The Common Element In California
The Record Searchlight reports from California. “The severity of the housing downturn hit home Tuesday with the release of North Valley Bancorp’s first-quarter earnings. The Redding bank’s nonperforming loans went from $459,000 in the first quarter a year ago to $25.7 million in 2008. The bank reported $1.6 million in nonperforming loans on Dec. 31. The dramatic spike is centered in four real estate projects, including three in Shasta County, with loans totaling a little over $24 million.”
“The two largest loans are residential development projects of $9.5 million in Placer County and $6.75 million in Shasta County.”
“‘We are seeing subdivisions or developers that are experiencing either a slowdown in sales … or price declines that are such that banks can no longer cover in terms of collateral,’ North Valley Bancorp CEO Mike Cushman said.”
“In Shasta County, the number of homes lost to foreclosure in the first quarter went from 65 in 2007 to 150 this year, according to the Shasta County Recorder’s Office.”
“Cushman, who’s been a banker for more than 30 years, said the current housing downturn is the worst he’s experienced. ‘We actually feel pretty lucky. Most of our markets are still performing pretty well. … It’s the Sacramento area where we are experiencing the greatest reduction in values,’ Cushman said.”
“The spike in North Valley’s nonperforming loans are not a result of subprime lending. ‘There were not any community banks in our area involved in any type of subprime lending,’ Cushman said.”
The Daily Bulletin. “Blaming the national real-estate market’s blowout, a local housing-land developer has gone bankrupt and left more than $5.1million of unpaid loans in the lap of its largest creditor, Rancho Cucamonga-based PFF Bancorp Inc.”
“There are other loans, but Ontario-based Empire Land LLC left PFF’s Pomona First Federal Bank & Trust holding the bag on the unpaid loans. Other big-name creditors listed include homebuilder D.R. Horton and banking giant Wachovia.”
“The bank loaned millions of dollars during the housing boom to local real-estate developers who got stung by the subprime mortgage meltdown.”
“Like several other home developers and builders, Empire Land’s revenue dropped when new-home sales began falling in the past year or so. At the same time, thousands of home foreclosures started hitting the market, forcing prices even lower and persuading would-be buyers to lay low.”
“The company owned or had interests in 11,800 properties across 14 California land projects as of March 31, according to court documents. Its sister company, Aviat Homes L.P., owned 330 residential properties - some unfinished - in California, with projects in Hesperia, Moreno Valley and Brentwood.”
From Reuters. “LandSource Communities Development LLC, a large California land and development company, is expected to file for bankruptcy protection in the next two to three weeks, a Standard & Poor’s publication reported on Tuesday, attributing the information to unnamed lenders.”
“S&P…reported that the company’s cash had declined to about $25 million from about $115 million in early February. An article on the Web site, citing unnamed sources, said a bankruptcy filing would help preserve cash and start a process to sell assets.”
“LandSource had received an official notice of default on a $1 billion loan after it failed to meet certain terms of its lenders, the Wall Street Journal reported last week. LandSource’s primary investment is The Newhall Land and Farming Company, which owns 15,000 acres of land north of Los Angeles.”
The Recordnet. “Foreclosure activity in the Stockton metropolitan area continued as the busiest of any in the nation during the first three months of this year, according to RealtyTrac. A total of 7,560 foreclosure filings, default notices, auction sale notices and bank repossessions, were filed countywide in the first quarter, RealtyTrac reported. That was almost a threefold jump year to year.”
“Six of the top 10 foreclosure hot spots in the nation were in California.”
“The actual numbers of repossessions also are soaring, DataQuick said. The firm said the number of homes repossessed during the first quarter in San Joaquin County nearly topped 2,500, more than a fivefold increase from 440 a year ago. That compares with almost 4,000 homes repossessed countywide all of last year.”
“Pending sales countywide nearly hit the 1,200 mark last month, compared with about 800 homes being foreclosed on per month countywide, at the first-quarter foreclosure rate. That’s a higher sales rate than at any time during the previous boom years of 2000 to 2005.”
“Jerry Abbott, president of Coldwell Banker Grupe, Stockton, said most of the sales are foreclosure homes.”
The Press Enterprise. “Owners of foreclosed homes in Temecula would have to register with the city and hire someone to oversee their properties under an ordinance expected to come before the Temecula City Council. As of Tuesday, there were nearly 1,000 bank-owned properties in the Temecula ZIP codes, according to Realtytrac.”
“March foreclosures in the 92591 ZIP code, which covers Temecula, are up 117 percent from March 2007, said RealtyTrac spokesman Daren Blomquist. Another 817 were in the foreclosure process.”
“Garnett, board president of the Redhawk homeowners association, argued that the city should drain abandoned pools and bill the lenders, whom he considers to be part of the problem. ‘These are not nice people,’ he said.”
The North County Times. “The ‘witching hour’ for foreclosures, as described by City Councilwoman Maryann Edwards, is the period from when buyers abandon the home they can’t afford to when the lender repossesses the house, a process that often takes months.”
“It is a state of ownership limbo that has cursed numerous neighborhoods in Temecula as it turns green lawns brown and clear pools into cauldrons of algae and goop. City officials envision creating a registry to track empty homes and to find the lenders who are responsible for the properties after the buyer walks away.”
“Many property managers want to see pools on abandoned properties drained. ‘As for the concern that pools may crack if we drain them, I don’t even care,’ said Harry Garnett, president of the Redhawk Homeowners Association.”
“Garnett said that, of the approximately 3,000 homes in the association, roughly 50 are abandoned.”
“‘I think this ordinance is a great idea, but we should have been talking about it three or four months ago,’ he said. ‘We didn’t think it would get this bad, and now we don’t think we’ve seen the bottom of this. It’s only going to get worse.’”
“Debra Thomas, president of the Meadowview Home Owners Association said, because of fewer assessments being paid, many associations have less money coming in for community improvements. She said it is evident that the number of foreclosures is increasing among the 900 homes in Meadowview, and ‘it’s getting worse.’”
“San Diego home prices were pummeled again in February, returning the county’s price decline to a record clip after the price freefall slowed in January. The decline in prices from the same month a year earlier hit 19.2 percent, the largest locally during this housing recession and the biggest drop since the Standard & Poor’s Case-Shiller Home Price Index started calculating home prices in 1987.”
“And when compared with January, the year-over-year gap widened by its largest margin yet, indicating that the fall in prices might be accelerating.”
“How long prices will decline for is impossible to predict, most analysts agree. And the role of easy money in the form of no-down-payment, no-verified-income loans makes this housing recession impossible to forecast, said James Hamilton, an economics professor with UC San Diego.”
“‘It’s a more extreme boom up and it’s a more extreme down,’ he said. ‘So as far as where prices are headed and when they’ll stabilize, I don’t think you can tell because I really feel we’re in uncharted territory.’”
“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the monthly decline of 3 percent will not continue for long.”
“‘I hope not. Gosh, that’s well over 30 percent decline if it continue on for a year. I don’t think that’s going to happen,’ said Cunningham. ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’”
The Union Tribune. “Las Vegas, Miami, Phoenix, Los Angeles and San Diego, five areas that saw home prices rocket ahead in the housing boom, are now leading the retreat backward.”
“The S&P/Case-Shiller index is based on homes sold in December, January and February as compared with previous sales of the same properties. The results are translated into index values with 100 for all areas as of January 2000. Percentages then are derived from changes month by month and year over year.”
“San Diego County’s February index value was 190.34, down from 197.45 in January and 235.54 in February 2007. The all-time peak was 250.34, set in November 2005, meaning that prices soared 2½ times their level in January 2000 before falling back 25.1 percent.”
“Of the 20 areas tracked, Los Angeles, Miami and Washington, D.C., still posted index values above 200.”
“James Hamilton, an economist at the University of California San Diego, said the downward trend is likely to continue because of the ‘overhang’ of unsold homes, numbering about 19,000 in the county – several times the typical listings count at the peak of the boom in 2003-05.”
“‘It’s not a shock that we’re seeing this decline now, and I think we’ll see some further declines yet to come,’ Hamilton said. ‘That overhang of unsold homes is still there.’”
“In explaining the San Diego area’s high ranking among declining markets, Hamilton said, ‘The common element there is those were the communities that had the biggest run-up.’”
The Modesto Bee. “Dennis Swann of Swann’s Automotive Repair in Modesto said he’s seeing more people forgo repairs for things they see as unnecessary, such as air conditioning. Dennis Slewoo of USA Auto Service, also in Modesto, said he’s had to schedule more repairs in stages, rather than doing them all at once.”
“Both men see the same standard: Consumers, stung by high gas prices and a downbeat economy, are clamping down on their automotive expenses.”
“‘Buying a vehicle because it looks good is less and less of a reason,’ said said Chuck Parker, publisher of Automotive Digest. ‘People are looking for utility, for cars to last. People are fighting to keep their kids in school and pay their mortgage.’”
“Slewoo said a customer brought his car in for a brake inspection Tuesday. Slewoo found the brakes were nearly metal on metal and needed immediate replacement.”
“‘He asked me if we could push it back two or three weeks,’ Slewoo said. ‘With his income, he said, he has to save his money. Two or three years ago, this conversation wouldn’t happen.’”
The Salinas Californian. “The first-ever completely affordable housing project in Monterey County will instead be priced at market rates, following a decision Tuesday by the Monterey County Supervisors.”
“At the request of the developer, Woodman Development, supervisors voted unanimously to remove all affordability restrictions on 123 single-family homes in the Commons at Rogge Road, north of Salinas. The project was first approved in 2006.”
“The company has claimed falling home prices have made it impossible to sell the homes at pre-set affordable rates, which are now more expensive than market-rate homes.”
“‘I don’t think there’s an advantage to those homes sitting vacant,’ said Supervisor Dave Potter.”
“The vote means Monterey-based Woodman Development can sell the once price-restricted homes at any price they choose, and buyers won’t have to meet income requirements. The homes must be owner-occupied.”
“Additionally, the homes’ resale prices will no longer be restricted to keep them affordable - a stipulation that also kept people from buying. Woodman will also have to pay the county more than $150,000 in fees it had avoided by building affordable homes.”
“Woodman’s original agreement with the county required it to provide homes for moderate and ‘workforce’ buyers, households of up to four people with incomes ranging from $76,080 to $114,000, with a maximum price of a home set at $480,000.”
“William Silva, Woodman’s chief financial officer, told supervisors the changes are necessary because qualified buyers have been opting to purchase cheaper market rate homes with no deed restrictions.”
“‘It has left us in a predicament,’ Silva said.”
“The Redding bank’s nonperforming loans went from $459,000 in the first quarter a year ago to $25.7 million in 2008. The bank reported $1.6 million in nonperforming loans on Dec. 31.”
Would these be considered balloon loans?
Let me restate these figures: In one year’s time, nonperforming loans ballooned from $459,000 to $25,700,000? That is a one-year increase of
(25,700,000/459,000-1)*100 = 5,499%. How is that even possible?
How? You should divide by the size of the loan.
If only 10 loans were not performing, and suddenly most of your portfolio is not performing, you will see this edge effect, right?
Virtually all loans they made in late 2006 and 2007 must be defaulting now.
Creative Accounting jeez.
No this is crashed commercial/residential loans expect a lot more where this came from. The local banks are in as deep on the building side and the big boys on lending for the loans.
The Sacramento Bee just had an article today about the affect of the housing bust on local banks. Many are doing better than the national banks. Local banks were not as involved with home loans because the larger banks were offering better rates during the boom. But they were invovled with giving loans to the local developers and contractors, many who are now bankrupt.
I’ve been considering moving part of my savings to a local bank.
http://www.sacbee.com/103/story/900604.html
You are going to see a massive amount of bank consolidation in the next 5 years. The little guys are hurting and in some cases hurting very badly.
Consider that the first banks to fail will be first helped by the FDIC.. deposits will be move to the healthiest of a wide assortment of institutions.
But, the last banks failures might occur after the FDIC is tapped out and there are no suitably healthy banks left to accept the load..
Putting savings in the most likely to fail soonest could be the safest route… yeah.. i know it sounds nutty.
“The two largest loans are residential development projects of $9.5 million in Placer County and $6.75 million in Shasta County.”
“The spike in North Valley’s nonperforming loans are not a result of subprime lending. ‘There were not any community banks in our area involved in any type of subprime lending,’ Cushman said.”
___________________________________________________
How this bank can say with a straight face twice, that they weren’t involved in subprime lending, is the pot calling the kettle black…
When I think of the prospect of banks going under and fdic possibly not covering our deposits, I think “Hey why save? Why not just get that tummy tuck I’ve been wanting? And maybe it would be safer to just put my money into some big purchase –like say a house.”
Don’t worry…
There $52 Billion in the FDIC insurance fund, to save us from ourselves~
joey, it may be true that your money will be more quickly paid back if it’s in “the first bank to fail,” but then, once you get the money from FDIC, where do you put it next? Under the mattress?
yup.. putting the money into a house may be the best/safest place to park it.
But not yet. Property could easily end up taking a worse beating than banks… recession related employment suprises might dictate that a mortgage becomes impossible to carry.
az_ My understanding is that your deposits aren’t converted to cash. A few FDIC’s accountants invade the troubled bank, take the deposit records and just move accounts over to another, local healthy bank over the weekend. We may not be able to cashout for a time but checks clear and cards work.. After all, the main objective is to avoid a bank-run.
Beyond that, they sell the failed bank’s assets to recover, among other things, any deposits which were above the FDIC insured limits.
And then there’s a fund gathered from the insurance fees banks pay them.. many $billions. I suppose the federal govt could also step in..
If all that fails we’re in deep sh*t.. so I’d buy shovels.
Prof, I have relayed a story on here before. There is a bank in Florida that was named bank of the year a couple times during the Florida boom. Their President/CEO was named Banker of the Year twice. Their non-accruals at the end of 2006 were basically $0. They were $81 million at the end of 2007. This is a $1.6 billion bank. That spells insolvency. In an article a few weeks ago the Herald Tribune stated that Mr. Banker of the Year couldn’t be reached for comment after several attempts.
These numbers are very possible and are becoming less and less rare. Your surprise surprises me. Rock on!
Wouldn’t surprise me one bit that he couldn’t be reached. I went to college with this person, he worked for a small bank for more than 25 years, was president and was fired a few months ago with NO notice. Bad investments (is the rumor).
“Would these be considered balloon loans?”
I’m sure large volumes of hot air were involved….
“said Cunningham… ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’
Hey this guy must be genetically related to Mr. Prof Bear
Folks like Cunningham will have to get past the denial stage of the bust before the worst is here.
“Garnett, board president of the Redhawk homeowners association, argued that the city should drain abandoned pools and bill the lenders, whom he considers to be part of the problem. ‘These are not nice people,’ he said.”
The North County Times. “The ‘witching hour’ for foreclosures, as described by City Councilwoman Maryann Edwards, is the period from when buyers abandon the home they can’t afford to when the lender repossesses the house, a process that often takes months.”
“It is a state of ownership limbo that has cursed numerous neighborhoods in Temecula as it turns green lawns brown and clear pools into cauldrons of algae and goop. City officials envision creating a registry to track empty homes and to find the lenders who are responsible for the properties after the buyer walks away.”
“Many property managers want to see pools on abandoned properties drained. ‘As for the concern that pools may crack if we drain them, I don’t even care,’ said Harry Garnett, president of the Redhawk Homeowners Association.”
———————–
Having my pool remodeled right now, and it is not cheap. Smart pool remodeling companies in the area would volunteer to do the draining of abandoned pools now for free, to drum up business later on when someone moves back in and pays to get the place back up to liveable condition. They could even leave a business card stuck in the pool pump control panel for the day 6 or 12 months from now when someone decides to open it again.
Easy fix. Don’t drain the pool and crack it. To take care of mosquitoes, just pour a quart of vegetable oil in.
Two questions:
1) Shouldn’t the pool be designed so that an empty load does not cause it to crack?
2) Wouldn’t the pool just fill up with rain (or groundwater if it does crack)?
3) If it is such a problem, why doesn’t the guy go get a $40 sump pump, an extension cord and a garden hose and drain the pool to the storm drain himself?
that’s three questions..
Based on your math skills, Iive got great loan for you…
LOL
some pools (prefab i think) will pop up out of the ground if they are emptied.
If ground water is present, hydrostatic pressure can literally pop an empty pool out
of the ground. It’s always better to leave it filled, juiced to the enth with chlorine and
vegetable oil on the surface.
“The ‘witching hour’ for foreclosures, as described by City Councilwoman Maryann Edwards, is the period from when buyers abandon the home they can’t afford to when the lender repossesses the house, a process that often takes months.”
The city should do foreclosure tours of homes ‘possessed’ by the foerclosure demon. Put skeltons, cobwebs, garlic cloves, mock cemetary with recorded sounds of ghost whistling thru the attic.
Lender repossession of a trashed out gutted foreclosed home must be a lot of fun. Occasionally One might find a surprised or two on that abandoned property-maybe a buried skelton in the back yard or under crawl space.
Think about abandoned houses that will stay that way for 6, 12, or 24 months. The pool water will evaporate, the water service to the house will be turned off, and in any case some of the plaster will be exposed. Not to mention that they will turn a dark green over the course of these empty months. Major hazard in terms of not being able to see what’s at the bottom - ie drowned kid. Will the banks carry liability insurance for this possiblity? Do they check daily to make sure that the gates are all closed? I don’t think so.
Some of these houses will be sold as “shells” where absolutely everything will need to be redone. Those will be the 10 to 20 cents on the dollar sales.
“Those will be the 10 to 20 cents on the dollar sales.”
Think lower.
Think Cleveland.
Think one-dollar.
read somewhere that banks go to edge of foreclosure but not over - they milk the homedebtor for all he’s worth but do not assume ownership - no taxes, no maintenance no liabilities
Valley Bancorp’s first-quarter earnings: The Redding bank’s nonperforming loans went from $459,000 in the first quarter a year ago to $25.7 million in 2008. predictions made here three years ago are now coming true
God bless America!
I’d never buy a house with a pool. And an empty pool looks like a mausoleum. Fill ‘er up.
I used to say that, and then bought a house with a pool (I bought despite the pool, with the intent of filling it up). I figured it was a death trap, chore, money-pit, etc. (and I was right).
But now that I have kids (swim lessons since infancy), I don’t think I’d buy a house without one, even with the hassles and costs. I love having a pool, it’s fun. (Start the flaming: “Blah blah-so much cheaper to swim in the river for free. What a waste, I don’t swim, I dab myself with a cool cloth…”)
I belong to a gym with a pool. It is also fun. Is that a flame?
The math is very simple. If enjoyment > hassle, go for it.
I would never want a house with a pool for the simple reason that I’m a mediocre swimmer. With kids I would want to be good to lifeguard level before getting a pool.
There’s another problem with buildings that have been empty for a long time - the water in sink and toilet traps evaporates and sewer gases fill the building with a unique aroma.
Vegetable oil will soon be digested by bacteria, you have to use motor oil.
They make mosquito dunks that you can get a Home Depot or Lowe’s. Just toss some in and it keeps the larvea from developing into adults. Do this about once a month. They’re cheap, easy, non-toxic and don’t screw up the pool equipment
Motor oil? I don’t know if you’re kidding.
not balloon loans….
bubble loans
The nonperforming part of their loan portfolio sure did balloon. Maybe the right moniker is “ballooning loan portfolio.”
bubble loans
I think I call some mortgage brokers tomorrow and ask them if they offer bubble loans…
Let me just remind people of one certain fact.
If you want to have money, there is one secret to do so.
DON’T SPEND IT!!
It is a trick most multimillionaires willingly share.
We haven’t had to change our spending habits at all, since we always looked at the bottom line.
But way too many people way overspent and now have to pay.
Such a good point, SMF. Exactly the reason why during my early working years, I shared a rented apartment with several other working adults.
same here…out of college, rented a house in south OC, CA, 4 bedrooms, five people (including best friends, a married couple). It was actually a cool experience, took turns making meals for everyone, etc.
That’s what I am doing now. lol.
Saving lots o’ cash. My 20% down is good to go, working on my retirement account, mostly.
Suddenly, the stock market is way more exciting to me that housing market.
Lawd yes! Always will be too; always. Bond markets as well, all over the globe.
You’ll come to see the waste of a house but it’s nice to have it. It’s useful as leverage, sadly enough for the people who don’t really need leverage.
“same here…out of college, rented a house in south OC, CA, 4 bedrooms, five people (including best friends, a married couple). It was actually a cool experience, took turns making meals for everyone, etc.”
Works until the young lady decides to start squeezing-out puppies.
True confession: I had a dream about this blog last night. The discussion topic was the increasing popularity of housing that includes roommates. And look at what we’re talking about now…
Slimmie, every dream I have includes hostile roommates, shopping carts full of dollars, and boxes for packing.
“San Diego County’s February index value was 190.34, down from 197.45 in January and 235.54 in February 2007. The all-time peak was 250.34, set in November 2005, meaning that prices soared 2½ times their level in January 2000 before falling back 25.1 percent.”
Only a (90.34/190.34)*100 = 47.5 pct drop is still needed to return to more affordable but still expensive 2000 price levels.
If you can’t fix the problem hide it
http://bloomberg.com/apps/news?pid=20601039&sid=aRFzA5qJQyd8&refer=home
“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the monthly decline of 3 percent will not continue for long.”
“‘I hope not. Gosh, that’s well over 30 percent decline if it continue on for a year. I don’t think that’s going to happen,’ said Cunningham. ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’”
He is sure the current rate of decline will not continue for long, and he doesn’t think it is going to happen, but either he has no economics to back up his assertions, or else he does not feel the need to express his reasoning in the MSM.
Just this morning I told my rehab/flipper cousin that the rate of decline in Jupiter FL, where he has FINALLY sold his condo, will probably not continue for long. My motivation for saying that was, that after persuading him to take an offer that is “only” about 200x the likely monthly rent, I wouldn’t want him to be disappointed if prices “only” fall to 160x likely monthly rents. I guess the question of the likely future trajectory of SD prices should be connected to the question of how far they now exceed the present rental-equivalent value. Seems in most CA locales another 30% decline would be perfectly reasonable. Whether it all happens in one year is in the who knows department.
“‘I hope not. Gosh, that’s well over 30 percent decline if it continue on for a year. I don’t think that’s going to happen,’ said Cunningham. ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’”
Anything to reassure the sheeple. Cunningham is in fact only saying it’s her “hope” that the monthly 3% decline won’t continue long.
“Anything to reassure the sheeple. Cunningham is in fact only saying it’s her “hope” that the monthly 3% decline won’t continue long.”
Maybe it won’t. It might increase to 4 or 5% per month as in some other peak bubble markets.
Consumer continues to shrink back into his hole, unfortunately I see more than 6 weeks of winter
http://biz.yahoo.com/rb/080430/starbucks_results.html
Haven’t stepped foot in a Starburnts in ages. They are desperate though, lots of ads in the news for their new coffee for the common man.
I stopped hanging out at starbucks after 911. It just felt different. I drink starbucks but buy it at costco.
Wow. The “terrorists” have won after all.
I don’t drink coffee. Hence, they’re never going to make any money off of me.
But I do drink green tea. Buy the tea leaves in bulk at the local food co-op. And then I make sun tea on the back porch.
Nothing like tasty tea at a fraction of the Starbucks cost.
Yeah- This is the ripple effect of dropping a house into the middle of the pond. People don’t get their car fixed, they don’t take their kids to karate, no more haircuts once a week, eat in, etc. etc. I’m fat and happy.
I had someone at work tell me their two kids were going into cosmetology and alcohol sales, respectively. He pronounced that both were recession proof. I vote for the alcohol sales. But not the higher end ones.
For the month of March ‘08, the cities of Santa Barbara and Goleta each chalked up double-digit year-over-year declines in median home-sales prices. This month (April), economists from the UCSB Economic Forecast Project (Bill Watkins, et al.) assured an anxious audience at Santa Barbara’s Lobero Theater not to worry, since the South Coast’s vibrant wine and tourism industries will likely serve as economic life preservers for the local economy. Currently at the Santa Barbara Housing Bubble Blog: our own panel of experts weigh in on these cross-currents and dole out some sage advice.
Wishing you good fortune,
Saint Barbara
I priced some Spa get-aways in Napa recently, they wanted $350 a night for a room not including the actual Spa. I decided to stay home, no hotel room is worth $350. I’ll check back in September and see if they have wised up yet.
A few years back a friend was booking a trip to a dude ranch..
I could only hear her side of the conversion with the reservationist…
about 1/2 way through the call, I heard my friend ask, “what do you mean horse backing riding costs extra?…”
“horse back riding”..sorry..
At least it wasn’t dude back riding…….
I was able to lock in a condo in Tahoe for a week (next) for $350.
Great Spa deals in Nevada, especially Decemberish. Check out AZ in the off season.
Action Line: Foreclosed houses need to be kept up, but by whom?
http://www.mercurynews.com/columns/ci_9103910
But But But Foreclosures are being “snapped up” so fast with multiple bids how could the house have time to fall into disrepair ?
Yeah, “investors” are gobbling them up like there’s no tomorrow!!
“‘He asked me if we could push it back two or three weeks,’ Slewoo said. ‘With his income, he said, he has to save his money. Two or three years ago, this conversation wouldn’t happen.’”
Oh great, and Mr. No-Brakes is going to be on the road for the next few weeks with the rest of us.
These FBs are on the Road to Hell…no brakes required
More like the “Highway to Hell”
I can’t wait to bicycle on the same road that Mr. No-Brakes drives on.
metal on metal will stop the car but it’s hard to listen to
I’ve been in that situation with brakes worn almost to the metaL, and having to drive a week Before a brake job. Just drove it reaaaal slow for that week. Just make sure you don’t have to make a sudden sqealing stop to avoid hitting an object or person.
Have also replaced the brake pads myself on my earlier beater trucks. Replacing front disk pads actually not that difficult, and i saved over $100 from having a shop do it.
Brakes work by converting motion energy into thermal energy - absorbed by the pads.
Riding metal to metal is a bad idea because you distemper the metal making it brittle - and some parts will just all and all fall off (think calipers.)
If worse comes to worse, buy a book on brakes, spend 25 bucks on pads, a couple more bucks on brake tools and do it yourself. It’s not rocket science.
The common element…
At this point, I think the most common element is unobtainium..
as in unable to obtain a mortgage, heloc, cash out refi, etc.
OT..
Interesting product..
Any one care to comment…
http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080430005476&newsLang=en
The result I anticipate is, REX goes out of business quickly, protecting nobody from the downside risk. Wonder who is financing this nonsense.
“However you look at it, a REX Agreement is a win-win situation for the homeowner,” said Cusack.
If this is true, then I like to look at it as a lose-lose situation for REX. But I doubt these buzzards created this business to lose-lose, so I can only believe these guys think housing’s really going to go up.
Also, they don’t really explain how the agreement on the share of future gains/losses works.
I agree it’s an interesting topic. Seems like a risky business for a company to be in during this housing market. Let’s see. Starting from their example: My house is “worth” 1,000,000 dollars and I borrow 100,000 dollars and the house goes down in value 200,000. For them to have loaned me money, I had to have at least 200,000 in equity, I think. So I sell the house and I have no equity, real estate fees and then I owe them $20,000. Since I’m a good credit risk, I’ll be able to pay them. But I have their 100K that I borrowed sitting in a bank. Didn’t I clear 80K minus any real-estate fees? Very interesting. One would need a darn good lawyer to look any contracts.
I was just driving in town and was passed by a new silver Mercedes E class with 2 women and a guy in the back seat. I was sure it was a local Realwhore with fried blonde hair taking her victims to see one of her overpriced listings in Park Estates. I was correct and she was pulling out all stops as I watched her fawn all over them. She is one of the most toxic agents in the area and I wanted to get out of my car and tell the people to run like their hair was on fire.
“‘Buying a vehicle because it looks good is less and less of a reason,’ said said Chuck Parker, publisher of Automotive Digest. ‘People are looking for utility, for cars to last. People are fighting to keep their kids in school and pay their mortgage.’”
Well, Gomer, I never really gave a crap about the car’s looks. I cared about the utility and cost was my criteria (looks way down, but didn’t want a tunawagon). I fix whatever is needed and pay as I go. I can pay my mortgage without sacrificing other needs. And kid goes to the public school and it is fine there. It is good enough for most of the rest of the kids too. I don’t live in a gang ridden scary area. It is safe, clean, and reasonable (as far as possible here).
Last comments, possible because we left CA for NM. Big improvement for my family.
The LandSource default is interesting. Calpers was a major investor…just before this news broke the CIO of Calpers decided to retire last week.
His pension is probably fine, but for other folks, the news might not be so good.
http://online.wsj.com/article/SB120916479361446151.html
I noticed that retirement I’m sure we have a lot more trouble coming for Calpers. So I don’t think this was the big one.
Money managers are under pressure to make gains, if they avoided the whole bubbly REIC sector the clients would get angry and demand better returns. In the early fall of 2006, the front page of Vanguard.com was telling “Rebalance your portfolio AWAY from the real-estate, the sector has run its course”. But did anyone listen?
How about the ‘Teachers Pension Fund’ ? They’ve invested with algore in one or both of his RISKY green hedge funds. If they loose money, the taxpayers of Ca have to make up the difference. Didn’t know that did ya? Now I know we are screwed again by the lefties.
CEO also resigned a few days after the CIO… nothing to see here, I’m sure.
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“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the monthly decline of 3 percent will not continue for long.”
It has lasted for the past 5 months for all the three CA metros reported by Case-Shiller. The latest trend for Radar Logic prices for all the 5 CA metros combined is 30% Annual Rate.
Price decline is directly correlated to foreclosures of 3-6 months ago and since foreclosures are still rising we can count on the price decline of 30% Annual Rate to continue. Since price decline feeds further foreclosures we don’t known when the vicious cycle would end.
Sacramento area has had 30% Annual Rate decline for a year and it may be showing the way for other areas as they catch up in foreclosures.
Jas
Hey Ben,
Looking at the front page graphic of the LA Slimes…just what will it take before we all get to a consensus about consumer sentiment 2008:
http://www.latimes.com/news/printedition/front/
http://thehousingbubbleblog.com/?p=4297
Joel Stein looks kinda young…so I’ll forgive him for leaving out one “Key” word in his “opinion” article:
“But your average American isn’t freaking out.”
Rewrite:
But your average American isn’t freaking out…yet
“Kelly Cunningham, an economist with the San Diego Institute for Policy Research, said the monthly decline of 3 percent will not continue for long.”
“‘I hope not. Gosh, that’s well over 30 percent decline if it continue on for a year. I don’t think that’s going to happen,’ said Cunningham. ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.’”
Stunning analysis skills at work. As usual “Hope” is not a strategy.
Hell, someone should tell that to one of the presidential candidates.
“Gosh,” I’m sure nobody thought house prices were going to triple over the space of a few years either, but here we are. I’ve yet to hear a cogent argument explaining why prices shouldn’t fall 30% or more, but I’ve heard a lot of very sound arguments explaining why they should.
Hope is a city in Arkansas.
Seems like I’ve read about someone from there.
Mike Huckabee?
Gotta love faith-based economics.
“The vote means Monterey-based Woodman Development can sell the once price-restricted homes at any price they choose, and buyers won’t have to meet income requirements. The homes must be owner-occupied.”
Yeah right…liar liar pants on fire…guess who will buy those homes as soon as the restrictions are gone… it should be a FELONY if the homes are not “owner occupied”
Hey, those homes are in an ugly area and are butt ugly to boot. They’ll all be section 8 after the dust clears. Not a lot of families making that kind of money here in Salinas as there are virtually no jobs except on the government payrolls. When schools get out in early June watch for a lot of houses all over CA vacate as people find more affordable living areas.
“said Cunningham… ‘But of course I’ve been saying the worst is here for a while now and then it gets worse.” Ah, Cunningham you might want to reassess things after school is out. BTW, hearing more stories about businesses cutting overtime here in CA and pending downsizing.
Thank you.
All around me: “bad credit acceptable” etc. Even in the gated golf course, 55+ HOA communties. No lie.
“The vote means Monterey-based Woodman Development can sell the once price-restricted homes at any price they choose, and buyers won’t have to meet income requirements.
So they are paying cash?
I was at my Costco today, you know the one of New York Sun fame, yes the store who had a limit on rice purchases.
This isn’t about rice though.
As I drive into the lot I see tire changers rounding up shopping carts, hmmmm.
I grabbed my groceries and lo and behold a cross-trained tire changer (no offense to the tire changer, I did that job 25+ years ago. It’s hard work) is working the register. I asked them is the shop really that slow. They said it’s very slow. Maybe a coincidence. Yeah right.
Hang on everybody.
Mike
I see lots of $8 an hour employees wearing many hats nowadays…
It’s quite common for them to work the cash register and also be an ad hoc receptionist, stopping everything to take calls.
My officemate just put his house up for sale in Pacifica, so naturally I took a peek at it on Redfin. His wishing price is over $500/square foot - very close to the most expensive listing in that city per square foot.
It’s only a block from the ocean and has a sweet view (on a clear day), and the pictures look nice enough, but I wonder if it’s going to sell as quickly as he hopes.
I heard him on the phone with his realtor earlier asking if the list price might be too low.
Meanwhile he’s made an offer on a place in Silicon Valley - contingent on his house sale going through first, so at least he’s not as stupid as a lot of the people we read about carrying two mortgages.
The punch bowl is still very spiked around here.
http://www.latimes.com/news/local/la-me-metal30apr30,1,2199437.story
“The rampant theft of copper and other metals in Southern California has begun hitting Inland Empire freeways hard, leaving motorists in increasing danger as traffic signals and lights in underpasses and rest areas have gone dark, law enforcement and Caltrans officials said Tuesday..Thieves also have swiped guardrails and irrigation systems along roadways……The aluminum bleachers at the Kessler Park Little League field in Bloomington were stolen last summer. Bronze plaques were taken from the facade of the San Bernardino County Museum in Redlands. The pool at the Boys & Girls Club of San Bernardino was temporarily closed because all its metal fixtures had been stolen.”
This was already posted earlier by E. Norton II in bits & buckets but i need to elaborate :
The IE and especially the ragged decrepit areas mainly in San Berdoo county has all the right conditions for massive thefts of metals from public properties . It is wide-open in many areas with
large corp parks intermixed with decrepit housing areas, giving a semi rural aspect to these places. Lots of recent tears downs and bulldozings done in haphazard manner with little city/ county oversight lead greedy developers and builders to simply plunk down infrastructures and commercial/res blgds anywhere in any open space without hinderences.
This mean’t that these thrown-together mixed-up commercial/ rural/ cheap housing tracts were basically wide-open little supervised areas with light policing, ecpecially in the IE unincorporated areas. Add to that a vast migration of lower income classes including section 8’s, immigrants, and their gang banging offspring into San berdoo inner county regions, and U have the ingredients for widespresad theft, looting, theviery, trashing, graffiting in such areas.
The IE area i refer to is from the 15 fwy east to the 215 and from the 91 fwy north to the 10. This is the IE ragged slimezone, an area of trashed- out rural fontucky plots, scattered haphazardly sited polluting industrail firms, illegal dumping, numerous pockets of illegals and other poor denizens inhabiting rustic shantievilles, and also plenty of half- finished road/ fwy infrastructures which invite massive metals & industrial thefts of city & county property .
This is a wide open almost wild west aspect of the iE which is little-known unless U live in these parts or have traveled extensively over it.
They should have a new law that makes copper worthless.
Or at lease recycled copper torn out of homes.
Does anybody know anybody who actully poured concrete down the toilet?
In white bread Carlsbad somebody has been ripping off the metal lettering on all the fancy McMansion subdivision monuments. No more “Cielo del [Mar/Vista/Sur/whatever]” for you!
There’s some street in Laguna Niguel named “Nueva Vista” I guess someone improved it from the “Vieja Vista.”
There was some movie, I want to say it had Leslie Nielsen, with a street called “Vista De Nada.”
LA Story?
“Numerous pockets of illegals”? I drive through there every morning and afternoon. Try “occasional pockets of citizens” and that sentence works. The IE is the most hellish dystopia in America today, all brought to you by the REIC and lax immigration enforcement.
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Anecdotal evidence (comments from a forum) of Housing Bust led recession?
Someone in SF Bay Area: “For the last week I have been astounded by the decrease in traffic in the San Francisco Bay area freeways and roads! Just like it happened before the hard down phase beginning in Sept. 2000 for the tech stocks!”
From someone in Ireland: “My wife just last week commented about how traffic in Dublin has lightened considerably. Last months Irish employment report showed unemployment shifting from the building sector to a more generalised trend with a big increase in reported female unemployment. Irish consumer sentiment reported down 11% yesterday portends further weakness going forward. Anecdotal evidence suggests that the demand for petroleum is dropping. Have we seen the intermediate high for oil?”
Jas
I thought traffic levels in the Twin Cities were declining as well, but alas my work commutes seem to have become more conjested in the last month. I have noticed more cars in the Metro Transit Park and Ride facility I pass every morning, though. After the bridge collapse there was an expected bump in Metro Transit usage but there appears to be a steady increase in mass transit usage and the numbers are confirmed by the Metro Transit Authority.
Isn’t it likely that the increase in congestion is due to the commencement of road construction season? Just over 35W, three bridges are out of service, in addition to the bridge that collapsed.
I am seeing a distinct reduction of traffic on Friday’s…Four day work week ??
keep spinning your web around the tech meltdow of 2000, we are two years into this downturn….its 2003 for the “real” economy, short financials….oil crashes….all the way to 106…
jas you irritate the shit out of me. Loading up the mega-cap global industrials shorts…..phhht, blow it out your ass.
the booms continue until the central bank takes steps to rein-in the inflation or until inflation slows under the weight of market forces.
this go long India, China, Brazil…
under the weight…
As above, so below.
define “big money monkey theory.”
is it the debt pig under the rug watching the elephants ride the whales eating the krill?
Have we seen the intermediate high for oil?”
I think I’m going to sell. to many folks are saying 180 per barrel of oil and as you point out demand maybe down on job cuts.
I’m sick of these retarded media outlets that can’t even master the obvious. I want to start my own paper, and I advise other HBB’ers to do the same.
Mine will be the Daily Bulletinthehead. I’m not much for subtlety.
tell Congress what you think.
buy SKF and watch the meltup on the coin shavers.
Seems like just a month or two ago that I reported a spike in Morro Bay inventory under $600K. Having watched it oscillate seasonally between 27 and 38 listings for a couple of years, I found in March (?) that it was suddenly up to 45. Woo-woo…now it’s 54. Looks like the infestors finally got the idea that the rebound isn’t coming soon.
A poster on here once said. “The bottom is not a trampoline,” rather a concrete floor. Bones will be broken!
Cinch
Hope is a city in Arkansas
Hope NM, 88250 also a small town in southern NM a little ways from Carlsbad. I passed through it once. About 100 people, no services.
“Slewoo said a customer brought his car in for a brake inspection Tuesday. Slewoo found the brakes were nearly metal on metal and needed immediate replacement.”
“‘He asked me if we could push it back two or three weeks,’ Slewoo said. ‘With his income, he said, he has to save his money. Two or three years ago, this conversation wouldn’t happen.’”
Funny. I was just out walking around in Pasadena (CA) and within a span of five minutes I noticed two cars with completely worn out brakes - loud metal-on-metal sound. One appeared to be a 2000 Accord, but the other was a fancy 2 or 3 year old BMW sedan. This is the first time I noticed this while walking through town (and I do this several times per week).
Also have noticed lots of headlights out and missing mufflers. There is no state inspection (other than smog) here in CA, so you can get away with a lot.
Yeah, but there are still lots of people riding their bikes around Pasadena… on the sidewalks… getting to their food service jobs… because they can’t drive legally…
“Dennis Swann of Swann’s Automotive Repair in Modesto said he’s seeing more people forgo repairs for things they see as unnecessary, such as air conditioning.
Those people must hurting bad if A/C is optional. Summer is regularly plus-100F for weeks straight (i think the record is 40 days).. 115F is nothing special.. and if temps drop to 90F by sunrise it’s a cool morning.
It’s quite common for them to work the cash register and also be an ad hoc receptionist, stopping everything to take calls.
Is the phone ringing? Who is calling to complain about what? I am sure it isn’t to buy something.
I’m getting ready to go home (retired from the Navy after 26 years) to WA state - been out in 29 Palms for the last 2+ years. Housing market has always been on a knife edge (this was the second time I’ve been here - first time was 10 years ago). Couldn’t believe the number of new houses out here when I returned here in ‘06 - many of those homes are empty, truned into rentals or are “rent to own”. Haven’t head anything recently, but late last year there were about 1,000 homes sitting empty in the 29 Palms/Joshua Tree/Yucca Valley area on the market, the majority of them newly built. Most will probably be Section 8 housing/housing for the gang bangers that can’t afford to live in LA/OC/Riverside or metro San Bernardino. The High desert will be the new dumping ground for the dregs of society.
As for the teachers pension fund - I grew up in CA and that fund has been into more trouble due to the lack of management by the state than a drug addict looking for a fix.