on “Reply to comment”, a white dialog box appears. This box has 4 text boxes in it. From top to bottom:
1. Name
2. E-mail
3. URL
4. Your comment
Directly underneath box 4 (the comment box), you will see a list of HTML tags available for you to use on this blog. The “strike” tag is the second-to-last tag in the list. To use it, do the following:
1. Type/copy the text that you want to mutilate into the comment box.
2. Directly preceding the text that you want to strike out, open up the strike format by copying the strike command from the list or by typing it. The command is typed as follows:
- A less-than sign
- Followed by the word “strike”
- Followed by a greater-than sign
3. Directly after the text that you want to strike out, close the strike format by copying or typing the close-strike command. (You turn any HTML tag into a “close” command by adding a forward slash [/] after the first less-than sign.) The close-strike command is like this:
- Less-than sign
- Forward slash
- The word “strike”
- Greater-than sign
I’m not as ignorant as I sound, I hopeThank you Big V !!!
home sweet home
[/]S.O.S.
Junk
Junk 2
O wait, it’s not an underline, it’s the other thingystrike off
“California unemployment hits 6.2%; worse than Ohio, Pennsylvania”
http://www.latimes.com/business/la-fi-caljobs19apr19,0,5944269.story
“This is a huge increase,’ a chief economist for the state says of half-point rise in March figures. Losses are greatest in the construction, financial services sectors.”
By Marc Lifsher, Los Angeles Times Staff Writer
12:22 PM PDT, April 18, 2008
“SACRAMENTO — California’s unemployment rate rose by a whopping half a percentage point in March, reaching 6.2% as a weakening economy shed jobs in the ailing construction and financial activities sectors. In all, 1.13 million were unemployed.”
CA will be getting ugly on the unemployment front all this year. Real UE rate is closer to 8-9% if u count I/C’s, cash only illegals and quasi legals, those who work part time , and those who have dropped out of seeking employment altogether.
In Inland empire the real rate is past 10% as the iE was so dependent on new infrastructure growth & construction, basically a boom & bust economy. It is completely bust now and IE is a shriveled up close to dying region, worse than the central valley as it dosen’t even have any agriculture at all. Worse than Vegas as it dosen’t have any tourism and gambling to rake in dollars, except a few indian casinos.
Welcome to the New Economy. Only golden roads from here on out.
Reminds me of Husing’s comments from a couple of years ago, when he was saying how strong and diverse the IE economy was, and that it was essentially recession-proof. Oops, I guess he didn’t see all of the reliance on RE. Most of the economists have proven themselves to be totally worthless (with notable exceptions, of course, like Thornburg, Shiller, etc.).
No surprise - some of the recent layoffs, not all but of interest
Acuity Brands Lighting, Hydrel is closing down and laying off 105 employees at 12881 Bradley Ave. in Sylmar by Aug. 31.
Alert Communications Co. is closing down and laying off 92 employees at 155 Pasadena Ave. in South Pasadena on April 26.
Beck Manufacturing is laying off 35 employees at 14103 Dorate St. in Santa Fe Springs on April 25.
EV3 Endovascular Inc./Foxhollow Technologies Inc. is closing down and laying off 17 employees at 740 Bay Road in Redwood City on April 11.
Evergreen Castro Valley LLC is laying off 86 employees at 20259 Lake Chabot Road in Castro Valley on April 30.
Fresh Market Grocery Inc. is laying off 40 employees at 1550 East F. St. in Oakdale on April 23.
GE Hitachi Nuclear Energy is laying off 155 employees at 1989 Little Orchard St. in San Jose by Dec. 31.
Luxfer Inc. is closing down and laying off 140 employees at 1995 Third St. in Riverside on April 28.
Metro Furniture Inc. is closing down and laying off 190 employees at 7220 Edgewater Drive in Oakland on April 24.
MHN, a Health Net company, is laying off 73 employees at 1600 Los Gamos Drive in San Rafael on June 30.
National Distribution Centers is laying off 175 employees at 2935 Ramco St. in Broderick on April 30.
Quicksilver Inc. is closing down and laying off 115 employees at 5600 Argosy Circle in Huntington Beach by Aug. 1.
Riverside Cement is laying off 65 employees at 19409 National Trail Highway in Oro Grande on April 14.
Safeway Inc. is laying off 63 employees at 5918, 6000, 6220 Stoneridge Road in Pleasanton on April 26.
Safeway Inc. is laying off 6 employees at 4410 Rosewood Drive in Pleasanton on April 26.
Valley Health System is laying off 396 employees at 27300 Iris Ave. in Sun City on April 21.
The layoffs are getting ugly, but the ripple effect is going to be horrible.
….well if you are like alot of the Sac. dwellers you just need to keep pushing out the babies every 9 months..get your welfare check, wic products,and other freebies, multiply that by 3 families in one house and assorted under the table cash jobs and you got a living.
Welfare and wic just isn’t a profitable trade for raising a kid.
No problem. I should have 10% down by next year at this rate (because prices will be so low by then, that is).
“Banks are smart.”
This is why I am only going to focus on REO properties. Why mess with an individual when the banks are now finding religion? But before I act I want the fact we are in recession to be acknowledged and felt. We need reality pricing.
“Buyers remain hesitant, Swift said. ‘They want to make sure they’re not catching a falling knife.’”
Hmm. Sounds like we might have a Realtor-Lurker here… Nothing wrong with a little education.
… and opera glasses.
I was once led to believe that the Bay Area was filled with intelligent, sophisticated, worldy, enlightened, and otherwise “enviable” people who floated above the grinding trials and tribulations of the flyovers, tisk-tisking the boorish behavior of their red-state cousins, and perhaps occasionally holding a black-tie society event to raise awareness of their natural superiority over the bitter heartland hicks.
But it turns out that they’re mostly a bunch of deadbeat posers, unable to muster up cash equivalent to a 10% down payment on a house, and completely reliant on a constant supply of new wide-eyed “utopians” willing to endure financial slavery to inhabit an undersized box of air located somewhere within the borders of their progressive promised land.
Where is the wealth? Where is the ingenuity and creativity that would allow the Bayarians to scoff at any suggestion of financial dependence, to simply say “if you must ask the price of our houses, you can’t afford them”?
Even before the national housing bubble, I wondered about parts of California and the mass delusion it took to pretend that somehow it was “different there”. Yes, flyover land will revert to historical norms, but so will California. What were the price-to-income ratios in the 1950s, 1960s and early 70s, when (from what I’ve heard), California was an incredibly nice place to live, work, and raise a family? What is the average wage in California vs. flyover land, and the ratio of housing cost? Where does the extra money come from to support this fantasy? It turns out that it doesn’t come from anywhere, because it doesn’t exist.
I can’t wait ’till most of these posers go back to their home towns where they belong. It’s high time California got back to being a place of industry, not a land of “dreams”.
So you actually believed that fairytale?
Amen!!! (from flyover land)
Here is a help to the local housing situation. More professionals exiting the once golden, now burned out state.
http://news.yahoo.com/s/ap/20080418/ap_on_re_us/wooing_teachers
“It plans to send recruiters to the city next month to dangle $3,000 signing bonuses.”
Too bad it costs around $5-7K to move state to state.
Not if all you’ve got is the shirt on your back it doesn’t…
The teachers are the last people we should be chasing out.
Tell that to Arnold.
Prisons first. It’s important to have priorities in order.
Foreclosures have become a larger part of the market in the Bay Area, making up 76.2 percent of home sales in San Joaquin County, 49.7 percent in Solano, 26.1 percent in Alameda and 12.3 percent in San Mateo.”
Wow, 3 out of 4 houses bought from deadbeats in one county, 1 out of 2 in another, 1 out of 4 in a real major metro area. Who could have predicted. Arnold didn’t see it. I guess just little old me several years ago (and my fellow esteemed HBBers). Back then I felt like a pariah. This is a true vindication stat. Sorry for some folks, but not really. You can’t tell me all of these people knew in their gut they couldn’t afford it. But the magical appreciation will hide a multitude of sins (NOT).
I can’t wait ’till they all get their SUVs reposessed. Then I won’t have to suffer being nearly killed by trashy moms who have trained their trash-in-training little daughters to flip people off on the freeway.
Thats downright un-American. Its every American’s god-given right to drive a Cadillac Escalade.
Ahh yes, the Escalade. Right up there with my LEAST fav vehicles ever put on the road. And seems to ALWAYS be driven by some soccer mom who thinks she’s finally found the big one, a guy who will just take care of her and let her spend money all day long.
Followed closely by the Lexus SUVs, both equally distastful in my book, and another indication of “rich b**ch” status (or credit cad millionaries).
Ugh…
Funny, I have the same disdain for the Lexus SUVs. Of any car on the road, that one screams, “I’M A REALTOR!!!”
Escalade? They’re junk. They’re not even put together properly.
Ain’t that the truth. But you forgot to add, flip people off on the freeway after waiting until the last minute to get off and cutting off everyone in an effort to get from the left lane to the exit lane, all the while not using a turn signal.
*** news article quote: “‘Sellers are still trying to overprice their homes and nobody is falling for it any more,’ said real estate agent Celine von May.” ***
uh oh . . . agent von May better listen to agent von Sydow;
“You have not much future there. It will happen this way. You may be walking. Maybe the first sunny day of the spring. And a car will slow beside you, and a door will open, and someone you know, maybe even trust, will get out of the car. And he will smile, a becoming smile. But he will leave open the door of the car and offer to give you a lift.”
(they might even be wearing gold jackets.)
Ah….a Condor reference……
I love the Condor reference, also Mad Max, and Klinger’s Toledo Mud Hens references.
Russo’s bankruptcy attorney, Phillip Gillet, said he consults with financially strapped mortgage brokers, real estate agents and those who work in construction on an almost daily basis
Mr. Gillet sure has job security here. This describes, what, at least half of Bakerspit’s workforce. Does he represent David Crisp also?
There are still clueless people out there though. My friend lives in a tract home surrounded by tract homes in SW San Jose. Her home on Zillow is said to be $660,000 (believe me, nowhere near worth that). However, the same house kitty corner has a sale pending sign for $800,000! Admittedly fixed up but it can’t even possibly appraise at that value! If it does, then the scams are definitely continuing.
I’ve seen sale-pending signs come, and I’ve seen them go.
Yes! had it happen to a friend. Watch it almost daily.
“‘It’s very frustrating if a seller is trying to do a regular sale that’s not in this subprime mess to have to compete with a property that did get caught in the subprime mess (and foreclosed upon). I tell folks (in high-foreclosure areas), if you don’t have to sell, take it off the market, rent it out and wait a couple of years until the market swings back up again,’ Koussa said.”
A “regular” sale?? What a disconnect. The only reason “regular” houses have the perceived value they do is because of the ridiculous leniency in the lending industry that led to the “subprime mess.”
That’s like saying INTC shouldn’t have fallen in 2001, because it’s previous rise in value had nothing to with the wacky valuations in companies like JDSU.
In my opinion after hearing this comment, now more than ever, comps should be set by the fc’s hitting the market.
“In my opinion after hearing this comment, now more than ever, comps should be set by the fc’s hitting the market.”
———
Not to worry, if investors are buying the foreclosures, they’ll be back on the market soon enough. A $200k sale that was ignored by appraisers because it was a foreclosure sale of a house really “worth” $400k will have to be noticed when the investor sells it on the open market for $275k after repainting the tagged walls and replacing the stolen fixtures.
The spiral down is wicked.
–
dude,
Here are the latest Palmdale numbers from DataQuick LA Times Zip code table for March 2008:
City Zip Code PPSF PPSF From peak
Palmdale 93550 $127 -56.7%
Palmdale 93551 $142 -29.6%
Palmdale 93552 $128 -24.3%
Palmdale 93591 $119 -52.4%
PPSF seems to be converging.
Jas
ACK! I just got chicken basil from my favorite Thai joint and it’s HOT; my eyes are burning; my nose is running; I feel like I’m'a barf.
But I rent, so everything will be o.k.
It’s better than Alpo.
OT–
Above page A1’s fold in today’s Santa Barbara News-Press are highlights of yesterday’s Bill Watkins lecture at our local Lobero Theater. (A photo of Watkins, the achingly handsome Executive Director of UCSB Economic Forecast, is on display today only at http://www.newspress.com.) Watkins says economic growth along the South Coast is “boringly steady,” and he predicts flat home prices in 2008 before they resume their upward trajectory, beginning in 2009 (I’m paraphrasing).
This week at the Santa Barbara Housing Bubble Blog: Saint Barbara compares two multimillion-dollar, South Coast blufftop homes. One’s hot, the other’s not — but both may disappear into the Pacific well within Ben Jones’ lifetime.
Saint Barbara
Whenever I see ANY of those large monstrosities (or a standard McMansion), the first thing that comes to mind is: “but just think of the dusting….”
Present living quarters is 800 square feet and housework/cleaning/whatever takes 1 hour/week max.
OKAY people this just in from my RE agent sister. (I guess I didn’t get booted from her weekly RE update after all!) She just returned from a RE “cheerleader” meeting telling them that sales were up from March (NO way REALLY?) and received this from a “mortgage consultant” along with the current rate quotes. Looks like everything is going to be OK. No Recession to see here, keep moving, it ’s all over…
Market Watch: Rates are up by quite a bit this week due to good market reports and the Stock Market’s reaction to them. There is a very good interview with financial strategist, Alfred Kugel …go to Marketwatch.com and click on “Kugel says maybe no recession after all”. it is in the first paragraph on the left.
Quote for the week: ‘While there is a chance of the world getting through it’s troubles, I hold that a reasonable man has to behave as though he were sure of it. If at the end, your cheerfulness is not justified, at any rate you will have been cheerful.”
Choose Cheerful!
-Mindy
BTW the email was in THREE different colors! Now that’s cherrful!!
http://www.marketwatch.com/tvradio/player.asp?guid={E96BFB7A-A3E9-40FE-82BC-8EB05442311D}
That email is a classic!!! I choose cheerful!!! Thanks for bringing a smile to my face!
I couldn’t get the web page to work, but the e-mail is confusing. Rates are up, so house prices will go up too?
“‘People don’t have the money to get these jumbo loans,’ she said. ‘Who has 10 to 20 percent down on a $500,000 to $700,000 house?’”
I do, I do! But I only want to spend half that, so find some other sucker.
The Bay Area was suppose [sic] to get some relief
Does ABC 7 outsource their writing and editing to illiterates?
They get them from the same place they get their debate moderators.
Apparently, unlike others, they don’t have any qualms about hiring former Realtors, mortgage lenders, etc.
Yes.
“Mona Koussa, a Realtor in San Ramon, agreed that foreclosure sales hurt values. ‘It’s tremendous downward pressure’ on price, she said.”
Oh but, homes prices just aren’t going to go down. You know, people have to live somewhere.
By Summer 2006, things will turn around.
The punch is still strong in Silicon Valley.
Co-worker #1 is looking to sell his Pacifica house, which he bought in 2000 for $360k, to move closer to work. He’s looking for a place in the “low $800k range.” I said that’s interesting, our salaries are probably the same within +/-5%, and my maximum budget is half that.
Co-worker #2 laughs and goes, “$400k? Good luck with that.” Of course he paid less than that ($380k or so) in 1999 for a place in southern San Jose, but it’s perfectly natural and normal that I should be expected to pay more than twice that, even though my 2008 rent (3-br apartment) is less than his 1999 mortgage payment, and probably less than 1999 rent for the same unit.
I mentioned what is happening in SoCal, and that if it keeps going that way, I will be able to move to Orange County and buy for literally half what it costs here, while maintaining my salary. That disparity didn’t seem to strike either of them as problematic for housing values in the Bay Area.
In 2-3 years I will either utter the mother of all “I told you so’s” or move to SoCal and buy at a firesale price. Either way I win.
Do it and spread the joy.
Sorry been gone a while. South San Jose. Huh. Where, Blossom Hill RD? Cambrian ParK? And if it’s in an older neighborhood, it probably has slab foundation. Good for years, truly. But it is years later. Got popcorn, er, a good plumber?
“‘We certainly thought if it was at the conforming rate, you could get a six percent loan for what was considered a jumbo loan in the past that we thought it would help stimulate the housing market and that hasn’t happened yet,’ said Cathy Warshawsky from Bay Area Loan.”
SYNTAX ERROR