The News Is Bad, Unless You’re A Buyer
The Union Tribune reports from California. “Dragged down by declines in hiring and home-building, San Diego County’s economic outlook continued to plummet in March…marking the 23rd time in 24 months that the index has fallen, according to an index of leading economic indicators released yesterday by the Burnham-Moores Center for Real Estate at the University of San Diego. The indicators suggest continued weakness through the rest of 2008, with flat or declining employment, said USD economist Alan Gin, who compiles the index.”
“The weakest area of the economy continues to be housing. With home prices falling 19 percent and foreclosures jumping 128 percent over the past year, home builders cut their plans to build new homes, which could lead to further layoffs at construction firms.”
“Only 193 new residential units received building permits in March. That is the lowest number since November 1992, in the midst of the region’s previous housing recession. Only eight multifamily units were authorized, compared with 804 units in March 2007.”
“‘My guess is that all the foreclosures coming onto the market are keeping new units from being built,’ said Marney Cox, economist with the San Diego Association of Governments. ‘Until we slog our way through that, I doubt that we’ll see much of a pickup at all in the construction of new units.’”
“For the first quarter of 2008, total residential units authorized are down more than 63 percent compared with the first quarter of 2007. Single-family units authorized were down 48 percent while multifamily units authorized were down nearly 74 percent.”
“‘What is particularly troubling is that 2007 was already the slowest year for building permits since 1996,’ Gin said.”
The Desert Sun. “New figures released Wednesday show 729 Coachella Valley homes were sold in March…down 30.2 percent from March 2007, according to DataQuick. The median price for the valley was $330,000, down 17.5 percent from March of last year.”
“The resale of existing homes are also down, 25.1 percent from March 2007. New construction continues to take the biggest hit. The 119 new homes sold is down 58.5 percent from March 2007. March and April are usually two of the Coachella Valley’s stronger months.”
“Just last week, Windermere Real Estate had nine offers on a mid-level Cathedral City property that was in a stage of foreclosure, said Nathan Heibeck, director of agent development. ‘Banks are pricing REO inventory (which are in a stage of foreclosure) to sell and this property was priced to sell,’ Heibeck said.”
“In Riverside County, 53.6 percent of all homes that resold in March were foreclosure-related; statewide, it was 35.8 percent. DataQuick officials didn’t have specific percentages for the Coachella Valley.”
The Press Enterprise. “Rancho Cucamonga-based PFF Bancorp announced Wednesday evening it expects to post a loss of $159 million for the first quarter ending March 31. Like some rivals but to a larger extent, PFF has been hit hard by the Inland area’s housing downturn. As new homes have sat empty, amid rising foreclosures and dropping values, PFF has had trouble collecting on loans it made to home builders and residential developers.”
“The company also announced the sale of nearly all of the loan portfolio of Diversified Builder Services Inc., a PFF subsidiary. The subsidiary recorded a provision for loan losses of about $48 million in the quarter, reflecting write-downs associated with disposition of the portfolio.”
“Diversified Pacific Opportunity Fund, a private equity group headquartered in Rancho Cucamonga, recently purchased $60 million worth of loans from PFF for about 22.5 cents on the dollar.”
The Signal. “Despite speculation throughout the financial community that the Newhall Land and Farming Co.’s owner is on the verge of bankruptcy, officials with the Valencia builder remained tight-lipped this week.”
“LandSource’s forbearance agreement expired on April 16, and the debt negotiations have involved a reported $1.24 billion in loans. The partnership reportedly received a default notice early last week.”
“LandSource is comprised of Lennar Corp., LNR Property Corp. and MW Housing Partners, which is co-managed by MacFarlane partners and includes the California Public Employees’ Retirement System.”
“Asked Wednesday what, if any, kind of preparations have been made for the possibility of Newhall Land’s owner going bankrupt, Newhall Land spokeswoman Marlee Lauffer said: ‘I’m not going to respond to speculative questions. There are a variety of different options that are (under consideration).’”
“With some 15,000 acres and 23,000 homes, Newhall Land is LandSource’s primary investment. LandSource was formed in 2007.”
The Times Herald. “The local real estate market news is bad, unless you’re a buyer or investor interested in a Vallejo area house, local industry experts said Wednesday. Sales of homes in Vallejo and Benicia increased in the past month, and while average prices dropped, the decline may be slowing, Solano Association of Realtors president Lori Collins said.”
“‘What this means for sellers is that prices are still going down,’ Collins said. ‘I know of a house in Glen Cove that sold recently for about $300,000. That’s a house that a few years ago would have been $500,000 at least.’”
“‘For buyers, this is great news. There are homes in Vallejo that are really becoming affordable. It’s a great time for investors. We’re reaching a situation where an investor can rent out a house and the rent will cover the mortgage with possibly money left over. We haven’t seen that in long time,’ Collins said.”
“Vallejo’s median price fell about 33 percent since last year, while sales were down about 32 percent compared to a year ago, according to the latest industry statistics.”
“Alan Schwartzman of Benicia’s Advance Mortgage, said he senses that the amount and depth of price reductions locally has diminished. In other words, if values are still dropping, they may not be in free fall any more, he said.”
“‘Also, because the prices have come down, there’s a lot more inventory within the FHA (federally insured loan) limit, so people can buy with 3 percent down,’ Schwartzman said. ‘And 3 percent of $300,000 is a lot easier to come up with than 3 percent of $450,000.’”
“‘I feel there’s a lot more positive now than there was six months ago,’ he said. ‘I see it, I feel it and I believe it.’”
The Oakland Tribune. “Overgrown weeds. Trash abandoned in yards. Vandals stripping homes of copper and whatever they can sell for cash. Squatters moving in. Drug use. Foreclosed homes that go dark and neglected are leaving behind a trail of blight that Richmond officials and neighbors fear makes neighborhoods unsightly and attracts crime.”
“‘What happens with these properties has a serious potential to have a major destabilizing impact on neighborhoods,’ said Richmond police Chief Chris Magnus. ‘All it takes is a couple of foreclosures in an area as small as 100-owner occupied properties to have a dramatic impact on crime.’”
“Richmond has 2,242 homes entering or in foreclosure, according to RealtyTrac. The number of foreclosed homes from January to March increased 275 percent from that same period in 2007, a trend that is not unusual in a number of Bay Area cities, including Antioch and Brentwood, said Andrew LePage, a spokesman for DataQuick.”
“The value of a home near a vacant property typically drops by about $50,000, which affects neighbors and city property tax revenue, Magnus said, citing figures from mortgage industry reports.”
“Officials are trying to get blighted properties fixed, Magnus said. When it comes to foreclosed homes, figuring out who owns the property can be difficult. Sometimes, owners walk away or banks avoid retaking the title quickly so they don’t have the liability and responsibility of maintaining the properties or paying property taxes.”
“There is no easy solution. Wood boards often are used to cover windows and keep potential vandals out, but some in Richmond’s North and East neighborhood don’t think that’s the best tactic.”
“‘Boarding it up is supposed to keep people out, which is a good thing,’ resident Sandi Genser-Maack said. ‘We don’t want people squatting, but we don’t like boarding it up because it looks bad, it makes the neighborhood look bad.’”
The Mercury News. “California may be loosening its grip on two groups that helped define the Golden State during the 20th century: predominantly white baby boomers, who are now approaching retirement age, and Hispanics.”
“What’s happening with the white population is not classic ‘white flight,’ demographers say, but a departure of middle-income people for economic reasons.”
“‘It’s kind of an ongoing middle-class flight in an area that’s very pricey,’ said Bill Frey, a Brookings Institution demographer who analyzed the census numbers. ‘I think the steady state for coastal California, especially the Bay Area, will be people leaving that can’t afford to stay, given the housing prices and the cost of living.’”
“To demographers, one of the most interesting phenomena in the new numbers is what they say about the place of older, mostly white baby boomers in California.”
“The new data suggests that on the cusp of retirement, boomers in their late 50s and early 60s ‘are definitely moving out of California,’ said Mark Mather, associate VP of a demographic think tank in Washington, D.C. ‘People thinking about retirement are still moving out of high-cost states like California in favor of less crowded, less expensive areas.’”
“Whether boomers and whites will continue to leave is uncertain. Already, say demographers, there are hints in the new census data that the white population loss is slowing, perhaps because the housing slump is locking people in place.”
The Bakersfield Californian. “Real estate agent David Crisp’s former mansion sold Friday for $1.2 million, according to the Bakersfield MLS.”
“The sale price was about $500,000 lower than what Crisp, 28, paid for the 6,666-square-foot Seven Oaks home less than three years ago. When it was foreclosed on in December, he had borrowed at least $2.1 million against the property.”
“Crisp and his ex-business partner, Carl Cole, 60, have been linked to dozens of foreclosed properties, an ongoing Californian tally shows.”
‘The value of a home near a vacant property typically drops by about $50,000, which affects neighbors and city property tax revenue, Magnus said, citing figures from mortgage industry reports.’
Better stop building then. Hear that congress?
Although to be honest, Richmond does need razing to the ground.
Another correlation vs. causation error. The reason for the vacancy is the declining value, not vice versa.
“People are screwed.”
-Big V
“Hear that congress?”
It’s hard for them to hear when their heads are shoved so far up their asses.
Members of congress have anal glaucoma.
OVER SUPPLY!
Gawd, how many times must this be said?
Leigh
Shh! Let them keep building. It’ll provide the inexpensive housing that we need. Quiet!
“a departure of middle-income people for economic reasons.”
Neil called it, as did Deflationary Jane. Boomers and middle-class whites…going, going, gone.
We’re about to be part of that white flight statistic. Please note the flight of hispanic origin families was mentioned as well.
We are also fleeing CA for greener pastures - literally.
We’re short timers now, only 7 weeks left in the Suck (meaning CA, not the real Suck. Devil dogs know what I mean).
YUUUUUTTTT!
Reminds of the three realtors we used.
Two stated that due to longer selling cycle, they’d have to charge us more. Third told us that he rather get the business than lose commission.
Guess whom we picked?
Similar here in California. They are not talking about lowering the cost of living to keep people here and maybe even bring some more people back.
The State wants to increase taxes and fees to help with the budget shortfalls caused by this bubble.
Nice going…*mumbles*idiots…
Taxes and fees are not what’s responsible for the cost of living. It’s just that CA is a very economically successful state with abundant natural resources and glorious climate/beauty. That makes things more expensive, but also causes high pay.
The problem that the middle class confronts is one of rampant job transfer from white, middle-class citizens to Hispanic illegal immigrants and H1-B visa recipients who are willing to work for very little. That, however, is starting to change. Don’t worry, white people are not going to start hating California. The pendulum swings in both directions.
Illegals are costing us $33 Billion in California. Hospitals going bankrupt, screwels over crowded and bad, 40% of prison pop are illegals. Sucking social security and disability funds dry. Don’t you just love it?
38 million people share the sunny state. How many are investor landlords?
How many equity extractors?
How many white boomers?
How many non card carrying americans?
How long will it be until all our utility bills rise to meet the cost of inflation?
“38 million people share the sunny state.”
And roughly 14-million of them are income taxpayers.
40% of prison pop are illegals.
So why not just deport them instead of providing them with shelter, food, and medical care at the taxpayers’ expense?
Oh I forgot, the prison-industrial complex needs the money.
Great idea, if we could make sure they wouldn’t just come right back.
As a boomer planning retirement, that is what we did - bought in another state with all around lower cost of living. It makes sense if you don’t want to work yourself to death saving to pay to live in CA for retirement. Life is not all that long and I doubt I’ll wish near the end that I had worked more and amassed lots of money to leave when I’m gone.
ARC,
Check the tax implications living out of state. I believe CA can collect taxes from your retirement fund if it originated in the state (please note I may be wrong on this).
California was taxing pensions earned in California even after residents moved but no longer.
Thanks taxloopholes.
When did they stop doing this?
I think Tenn fought NY on this issue and won.
The teachers and other state employees sued and won. Cal no longer can tax pensions if person moves to another state. With state tax of 9.3% on income over $40k ‘Hi Ho Silver Away’.
Changed by federal law in the mid-late 90s and updated recently. I posted a bit about this a couple of weeks ago.
Middle class with any equity left in their homes if they can transfer, run out of California. Taxes increasing, housing falling faster as California the sunshine state has the largest Altr A loan payments not being made and gas prices as some of the highest in the nation all make for a dim picture. Wealthy not worried, poor can’t do anything and middle class stand by as their living standard is destroyed.
Not directed at anyone posting (or anyone).
Scenario: Middle class transits from Cali.
Who fills in the blanks?
I see lonely rich people.
Leigh
I see dead rich people.
The thing is that this isn’t just for California, but more generally for a large number of major metropolitan areas. The Relocation forums are absolutely crammed with young 20-30-something families, working class families, boomers, and even some well-off professionals. All of these people are from Chicago, Boston, Ney York, Florida, California, Arizona, Washington, Minneapolis… and so on.
If you look at the big picture, there’s a vastly more troubling scenario unfolding.Simply put, most large metros are incapable of dealing with inflationary pressures. The “fix” for people is to move, which would suggest that the problem that caused this to happen will only repeat itself eventually in the cities they move to.
It’s that nasty, durn growth cycle. As long as things are go-go, growth miraculously pays for infrastructure, salaries, pensions, you name it, it’s like Miracle Gro. Stop the growth machine, it’s like that Visa advert where people, shock, pull out cash dollars and the world stands still.
Yep. They keep moving into low tax areas and voting to raise property taxes. It’s for the teachers’ union, ahem, I mean, children.
I guess its time turn over CA to Mexico.
Thanks the hattip Spike66,
But we’re not done yet. We’re in a pause. Knowledge workers primarily move during the school semester breaks (summer and a smaller number in winter). They value education too much to disrupt their kids (or their boss won’t dare risk a move during school season).
Many are fed up. I have hordes of coworkers excited to apply for job transfers this summer to states they would never have considered five years ago. Heck, five years ago it would have been joke city. Not now.
There is a new Meme going through well to do areas that I find fascinating: “I can afford a million dollar home and I’m going to go and buy a million dollar home, not a shack!” For the record, I’m hearing this from individuals who truly could afford a million dollar home. Some are fellow HBB’ers, most are ‘normal’ professionals who see no value in purchasing in the bubble markets. (Its not just California, but also DC and NYC.)
This is a self re-inforcing cycle. California is cutting back services to the middle class (UC system, k-12 schooling, roads, rail, police/fire) while trying to preserve spending the middle class can not see the value in.
I still remember the 1990’s recession like it was last year. This feels like 1993… everyone thinks things will hold together, but they worry it won’t.
1994 and 1995 changed the state.
Three of the four big aerospace companies are moving people in bulk in 2008/2009. None are moving out of bubble areas, but they are trying to move enough so that attrition slows. How can it be so bad? Simple, the nuclear power industry has always pilfered aerospace during their growth times and if I know eight people who have already received job offers…
If you have friends in Colorado Springs, Houston, Huntsville, or near the Eglan(d?) Air Force base in Florida, take a moment to ask them what corporate logos are going up on the new buildings.
BTW, I’ve been cheating on getting this information. One of my mentors retired and somehow stumbled on an odd new career… Moving aerospace departments out of bubble areas. He goes in, shakes up the projects, raises the heat… pisses off the workforce… and then everyone is offered a relocation to low cost of living area X that will be under a known ‘employee friendly boss who has been a member of aerospace company Y for a lot of years…’
Works every time and this guy gets an amazing bonus every time a building can be sold off. (He even turned the lights off for an entire campus… I still shocked the MSM missed that one! I only know of four that have been bulldozed in bubble markets in the last three years…) Its win-win and he’s smart enough not to shut down anything within 90 minutes of his primary residence (no ill will amoung neighbors).
FYI, the guy is also a brilliant scientist. But being the bad guy pays…. a lot more. Down side is the weekend only home life.
Got Popcorn?
Neil
He goes in, shakes up the projects, raises the heat… pisses off the workforce… and then everyone is offered a relocation to low cost of living area X that will be under a known ‘employee friendly boss who has been a member of aerospace company Y for a lot of years…’
“Goodwill toward men”? Or “Decrease the excess population”.
Just because something is not illegal does not make it right. Example: Federal Reserve
Ugh! Having been through a Aerospace plant shutdown in the early 1990’s and having to apply for my job like that scene in “Office space” I can only say that your mentors companies’ employees will be tweeked now. I guess the problem is Areospace can’t hire H1B workers so has to find a way to break American workers so they too will grovel and run around like frightened rabbits , not a pretty sight. Acually happening right now were I work although my present company is not Aerospace. Got a guy I work with everyday freaked out he will get laid off and then he can’t afford his house payments. Nope not pretty and a real good reason to rent.
Got Tequilla ?
Neil,
Eglin Air Force Base. Fort. Walton. Beach. Crestview. Niceville.
Last, but not least, Destin. Err…Cape San Blas.
Leigh
Oh shoot, I forgot about Colorado Springs, Houston - hey- have we met??
Leigh
P.S. Defense Science Board?
Interesting stat here, between April 1rst and May 1rst the median wishing price in Palmdale 93552 fell from 300K to 270K. 10% in one month!
Capitulation?
More likely is change in mix of houses. More low end houses coming in the market hoping to sell during the hot spring selling season.
Just like median price is greatly influenced by mix of houses, so is medain list.
If you can find price/sqft data you will likely see much slower movement in the median sell and median ask.
That said, the value of my house fell 10% in about a week when two neighbors decided to take the money and run, each selling for 10% below previous appraised value, and setting a new appraised value 10% lower for the next transactions to be 10% under.
Had an arguement today with a lady that was sure new “longer term loans” were going to come along and make houses more affordable at higher prices. See, in the depression you could only get a 5 year loan, and after innovation you could get a 30 year.
Yeah lady, but! On a 5 year loan, principal is 66% of your payment. At 15 year, it is 35%. At 30 years, principal is only 10% of the payment. At 40 years it is 6%.
So, by going I/O, INFINATE term, you slice 10% off the payment as opposed from going from 5 year to 30 year where you cut the payment by over 60%.
BUT, if you factor in higher rates for longer terms, really, NO MORE affordability gains can be acheived by lengthening the term of repayment beyond 30 years!
She got mad.
Besides, no one wants to take out a 50-year loan becuase it would cost less for them to just rent for the rest of their lives than it would for them to pay interest on a high balance for 50 years. Furthermore, with prices droping, most people don’t want a loan at all.
In addition to effectively renting, you also get all of the liabilities that a landlord would have. Is there any scenario where taking out a loan of that length makes sense?
No disrespect-D.I.R.E.S.P.E.C.T. (Lawd, I feel a song coming on!)
Some do have 40 -50 year mortgages (not often in America).
Ya just can’t make this stuff up!
Leigh
Shoot - RESPECT
oo) What you want
(oo) Baby, I got
(oo) What you need
(oo) Do you know I got it?
(oo) All I’m askin’
(oo) Is for a little respect when you come home (just a little bit)
Hey baby (just a little bit) when you get home
(just a little bit) mister (just a little bit)
Dont’cha try to get a song out of your head?
Leigh
I’ve been playing with mortgage calculators to see what happens on a 200K balance. If an adjustable goes from 3% interest only to 6% on a 5/25 should drop the monthly payment by going over a 40 year term on the remaining balance by about 10% from the first reset, and about 40% from the 10 year reset…am I calculating this wrong?
Not that I am suggesting this is a good idea…it just prolongs the pain. A 40 year mortgage for a FB would wipe out any chance of saving for retirement or anything else.
Was the “innovation” just another factor that made prices go up? I mean they were paying what, 1500 for a house back then?
“Had an argument today with a lady that was sure new “longer term loans” were going to come along and make houses more affordable at higher prices.”
Next time just kick her in the t*ts. Much easier than trying to reason with her.
I love my hubby - with all my heart, and I’m a lucky lady, for he loves me.
We spoke about the 40 year mortgage - in his defense, he debated well.
Math. Does. Not. Lie.
“there are hints in the new census data that the white population loss is slowing, perhaps because the housing slump is locking people in place.”
When everyone has the same retirement plan, selling an overpriced property to a sucker then moving someplace less expensive, it tends to not work very well. The exit door is jammed with sellers.
It’s not just those that want to relocate to lower cost areas that are locked in. It’s effectively almost anyone that owns that wants to relocate. Those that are renting are going to be grateful for the flexibility in relocating if needed. For those that own, it might take 5 or more years before enough stability returns to the housing and credit markets to support past levels of mobility and even then might not return to anywhere near the levels of the past ten years for decades.
I remember the boarded up houses on Long Island NY in the 70s.
Very few Squatters but lots of teenagers looking for party houses.
The neighbors would always call the police when they saw kids in an abandoned house, but once the boards were up no one could see in and the kids were free to party on.
Baby boomers leaving? Ha ha ha ha ha ha ha. But, that’s impossible. It has already been proven that places like Shallow Alto and its ilk are invincible to crashes because of all the “rich retired people and their Prop 13 status”.
Ah, science.
Lot of truth to that. My dad lives there (since 1962) and pays about $1200 a year in property tax. If he sold his place, the buyer would pay about $12,000. Prop 13 screwed young families and was one reason people like me moved away. Thanks for the reasonably-priced education. Sorry you chased me away before I could pay it back.
No prop 13 didnt do that. It was the idiots who keep overpaying for homes. Palo Alto wasnt that expensive
relative to other place in area. The problem
is prices have gone up 300-400% in just the past 10 years.
So dont blame prop 13…
Why does it have to be one or the other? Prop 13 and the bubble together would seem to do the trick.
And like or not, any proposition that lowers taxes in some way for a group of existing home owners must raise taxes and prices for the newcomers.
I use my dear departed grandma as an example of both the subsidy phenomena and why it’s clear that a young age, I’ve lost all my tender emotions.
The state of VT has had a program for years that gives close to 100% refunds for elderly, low income property owners. This is the warm and fuzzy “save our homes” move.
My grandmother, sitting on semi-prime property (for VT) was able to stay in her home for close to a decade after my grandfather died, in part because of this program. What it mean from an efficiency standpoint, however, was that 1 single elderly woman on a tiny income could effectively compete with younger working households for the same housing.
If the program had not existed, she probably would have been forced to sell (to probably a working household) and move into an apartment. This would have been a more efficient overall solution than what actually happened.
So I realize here, that I’m advocating the removal of subsidies from the elderly and kicking little old ladies out of their homes.
On the balance, though, if someone can’t even pay fair market property taxes, how are they going to maintain that home? It would have been a big emotional shock for my grandmother to sell, but she fretted about maintenance on that house until the day she died (literally). I think there’s a good chance she might have been much happier if someone else worried about the roof and plumbing.
I think 99% of this bubble is/was crazy financing but the current craze to protect existing homeowners in some fashion from “out of control” property taxes ends up looking mini-ponzi scheme in whatever form it takes. The “other” group (out of staters, new homeowners, the young) all must see both their property taxes and prices from artificially high demand go up to protect the “in” group.
Well, I think your grandma deserves to stay in her own house after raising your mom/dad and helping to raise you, your siblings, and your cousins. However, I don’t understand why Prop 13 provides protection for commercial property, investment property, and nonprimary residences.
Oh V - music to my ears. It really pisses me off that what was sold as savior for the fixed income elderly was really used to suck the life out of the state all for the benefit of bidness. Yeah, yeah, yeah - trickle down - they invest and make jobs for the masses - blah blah blah - dut their taxes so they can help the lowly middle class yadiddy yadiddy we need to help the rich and make everything bidness friendly to save the state. Not working out so well.
Well, I think your grandma deserves to stay in her own house after raising your mom/dad and helping to raise you, your siblings, and your cousins.
LOL - you clearly didn’t meet grandma. She did raise my Dad and Aunt and helped with my cousin in a divorce situation. Everyone’s else kids were their own problem.
The problem word for me in your sentence is “deserve”. I think everyone deserves an affordable, appropriate, clean and comfortable place to live. That doesn’t equal the housing they lived in while raising a family.
And how about what “the others” deserve ? My grandmother, while she was my age, enjoyed a situation where she was not competing with housing subsidized for the already established. (Actually, I believe the GI bill tilted the scales *towards* the young and working.) Don’t I “deserve” the same? Why do I have to pay sky high taxes/housing prices she didn’t have to face?
deserve = entitled.
I will say most people really need to read up on the history of Prop 13 and Jarvis’ backing and financing by the Los Angeles Apartment Owners Assoc. and the UTO.
It’s a great piece of faux populism. It was always meant to be a huge tax break for land owning corporations. Jarvis just _said_ it was to save poor grandma and grandpa to sell it to the CA public.
He was a really ugly small person. If there is a hell, I’m sure he has a management position.
Some retired people do not pay one cent in taxes - state, fed or property, and of course not social security. It depends entirely on status, age, income deductions and the state they live in. When you retire look for a state that has liberal tax laws. Your total retiree income might be low but you can save significant amounts (thru these loopholes) and live quite well.
Don’t I “deserve” the same? Why do I have to pay sky high taxes/housing prices she didn’t have to face?
prop 13 is werid but eventualy the old folks will pass away leaving their CA homes to be bought by H1B visa workers who are hired more for the fact that if they don’t grovel like slaves they get kicked out of the country. I’ve worked with so many of them doing pointless BS work on weekends for really no good reason. of course I can say no and not worry about getting booted out of the country. Managers hate that.
“”And how about what “the others” deserve ? My grandmother, while she was my age, enjoyed a situation where she was not competing with housing subsidized for the already established. (Actually, I believe the GI bill tilted the scales *towards* the young and working.) Don’t I “deserve” the same? Why do I have to pay sky high taxes/housing prices she didn’t have to face?”"
No disrespect - The GI bill tilted toward the young and working?
I do not know your situation, so I will not disrespect you or your grams.
I do know, my tough ‘ol gal (grams) subsided on a dead husband’s Korean War Vet Fund.
Nicest person on the planet, and she (at 91 young years) can still squeeze the nickle ’til the buffulo poos!
Best,
Leigh
GI Bill = cheap home loans (I think) for returning GIs. I could be totally wrong.
I’m not against income streams for old ladies - I hope to be one myself one day. My issue is only with that the idea that an a elderly person with a low income, “deserves” a house they cannot afford or maintain without a tax break. No house does not equal homeless.
..since 1962) and pays about $1200 a year in property tax. If he sold his place, the buyer would pay about $12,000. Prop 13 screwed young families …
I fail to see the logic. The new buyer is gonna pay according to the 2008 assessed value, no matter what happened or didnt happen to the prior owner’s taxes in the past..
If dad bought a home in ‘62 and there was no Prop 13, his tax bill would rise year after year until he sells, as the assessed value of the home rose.
Jump to 2008 when the home’s value has quintupled. Dad paid a sh*tload of taxes along the way.. but this matters not in the least to the new buyer. The new buyer’s tax basis is the current 2008 assessment… the same amount dad is paying this year.
The only person who lost out, paying more in taxes without Prop 13 than with it, was dad.
the point is, if services are being roughly evenly distributed, those paying “more” are subsidizing those paying less.
if those being protected by prop13 paid something closer to what the rest were paying there would either be lower taxes on newbies, or less strain in budgets.
well, i know people argue about the effects of Prop 13 but MacAttack didn’t mention that part of it.
Calif govt tax ‘n spending has always been out of control. On top of that, the property tax situation got so out of hand that people (like fixed-income people) were unable to keep up, and were losing properties.
Schools were funded by property tax alone, no matter if you had kids in school or not, or were 89 years old or not. (if you think it comes back in rent, think rent control..)
No matter who was elected, the situation worsened, so Californians thought they’d try and starve the Beast… thinking.. we’ll force them to cut spending.
As we all know, politicians are not so easily disuaded. They will find a way to get the money from other sources and piss it away on social programs, mostly pandering to the majority-non-property owners, and on growing the bloated government even further.. and they succeeded and were not deterred in the least.
The objective was never about spreading the misery equally. Prop 13 helped the people who were being viciously mauled at the time that it passed.
It failed to reign in spending or reform the govt. It did put pressure on local govts to pay more of the costs for local schooling and yes, old property owners do get a “discount” on some services… Oh well, nothing’s perfect.. but if anyone thinks that Calif’s tax situation would be just rosey had Prop13 never passed, or that it’s some kind of obvious fact that new owners would now be suffering less had it not passed, they are mistaken.
“Real estate agent David Crisp’s former mansion sold Friday for $1.2 million, according to the Bakersfield MLS.”
Some nut paid 1.2 for that! Not at all impressive, cheesy looking place. Looks like it’s built out of that cement covered Styrofoam .
What’s happening with the white population is not classic ‘white flight,’ demographers say, but a departure of middle-income people for economic reasons
Count myself and family as part of this. Middle aged educationed professionals that had reasonably good jobs left for less expensive area when wifey wanting a house for kids. And Arnold and Co. are surprised. I remember talking to the moving van driver. He said he was empty driving into California (Bay area) and full coming out (to NM and TX).
Ah, thinning the herd.
Spent an average of at least 5 mos/yr in CA 1992-2008. Seriously thinking of looking at Palm Beach County next winter. Seriously thinking of looking at Palm Beach [sic]…my uncle was one of the two dumbest boys who ever went to Yale (his chem prof said), so I could be one of the two poorest people who ever lived in Palm Beach, why not.
“one of the two dumbest boys who ever went to Yale”
Do we even have to ask who the other one was?
…and my favorite quote of his.
” I never said I was a rocket surgeon “
Actually, the the news is still bad for Vallejo. They have more houses than people who live there. They will not clear that inventory until they get more jobs.
Think Detroit.
“They will not clear that inventory until they get more jobs.
Think Detroit.”
Think America!
F*ck yah!
Sorry, got the “Team America” song stuck in my head when you said that.
Anyway, I have a coworker who dumped the house her FIL left to them last year. She had to fight with her husband to get him to agree to sell (Febish of 2007) because he was SURE he’d get more by holding on for a recovery, and now he’s pleased as punch. The comps have dropped by about 100k since then. Ouchies!
Good for you and your friend, sfbubblebuyer, we wives have to keep our husbands educated at all times, otherwise they will start to use the money!
“They will not clear that inventory until they get more jobs.
Think Detroit.”
Think America!
Think of America taking unserviceable debt just as the Titanic took on water.
California banks and American banks in general, are not too big to fail, just as the Titanic was not too big to sink. For many people, imagining the catastrophe may have been unthinkable beforehand, but that certainly changed as and when it happened. After the fact it’s very easy to see the physics and design flaws. The compartments were not watertight in themselves; so as one section filled with water it brought more and more of the ship below the waterline.
Now, mentally jump to foreclosures putting people underwater in their mortgages. Sections of cities and sections of counties are going down fast in California and elsewhere. Does anyone here not realize that the FDIC, Citibank, Credit Suisse, California, Florida, etc, etc, are not unbreakable fiscally? Of course they are, and the one trillion tons of underwater mortgage debt can split the good ship America fiscally, just like the Titanic did physically.
The only “fix” is to suddenly increase “affordability” across the board, which is fiscally impossible, just as restoring “floatability” was impossible aboard the Titanic AFTER the hull was breached across several sections. Unthinkable or not,
some very bad things are happening, and because they involve economic trends on a grand scale, many wish and hope for a happy ending.
Take care of yourselves, your families and children, and be prepared for things you never thought you’d see in this country.
California Titantic meet 20 billion dollar deficit iceberg.
Whoops,
Titantic = Titanic.
And still the stock market soared today. Brain meet window. Out you go!
Not every Captain sails into an iceburg and declares:
No. One. Will. Survive.
I am all for Richmond being firebombed so not a thing is standing. And then start over from scratch and build some nice stuff. That has to be one of the worst gang-infested, slimiest, most dangerous and polluted places (thank you Chevron) in the whole country. I was scared and nervous passing through that slimepit even on the freeway. Forget getting off and going through the place.
What was the name of the movie in which Kurt Russell was the hero with the name of ‘SNAKE’ ? Something about N.Y. or LA. Sounds like Richmond? Help me out sports fans. hehehehehehe
Escape from New York and Escape from L.A. respectively. You are very evil
” That has to be one of the worst gang-infested, slimiest, most dangerous and polluted places (thank you Chevron) in the whole country. I was scared and nervous passing through that slimepit even on the freeway.”
Sounds like large parts of the IE and LA. The northeast San fernando valley including pacoima, san fernando, sun valley ect. have all those problems including polluting on a big scale. I have mentioned the part of the IE which has those severe polluting industrial scarring problems on a eralier post: here is an exerpt from that posting:
‘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. ‘
I know all those places. Richmond makes the Pacoima/SV area look good. No- I’ am not kidding.
bay area oldtimer’s have told me Richmond was a very nice place to live and work in back in the day.. probably meaning pre-WW2.
“‘For buyers, this is great news. There are homes in Vallejo that are really becoming affordable. It’s a great time for investors. We’re reaching a situation where an investor can rent out a house and the rent will cover the mortgage with possibly money left over. We haven’t seen that in long time,’ Collins said.”
No WAY. A $300K house in Vallejo will rent for $1450 a month at most.
“A $300K house in Vallejo will rent for $1450 a month at most.”
And section-8 will cover about $1200 of that…for some loser.
Where’s Crispy? I still think he should have rented a big donkey to take a crap in Crisp’s yard. He could have photographed it and sold it to Billery for a campaign sign.
Good news. I’m almost ready to open that champagne bottle and pour myself a nice glass. Check this McMansion on the corner of Overland and Olympic. Early in 2007 I saw it come up, go for sale, then for lease, then sell for 2.35 million 2007. Guess what, a listing is worth a thousand words. Talk about a haircut.
http://www.redfin.com/CA/LOS-ANGELES/2203-OVERLAND-Ave-90064/home/6799013
Hmm, other than the quality of being “big” I don’t see much to get excited about. Ho-Hum Bathrooms & Kitchen. I think it needs another haircut, this time using the number one comb.
What I’m excited about is that it sold for over 2.3 million just over a year ago…
“What I’m excited about is that it sold for over 2.3 million just over a year ago”
U should repost or paste this on LA land Blog. too many disbelievers still on that site, which is 50% westside postings anyway. Still half of posters on LA land believe that westside will stay up in prices. Unbelieviable!!
I post at least one item a day on each subtopic in LA Land, and thanks to the knowledge gained from bens blog i am well armed to wade thru the disbelievers.
Going for $1.6M…
Wow. During the bubble, the price spread between good and great home shrank right along with the bond risk premiums. Just as those risk premiums first reared their ugly head in low quality bonds, so will the price drops in the more ’scratched and dented’ homes.
But what was also very interesting from the link:
Closest homes of similar size and type, and sold within the past six months:
$1,700,000
2207 PELHAM AVE
Sold on Dec 07, 2007 0.06 miles
5 br / 5 ba
3,862 Sq. Ft.
$641,500
2042 GREENFIELD AVE
Sold on Jan 18, 2008 0.5 miles
4 br / 4 ba
3,748 Sq. Ft.
$835,000
2255 FOX HILLS DR
Sold on Feb 08, 2008 0.81 miles
6 br / 6 ba
3,957 Sq. Ft
the only one that sold at a similar price to the list price is already an expired comp! This price is chasing the market down and is FAR behind the curve already!
Both my folks and my wife’s live in a very nice area that is seperated into these little ‘enclaves’ that all have their own name. Normally there are ~3 sales per month in each enclave (they’re not all quite the same size, with 4 or 5 per month in the summer normal). Sum for my folks and the in-laws enclave for 2008: ZERO closed sales, two homes dropped out of escrow, none currently pending.
Not 1, nor 2, nor 3… in a prime LA city.
Cue violin music.
Got Popcorn?
Neil
I live right near this place. It’s a desirable neighborhood but I think there’s something fishy going on with the real estate. Lots of homes for sale, get sold fast, then up for sale again in weeks. Are they going back to the bank and hitting the market as REO’s? Also, who’s buying? Asking prices are 900K minimum for the area so even with the new jumbo loans, you’re looking at 200k downpayment and huge monthly payment. This house is one of the bigger ones, but most are 3bed 1 bath places built in the 40’s when houses were smaller. Real estate investors are always sniffing around nearby complexes but the prices are too high so they don’t buy. If the smart money is staying away, only people with no knowledge of the market or insanely wealthy are buying.
Whether the person who paid 2.3 million for a house getting all that Olympic traffic was stupid or insanely wealthy, I have no way of knowing. The one thing we know is they want out…
“was stupid or insanely wealthy”
You would be amazed how often those two things go together. It doesn’t take a f-cking genius to inherit a trust fund.
It takes a genius to preserve a trust fund.
I drive by this house every morning! I am so happy to see the specuvestors take it in the shorts. That lotbuster is BUTT-FUGLY! Totally ruins the neighborhood aesthetic.
That’s awesome, although I would prefer to see it demolished to make way for a smaller house with an actual yard around the stupid thing.
Most I’d pay for that sucker is $400K, tops. One of my friends just bought something even better in a very nice part of Pittsburgh for $350K.
Guess L.A. has a ways to go…
Got a ways to go.
Olympic & Overland is not Westwood - just old joke from the hood about “south of Wilshire” not really being Westwood. In the old days, Westwood was Sepulveda to HIlgard & Sunset to Wilshire. But talk about a horrid location. The traffic noise and dirt would be horrible. One of the busiest intersections on the westside. I see they’re continuing to McMansion the flats - lovely little houses on big lots now are lot line to lot line piles of faux you name it.
Regarding that olympic & overland house. It is rancho park. That area is all 3/1-3/2 1200-1800 wwii housing and slightly upscale middle class: not brentwood/BH posh except for a few overpriced monstrosities like this. Any house facing busy olympic is suspect as there are actually abandoned weedy properties, lots, and businesses along olympic-believe it or not.
The earlier poster was suspicious of fast buying/selling schemes on 1-2 million $ properties in this area.. This may be some type of family to family selling or something like this going on. Price droping from 2.3 down to 1.6 is still 1 million too high for a property facing a busy blvd and on corner of two busy streets.
This is a scam property . Next buyer will bump up price to 2 milion to resell it , maybe get a sucker to take the bait. Maybe a commisson- generator for crooked realtor/investor/scammer/fippiers.
Westide is not immune from Re scams and cons.
Nice haircut from the Bixby Knolls area of Long Beach CA.
Sold 05/01/06 $695,000
REO list price $447,900
35% decrease.
“Nice haircut from the Bixby Knolls area of Long Beach CA.
Sold 05/01/06 $695,000
REO list price $447,900
35% decrease. ”
I live next to bixby and go there daily. There are some really nice well kept up homes there, even stately old mansions on quiet streets. Those homeowners there are in for a rude shock, when they find their zip prices collapsing -actually it already has dropped about 20% neg yoy. Bixby is small pocket of nice upper- class homes surrounded by dumps such as LB 90805 and signal hill.
The surrounding hood can reach down into that nice bixby pocket -the infamous 2006 beating of 3 female white teens by a gangpack of teenage blacks took place in heart of bixby on halloween night.
Bixby area is getting hammered by the recession and dissappearing mew.
I just checked today and there are 50 single Family homes for sale in Signal Hill, CA and only 1 in escrow at a list price of $699,000. S.H. is ground zero for REO’S because prices are about 2003 levels and most of the homes were built and sold after that date. I bet most are underwater.
PS, A NOD was filed on a home on LA Linda Drive.
Nice Haircut!
I’ll be in NYC this weekend. In addition to viewing the pre-carnage, I hope I have time to hit The Palm to gauge steakflation.
Let the renters eat tenderloin!
Capital Grille. I like The Palm but I would go to Capital Grille. You can find one at 42nd and Lexington near the Chrysler Building.
“‘I feel there’s a lot more positive now than there was six months ago,’ he said. ‘I see it, I feel it and I believe it.’”
In another year, the only thing he’ll see, feel, and believe in is the Joshua Tree.
I see no difference between this guy’s perception of the housing market and a blow-up doll.
“‘Also, because the prices have come down, there’s a lot more inventory within the FHA (federally insured loan) limit, so people can buy with 3 percent down,’ Schwartzman said. ‘And 3 percent of $300,000 is a lot easier to come up with than 3 percent of $450,000.’”
“‘I feel there’s a lot more positive now than there was six months ago,’ he said. ‘I see it, I feel it and I believe it.’”
I’m just getting sick of this FHA is going to save the day bull-sh*t. Look, this type of financing has always been around, it’s just that it almost went extinct during the era of no-doc, easy money 100% financing. The bottom line is you still have to qualify FULL DOC with traditional FHA guidelines. Great! Bring on FHA! Because all it means is that houses are still going to have to be affordable to sell. Heck, I don’t care if FHA gives them 100% and pays for their closing costs, as long as they have to prove they can afford the home by traditional FHA guidelines. Bring it on! The only thing I feel sorry for is the poor sap LO who’s going to wear himself out originating tons of apps with no closings. Oh well, at least he/she will feel like they’re getting busy again. Gotta love that “all work and no pay” thing!
check out the Canseco foreclosure story on Yahoo newz
Classic! I’m sure this will be fodder in the morning Bits Bucket.
The News Is Bad, Unless You’re A Buyer
Such a bunch of negative Nellies! Let’s turn that frown upside-down: “The News Is Good, Unless You’re a Seller.” There, much better!
Yeah bun, im so sick of worrying about families losing their homes that I’m sleepless. I’ll just be waiting for 250K near the beach.
“Only 193 new residential units received building permits in March. That is the lowest number since November 1992, in the midst of the region’s previous housing recession. Only eight multifamily units were authorized, compared with 804 units in March 2007.”
That’s finally a big drop for multifamily units that’s long overdue given the glut. It’s only taken until nearly two years into the downturn. However, I still see plenty of new units hitting the market and others that have just broken ground. There are a few where work has stopped completely, lacking financing. In the near term, the glut is going to continue to grow.
I expect given increasing energy costs that multifamily units will eventually be a stronger area of growth in the future. That might not be for a decade or more into the future, though. However, in the interim, prices still need to fall significantly to work through the current glut.
Jose Conseco sends jingle mail
http://news.yahoo.com/s/nm/20080501/sp_nm/canseco_foreclosure_dc
“I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else,” he said.
Wow, check this out
http://news.yahoo.com/s/nm/20080501/sp_nm/canseco_foreclosure_dc
Canseco tries to steal home, throne out by horrible ARM….
weak sauce.
Since txchick pointed out, here is the link. Those that once thought they were financially ‘it’ now losing it. No sympathy from me for someone having made so much, and reckless spending doing them in.
http://news.yahoo.com/s/nm/20080501/sp_nm/canseco_foreclosure_dc
Was a lot of lipstick missing too? Was this done by Jose trying to hide his foreclosure?
http://news.yahoo.com/s/nm/20080430/od_nm/pig_dc;_ylt=AjPNJZnDsQCcBUoQlnmLGmIuQE4F
Peter, also agree with you that part of the IE you mention needs to go also in the same manner as Richmond (and a lot of Oakland, So Cntrl LA, etc).
Peter, also agree with you that part of the IE you mention needs to go also in the same manner as Richmond (and a lot of Oakland, So Cntrl LA, et
A couple passes by a b-2 bomber loaded to the gills should ‘improve’ Scentral.
Those folks needing Joshua Trees also need a few Yucca Trees to go with them. Great education for the used house tards.
keep loading up the shoe droppers…….financial melt up underway.
and not one Jas Jain comment to bitchslap.
look at how much the world crazes over a strong dollar, and moderating commodities….keep up the good works.
How does the public get ahold of loans at 22 cents on the dollar? I’d like to buy, unless they’re seconds.