Letting This Artificial Air Out In California
The Used House Salespeople report from California. “The percentage of households that could afford to buy an entry-level home in California stood at 44 percent in the first quarter of 2008, compared with 26 percent for the same period a year ago, according to C.A.R.’s First-time Buyer Housing Affordability Index. The minimum household income needed to purchase an entry-level home at $356,350 in California in the first quarter of 2008 was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment.”
“At $67,830, the minimum qualifying income was 30 percent lower than a year earlier when households needed $96,500 to qualify for a loan on an entry-level home. The California…median household income was $50,700.”
The Press Democrat. “Bay Area home sales and prices continued to slump in April from year-ago levels. Sales of all new and resale houses and condominiums fell 15.3 percent in April, compared with a year ago. The median price for the nine-county region was $518,000, down 21 percent from a year ago, according to DataQuick.”
The Appeal Democrat. “Among the foreclosures and sinking home prices roiling the Yuba-Sutter area is a rare bright spot - for homeowners, if not for governments. Thousands of local residents will receive cuts to their property taxes this summer.”
“‘If someone bought a house in Plumas Lake for, say, $350,000, we’re listing it on the assessment rolls now for about $200,000, $210,000, $220,000,’” Yuba County Assessor David Brown said Monday.”
“Despite the pain of lost homes and falling revenue, Brown said, the housing shake-out carries at least one benefit - the chance to take in would-be home buyers once priced out of the Mid-Valley market.”
“‘Letting this artificial air out is a good thing,’ he said. ‘It leads to where people can put down a reasonable down payment and actually afford the payment, raise a family and make the payments long-term.’”
“‘It’s painful now, but it will stabilize and be sustainable in the long run - though it doesn’t help the folks that paid those higher prices,’ he said.”
The Sacramento Bee. “Months of plummeting prices and droves of discounted, bank-owned properties turned April into one of the Sacramento region’s best months for home sales in nearly a year, DataQuick reported. Prices have dropped as much as one-third in the past year and are still falling as banks aggressively price thousands of bank repos.”
“‘It was a terrible market,’ said Sacramentan Roy Amerine, who closed escrow in April on his Campus Commons residence, which had been on the market since January.”
“‘We started at about $360,000 or $380,000, and made several drops of either $10,000 or $20,000,’ he said, before selling for $310,000. ‘I was relieved, finally, to sell the property. It was just real stressful.’”
The Tribune. “Construction had the largest decline year-over-year in San Luis Obispo County, down by 9 percent - or 700 jobs. The drop directly relates to the sluggish housing market, said Dan Hamilton, director of economics for the UCSB Economic Forecast Project.”
“‘Developers need to take new homes off the market as fast as they can because it’s a bad time in the market,’ he added. ‘And one way to do that is not build anymore homes, or not put anymore in the pipeline, which takes away jobs.’”
The Ventura County Star. “There were 771 new and existing homes and condos sold last month in Ventura County, a 13.4 percent drop from 890 homes sold last year, DataQuick reported. The median price of homes sold declined 22.2 percent from $572,000 a year ago.”
“Areas slammed by foreclosures and deep discounting have shown the most gains in sales, as buyers rush to grab up deals, LePage said. In Ventura County, 30.7 percent of the homes sold last month were foreclosures.”
“‘There is a blue-light special taking effect,’ said Andrew LePage, a DataQuick analyst.”
From KGET.com. “New home sales for April were down more than 50 percent compared to a year ago. Bakersfield posted an all-time low for building permits pulled in a month, just 20 permits last month.”
“According to Gary Crabtree of Affiliated Appraisers, existing home sales for April were up nearly 80-percent over April of 2007. More than 70 percent of those sales were distressed, bank-owned, and heavily-discounted properties.”
“According to Crabtree, for every bank-owned home sold last month, there were nearly three new foreclosures.”
“Crabtree says lenders lost nearly $100 million in the last eight months selling off foreclosed homes in the Bakersfield market.”
From The Sun. “Sales of new and existing homes dropped 18 percent in San Bernardino County from April 2007, according to DataQuick. Riverside County saw almost 3,200 sales, and San Bernardino County just over 1,660.”
“The Perezes, like thousands of San Bernardino County residents, are fighting the financial forces that threaten to sweep them from their home. Raising six children in Fontana, the Perezes are on the brink because monthly payments for the home they bought in 2005 leapt from about $1,400 to more than $3,500, Rigoberto said.”
“‘We had no idea this would happen, we didn’t expect it,’ Rigoberto Perez said in Spanish.”
The Press Enterprise. “Riverside County last month saw the first year-over-year sales increase since 2006, as bargain hunters streamed into a market rife with foreclosures.”
“The median price of homes sold in Riverside County last month dropped almost 31 percent to $283,500 from April 2007, and 33 percent in San Bernardino County to $248,000.”
“Meli Van Natta, a real estate broker in Moreno Valley, said about 90 percent of the sales in her office are homes repossessed by lenders.”
“‘I call this a false dawn,’ said Chris Thornberg, an economist with Beacon Economics in Los Angeles. ‘Foreclosures are not a sign of a stable market. Prices are getting closer to affordability, but they still have some ways to go.’”
“The report shows that prices make a difference, said Leslie Appleton Young, chief economist for the California Association of Realtors. ‘It is just a little bit too early to call a bottom,’ she added.”
The Voice of San Diego. “The San Diego housing…sales total — about 2,800 new and resale houses and condos — was down about 18 percent compared to the total in April 2007.”
“More than one-third, 35.1 percent, of the homes that resold last month in the county had been foreclosed on in the prior 12 months.”
“‘We’re seeing some momentum — and I’m not talking price at all — in areas that have been heavily discounted from their peak,’ said DataQuick’s LePage. ‘Prices are 20 to 40 percent off their peaks in some places. That’s luring some buyers back into the market, getting what they perceive is a good deal.’”
“LePage cribbed the firm’s three Big Ifs we’ve been hearing for a few months: Are we in or headed for a recession? Will credit become un-crunched? What if foreclosure sales taper off?”
“There was more nuance where that came from. ‘What we don’t know is how deep the demand is, even at these prices,’ LePage said. ‘There are a lot of foreclosures that still haven’t sold and a lot more coming.’”
The LA Daily News. “In Los Angeles County, where sales fell an annual 30.6 percent, to 5,016 transactions, the median price declined 19.4 percent, to $435,000. For all of Southern California, the median price fell 24 percent, to $385,000.”
“And despite April ringing up the highest sales total since last August, it was still the second-lowest for the month on record.”
“Post-foreclosure homes are becoming a bigger part of the sales mix across the Southland. Of all the homes sold in April, 37.5 percent had been foreclosed on at some point in the prior 12 months, compared with 35.8 percent in March and 4.6 percent a year ago.”
“‘We heard several months ago that people were going into brokers’ offices and saying `Show us your REOs (foreclosures).’ They were looking for bargains,’ said Jack Kyser, chief economist at the Los Angeles County Economic Development Corp. ‘People who were priced out of the Southern California real estate market are realizing that a door is opening and it’s going to stay open for quite some time.’”
“That’s because foreclosures, already at record levels in most areas, will continue increasing in the months ahead and further push down prices.”
“DataQuick said April’s sales increase was most pronounced for homes priced under $500,000 and accounted for 66 percent of the monthly gain. Most of that activity was in areas hard hit by foreclosures, most notably the Antelope Valley and Inland Empire.”
From KABC 7. “In Antelope Valley, 17 houses are about to hit the auction block. Starting bids are listed at less than half the original asking price. Opening bids on homes that are around $600,000 are starting at $125,000.”
The LA Times. “The rich may indeed be like the rest of us. Prices of their homes are now falling too. Data released Monday showed big drops in the region’s most exclusive neighborhoods.”
“Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach’s 92660 ZIP Code took a 34% hit, according to DataQuick.”
“Experts say these areas and others are catching up with price declines that struck first in outlying suburbs such as the Antelope Valley and the Inland Empire. ‘You can’t have one market hugely cheaper than another forever,’ said UC Berkeley professor Thomas Davidoff, who specializes in real estate.”
“The decline in the high-end market can be seen in both the Los Angeles and the San Francisco Bay Area markets, according to a study released Monday by First Republic Bank of San Francisco.”
“The weak economy suggests that prices will remain depressed for some time, said First Republic’s president, Katherine August-deWilde. ‘People worry about their jobs and incomes — even rich people,’ she said.”
“Orange County’s more expensive neighborhoods are also seeing price declines, DataQuick figures show. ‘The market over $1 million has definitely changed,’ said Aliso Viejo broker Steven Thomas.”
“Foreclosures, which had been almost unheard of in high-end markets a year ago, now account for a substantial share of listings. In Coto de Caza, where the average listing price is $2 million, 17% of the 167 homes for sale are either foreclosures or “short sales,” in which the listing price is below the amount owed on the property, Thomas said.”
“In Mission Viejo and Laguna Hills, Thomas added, foreclosures and short sales make up more than 40% of the homes for sale.”
“With the passage of time, sellers who want to move but have been waiting for a market turnaround grow weary of waiting, Berkeley professor Davidoff said. ‘It’s like being in a teakettle. People eventually want to get out,’ he said.”
“The weakening overall economy will be another likely drag on prices at the high end, said John Burns, an Irvine real estate consultant. ‘Executives are now losing their jobs too,’ Burns noted.”
“Simon Lee, a commercial real estate investor who has been shopping for a house in Bel-Air, Pacific Palisades and Brentwood, said he believes that prices in those areas are still inflated in today’s market.”
“‘I think it needs a major adjustment, 25% or 30%,’ he said.”
From CNN. “Barbara Harvey climbs into the back of her small Honda sport utility vehicle and snuggles with her two golden retrievers. A former loan processor, the 67-year-old mother of three grown children said she never thought she’d spend her golden years sleeping in her car in a parking lot.”
“Harvey was forced into homelessness earlier this year after being laid off. She said that three-quarters of her income went to paying rent in Santa Barbara, where the median house in the scenic, oceanfront city costs more than $1 million. She lost her condo two months ago and had little savings as backup.”
“‘It went to hell in a handbasket,’ she said. ”I didn’t think this would happen to me. It’s just something that I don’t think that people think is going to happen to them is what it amounts to. It happens very quickly, too.’”
“John Quigley, an economics professor at the University of California-Berkeley, said the California housing crisis has left many middle-class families temporarily homeless or forced them to go to food banks to feed their families.”
“‘Part of the reason why it’s so painful in Santa Barbara is there’s so little in the way of alternative housing,’ Quigley said. ‘If there were alternative low and moderate housing and rental accommodations that were reasonably close by, you can imagine it wouldn’t have this desperate look to it as people living in their cars.’”
“The report shows that prices make a difference, said Leslie Appleton Young, chief economist for the California Association of Realtors. ‘It is just a little bit too early to call a bottom,’ she added.”
Well, lookit this! Good ol’ Leslie sounds a wee bit less stupider than normal. Maybe her meds are kicking in.
I sent her a pic of my last JT victim. Needless to say, she found religon.
“Newport Beach’s 92660 ZIP Code took a 34% hit, according to DataQuick.”
A good beginning. Prices in 92660 have doubled in five years. But they need to go down by another 20%, at least.
The report shows that prices make a difference
That’s just crazy talk.
Comment by Olympiagal
2008-05-20 15:34:11
“The report shows that prices make a difference, said Leslie Appleton Young, chief economist for the California Association of Realtors. ‘It is just a little bit too early to call a bottom,’ she added.”
LAY + CAR = (bottom) [B]
Lying and Yellow + Cali Is Robust = Bum [wiggle]
HAR!
Leigh
Are you saying L-shaped recession, sweetpea?
Gimme an L, go on, gimme, gimme, gimme!!!
L - lying
A - almost
Z - zeolet
Y - yellowed
(Think wildly swinging cheerleader acrobats and all the flips) - L -A -Z -Y
Spell it out! What do you have!!!
Gimee an L -
HAR - I crack myself up - dang, if not for the humor, I’d cry.
Leigh
No, you musn’t cry. You must think of the children. Won’t someone, please for the love of sweet baby Jeebus, think of the children???
I wonder if consumer reports will start a buyers guide to homes like the one they do for automobiles. You know all the 2005 thru 2007 builders will have the solid filled black circles
““‘I call this a false dawn,’ said Chris Thornberg, an economist with Beacon Economics in Los Angeles. ‘Foreclosures are not a sign of a stable market. Prices are getting closer to affordability, but they still have some ways to go.’”
He ain’t kidding. I’ve noticed locally the out-of-town, wanna-be vultures sweeping in to grab foreclosures only to re-list a couple weeks after close at todays wishing prices. WTF? The stupidity just leaves me scratching my head, as well as reinforces my belief that people, for the most part, are f-n idiots! Talk about a fool and his money…..
Oh by the way, wait until the new median reports after the wave of current sales hits the deck. Once that sinks in, a whole new wave of “F this, I’m outta here” foreclosures come online.
I agree. What’s not covered here are median price per sq ft and zip code. I bet these REO sales are going to tug down the prices big-time, once they filter through.
“Once they filter through”
Oh my ~
This is NOT good.
Lawd be with us.
Leigh
This is my favorite time of the month, waiting for the DQ zip chart to come out. It’s like Christmas morning each and every time.
““‘I call this a false dawn,’ said Chris Thornberg, an economist with Beacon Economics in Los Angeles. ‘Foreclosures are not a sign of a stable market. Prices are getting closer to affordability, but they still have some ways to go.’”
Love Thornberg. I’m amazed how well he has predicted this bear market. He’s one of the few economists I expect to turn bullish ‘at about the right time.’
Oh by the way, wait until the new median reports after the wave of current sales hits the deck. Once that sinks in, a whole new wave of “F this, I’m outta here” foreclosures come online.
Combine that with those who believe the media reports of the market turning and flee the bubble markets due to the lack of affordability.
And ignore the CAR. Only the Wells Fargo affordability index is worth anything for saying who can afford what.:
http://www.nahb.org/page.aspx/category/sectionID=135
Got Popcorn?
Neil
oy vey
Thx Neil. Interested to note that among smaller metros (under 500K people), Salinas is least affordable and San Luis Obispo comes in second worst. Ever since beginning to post at HBB I’ve been wondering why the drop in Central Coast housing prices is so slooooooooooooooow. Dropping they are, but some number of cash-paying retirees must be propping them up. Cash-paying retirees also create an artificial unaffordability statistic, because they may have $500K or $1M to buy a house, without having the INCOME that would make the house appear to be affordable. Think of $2M at 5%, generating a $100K income. Logic says a $100K income can’t buy a $600K house, but take the $600K out of the $2M, and abracadabra, customer still has a $70K income to support himself and the taxes, insurance, maintenance, etc. I think this scenario is reasonably applicable to beach areas.
Preach it Neil. When are we going to descend into the slough of despond again?
The current market will be weak but will survive the summer.
Wait until the fall. That’s my prediction for the next emotional state transition.
Got Popcorn?
Neil
Where is these folks’ financing coming from?
I do believe we’re seeing folks that have an availability of cash that are jumping in far too early, thus the term “wanna-be vultures”. This pool of idiots is soon to be exausted, though.
Said idiot has cash, yet gun shy.
Er…but does have guns! (and plenty of dry powder),
Have we lost our collective minds?
Ya just can’t make this stuff up!
Leigh
I hate to say it, but my wife is one of these idiots. She can’t understand why I’m not interested in buying yet. “Prices are so low!” she says.
Yesterday I told her I didn’t want to spend more than 400K on a house. She said, “Then why are we looking at houses priced at 600-700K?”
DUH!
Don’t say I said this…but it works - sssshuh,
OK. Lock her in the closet - don’t tell!
Leigh
I see the shills at the NAR are still touting adjustable mtgs as a way to bump up affordability. What a bunch of sh#t. They’ll suck in some more FBs with that line. Plenty of idiots still out in public to screw. Remember, better buy now or loose out forever. hehehehehehe
They’re doing more than just using adjustables to tweak the numbers. they also assume 40% of gross income going to payments, and a bottom-third house. What their numbers say is that if you’re in the top 60% of income you can afford to buy a bottom-third house, if you’re also willing to risk financial hari-kari and never have fun that costs money again.
Olygal is much nicer than I am. Knucklehead Leslie promised that prices would not come down in Marin in her lifetime. Well,prices have come down, so why is she still alive? Isn’t it time for her to die already
Wait until the real carnage in Marin happens. Only a year away or so. Maybe three.
But we can all drink Scotch to wait it out, right?
Yeah, well the last time I was with you, It was generic scotch!
Single malts only FPSS. Primary food group
That’s what I meant, single malts.
Chill. That’s means you, not the malt.
‘Yeah, well the last time I was with you, It was generic scotch.’
But I thought FPSS favors whiskey? Maybe it was one of his more mellow de-toxing days.
Oi? And I thought you were my friend, Oly.
No risotto for you, even if you bring the wild mushrooms, and that’ll hurt me more than you. No risotto for you.
‘No risotto for you, even if you bring the wild mushrooms, and that’ll hurt me more than you. No risotto for you.’
What ARE you on about, my good fellow? I simply observed that you have, in the past, indicated a preference and a fondness for whiskey. As is only natural and goodly: ‘Uisgebaugh’; the ‘water of life’, all that good stuff. I’m fond of whiskey myself. Is scotch like one of them forbidden subjects?
I want risotto! Risotto! Gimme! Gimme!
I mean, jeeze, Faster, I remember what you like to DRINK, and I don’t even know you. I just barely got through dating a very presentable nice young lobbyist who wasn’t even married for once, for at least 3 whole entire months, and I didn’t even bother to remember his NAME, just about, let alone what he liked to drink. (I called him ‘Honey’. They always like that. ‘Muffin’ is an alternative, but they don’t always like that, for some reason, maybe because it sounds buttery or fluffy. ‘Punkin’ is also good with many, especially if they had farm-raised mothers.)
Oh, that reminds me that there was this one time two years ago when I happened to end up dating two and a half ‘Steve’s’ at one time. I didn’t plan it, it just happened. It was incredibly convenient. I loved it. Ever since then I ask nice boys, ‘Have you ever thought about being named ‘Steve’? No? Are you quite, quite sure? Because you look just like a Steve to ME’.
That’s because the ‘Steve’ name had sunk into my brain like hot molasses into home-made vanilla ice-cream and I thought, why waste a good neural connection, right? Right. It’s either ‘Steve’ or else it’s ‘Punkin’. Sadly, it seems that the Steve Event was a one time thing.
Look, moving on, so my point is, I want some risotto! With broth! Risotto!
OK, risotto it is! YAY!!!!
Risotto for everyone!!! Right from the pot.
Took four big Crown Royals to a friend in Renton back in 1998. Unavailable in Washington state owned liquer stores. He tried to repay me with Gooey Duck Chowder. You folks in the “Great Northwest” know what “Gooey Ducks” are!
We haven’t talked since.
‘OK, risotto it is! YAY!!!!
Risotto for everyone!!! Right from the pot.’
Okay, then, fasty. I’m a gonna make a note. We’re good, then, is what matters.
Speaking of risotto, I had this red beet risotto with bay scallops and gold leaf in new york. By far the finest tasting risotto you’ll ever encounter. It was like a circus in my mouth.
I posted this the other day, but I will repeat myself:
The grocery stores are starting to freak out. I went to one the other day, and they had rid themselves of all their “top shelf” (really mid-tier) stuff. They had moved the “mid-tier” (really bottom-shelf) stuff to the top shelf, and had stocked about twice as much of the wood distillate to fill in the empty spaces. Also, everything was on sale. Ugly yellow stickers plastered all over the aisle.
Life is gonna get harder on hard-boozing V; I will have to make it all the way to Bev Mo now for my bourbon
Was that a store chain, V? If so, which one?
BayQT~
Well hidden article in LA Times business reported that 8 AOL executives pleaded no contest to filing false accounting reports that overstated AOL’s income by 1 Billion Dollars. And then we get the AAA ratings for bonds that are now junk. Does anybody believe in any earnings reports from any accounting firms these days? Stock market stations live and die on earnings reports and they are all fraudulent. Hiding money in the back yard is starting to look like that only reality today.
Tinfoil again, present and accounted for. Not you, David, but me. David, this will get much worse as time goes on. Many companies, like the investment banks are hanging on by cooked books and loads of debt.
My advice to anyone at this poiont in time is:
-Get ouf of debt. Don’t wait to inflate it away.
-Keep a chunk of change at home or somewhere safe, not all at the local wallyworld bank.
-3-6 months, more if possible, of emergency money.
-1-2 weeks of food stored. No brainer here. PMs are a good store of value, but don’t mean squat if you don’t have food and/or can’t find anyone to sell you food for PMs.
-Don’t buy a house.
-I repeat, don’t buy a house. You need to be mobile in this day and age.
-If you have mortgage, unless the tax deduction merits it, pay it off asap. Again, no debt. When this things collapses and the sheeple finally see it when it is too big to hide and finally hits them, you need to be in a good position. When it finally goes, everyone will be calling in debts, obligations, payments, etc. all the way back to when you where in 1st grade. That means mom is going to remind about the 2 bucks she lent you 30 years ago when you where in 3rd grade.
Sorry to be so glum and tinfoil, but I see a very bankrupt society that is ready to go over the cliff.
For so many households this disaster could not have been planned more perfectly. As you point out, just when they should disengage from debt and start building reserves - they have to deal with soaring food and fuel prices.
As for the tinfoil element, I pose this question:
If $20bbl gave us 9/11, then what will $130bbl bring?
IMHO, not tinfoil enough. No reason to pay off debts or save up money at the point where the society collapses; money will likely not be worth much at that point, and you will want to have all the hard assets you can. Besides, before that point, if history and current political directions are any indication, the government will be taxing your savings at near 100%; best to have things you can hide when the wealth redistribution man cometh.
Of course, this is assuming you can’t get to a more stable country first, and watch the collapse from a safe distance. I assure you that the wealthy people will be long gone by the time the collapse comes, if their slow exodus doesn’t trigger it faster.
The Bush’s bought 80k acres next to the Generalisimo is Paraguay last year..Setting up the escape compound?
BS. Hard assets. Not likely. Poo-Bahs have other arrangements and cavier to go with it. Just who would want or could afford my hard assets? Before anyone starts, that was a pun. Don’t even think about it! You are wasting your time.
I don’t want to imagine it will be as bad as you say, but psychologically it could be. It seems the vast majority of folks don’t even believe how close to the edge they are, let alone have a big enough vision to imagine society is teetering.
“You’ve got jail”
hahahah. good one.
The amount of foreclosures that are hitting the market and soon to be hitting the market are mind-blowing numbers .I have never seen anything like this crash ,and its so widespread .
OCDan ,I just can’t blame you at all for trying to prepare for the fall out from this mess. I don’t think it helps for the powers to continue with their game playing . People know that something is wrong ,even if they can’t put their finger on it . It’s not a good situation when you have this much supply of homes with little demand or still lack of qualified buyers ,so anybody who thinks they can call a bottom is crazy at this point . The job loss is going to continue, yet I don’t hear much talk by the MSM about how this factors in to the over-all economy . People don’t buy houses when they are in fear of losing their job .If your normal, you have to have pretty good job security to want to buy a high ticket item .
The government is still trying to hold up a fake housing market that
created jobs, it created the money for people to buy goods they couldn’t afford,it created taxes for the public coffers , and it created a false sense of security for the American people .
Ben submitted the article about the 67 year old lady sleeping in a car with her dogs . If this lady is 67 she can collect social security and she better move to a cheaper town . I just wonder if this is another scam by some hustler wanting to get people to donate money to her .
Some lady at work today told me that she can retire in 2 years because she turned 60 today. WTF? They’re making me work ’till I’m 69.
When a older person becomes unemployed ,its a lot harder to get a new job . There are few companies that are thrilled with hiring older people ,even if they want to work and can work .
Thats why people have to get serious about planning for retirement .A 67 year old lady who is sleeping in a car with two dogs did not plan her retirement very well .
I know of some hard luck cases of older women who are broke and in a hell of a spot for people at that age . I wonder how many little old ladies bought into the housing boom thinking that they were going to improve their life and have ended up broke .
My point is that we are going to continue to hear stories of the fall out from this housing boom that has affected every age group .
Big V,
Can begin collecting permanently reduced SS retirement at 62.
“That’s luring some buyers back into the market, getting what they perceive is a good deal.’”
Ahhhhh, well worded LePage…..and we both know their perception is WRONG!
Ms. Harvey needs to swallow her pride and start asking friends and family to help. She may also need to move to a more affordable place. Clearly, SS plus a low-wage job are not allowing her to live there. Or she needs to band together with some of those other car-dwelling females and pool resources to rent an apartment.
But, first off, tell your kids and get them to help. If they’re grown and mama needs help, then they need to help.
I know as long as I had a roof over my head, so did my mom, and as long as I had 20 bucks in my pocket, my mom was eating!
I won’t even go into why someone who wasn’t wealthy thought they could live in a high-priced Santa Barbara condo…
M
Because it’s Santa Barbara.
Everyone wants to live there, and the good baby Jeebus knows, that if everyone wants to live there then you will be able to flip a crappy condo.
What are you, a commie? Get with the program.
Two big dogs doesn’t help much with renting an apartment. How can she afford to feed them, anyway? She’s better off in the car if she wants to keep them. Plus, they make better roommates than what she’d likely end up with.
I couldn’t help but comment. She should train the dogs to beg. Was in Bangkok and a beggar had his dog trained to stay and mimick his begging position. The dog’s cup was full, his not so much. Need a gimick
Maybe she doesn’t have any kids, or maybe they hate her, or maybe they’re just losers. I’ve noticed a lot of people on this blog seem to hold it against people when they aren’t receiving help from friends or family members. Trouble is that most people don’t have such help available to them. After all, if we were all helping each other to survive (above and beyond paying taxes into social security, etc), then none of us would have enough.
OK, so she has kids (sorry about that), but the other two possibilities still apply.
I thought I read that she’s living there so she can be close to daughter - why isn’t she living with daughter?
Who cares? Let her live in her car and tell everyone she lives in SB with her children and her dogs. Absolutely zero (0) sympathy here. The age card is as tiresome as the race card.
“A former loan processor, the 67-year-old mother of three grown children said she never thought she’d spend her golden years sleeping in her car in a parking lot.”
Here’s an Idea, move someplace cheaper where you can afford to put a roof over your head.
Funny, I’ve worked with fellas who had to live in cars and RVs to get by due to layoffs during past recessions - the MSM didn’t do stories about them.
In 1981, I met a family that was living out of a station wagon. They supported themselves by collecting cans along roadsides.
Despite such grim conditions, they viewed their way of life as a grand American adventure.
This is no joke my friends, my used-house salesperson is currently sleeping in his office, having been evicted from his apartment. I’m going over there tomorrow to scout out his cooking equipment (side business of being a professional chef, which I think he will soon be going back to).
Plenty of houses under 200k in Bakersfield or Merced.
What in the world is wrong with a trailer that is in good shape, if that’s all you can afford? I’d be into one in a minute if my income went to squat and it cost less than a decent rental of a non-trailer. This woman hasn’t seen enough pictures of people in the world who can’t afford even a meal.
After we split up, my ex was living in the mountains above Palm Springs in this great Airstream. I would take daughter up to visit him (he had only supervised visitation and his family bailed and I wanted daughter and him to have a relationship) for weekends and kept thinking it would be heaven to have a little one of those airstreams and just go from place to place and work temp jobs. I’d rather be in a trailer in a rural area living a small life than stuffed in a car with 2 dogs.
Even the Great NYC dj lived in a mobile home twice in his lifetime.
And it want horrible, just felt cheap and tacky, but still…it was necessary, same situation,lost job didn’t want to sign a year lease anywhere,so it was good alternative.
“Barbara Harvey climbs into the back of her small Honda sport utility vehicle and snuggles with her two golden retrievers. A former loan processor, the 67-year-old mother of three grown children said she never thought she’d spend her golden years sleeping in her car in a parking lot.”
Nice kids you got lady! This is why I don’t breed.
Mom - “Uh, hi honey it’s mom”
Kid - “…..and?”
Mom - “Well, you see, i got kicked out of my condo and I need some place to stay. Do you think…..?”
Kid - “Blow me mom”….click…
What is she complaining about? Just try and find a radio or heater amenities in a Frigidaire box.
‘Nice kids you got lady! This is why I don’t breed.’
Maybe she didn’t raise them right. I raised my seven (7) younger siblings right, doing the best I could, and pretty good job, I tell myself. Well, there’s one waste of skin, but I can’t blame myself for her, every family has a loser, it seems like. But you will notice I am ‘Olympiagal’, and not ‘Still In Utarrr Fixing Everyone’s Stupid and Repetitive Problems Gal’. There’s a time to let go of the apron strings, from either end, isn’t there? Maybe she already used her kids up.
I’m sure there is a big, long, sad and very stupid story here. One point I’d like to see examined is why the heck this simpleton chooses to live in her car with two golden retrievers. Retrievers are very bouncy dogs, plus they fart a lot, almost as much as labs do. (This is not a scientificky sort of study result with balloons and test-tubes sort of thing, just simply observation, but seriously, why would you choose to live in a car with two farty, bouncy, and continuously hungry golden retrievers?!)
This is a crazy person. I bet her dogs get hungry and decide to eat her as a midnight snack and then drive themselves to Puerto Vallarta and live on the beach getting morsels from German tourists. And I say to them ‘Buena suerte, perros.’
What’s worse, they tend to lay those “silent but deadly” farts. Which means that you never know when you’re gonna get gassed.
It is so true. You obviously are full of scientificky knowledge. It’s like a slithery sort of cobra fart, is what I think. Sneaky, and penetrating and deadly.
I mean, what do they got IN there? In their hairy yelping joyous little innocent dog tummies? A miniature Zyklon-B factory? One time, on a camping trip with my dog Murphy I retardedly let him in the tent because there was a lightning storm and he was all carrying on and complaining, and heavens, I didn’t even wake up for three days, he gassed me so good.
Okay, Oly, now you’ve done it. I’m going to have off-and-on giggle-fits for the rest of this evening ;-).
It’s what you feed dogs that gives them gas. Try a protein rich raw feeding regimen and you should find the farts from the carbs in the grains in the food quickly go away.
I feel sorry for the dogs. She’s may not be a grandma, but she’s old enough to be a grandma, and grandma farts are like dog farts on steriods - like big green angry Hulk farts.
Not good.
God… I hope she doesn’t smoke.
Like on the Day After Tomorrow where the dogs turn on man’s best friend?
Wolves from the Central Park zoo.
I think I like you. But then again I’am an FB and don’t require protection.
I remember a few months back I made the prediction that not every cheap used car that comes out of this mess, will be a good deal…
No amount of Fabreeze is gonna get the funk of two big dogs and some old lady homesteading for months on end outta that CRV…
OLD LADY! OLD LADY! How dare you! She appears to be a quite a find given her professional stature. Suspect that she matriculated with “The Smirking Chimp” at Yale.
I like her, already. When we are not messing around, she can give me RE advise.
wait a minute.. the bottom of the article says:
Her other children live overseas, and she didn’t want to tell them about her living status.
Even if her children offered to help, she said, she wouldn’t accept it. “They know me well enough to know that I will get through this.”
“My daughter especially is very unhappy. Sometimes she’ll cry, and she’ll call and say, ‘Mom, I just can’t stand it that you are living in a car,..’
Still, there’s something wrong with the relationship if..
A) she can’t get herself to call them for help and
B) the kids don’t even freakin KNOW mom’s homeless.
67 years old- Retirement age with just about nothing to her name. What a loser. If she had 1/2 a brain she would be squatting in a new McMansion someplace near the beach.
she ain’t thinking straight.. it’s probably just depression but she might’a freaked out completely.
now, if it was my mom, i’d tell her up front to either accept help or i’d have her arrested.. or declared incompetent and committed to a goddamn hospital. Then i’d do it.
OK, now I take back what I said earlier about maybe having kids that hate her, etc. I’ve been getting out of the habit of actually reading the articles. If she is being offered help, then she should take it. She can live with her daughter and pay rent there. Why should “we” be asked to help her when she refuses to take help from her actual kids?
But her daughter does know, according to the story and wants to help her. No sympathy for people that are willing to go under because of some false sense of pride. Yeah like chillin with her homey hounds in the mobile crib is better than bagging some couch with the fam or friends? WTF is wrong with people?
ummmm…that’s exactly what I do to my M-I-L every time she calls, drunk, for a bail out. I don’t see why mom’s irresponsibility should drag down the rest of the family.
(Of course, my M-I-L’s kids had to live in *their* cars to finish high school, while she was running around with different men. And then she made a career out of collecting back child support for periods of time when she was so drunk the kids didn’t live with her.)
The CAR people sure have strange ideas about affordability. A $356K house with 10% down requires the buyer to come to settlement with $45-50k in cash (down payment, closing costs, and escrows). Plus, under the loan terms quoted the P&I ratio is 33% of monthly income. Using the standard 28% you would need an 80K annual income to service the debt. Also, such a buyer better have little or no other monthly debt service or they will be pinching the pennies for years to come. In reality, even with today’s low interest rates, a $356k house with a 90% loan requires an income of $90-100k for a sensible buyer. Prices for California tract houses have a lot further to fall.
Thanks for doing the math on this. CAR always cooks the numbers.
To afford a 356K POS house, a minimum income of 120K/yr would be needed. Sheesh, what are they smokin?
And with Americas average savings rate of zero how long can the housing market continue to function before the pool of buyers with actual downpayments drys up ? Another argument that prices wil have to drop to meet our paltry savings and meager incomes.
$367k on almost $68k? That’s still well over 5x. Enough already, debt is not a lifestyle. 2.5x - 3x for something good - get in, pay it off, get out - and get on with life. No matter what the agents say, there is life beyond housing.
All I know is that my wife and I make over 140K combined and there is no way I am paying 350K for a house. With a kiddo on the way that much of a mortgage would strain our budget. I am waiting untill I see 250K, then I start to serious look in the IE.
Well they did say “based on an adjustable interest rate”
They said it because affordability goes up based on an adjustable interest rate (the kind that is leading to myriad foreclosures at the moment) compared to fixed-rate affordability.
The affordability index is a load of crap. They revised it early in the bubble to avoid pesky things like underwriting.
First off, they assume the first time home buyer is buying .8 as much home as the median house price, but has exactly the median salary. That stacks the deck a bit. Next, they ignore taxes, PMI, and home owner insurance. Then they assume zero debts and obligations on the buyer’s part. Then they simply take the payment with the lowest rate they think they can get away with (using a ARM or option ARM rate like it’s a 30 year fixed) to calculate the monthly payment (in this case 1810 a month), multiply it by 12 to make it a yearly payment and then again by 4.
( I found it at the Realtor.Com site Qualifying Income – Income necessary to qualify for a loan for the median priced home
Formula: PMT * 4 * 12)
Of course, if you run the numbers with what they provided up there and what they CLAIM is their calculation you get an income of 88k a year which is closer to correct.
Also, first time buyers are likely to be towards the lower end of income scales, which they don’t worry about.)
I also thought their claim of what was “affordable” was pure BS.
No way that median income goes with that median house price. Those home prices need to come way down to about 150 to 180, 200K absolutely tops for me to consider it affordable for folks making 45 to 50K.
I think they have some crazy gremlins doing the math on affordability.
Or they don’t save for roof repairs, painting every 10 years or so (sooner in storm-washed, sun-drenched Miami), replacement flooring, ac repairs, further education, eventual retirement, to give to responsible charities, and to pay for anything in all or mostly cash–just keep getting deeper in debt to make up for all that moolah going to a mortgage/insurance/taxes.
Dunno. Ain’t buying it, though.
When they say a 200K house is affordable, then I’ll nod and say “Yeah, with 40K down it may be.”
M
“I also thought their claim of what was “affordable” was pure BS.”
Ten percent down, high risk loan, and 5x income is the CAR definition of “affordable”. This measurable of “affordability” is about as useful as government measures of inflation. Apparently if you don’t like the results, change the formula. This doesn’t change reality, though. True affordability is still abysmal.
Meerteekah
I like you already. Would not be afraid to meet you on the road.
“In reality, even with today’s low interest rates, a $356k house with a 90% loan requires an income of $90-100k for a sensible buyer. Prices for California tract houses have a lot further to fall.”
You’ll need about $800/month per $100k financed to cover PITI and dues, so you’ll need $2848/month for that $356k 3/2 ranch. I’d need more income or less house to get a good nights sleep in the place.
I have some questions about their ideas of affordability, too. Also, what is the criteria that makes a home a “starter” home?
We are somewhat newly married with two small kids. Food, gas, and electricity are big expenses. If we have cell phones and cable tv, get our hair cut at Supercuts, spend modestly on clothing and entertainment –our regular monthly expenses could easily get up to $3000 a month. And that’s before figuring in mortgage, taxes, insurance, home maintenance, home furnishing. Just a few weeks ago the Sac Bee stated that the average family income in the Sacramento area was around $62,000. If you buy a $300,000 home on that median income, that doesn’t leave much for unexpected expenses, taxes, or savings.
Once again in this post we see yet another MSM article citing the “silver lining” of falling property taxes (or at least assessed values). They keep doing this, but they never seem to go a little further and ask what effect that will have on local and state gov’t budgets.
Then low and behold a few days later there’ll be another story expressing total wonderment that a school district is in trouble or that there won’t be any musquito abatement this season.
Every time I read anything about ‘affordibility calculations’ done by the NAR or CAR, I want to punch them in the mouths.
Their calculations are so obviously bogus I can’t understand how they manage to utter them without blushing.
They rely on the fact that people are incredibly poor at math in this country and too lazy to sit down for a few minutes with a calculator to see if these deals make sense.
Mo,
I didn’t need a calculator, common sense told me I couldn’t afford to buy a house, no matter what type a deal was being offered.
Common sense has been in a shortage for quite some time, hang on to yours.
Well, when we went househunting last time (Jan 2004), all I had was a calculator and the internet, and that was all I needed to figure out 1. monthly payment on the cost of what was out there that suited our needs 2. approximate taxes 3. approximate insurance (which went up by 70% the next two years due to hurricanes, and so my calculations were way low). With those three figures added up, I soon saw that the most we could comfortably afford in a house, even with 100K income and 20% cash down, was just NOT OUT THERE. Unless we wanted to live in the totally crappiest, crack-jungle part of town.
So, we opted out of the housing frenzy.
It was NOT affordable even a year or two before peak.
Long way to drop…
Or maybe most people just don’t think it’s worth their time to figure out how the CAR calculates their number. They’re probably assuming there’s a law out there that would actually hold CAR responsible for making misleading statements and causing people to lose huge amounts of $$. I wish some really PO’d judge would just rule against the CAR and slap them into next Wednesday, but I know it probably won’t happen.
The economic activity in Las Vegas from April 2008 compared to April 2007 is holding up very nicely. I expect to see the doom and gloom ecomic reports from the pathetic main stream media in Vegas, and the economist who missed the bubble 2 years ago, but TOTAL EMPLOYMENT is excellant.
New Residents (Drivers License Count) April-08 6,044… March-08 5,378…April-07 6,195….Down from 07 -2.4%
Active Residential Electric Meter Count April-08 721,…March-08 233 722,875…..March-07 717,880… Up from 07 + 0.5%
Total Employment April-08 926,900…March-08 925,500….April-07 930,300….Down from 07 -0.4%
I know, Vegas usually does OK during recessions, since people like to gamble when they’re down, and they like to gamble when they’re up. Trouble is that most people in Vegas make a living by dealing cards, serving drinks, or getting naked. Not a whole lot of money in it.
During the 2001 downturn Vegas was gasping for air, conventions were cancelled, and tourists were as rare as buyers with cash to spare nowadays.
Gambling is ok in mild recessions.
Look at Capone’s operations in the 1930’s. They fell apart. You need spare cash to travel to Vegas. As California plummets… so will Vegas. Oh… Maybe that’s why its falling apart faster than even Florida!
As Chip notes below, Lost Wages is hurting alreay. Just wait when US air downsizes the hub to ‘focus city.’ That will probably be the publicly recognized ‘kicker.’
Got Popcorn?
Neil
Coulda’ sworn I read some negative reports about the LV economy - the Strip - just within the past week or two. Gambling, hotel occupancy down. Notable because the writer(s) said it was unusual relative to past performance during recessions.
But, but…
Doesn’t a bunch of highly suspect numbers on economic activity, beat a Flush?
You did, Chip. And I just found more info. Here is a link and excerpt:
http://www.cnn.com/2008/TRAVEL/05/20/uneasy.economy.tourism.ap/index.html
“A new Rand McNally survey says two-thirds of Americans planning road trips this summer are either altering their plans to shorten their trips or canceling altogether. AAA predicted the number of Americans planning to drive more than 50 miles over Memorial Day weekend is down by 1 percent. Air travel will decline slightly as well, AAA said.
In the casino capital of Las Vegas, things already are tough.
Room occupancy rates have fallen slightly, forcing casinos to lower hotel room prices. Gambling giant MGM Mirage Inc. and local casino operator Station Casinos have cut their work forces. Las Vegas Sands, which opened a massive new casino on the Strip in January, unexpectedly swung to a loss of $11.2 million in the first quarter of the year.
Analysts expect the slowdown to be most dramatic at mid-market Las Vegas resorts that rely on tourists driving in from southern California. Those tourists already began staying away in the early part of the year, before gas prices rose again.”
BayQT~
Anecdotally…getting lots of promo emails from Vegas. Luxor prices are back to what they were 5 years ago. So I question the stats showing how wonderful things are. When I get get Luxor for $69, MGM Grand for $74, etc. Things are not still soaring in Vegas…
The License count is bullshit. People surrender their licenses so that they can demonstrate Owner Occupancy. No taxes in NV too, so they can get creative at state tax time. Doesn’t mean they live and work in LV.
I was thinking the same thing eggman….
“‘There is a blue-light special taking effect,’ said Andrew LePage, a DataQuick analyst.”
Not as far as I can see here in Thousand Oaks for 3+2 SFR’s. Anything that is not a fixer-upper or right next to the 23 Freeway in the $400,000-$600,000 range is going pending in less than 2 weeks - usually at anywhere between $300 and $325 per square foot with sales prices at or above 95% of list price. The “beaters” are sitting for months and the lenders are not discounting….. condos are having some problems as far as demand goes.
Just not enough subprime, new construction, or foreclosures in Thousand Oaks proper yet to drive prices down. Newbury Park has more foreclosures and things might be a little tougher there.
Hi JOhnF:
The statistics don’t jibe with your observations.
Single Family Residences Condominiums SFR Only
VENTURA COUNTY SFR Price % chg Condos Price % chg $/Sq Ft
Thousand Oaks 91360 15 $440 -33.3% 5 $295 -30.6% $308
Thousand Oaks 91362 12 $645 -11.6% 7 $450 -3.7% $322
You are using March numbers, DQ hasn’t posted April numbers by zip code yet….
I’ve been watching Ventura County prices closely for the last 3 years. They are dropping faster now than at any time since 1991, between 2 and 3% each month. JohnF is either seriously delusional or a Realtor/pumper. Inventory is at about 20 months at the current sales rate and increasing.
“the Perezes are on the brink because monthly payments for the home they bought in 2005 leapt from about $1,400 to more than $3,500, Rigoberto said. We had no idea this would happen, we didn’t expect it,’ Rigoberto Perez said in Spanish.”
They didn’t know that they had an option pay loan? Did they think it was typical in the U.S.A. for people with about $60k in annual income to be able to buy a house at the price that they paid? I bet that they paid over $400k for the house.
Um, Rigoberto, did the fact that your loan originator kept saying “No problemo!” raise a red flag in your mind?
What kind of crazy math says that an annual income of $67,830 should be taking out a loan for $346,350? And at an adjustable rate?! Have we learned nothing?
When I was growing up in Ohio, I was taught that your house should cost no more than 3X your annual income. Has this gone out of favor among sane people, or just with the lunatic-mortgage-broker-fringe?
Have we learned nothing?
They have learned nothing and will learn nothing. We, on the otherhand, already know it.
There are still plenty of maniacs out there.. getting in over their heads.. some are still buying with the idea of flipping.
Meanwhile, the REIC will do anything but try to stop them. If they can shoehorn someone into a property, it shall be done.
Ugh. It’s like they’re RE-bots, nothing fazes them. They just keep buying and buying and buying . . .
We moved out here 6 months ago, and my husband gets nervous when he gets up and sees me paging through the Homes section. I assure him that we are merely spectators, and I’m just keeping tabs on the free fall.
In my part of the SFV, the bottom of the market has come down almost $50,000 since we got here. And there’s still a ways to go. In the meantime, we’re paying off Midwest debt with California dollars, and its pretty sweet.
Our first two houses were right at 2.5x monthly income and we did not end up with much left over each month to spend on fun or luxuries. 3x would have put us in a hurt, though granted we had two ankle-biters.
Specuvestor special in downtown San Diego. Come one, come all! There’s enough for everybody, like manna from heaven!
MLS# 088036655
350 Ash St #1203
Price: $685,000
Square Feet: 1,232 sf
Sales History
Date Price Held Return Annual
08/29/2006 $1,200,000 n/a - -
Exactly.
Though in reality they probably have farther to fall.
I say:
“Downtown San Diego condos for everyone!!”
It’s still hugely overpriced. That $1.2 million price was probably fraud.
This is the penthouse, top floor baby!, a deluxe apartment in the sky. Actually if I’m not mistaken, the Jefferson’s lived there. In the dark days, this place will go for around 400K. Everybody else is going to be crying in the arms of their milk maid.
“Median sale prices fell by 13% in Beverly Hills in April, compared with the same month last year. Rancho Palos Verdes dropped 18% over the same period, while Newport Beach’s 92660 ZIP Code took a 34% hit, according to DataQuick.”
LA_Investor_Girl, this is your cue. Is it still different in pricy LA zip codes?
“Rancho Palos Verdes dropped 18% over the same period”
Oooh, that’s my boss’ boss’ hood. Wonder how good her mood’s gonna be?
My suggestion: Don’t ask, don’t tell.
Good advice.
But man am I enjoying the Schadenfreude.
I’d love to buy in PV. Let’s see what state my job is in by 2010 (the earliest I’ll buy).
Got Popcorn?
Neil
“At $67,830, the minimum qualifying income was 30 percent lower than a year earlier when households needed $96,500 to qualify for a loan on an entry-level home. The California…median household income was $50,700.”
Let’s get this straight: Over half of Californian households at all stages of their working life cycles make less than $50,700, but households just starting out in the game of life need to make $67,830 per year to afford a so-called starter home. Moreover, this entry-level household needs to fork over a ten percent downpayment and to use a risky adjustable rate loan to artificially lower the monthly payment requirement. What is there to like about this affordability calculation?
“The minimum household income needed to purchase an entry-level home at $356,350 in California in the first quarter of 2008 was $67,830, based on a
n adjustablenegatively amortizing loan with an initial interest rate of 5.65 percent and assuming a 10 percent down payment. Unfortunately, the minimum income required to continue payments on that loan when it resets is approximately $100k/year.”Well noted.
Hence why I only consider Wells Fargo’s affordability index.
Last I looked, 6% for LA. It generally hits bottom at about 50%. I think it might overshoot this time.
We’re but weeks away from the first relocation notices… (Ok, maybe a month for the first big one… but they’re coming.)
Got Popcorn?
Neil
The California Used House Salespersons loves it.
I wonder how many will have 10% down and how many should be able to qualify for a proper loan.
PB,
B I N G O, B I N G O, B I N G O, and B I N G O was his Name-O.
“‘It went to hell in a handbasket,’ she said. ”I didn’t think this would happen to me. It’s just something that I don’t think that people think is going to happen to them is what it amounts to. It happens very quickly, too.’”
People don’t think that it will happen to them because they plan ahead and save and don’t buy what they cannot afford!!
Something about this story stinks, really reeks and doesn’t ring true. Sounds like sympathy for that new ballot issue coming up.
“People don’t think that it will happen to them because they plan ahead and save and don’t buy what they cannot afford!!”
What color is the sky inthe world you live in…. in my real world, outside this blog, I don’t know anyone under 50 that lives like this.
In my world, it is all about how much room is left on the credit card and HELOC. How much debt they can get their hands on. What the new style is for this season. What new car are they going to trade in their 2 year-old one for. Which timeshare are they going to stay at for their summer vacation.
My in-laws home was valued ~400k at the peak, now about 310k. South side of Moreno Valley. Bank owned home just came on the market a couple doors down at 210k. Ouch! Hair cut and we ain’t even started yet.
Of course, this is nothing compared to the 74% haircut on that Victorville haircut we saw yesterday on the home with the power lines.
“‘It went to hell in a handbasket,’ she said. ”I didn’t think this would happen to me. It’s just something that I don’t think that people think is going to happen to them is what it amounts to. It happens very quickly, too.’”
Only if you have very little savings, because you were very reckless during the boom years.
“John Quigley, an economics professor at the University of California-Berkeley, said the California housing crisis has left many middle-class families temporarily homeless or forced them to go to food banks to feed their families.”
Saying ‘yes’ a few times and signing a few pieces of paper made it so easy for myriad middle-class families to financially hang themselves a couple of years ago.
Did these people lose their jobs? I wonder why they can’t rent a cheap place rather than go homeless .
I’m just wondering how many people are homeless because of job loss verses people who are homeless because they walked from a house they couldn’t afford to begin with .
I have just been feeling lately that these stories and reports in the news somehow don’t add up . I can understand how a family could become homeless if they lost their jobs and could not obtain employment and ran out of unemployment insurance and exhausted all savings ,and also they didn’t have any family that would put them up for a while.
Uh-oh… This just out from Dataquick. As soon as something like this hits the MSM… Idiot-home buying time! ( aka knife catchers)
“La Jolla, CA.—-Bay Area home sales edged up from a seven-month run of record lows last month, indicating that mortgage availability is improving and that an increasing number of fence sitters have decided they like today’s lower prices, a real estate information service reported.
A total of 6,310 new and resale houses and condos sold in the nine- county Bay Area in April. That was up 28.8 percent from 4,898 in March, and down 15.3 percent from 7,447 for April 2007, DataQuick Information Systems reported.
The month-to-month jump was the strongest for any March/April in DataQuick’s statistics, which go back to 1988. Starting last September and through March, each calendar month was the slowest on record. Last month was the slowest April since 1995 when 5,636 homes were sold.
“The big issue here is that mortgages are becoming obtainable, which will reduce the pile of stacked up pending escrows. It’s unclear if the financing is because of policy changes or because mortgage investors are getting more interested in securities. Probably both,” said Marshall Prentice, DataQuick president.
The median price paid for a Bay Area home was $518,000 last month, down 3.4 percent from $536,000 in March, and down 21.4 percent from $659,000 in April last year. Last month’s median was 22.1 percent lower than the peak median of $665,000 reached in June and July last year.
Last month’s median price would have been closer to $578,000 if the availability of jumbo home loans had remained stable. A year ago jumbo loans, mortgages above $417,000, accounted for 63.4 percent of all Bay Area home loans. Last month they were 28.8 percent, DataQuick reported.
Foreclosure property resales accounted for 25.7 percent of last month’s Bay Area market. The percentage is higher in outlying areas that absorbed spillover activity during the frenzy. While foreclosure properties were 5.9 percent of San Francisco’s resale market and 8.9 percent of Marin’s resale market last month, they were 44.7 percent in Contra Costa and 54.2 percent in Solano. “
DataQuick has not given the numbers a fair shake. They have forgotten that it is magnitude and direction of inventory, not sales, that portend the magnitude and direction of prices. Furthermore, Contra Costa and Solano counties cannot be considered “outlying areas”. They are officially members of Bay Area proper. It is neither fair nor balanced to throw them out as outlyers simply because their numbers are bad. Perhaps those areas with remarkably good numbers should be considered outlyers and thrown away as well.
I was going to disagree with you about Solano, but it does border the bay, so I guess it has to be “bay area”
http://en.wikipedia.org/wiki/Image:Map_of_California_highlighting_Solano_County.svg
The LA Times. “The rich may indeed be like the rest of us. Prices of their homes are now falling too. Data released Monday showed big drops in the region’s most exclusive neighborhoods.”
If these people are in fact, rich, they don’t care what their house may be worth because they didn’t rely on wacky financing to get it.
Are the elite Liberals in the MSM trying to make J6P feel better by saying: “Look! Beverly Hills prices are dropping, so you should feel smug?”
What really matters is, can *you* afford the home you’re in. For 30-50% of the FB’ers that bought in the last few years, the answer is “no” and would be “no” even if prices didn’t start to drop. It just caught up with them faster.
It’s true that the truly “rich” don’t care about the value of their house. However, many of the poseur riche currently residing in wealthy neighborhoods are about to be exposed.
Right! And that’s why it’s important to make this distinction. The FBs that the press likes to print sob stories about haven’t LOST ANYTHING. Just because you have 5 I/O teaser-rate Neg-Am mortages on 5 condos doesn’t mean you’re a MILLIONAIRE.
Trying to console FBs by saying “Look! $20 Million Mansions are selling at a loss” is irresponsible reporting.
And efforts to save these FBs simply punish people like me. Reduced interest rates + inflation eat away at savings.
The FBs can walk away and in many cases MAKE A KILLING! George W. Bush signed into law a provision to exempt forgiven mortgage debt from income taxes.
Most FBs haven’t lost anything! Comparing them to people who truly have large sums of money and vast assets is silly.
LOL! I cannot believe you said “liberal media.” That has to be the most famous oxymoron outside of jumbo shrimp or military intelligence. This is the same liberal media that followed our Great Leader unflinchingly into an unjust war and stood idly by as we destroyed our own bill of rights.
I’m never 100% serious
And now for something completely different…
http://youtube.com/watch?v=CV4i7dWeu0c
Good points reuven . The rich will be able to afford their homes and ride out the cycles while the other classes won’t be able to .
There is a lot of spin and PR campaigns going on in the news these days .
I’m thinking I can afford a 1 room, no bathroom fort. But I have not found any in Sac or Placer county, so I still rent.
If I was paying a mortgage on a home with a ‘traditional’ loan, I wouldn’t worry. Home prices are like stocks, if you’re not selling the price at the moment doesn’t matter. Both markets are cyclical, about every 10 years they crash (there’s a market correction). Then it stabilizes, then the market goes back up. It only takes minimal observation to notice this.
How so many people talked themselves into these bad loans to get a house they could not afford is beyond me. And the lenders that made these loans?!
The minimum household income needed to purchase an entry-level home at $356,350 in California in the first quarter of 2008 was $67,830, based on an adjustable interest rate of 5.65 percent and assuming a 10 percent down payment.”
Holy Batman. I wouldn’t feel comfortable with those terms. Lets hope these people don’t need to do things most of us find necessary like eat, drive, wear clothes, go to the doctor, pay forced homage to Arnold and Shrub, etc. because there won’t be anything left for those frivolous items.
Even if the affordability calculations were correct, it’s crazy to compare median CA income to median CA house just because they are in the same state. Does it really matter if the average person in La Jolla can afford an average house in Victorville?
Good point, gascap. Also, I agree with Mo Money and SF Jack that the undiscussed “elephant” in the so-called “improved affordability” story is the issue of the down payment. Leaving aside (as if!) the issue of whether a person with an income of 67k can truly afford to make payments on a house of 365kish, where is Mr/Ms Median going to come up with the 36k down payment? And if they can, will they be willing to say “And now, I’m going to bet 36 thousand dollars that the market will not go down”? But the truth is few have this cash money. We know that the Average Mr Median has nearly zero savings, having thrown his bountiful wages away on such frivolities as food, gas, health insurance, and yes, rent. Traditionally, you might borrow the cash money from Grandma or Grandpa Median, who made a nice chunk of cash in the 70’s and 80’s–but right now, the older boomers are understandably nervous about the idea of blithely ‘loaning’ out that chunk of cash, even to their own children or grandkids. They are no longer likely to get it back, and they are starting to see they need to put on their own oxygen mask as the plane plummets. And the more responsible kids are not likely to take them up on the offer, anyway. My 70ish mom had offered to ‘help’ me with a down payment to buy into a Palm Springs lower-end house, but now this idea is starting to seem to me like a form of elder abuse. When people start to realize the whole r.e. thing is a huge, uncertain gamble, few people are willing to make a thirty or forty thousand dollar CASH bet. And especially not with Mom’s money. I don’t want to see her end up living in a car with her two dogs. And know that I PUT her there ….