The American Dream Has Not Gone Bust, It’s Just Recycled
Some housing bubble news from Wall Street and Washington. MarketWatch, “In a sign that the U.S. housing market may have further to weaken, an index of sales contracts on previously owned homes fell 1.0% in March from the prior month, the National Association of Realtors reported Wednesday. The NAR’s index, considered a leading indicator of existing home sales, was 20.1% below the March 2007 level.”
“Some observers were cheered by last month’s report that signaled a bottom could be approaching. However, the February index was revised to a decline of 2.8% from the prior estimate of a 1.9% drop.”
“‘Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs,’ said Lawrence Yun, NAR chief economist. ‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
From Bloomberg. “Florida home builder WCI Communities reported its sixth consecutive loss. The first quarter net loss widened to $84.1 million,, the Bonita Springs-based company said Wednesday in a statement. Revenue declined 59 percent to $137.1 million.”
“WCI said net new orders fell 23 percent to 183 and completed home sales declined 45 percent to 309.”
“‘Beyond the seasonal lift in Florida, there are no signs that demand has firmed — many potential purchasers continue to sit on the sidelines afraid of falling prices and the direction of the economy,’ CEO Jerry Starkey said in the statement.”
“‘We…saw a dramatic drop in traffic and new orders in the Northeast and Mid-Atlantic,’ said Starkey. Most of WCI’s business is concentrated in Florida, but it also builds in the New York and Washington, D.C., metropolitan areas.”
The St Petersburg Times. “St. Joe Co., the state’s top private landowner with 638,000 acres spread mostly across the Florida Panhandle, suggests the real estate market in its neck of the woods might have bottomed. The company’s task now is to ‘retrain’ buyers that home purchases can’t be deferred forever, CEO Peter Rummell said Tuesday.”
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
“St. Joe’s residential housing business, mainly Gulf Coast resort property, has been in free fall. Its closest project to the Tampa Bay area is the SevenShore condominium project in Bradenton. The residential side of the business brought in $30-million in early 2007 but only $9.8-million in early 2008. The company said ‘opportunistic value buyers’ have replaced traditional home purchasers.”
“In the first quarter of this year, the company made $91-million on the sale of 57,435 acres to sportsmen, investors, conservationists and other buyers attracted to prices of $1,330 to $4,500 per acre.”
“In a conference call Tuesday, Rummell said home and lot prices are ’starting to firm’ after deteriorating 20 to 30 percent from their peaks in August 2005. ‘If we are in fact on the floor of the valley, the question is, ‘How wide is the valley?’ Rummell asked.
The Associated Press. “State-owned Bayerische Landesbank said Wednesday its ¤1.1 billion (US$1.7 billion) in write-down related to risky subprime investments pushed the company to a first-quarter pretax loss of ¤770 million.”
The Post Gazette. “While it does not appear any local banks have frozen home equity lines of credit in Western Pennsylvania, at least one — National City Bank — has indicated that it might exercise that option.”
“‘In situations where there has been a material change in financial circumstances or a significant decline in the mortgaged property’s value, we may suspend further access to a homeowner’s line of credit,’ said Bill Eiler, a company spokesman.”
“‘We are facing an unprecedented time in the housing industry, and we believe it’s prudent to assess and address risks that arise due to significant changes that have occurred since the original line of credit was extended,’ he said.”
“Mr. Eiler did not want to identify any markets that might be affected; the bank covers nine states. Countrywide and other major banks have been notifying customers across the country that they no longer can write checks on their credit lines because sinking home prices have left them with little or no equity.”
“Carrie Coghill-Kuntz, president of DB Root & Co., a Downtown investment manager, said she believes banks are making a smart move in scaling back on credit where equity has been lost.”
“‘It goes back to the whole reason we’re in this mess,’ she said. ‘People are borrowing too much.’”
The Sun Sentinel. “In the U.S. Bankruptcy Court’s Southern District of Florida, there were 73 percent more business and personal bankruptcies in April compared with a year ago, according to new statistics. Business bankruptcy filings nationwide increased 49 percent in April from a year earlier, the biggest gain so far in 2008.”
“The rise in bankruptcies began a couple of years ago with the housing downturn and now related businesses, including contractors, door and window companies and flooring businesses, are declaring bankruptcy.”
“‘This is really serious. It’s not going to be a short cycle. It’s not a quick recovery,’ said Paul Singerman, bankruptcy lawyer for Levitt and Sons of Fort Lauderdale.”
“For every client that files bankruptcy, Singerman said he has 10 more troubled clients that do ‘workouts,’ to avoid bankruptcy. They sell the business, refinance debt, or take on new partners with money.”
“In South Florida, many family-owned businesses are being affected. ‘We’re seeing generations of wealth evaporate,’ Singerman said.”
The Charleston Daily Mail. “A Welch-based bank that looked for growth by opening an office in Florida five years ago now finds itself working out of a mortgage mess. Ameribank Inc., after grappling for decades with a shrinking coalfield economy, opened a branch in wealthy, growing Palm Beach County, Fla., in 2003.”
“Jim Sutton, the bank’s vice chairman at the time, explained the theory behind the Florida expansion: ‘The growth of Palm Beach County will allow us to prosper.’”
“But the expansion turned sour last year. Bauer Financial Inc., an independent bank rating firm that rates banks on a scale from 0 to 5 stars, gives Ameribank 0 stars - its lowest rating.”
“Palm Beach Post Staff Writer Randy Diamond told the story in a March 7 article headlined, ‘Rural W.Va. Bank Lost Big on Loans Here.’ The article recounts how, after opening the Florida office, Ameribank struck a deal with Lending One, a Florida-based mortgage broker. Borrowers paid Lending One 15 percent interest, Diamond reported. Ameribank assumed the risk for loans in 11 states and in return received 8 percent of the interest.”
“Lending One ‘was selling thousands of no-money-down one-year home mortgage and renovation loans designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price,’ Diamond reported. ‘But the borrowers didn’t have to repay any of the money until after the houses they bought had been renovated and sold.’”
“Ameribank President David Hartman said Tuesday, ‘The whole concept that the price of real estate is going to constantly go up is a stupid idea. If that stops and you’re talking about people buying homes as investment properties only and the price of homes goes down, that can be a problem.’”
The Palm Beach Post. “In a wide-ranging mortgage scam, two real estate investors and a mortgage broker used inflated appraisals, straw borrowers and phony loan applications to fleece big-name lenders of millions, federal prosecutors say.”
“The collateral for the ambitious fraud? McMansions throughout Palm Beach County, including several in posh gated communities in Wellington and Boca Raton.”
“An assistant U.S. attorney calls the alleged scammers ‘economic parasites’ whose ilk have played a little-noticed role in the mortgage meltdown that has roiled financial markets worldwide. Such scams have been especially common in South Florida, where state and federal investigators believe a boom-and-bust housing market has made some willing to bend the rules for illicit profits.”
“The U.S. Attorney’s Office accuses Berry Louidort and Ralph Michel (also known as Ralph Duverneau) of putting together deals for two dozen homes in Palm Beach County, persuading banks to loan far more than the properties actually sold for, then pocketing the difference and letting many of the homes lapse into foreclosure.”
“Boca Raton mortgage broker Lauren Jasky helped Louidort and Michel arrange the deals, prosecutors say.”
“Louidort, 26, Michel, 35, and Jasky, 29, were arrested April 23, and it’s hard to say which detail of their deals, as federal officials describe in court documents, is the most jaw-dropping.”
“There’s Michel - a native of Haiti who, according to his attorney, can’t read or write well enough to pass a U.S. citizenship test - collecting ‘assignment fees’ of $650,000 and $600,000 on side-by-side homes in the Versailles development in Wellington.”
“There’s Louidort, also a native of Haiti, describing a scheme to buy 50 condos in Boynton Beach while stealing $4 million from lenders. He thinks he’s talking to a willing accomplice. In fact, he’s laying out the plot to an undercover FBI agent who captures the conversation on videotape.”
“There are straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a palatial home in a gated community in Boca Raton. The borrowers haven’t been charged.”
“In another instance, a borrower making $25,000 a year as a hotel worker claimed to make $594,120 a year at Florida All Insurance. That borrower landed $1.8 million in loans for a home in Wellington.”
“There’s Jasky saying she doesn’t want to know the unsavory details of the loans she’s shopping to lenders. Meanwhile, her mother is acting as the Realtor on some of the deals.”
“In court documents, FBI Special Agent Elizabeth Lynch, who posed as a developer who wanted in on the deals,…describes an April 14 meeting with Jasky, Louidort and an unidentified appraiser. Louidort outlined his plan to buy 50 Boynton condos valued at $115,000 and fool lenders into believing they were worth $205,000.”
“‘During this discussion about the kickback, Jasky stated words to the effect she didn’t hear, didn’t see and didn’t care and continues to talk about closing 10 and 50 loans, as soon as possible,’ Lynch wrote in an April 22 affidavit.”
“And there are some of the world’s most sophisticated financial institutions, including JPMorgan Chase and Bank of New York, making loans on these properties for twice what they were worth. The Wall Street giants approved these mortgages in 2007 for much more than the properties sold for in 2005 and 2006, despite the steep downturn in home prices in Palm Beach County.”
“‘This case is getting bigger by the minute,’ Assistant U.S. Attorney Lothrop Morris said during an April 30 hearing in federal court in West Palm Beach. ‘We have no idea how big the loss is going to be.’”
“Lauren Jasky is out of jail after putting up her home and two homes her parents own as collateral for her bond. Louidort and Michel remain in jail.”
From 11 Alive.com. “Record-high numbers of home-foreclosure sales filled courthouse steps across Metro Atlanta on Tuesday.”
“Mortgage holders, trying to get some of their money back, at auction, from homeowners who defaulted, sent their attorneys to the first-Tuesday-of-every-month mission with bigger inventories than ever to sell, in one of the toughest sellers’ markets ever.”
“Protestors, angry at the mortgage industry, showed up at the auction outside the Fulton County courthouse singing and chanting and marching. They were unable to stop, or even drown out, the efficient drone of the mortgage attorneys reading the legal descriptions of hundreds of properties and trying to sell them.”
“The protestors are accusing mortgage lenders with ‘reverse red-lining,’ making quick profits off of the poor by writing them home loans that they can’t possible pay back to whomever ends up holding the mortgages.”
“‘I’m not against free enterprise,’ said the Rev. Dr. Richard Cobble, ‘because this is America…. There ought to be a system in place where everybody can sit at the table, where it would be a win-win situation for everybody’ so the borrowers can keep their homes and the mortgage holders can, eventually, be paid in full.”
“Investor Lamar Lang is at the auction, stuck with an inventory of more than a dozen $500,000 homes in default that he can’t sell. ‘I’ll tell you what, if you don’t steal a house now, you’d better not buy. ‘Cause you can’t sell it.’”
“Chenieve Williams, who has never owned a home, came to the Fulton County courthouse steps to try to buy one. She and her husband researched the foreclosure notices and found a midtown Atlanta condo that was scheduled for auction.”
“‘The market value, I’d say, is probably going to be around $170,000. And the opening bid is $33,000,’ cash.”
“The American Dream has not ‘gone bust’ for Williams. It’s just recycled. ‘It’s really just, it’s a way to build wealth, personal wealth. So my husband and I decided now is the best time to jump in.’”
The Fed’s Hoenig gave a very hawkish speech last night in which he stated that the inflation was at “unacceptably high levels.” He’s talking about price inflation, of course, but gee, how come its happening? It wouldn’t be a $200 billion “hot money” blob that Bernanke and crew have stuck out into the market to tamp down the trading range on Fed Funds, would it? Just don’t ask how much it costs!
Goldman Sachs now says they expect oil to hit somewhere between $150 and $200 in the next 6-12 months. Unless Bernanke drains the swamp there’s no reason for people to pull their commodity bets, as that trade is going in exactly one direction - north - and I see no evidence that Ben is going to do the right thing, nor that Congress is going to force his hand.
The Fed’s policy, after seven years of excessive inflationary stance, has evolved to a stage that threatens social and economic collapse and financial disorder. It has strengthened inflation dynamics causing an economic recession, which may be followed by rising unemployment.
The recession effects of inflation can be explained by a fall in real cash balances, erosion of purchasing power of fixed income and wage earners, and decline in savings and investment. By forcing nominal interest rates to abnormally low levels, the Fed is making real interest rates largely negative and in turn destroying savings needed to support investment.
Welcome to $4 gasoline, and if we get one hurricane in the Gulf this summer or that $150 prediction proves up, better make that $5.
What about natural gas? Foreigner’s are outbidding us on LNG and we no longer have a big surplus in storage. Natural gas at $20, plus shortages, can’t be ruled out.
One of the reasons I live in Dixie is I want to get by in the winter on a heat pump. Also, where I live, electricity is coal, nuclear, and hydro generated.
Excellent post!!!!!!!!! BRAVO!!!!!!!!!!!
In an inflationary environment is it a good idea to take a low-interest, fixed rate mortage on a nice, foreclosed (REO-owned) house that is available at 50% of its 2004 price? Erosion of debt via inflation can be profitable.
Where I live (Maui) diesel is already 4.65, regular is 4.18. I predict $5 gas within 6mos here.
That’s an interesting tidbit. I am surprised it is not much higher on such a remote location.
However, it’s almost irrelevant.
Traversing your entire island is less distance than I travel to work……one way.
So, how far do you need to commute, on average, daily to go about your business?? 10 miles?
You can’t compare prices there or in Europe with average commutes for the mainland.
RE: I predict $5 gas within 6mos here.
You’ll see $9.00 a gallon when O’Bama pulls the troops out.
I believe we’ll see $9/gal gas no matter who wins the Presidency & no matter what happens with our troops. I’ll be glad if we don’t have gas rationing.
Too bad our short sighted gov and car companies and SUV drivers didn’t plan for oil shortages. If we had taxed gas the way Europe does for the last10 years and returned the money to tax payers in the form of rebates or income tax cuts Iraq wouldn’t even be an issue. Imagine if GW had used the 1 trillion dollars wasted in Iraq to decrease our consumption of oil.
My industry is already downsizing “product” and telling us there will be layoffs in the very near future, probably just after the ‘heavy’ summer travel season is completed.
Well now… Lauren Jasky certainely had her mother Lisa’s help in this scheme.. there is no way that a seasoned realtor could have not been in on the scam with the homes that she listed and sold!
The company’s task now is to ‘retrain’ buyers that home purchases can’t be deferred forever, CEO Peter Rummell said Tuesday.”
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
Wow, as a prospective future buyer, I find that INCREDIBLY insulting.
Go train yourself, buddy.
We are just a bunch of “consumers” and widgets to guys like him. This attitude is prevalent not only in big business but our government as well. We are to be “handled” and herded. They just have to market it right and we will follow the pied piper anywhere. Maybe through all of this we can rediscover more then just status and things.
“home purchases can’t be deferred forever”
Why?
Because he and his ilk needs to make their Beemer payments before Repo Reggie pulls up in his chromed-out tow truck.
Or Prius payments.
I can see the armed guards surrounding the ‘education’ camps, where hapless renters are forced to watch propaganda pieces put together by the NAR. With no sleep and only occassional breaks to eat tasteless gruel, soon all will be properly retrained.
Now say after me, “It’s a great time to buy, it’s a great time to buy, it’s a great time to buy….”
lol al
And another lol….almost sprayed my whisky!
Heck, my corp already has those kinds of “movies” and “education camps”. Yearly, we are forced- otherwise we will be penalized- to watch and participate in these things, and sign off.Threat of punishment is the MO for the mgmnt style of this corp for the last 25+yrs.
That is also why the corp paid out millions to a consulting firm to tell them how to talk to “us” and tell us how to look at things.
Decent pay would be nice, but then I digress.
They just have to market it right and we will follow the pied piper anywhere.
I have noticed these days in Corporate America that the folks in Marketing are the most valued employees. Not that the big bosses wouldn’t offshore them if they felt it would work. I guess they still believe that it takes homegrown guys and gals to understand what makes J6P tick.
Maybe they should hire J6P instead. Maybe then they might figure out what makes them tick.
when the majority act like sheep, expect to be herded.
The company’s task now is to “retrain” buyers that home purchases can’t be deferred forever, chief executive Peter Rummell said Tuesday in announcing $32-million in profit for the first three months of the year.
“We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,” Rummell said. “So now people are going to have to learn that they’ve gotten to that point.”
Such crap, who are you referring to when you say “”We have trained people”. I hardly think you, or your company had anything to do with this “training”. What I recall is people like you denied the claim of a bubble and then when this cat got out of the bag you all stated that prices would NOT come down. I find it so incredibly maddening that you now have the nerve to say somehow you were responsible for telling people prices were going to come down.
On a further note a@@wipe, my purchase is and will be “DEFERRED” UNTIL PRICES ARE BACK IN LINE WITH HISTORICAL NORMS AGAIN. Meaning Median prices are 3Xs the Median income.
Jokers like this really get my “buyer” blood boiling and I could rent for the rest of my life due to statements like this.
Jokers like this really get my “buyer” blood boiling and I could rent for the rest of my life due to statements like this.
LOL! That’s what keeps him up at night! He’s afraid that even the lowliest J6P has figured out their scam.
The company said ‘opportunistic value buyers’ have replaced traditional home purchasers.”
Yes, all the “traditional home purchasers” went the way of the Dodo when the crappy underwriting and exotic loans dried up. Only opportunistic vultures would dare to purchase what they can actually afford, right?
Dumbass…
Apparently we are little more than children, or dogs, to somebody like that. The person who really needs training is Peter Rummell — he is “going to have to learn” that people can’t and won’t buy overpriced undistinguished uninsurable grandiose stucco s__tboxes far from anything anymore.
And another thing. I read in today’s Tampa Tribune about a “luxury” apartment tower planned for downtown. The average rent will be $1,000 per month. That sound you heard was all the I-hope-I-can-rent-this-out-to-cover-my-mortgage accidental landlords peeing their pants.
snake charmer,
And how fitting someone w/ your name would make this observation? Actually I think Peter missed the mark. What he probably meant to say was “sculpt”. Major Madison Ave. advertising firms have been telling cons. goods companies for years that it’s much easier to win the battle for “the consumer” when it’s done at an early age. For example, Harley came out with a low-priced entry level scooter for the younger crowd instilling loyalty for when they were better paid after college, the service etc.
Notice how the NAR spokeslady (telling us about family conditions, not market conditions) has blonde hair so we’ll notice her from across the room. BUT… she also has brown eyes! In spite of what we say about being “full of”, consumer surveys show that when shown photos of people you think you can trust, most participants opt for the brown-eyed person. Consistently. Next time the commercial comes on note how close the camera focuses on those Oh-so-trustworthy eyes?
I’ve been thinking of changing my handle to something that reflects that I am more liable to irritate than charm.
That sound you heard was all the I-hope-I-can-rent-this-out-to-cover-my-mortgage accidental landlords peeing their pants.
I just thought that sound was the sprinklers going on outside.
“The company’s task now is to ‘retrain’ buyers”
We, the bitter renters of America, are going to retrain you, buddy.
We do not have to buy anything…but you, slugger, have to sell, or go broke. We won’t consider this a housing bust, but a retraining effort for all you housing moguls.
We do expect you to learn from your mistakes.
“Go train yourself, buddy.”
And when I said “train”, I really meant the “f” word.
lol.
Although I doubt their numbers, if what St. Joe says is true, we are seeing the ‘dead-cat bounce’.
Prices will not rise anywhere in St. Joe territory for 3-5 years.
If we were susceptible to “training,” we would have bought already.
Sorry dude, you’ll just have to learn that you’ve gotten to the point where you’ve already picked all the low hanging-fruit.
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
We didn’t have to be “trained” to recognize that housing prices could fall. We learned that through no fault of the RE industry. However, the monkeys that run St. Joe could be “trained” not to clear cut. That type of training might actually be useful. With statements like that of Rummell, my opinion of St. Joe is even lower than it already was, if that’s possible.
Yeah…when we have clowns like him plotting to “retrain” us, realtywhores like Lawrence Yun dictating our US Tax Laws and Cheney’s Wet Dream Secret Energy Policy kicking in at $120 a barrel, We KNOW we are in serious trouble
I understand exactly what he meant - it was not an insult. I worked for a company hanging on by the skin of its teeth in an LBO - the bank was close to taking the keys if we violated the loan covenants. To avoid doing that, we’d pack distributors full of product every quarter end. They learned quickly that if they called us at the end of a quarter, they could get a great deal. We did eventually lose the keys. The new CEO said, We need to have level production and sales. And he could do that, where we could not. All he needed was to have one really bad quarter and announce the end of last-minute deals. We were profitable the entire time - just not enough to meet the loan covenants.
The reason it won’t work in this case is that St. Joe isn’t the only supplier - and demand is very soft. But try they will. Should be fun to watch.
I’ve noticed in my (Portland) market that some listing prices have been INCREASED- which makes no sense to me. I guess the old ways - applied to the market without regard to the appropriateness - die hard.
You would be amased at how many people think asking price is what they have to pay. If you dought that ask how many people what a any new car costs and they will tell you what the sticker price is.
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
Uhhh I think that facts have trained people to believe that prices are going to be lower tomorrow.
and if you are going to “train them otherwise” it is not called training it is called propaganda
What an arrogant POS
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
I’m trying to train the sellers still here in ATL. Incredible amount of listings at the wishing price. More training needed; I’m not giving up yet.
Let’s see. A homebuyer tax credit of $7,500 should REALLY offset that extra $100,000 you just paid for your new pride n’ joy.
The NAR must pay Yun a handsome salary to lie through his teeth.
He obviously has no shame. I wonder if he actually believes what he says?
They gonna allow that tax credit against the amount calculated under AMT too?
“It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.”
Wouldn’t telling sellers to walk away or drastically lower their asking price be much more efficient and have less unintended consequences. What a piece of garbage Yun is.
Giving the same tax break they gave 30 years ago isn’t a tax break anymore. It’s a stunt to buy your vote.
I fail to see how keeping house prices unaffordable is a legitimate government purpose. Any politician supporting such an ignorant and corrupt plan should be shown the back door by brutal force.
I find it amazing that the Shrub gubmint thinks the NAR is a credible source to inspire their policy decisions…”true conservatives”, my ass…it’s no small wonder that the same bozos got suckered by “flawed intelligence” into fighting this never-ending Iraq war.
We’ve not elected a very bright group of people.
We’ve not elected a very bright group of people on either side of the isle
There finished it for ya.
Hang em all…
Where is that darn guillotine, we hid it in here somewhere.. comeon folks..help me find that guillotine!
wow.. a $7,500 tax credit? I’d hate to miss out on that..
There. I’ve added a tax credit to my list of things that must happen before I’ll buy..
Instituting a tax break will inflate house prices by exactly the amount of the tax break.
And 6% of that amount will go to his dues-paying Realtors(tm) as fees.
Nice try FunYun. How stupid do you think we are?
The $7,500 tax “credit” is actually a tax loan. It has to be paid back over 15 years. Lol…what a joke.
‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
Unless that tax cedit is over $300K, you won’t see me budge in Coastal Los Angeles. A few people have gotten “deals” in the 5-10% range but we are nowhere near historical affordability numbers here. Sellers just aren’t budging.
In the meantime, we continue to look out of state for new jobs. Even though we can afford it, we refuse to buy a $750K “starter” home. Either prices drop, or people like us continue to leave.
Funny, you mention leaving - I did a quick search on Monster.com to see what openings looked like in my line of work, grants and contracts officer. I can find a ton of positions in NY, DC/VA, LA, and Boston but there is nothing in non-bubble locations. Thankfully, Mr. Jane is interviewing a top 10 midwest univ as I type and should be on a plane home later today. I’m willing to work entry level clerical **shudders** if I have to just to get out of CA.
Jane, if you do grants and contracts, that university would be itchin’ to talk to you.
Hmmm which one are you thinking of? We’re open to any big research campus that is not located in a bubble market. There are lots of campuses I’d love be a part of but their housing market makes it impossible. And if you are a campus recruiter in a bubble market - my profoundest condolenses. I know how difficult of a time you are having even with the fat relocation packages.
But then you’d have to live in the Midwest. My 30 years in California were enjoyable - just expensive. I know a lot of secret places off the beaten path. You can’t beat the CA climate either - OK, hot in the Central Valley, but there’s escape in the Delta or the Sierra. Does cost gas to get there, though.
“‘Although some market adjustments are necessary, a downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs,’ said Lawrence Yun, NAR chief economist. ‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
If Yun wants to stimulate demand, drop the prices. Like jjinla said, with current prices you’d need a tax credit far greater than what would ever be offered to stimulate demand in coastal California, well north of $100K.
Also as many others have noted, there was no concern on the part of Yun and other RE shills for the damage that was done when prices overshot on the way up - people forced to move due to high housing costs, condo conversions, etc. How many moves since 2000 were driven entirely by increases in housing costs?
1960’s protestors: anti-war
2000’s protestors: anti-auction
“Protestors, angry at the mortgage industry, showed up at the auction outside the Fulton County courthouse singing and chanting and marching. They were unable to stop, or even drown out, the efficient drone of the mortgage attorneys reading the legal descriptions of hundreds of properties and trying to sell them.”
They need to use airhorns. That’s what protestors used when VP Dan Quayle came to Phoenix back in the early 1990s.
Here in Tucson, we went for a more subtle approach. A Fourth Avenue street kid greeted Quayle’s limo with the “Sig Heil!” salute.
(For all of you non-Tucsonans, Fourth Avenue is our equivalent of Berkeley’s Telegraph Avenue.)
Hey, hey, Fannie Mae
How many homes did you foreclose today!
As I have said repetedly, this isn’t over until a city burns.
Is there a pool on which one? I’ve got a couple nominations…
RE: this isn’t over until a city burns.
Could be Philly after watching those cops kick and beat the ever lovin’ crap out of those suspected homies.
The welfare ghetto bomb is really to blow!
‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
Houses falling to 100-120x monthly rent would accomplish this. A homebuyer’s tax credit will accomplish nothing.
I love how the NAR is trying to get congress to entice people into stepping into a bucket of cement while watching the guy who stepped in the previous bucket get shoved off the bridge.
“I love how the NAR is trying to get congress to entice people into stepping into a bucket of cement while watching the guy who stepped in the previous bucket get shoved off the bridge.”
ROFLMAO
I love how the NAR is trying to get congress to entice people into stepping into a bucket of cement ………………we’re your friends!
Whether you are buying or selling, don’t do anything without your Realtor ™! They know the markets. They know what properties are “worth”, and “every markets different………..andd RIGHT NOW!! IT’s a GREAT TIME TO BUY!!!
hahahahahahhaha.
‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
Too bad you guys are depending on tax breaks from a country that is flat broke. The American public cares little about your selfish demands to prop up your failed business model.
Fine, give them a tax break to buy a house - that’ll tie up even more money in a declining asset class and shunt it away from retail and services - where most of recent job growth was. They’re running out of shells fast.
edgewaterjohn,
While I do agree w/ Ernest’s p.o.v above ( and they know no shame ) this is really more to the heart of it. The REIC has got to keep everyone, including the government focused on the REIC-based economy.
What they fail (or refuse) to recognize is that if home prices slide into more trad. norms there will be PLENTY of disposable income left at the end of every payday! But the REIC obviously prefers to have ALL consumption done through “the consumer’s” home as this best suits their agenda.
REIC: It’s over, start liking it!
“The company’s task now is to ‘retrain’ buyers that home purchases can’t be deferred forever, CEO Peter Rummell said Tuesday.”
These clowns think they can ring a bell and we’ll salivate ?
Who needs training here?
“These clowns think they can ring a bell and we’ll salivate ?”
They think it for good reason. There were a whole lot of people who were easily steered into the bubble, and there’s no reason to assume those people cannot be led in a different direction.
The only hitch in the plan is that those people now have no money and no credit.
The CASHLESS Society has had a lot to do with this “training”
If American’s were still dealing with and handing out what they believed were REAL dollars , buyers wallets would have snapped SHUT long before this
yeah .. same psychology applies to casino chips.
In defense of credit, i sincerely doubt that modern civilization is even possible without it. Hopefully the credit markets won’t degenerate to the point where we’ll find out if i’m wrong or not..
Wow, this is really one of the better articles covering all the current aspects of the bubble bust - flippers, Wall street, fraud, local banks, HELOCs.
I have to admit that with Buffet saying “it may be mostly over by now”, I’ve started to think the same way, but articles like this remind me that the worst it probably yet to come.
I really wonder what the next Fed meeting holds- if they go under 2% I’d exect to see $150 oil and $4.50 gas within a few weeks. If they go up to “WIN”, then the housing market will crater even faster. When does the Fed meet again - June?
One of the houses I’m maybe looking to buy (and live in) sold for $575 in late 2006. Currently short-sale listed for about $420. I’m really starting to think this could be a $250 house at the bottom.
RE: $575 in late 2006. Currently short-sale listed for about $420. I’m really starting to think this could be a $250 house at the bottom.
Yup…50/60% down is about right.
Everyone seems to be using the early nineties as the measuring stick. And accordingly, we should be at the bottom.
Depends on where your at. If 90’s prices is where we are heading my areaa still has a long way to go. Currently prices are still 125psf, early 90’s they were i nthe 80’spsf.
Buffett didn’t really say that the problem was gone, he just said that the true “Oh Sh!t” moment had passed”. He acknowledged that there was a lot of pain yet to come but we may have escaped the possible “Fight Club Scenario.” Though I’m not a big fan of moral hazard thrown to the clowns but I think that Bernake has done a noteworthy job of keeping the big boys just happy enough not to commit Hari Kari and take the current economic system with them, instead the banks have taken SOME of their medicine. I don’t know that we can feasibly ask for a whole lot more.
“For every client that files bankruptcy, Singerman said he has 10 more troubled clients that do ‘workouts,’ to avoid bankruptcy. They sell the business, refinance debt, or take on new partners with money.”
‘workouts’?
Makes losing money so sporty sounding, eh?
“or take on new partners with money”
Would those new “partners” happen to look anything like Tony Soprano?
My friend lives in Versailles in Wellington. The FBI is in the community NOW arresting people related to the mortgage fraud scam. RE agents were also renting out houses that were bank owned. They had the locks re-keyed and were renting out the houses.
Andrea,
OMG! That is so hysterical! Above all, renting out bank-owned homes? What class, huh? Nope, nothing wrong with the REIC here. Nothing to see people, move along. Oh btw I’m sure they weren’t pocketing the money and faithfully forwarding every dime to the lenders, right?
Why is there this sick part of me that wants to get the most outrageous rental there (non bank-owned of course) and just nestle down for a long hot summer of sheer entertainment and delight!?
“Oh look honey! They’re cuffing and stuffing the Sleaze’s from next door! Sorry, couldn’t hear you dear with all of the helicopters”
Renters! It’s like the third world all of the sudden.
Do the loan officers mow the lawn every week?
Congress and the REICgang might see the problem when they notice the semi-truck tire marks on their eyeballs
“~~~~and every lock that ain’t locked and no one’s around i sing: “Trailer for sale or rent.. rooms to let, 50 cents.. ~~~”
Ahh! Rodger Miller: King of the Road
“RE agents were also renting out houses that were bank owned.”
Were these REALTORS ™???
Remember, REALTORS ™ have a strict CODE of Ethics, so you know that you can trust and depend on them to do the right thing. Call a Realtor ™ today.
I will, when Hell freezes over.
“Some observers were cheered by last month’s report that signaled a bottom could be approaching. However, the February index was revised to a decline of 2.8% from the prior estimate of a 1.9% drop.”
Same old game, send out incorrect and misleading information to get the market moving again and revise it later. How can anyone trust this type of information to make the largest purchase that most will make in their lifetime?
Lawrence Yun, NAR chief economist. ‘It is critical to stimulate housing demand by inducing fence sitters back into the market. A home buyer tax credit on any home purchase would accomplish that.’”
Critical to who?
‘It is critical to stimulate housing demand by inducing fence sitters back into the market.
Mr. Yun, since when is it critical to stimulate housing demand to induce the fence sitters by providing false information put out by the NAR? NAR propaganda such as property values nearly double in ten years which is false information simply because home prices based on long term trend appreciation do not double or nearly double in ten years. Now is a great time to buy when housing prices are dropping does not make good economic sense if you are the buyer. Yun, the NAR fooled the public during the boom years, but you won’t succeed this time!
Well I think that is an excellent point. These numbers are released, together with an interpretation, by an industry group that has a vested commercial interest in the numbers appearing a certain way. The group does not pretend to be impartial or in the public interest, yet the numbers are accepted as gospel by the federal government and the news media.
Yeah, Ronin, it’s a bit like the numbers sprouted by self-interested “climate scientists” and assorted hangers-on who have made a life-long trough of “global warming” to dip their noses in.
These people expect to retire wealthy as a result of government largesse, extortion, and media manipulation, and their wilder and wilder predictions and “numbers” are completely accepted by a credulous sheeple.
“It’s really just, it’s a way to build wealth, personal wealth. So my husband and I decided now is the best time to jump in.”
It can be the way to build wealth but probably not the way these two are looking at it. In “The Millionaire Next Door” the authors explain that well-off people buy, and live in, much less house than they can afford and that way have surplus cashflow to invest. As part of a long-term, wealth building strategy, the authors said to not borrow more than 2X your income when you purchase a residence.
Excellent! I agree 100%. The fools who bought the largest and the most expensive house that the mortgage banks allowed them to buy, are doomed. Their dreams of building wealth have turned into nightmares.
Neil/tuxedo_junction,
Oh more than agree, I’ve lived by it!
I WILL say however… had this damn thing not been so frenzied, I would have likely done the same. At_the_time, it DID make sense to leverage yourself to the greatest degree possible? What would you rather have? A 20% return on a 100k investment, or a 20% return on a 500k investment?
This is EXACTLY how the mortgage brokers and realtors worded things to perspective buyers!
Yeah, I read that book a long time ago, along with ‘The Millionaire Mind’. The book also says that millionaires tend to buy in established neighborhoods (not new developments). Problem is, good luck getting into an established neighborhood at 2X income. And the other issue is the most stable job markets are in bubbly areas, where established neighborhoods have a huge price premium. The market I’m in, Boston, is going to decrease very little because its so goddamn expensive to develop here. There’s an anti-development mindset here by local politicians, which drives up price. It really pisses me off, honestly.
Established neighborhoods are not the same as expensive neighborhoods. A stable, old, middle-income or working-class neighborhood is an established neighborhood, it’s just not trendy or expensive. Also, they did not say price at 2X income but borrow at 2X income, meaning big down payment.
Ed G,
I agree and the 2X kind of jumped out at me too. The truth is, we need to update that periodically but the principles are still sound. I’m pretty sure the authors wouldn’t agree to 10X or whatever?
Even though some of the neighborhoods in Vegas where I’ve been looking for a 2nd home are a little beat, I’m willing to bet some may be “re-discovered” when McCr@pshacks don’t correct enough to attract long term buyers? ( You have no idea how important a little shade is there! )
‘Even though some of the neighborhoods in Vegas where I’ve been looking for a 2nd home are a little beat, I’m willing to bet some may be “re-discovered”’…
I went on an architectural tour of Las Vegas last year, organized by Mondo Lounge and the Friends of Classic Vegas. We saw dozens of cool mid-century houses (some wrecks, some not so wrecked; some totally renovated). Just checked their site and they’re doing another event on Oct. 8th:
http://www.mondolounge.com/about.php
Also, LottaLivin.com, the mid-century modern website, always has plenty of info about interesting houses in Vegas. Good luck!
RE: “‘This case is getting bigger by the minute,’ Assistant U.S. Attorney Lothrop Morris said during an April 30 hearing in federal court in West Palm Beach. ‘We have no idea how big the loss is going to be.’”
LMAO…And everybody thinks a turnaround in the 4th quarter of ‘08 in in the cards.
This FL scam is just a sand flea on a camel.
I’m waiting for the US Attorney General to bring in a pit-bull type Assistant DA (preferably one with some political aspirations), and say something like:
“Mortgage Fraudsters, meet my little friend Rambo…….I’m taking his leash off……KYAGB”
We have an AG in Mass, Martha Coakley. She is tearing the Mortgage brokers a new loan-hole.
At a brokers association meeting, she told them that she was going to make it illegal to give borrowers anything less than the lowest cost mortgage. The brokers said that would wipe out more than half the brokers in the state. She reponded “I know”.
She reponded “I know”.
Now there is a reelection campaign worth contributing to. Better yet, please feed this woman some juicy leads and let her build a helluva career out of it.
RE: Mortgage Fraudsters, meet my little friend Rambo…….I’m taking his leash off……KYAGB”
Maybe that’s what’s behind the rumors of large fenced “camps” being constructed in various parts of the West.
They’re “re-education” Gulaags for all the RE bubble related scamsters.
Maybe the Feds have belatedly woken up to the damage that all this crap has done to the dollar, the economy, the budgets at all levels of government.
And, just maybe, they are starting to run the standard White-collar prosecution game plan, getting to the big fish by tearing the little fish a new a-hole.
I can dream, can’t I?
WHERE IS CASEY????
I Call bottom… but which bottom?
This twit thinks we have hit bottom or very close. I think we are still on the way to the . From there it depends on if the government decides to give a helpful push.
And much like the water pressure, the weight of all the debt will be crushing.
“In a conference call Tuesday, Rummell said home and lot prices are ’starting to firm’ after deteriorating 20 to 30 percent from their peaks in August 2005. ‘If we are in fact on the floor of the valley, the question is, ‘How wide is the valley?’ Rummell asked.
The valley of the shadow of death. Perhaps Lawrence Yun’s pronouncements are the “Realtors’ Psalm.”
Off topic……
I’m not a huge fan of Harley-Davidsons (actually, it’s not the bikes so much, as the poseurs that they attract), but I really like this ad on their website”
harleydavidson.com/screwit
RE: I’m not a huge fan of Harley-Davidsons (actually, it’s not the bikes so much, as the poseurs that they attract), but I really like this ad on their website”
Been ridin’ HD’s since ‘76.
The poseurs have sure definitely fooked the V-twin scene up-but if you bought the stock at the IPO or, shortly thereafter it’s been a hellava a ride-thanks to these same hordes of johnny-come-latelys.
how do you and Gulfstreamsitter define a poser?
To me, Harley guys were always about loving the bikes, in spite of (and admitting) their deficiencies. They spent as much time working on the bike as riding it.
Nowadays, it’s too damn easy being a Harley guy. All it takes is the ability to write a check, stock up on the Harley wardrobe, then taking this attitude that “If you aren’t on a Harley, you ain’t sh#t” irritates me to no end.
(Yeah, I know I’m sounding like “I can remember when That Wasn’t There” guy….)
Disclaimer: I don’t ride a motorcycle of any kind.
Call me old-fashioned, but if you can’t back up what you are spewing, you need to shut your mouth.
If anything but your bike says “Harley Davidson” on it, you’re a poser.
That sounds about right. Disclaimer: I ride a Sportster to work. Some riders refer to that as a “girly bike.” That’s because they can’t stay up with me.
Why the Sportster? I can afford it. It’s made here. I was watching Discovery and I saw the plant.
HOG stock is taking a beating now, but the product is very well made. Think of a ‘57 Chevy that doesn’t leak oil and runs well all the time, with just a bit of rough edge. Not the fastest, not the best handling, but not bad at all - and 42 mpg when I get on it, 50mpg on a pleasure cruise.
RE: I ride a Sportster to work. Some riders refer to that as a “girly bike.”
Anybody who disses another man’s ride, is the real poseur.
RE: how do you and Gulfstreamsitter define a poser?
A poser sits in the Camel beer tent @ Laconia dressed in a full set of unscuffed HD(trademark) leathers when it’s 90 degrees outside. He’s usually accompanied by a suffering wife or GF dressed the manner.
“If I paid $1000.00 for this outrageously priced stuff, I’m sure damn well gonna wear’em, heat or no heat!”
LMFAO!
Poseurs also notoriously for extreme footdraggin’ at stoplights because they can’t balance and run a clutch at the same time.
Who gives a rip about the poseurs, it’s the bloody noise that bugs me. Harleys, tricked out Honda Civics and loud trucks - what a bunch of selfish jerks. It’s nice to be able to sleep with the windows open.
Thank you, Climber! And permit me to add those car stereo systems with the super-subwoofers to this list. You know, the ones that blast the [c]rappers’ latest hits at all hours of the day and night.
“‘We have trained people to expect that prices are going to be lower tomorrow than today if they just wait,’ Rummell said. ‘So now people are going to have to learn that they’ve gotten to that point.’”
Rummell, you can lie all you want to the public, but sooner or later your credibility will falter and fail as the public finds out you have lied to them. We are nowhere near the bottom and your interests is in selling your overvalued property so you won’t get stuck losing money. To reach your goals Rummell, you have to lie to the public and provide false information. That has nothing to do with reaching a bottom!
The only bottom whas his. Reaching and scratching.
Who are “we?” Are they the same as the ever present “they?”
“…downward overshooting of the housing market would cause unnecessary loss in economic output, income and jobs,’ said Lawrence Yun…”
Yeah for Yun. He’s finally opened my eyes. We need higher house prices so builders will build more houses we don’t need (economic output). And without thousands of people in the REIC leaching off those who are foolish enough to flip houses, how will this economy survive? I’m glad their are farsighted individuals like Yun who ignore their own shallow interests and tell us what we should do to make the world a better place.
Al,
LOL
Yes of course. The only way we can move forward as a country is with real estate leading every step of the way. Never mind technology, advances in medicine and improved energy consumption. Granite counter tops will cure all.
somebody mentioned the BRCMs earlier, and it got me thinking of the soundtrack to O Brother Where Art Thou, so I thought I would chime in.
In the Big Rock Candy Mountains
All markets only ever go up.
Just make sure you don’t see
All the HELOC Humvees,
And the booming Chinese,
The massive Realtor(TM) fees,
And the Joshua Trees,
In the Big Rock Candy Mountains.
is the stock market responding to bush’s threat of a veto? it looks like they are having a fit because he wont throw the rest of the bad debt on the taxpayer!!!!! we all know the fed has already took most of it!!!!!!!!
“And there are some of the world’s most sophisticated financial institutions, including JPMorgan Chase and Bank of New York, making loans on these properties for twice what they were worth. The Wall Street giants approved these mortgages in 2007 for much more than the properties sold for in 2005 and 2006, despite the steep downturn in home prices in Palm Beach County.”
The biggest “economic parasites” are on Wall Street.
“There are straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a palatial home in a gated community in Boca Raton. The borrowers haven’t been charged.”
I suppose it was inevitable, but we’ve now beaten the strawberry and cabbage pickers. Apparently if you sell them rather than pick them, even if you make less, you can buy a bigger house. Who knew? Only 100x actual income!
From what I’ve read, we’re only at the tip of the iceberg for fraud. I don’t understand why the bailouts are coming before the investigations? Must be an election year.
Funny
http://www.mcsweeneys.net/2008/5/7woodiwiss.html
I guess I went to the wrong schools. I never got asked any of these questions. I feel so ill-prepared.
Zomg! That is a riot
“Lauren Jasky is out of jail after putting up her home and two homes her parents own as collateral for her bond.”
Wait a minute. Just how much is this “bond” worth? Did anyone confirm the equity in these places relative to for-real selling prices in today’s market? Well, at least if she skips because the houses little or no net equity, she’ll have screwed a bail bondsman and maybe they’ll sic “Dog” on her.
I think public sentiment is shifting when it comes to things like “home buyer tax credits”. There’s a chance that the majority of Americans will see this for what it is and pressure their legislators not to support it.
“Carrie Coghill-Kuntz, president of DB Root & Co., a Downtown investment manager…”
Carrie has to be on the “All-name team.” I mean, how on earth do you pronounce “Kuntz” and not make it sound like, well, you know…
With a long ‘u’ and silent ‘t’? coons..
But even if everyone took the trouble, she’d still have to live with the nickname God gave her.
It’s so refreshing to hear the MSM prattle on about how the “worst of the crisis is over”.
Picture Atlas carrying the world on his shoulders. Now picture Atlas shot in the head with a .45 hollow point at close range.
As he hits the ground, you could probably say that the worst of the crisis was “over” for Atlas.
That is the current spin on the economy in the MSM.
We are at the point in time where parasitic central bankers are leaning over their former host, standing on splattered brains with their $1000 per pair shiny shoes, uttering words of encouragement, desperately looking for signs of life, ignoring the spreading pool of blood, clinging to the false hope that things will get better soon.
They won’t. This economy is cooling because it is dying. What will replace it, I don’t know. The International Banking / Federal Reserve gang /cartel might need “re-education”.
great visual!