It’s Like The Return Line At Christmas In California
CNBC reports on California. “So DataQuick says home sales in the Golden State rose almost 27 percent last month compared to the month before. Hmmm, let me see, who blogged about the possibility that we were bottoming in housing. Who? Who who who… oh yes, that was me. Of course, in some places most of the houses are foreclosures or short sales, which means prices are still falling — so it’s not quite time to sell unless you have to.”
The Daily Press. “As more homes face foreclosure, home owner associations are left with dwindling dues and unsightly properties that become blights to the area.”
“It’s not an acute problem, but it will become one if the foreclosure trend continues according to Richard Munson, president of the California Association of Homeowners Associations.”
“‘There’s a tremendous impact over the last several months in particular,’ said Munson. ‘People are being foreclosed on or outright walking away from their properties.’”
“The Silver Lake Association in Helendale won’t clean up the foreclosure properties at the members’ expense, said Silver Lakes General Manager Sandra Wojecki. Some of their tenants were business owners and when the construction industry took a dive they were victims of the trickle-down effect.”
“‘Some people just walked away from their homes rather than be foreclosed on,’ Wojecki said.”
“‘We’re fortunate and we’ve had a very small delinquency rate of only 2 percent and only three foreclosures,’ said Kat Harrison, project manager for Stonebrook Estates in Apple Valley. ‘I also manage in Moreno Valley where there’s been a delinquency rate as high as 76 percent. I had to scale back services like frequency of garbage pickup, irrigation and landscaping there.’”
The Press Enterprise. “Nick Manfredi, a professional real estate investor in Corona, said he doesn’t expect the steady influx of foreclosures or price declines to end soon.”
“‘I can’t even buy right now because prices are decreasing so fast,’ he said, explaining he can’t turn over a property before it becomes less valuable than what he paid for it.”
The Daily Press. “Houses with boarded-up windows, peeling paint, tumbledown fences and overgrown lawns are cropping up across San Bernardino County. The county has been home to about 6,000 foreclosures this year, with another wave of 8,000 expected by the end of the year, officials said.”
“‘The banks are so overwhelmed,’ said Tim Adams, a broker associate and Realtor in Fontana and San Bernardino. ‘It’s like the return line at Christmas.’”
“Lisa Castro Carvalho, VP of Casablanca Associates, said houses become run-down even before the foreclosure process starts because homeowners can’t afford to make mortgage payments as well as maintain their properties.”
“‘These are people who are just barely making ends meet,’ she said. ‘Their main priority is feeding their families. It’s not watering their grass.’”
The Union Tribune. “Home loan failures in San Diego County continued to set new records in April, the 37th consecutive month of year-over-year increases for both foreclosures and notices of default.”
“The April spike in foreclosure activity comes as no surprise to Gabe del Rio, president of the Housing Opportunities Collaborative. Risky adjustable-rate loans are continuing to reset at higher interest rates, he said.”
“‘Month over month we continue to see an increase in callers for foreclosure prevention counseling,’ he said. ‘We anticipate that this will continue through the next six to 12 months.’”
The LA Daily News. “More than one-third of Los Angeles County families could afford to buy an entry-level home in the first quarter, thanks to an epidemic of foreclosures that depressed prices. During the first three months of 2008, 35 percent of county households could afford to buy their first home, the California Association of Realtors said.”
“‘I would personally wait a year, but if you are a buyer, this would be a good time to buy a home,’ said Dennis Torres, director of real estate operations for Pepperdine University’s Graziadio School of Business and Management.”
“‘Essentially we’re working our way out of the downturn and coming back up,’ said Leslie Appleton-Young, chief economist of the Los Angeles-based association.”
“Appleton-Young expects affordability to continue improving as more foreclosed homes come on the market and drive prices down further. ‘I think they are going to make a dent in the supply. Is it going to evaporate overnight? Absolutely not. It will be a slow workout,’ she said. ‘We’re still into the wave of foreclosures.’”
The LA Times. “Thousands of abandoned swimming pools, another casualty of the real estate market meltdown, have become breeding grounds for mosquitoes that can carry the West Nile virus, Orange County vector control officials said Tuesday.”
“‘One of the problems we’re having is with all the foreclosures, we have many abandoned swimming pools and also neglected or uncollected trash,’ said said Truc Dever, a spokeswoman for the Greater Los Angeles County Vector Control.”
“The number of Orange County homes going into foreclosure jumped 167% from the first quarter of 2007 to the same period this year. That represents a dramatic increase from 2,644 homes to 7,082 — though not all homes had pools.”
The Fresno Bee. “Marilyn Schutt, an agent in Fresno…attached a ’sold’ sign to a real estate sign in the Fig Garden neighborhood last week — after walking down Maroa and Rialto avenues waving it like those sign-twirlers at intersections in Clovis and Fresno.”
“The house was on the market for six months before it was sold for almost $150,000 less than its original asking price. ‘It was a sign that things are better,’ Schutt said.”
“Foreclosures continue to rise and new-home sales are struggling. Sales of new houses in Fresno County fell 27.2% and prices declined 13.6% from April 2007, DataQuick reported.”
“Some analysts suggest this is not the time to sell property. ‘It’s best to sit on the sidelines and get that absorbed,’ real estate analyst Robin Kane of Fresno said of foreclosures. ‘There is no one left who doesn’t know this is a tough market.’”
The Modesto Bee. “Stanislaus County homes sold for a median $225,000 last month, which was $5,500 less than March. At the market peak, Stanislaus homes sold for a median $396,000. That’s a 43.2 percent decline in 2½ years.”
“San Joaquin County prices have dropped even more. Last month, the median sales price hit $245,000, which was $20,000 less than March. San Joaquin homes peaked at $451,500, but prices have plunged 45.7 percent since.”
“Merced County is even worse. Its homes sold for a median $186,000 last month, which was $17,000 less than March. Merced’s homes peaked at $382,750 before plummeting 51.4 percent.”
“New home sales remain gloomy throughout the Northern San Joaquin Valley. Only 54 new houses were sold during March throughout Stanislaus County, which was less than half as many as in March 2007. New home sales declined even more in Merced and San Joaquin counties, according to the California Building Industry Association.”
“‘We expect the market to stabilize in the third quarter of 2008 and start picking up in 2009. With a decline in housing inventory and rising demand, home prices are likely to start moving up in 2009, thereby impacting affordability,’ said Gopal Ahluwalia, VP of research for the National Association of Home Builders.”
The Capitol Weekly. “As the real estate market softened in 2007, the new owner of a three-bedroom, 1,600-square-foot house in Sacramento’s Curtis Park neighborhood ran into trouble. The house that was purchased for $535,000 in January had lost equity. The owner fell behind in her payments, and eventually, the bank seized the home.”
“What makes this story different from the thousands like it is that the owner of this house was a member of Congress.”
“While Long Beach Democrat Laura Richardson walked away from her loan, she bested Oropeza in a June special election, and moved on to Congress.”
“‘The neighbors are extremely unhappy with her,’ said Sharon Helmar, who sold the home to Richardson. ‘She didn’t mow the lawn or take out the garbage while she was there. We lived there for a long time, 30 years, and we had to hide our heads whenever we came back to the neighborhood.’”
The Mercury News. “The median price of the existing houses that changed hands in Santa Clara County last month was $699,500, the Dataquick said. That was down 12.9 percent from $803,000 in April 2007. The median price of condos sold in the county slid 13.5 percent from a year ago, to $467,000.”
“‘The overwhelming trend across the state is markets that have seen the biggest price declines are now posting some of the biggest sales increases,’ said DataQuick’s Andrew LePage.”
“Median house prices were down 38.4 percent in Contra Costa last month from April 2007, and down 24.9 percent in Solano. DataQuick also reported that a quarter of all home sales in the Bay Area last month were of properties that had been foreclosed upon sometime in the past 12 months.”
“David Martz said he is listing an East San Jose home that the owner tried to sell months ago for $480,000. But perhaps 80 percent of the other homes for sale in the neighborhood are bank-owned properties or ’short sales.’”
“Prices in this owner’s area are dropping. ‘He had to go down to $350,000; that’s what the neighborhood is doing,’ Martz said.”
“Vickie Nyland, president of home builder Taylor Morrison’s Bay Area division, said new home prices are definitely falling in the South Bay. ‘We have to move our inventory through,’ she said. For example, at one of the company’s townhouse developments in San Jose, ‘We’ve got three-bedroom homes . . . in the $450,000s,’ she said.”
“‘A year ago we might not have had anything for sale in Santa Clara County under $505,000,’ the median new-home price in April.”
The Record Searchlight. “Redding real estate agent Rick Goates said we’re awfully close to the bottom. Activity is picking up, especially with foreclosed properties that have been taken back by the bank. Goates noted a bank-owned house last week sold in less than four hours for $115,000 — a snug 1,400-square-foot, four-bedroom home.”
“‘I think there are buyers but they all want the same thing — a deal — and are willing to wait if they don’t come across one,’ Goates said.”
“Lisa Castro Carvalho, VP of Casablanca Associates, said houses become run-down even before the foreclosure process starts because homeowners can’t afford to make mortgage payments as well as maintain their properties.”
What a surprise, someone who can’t or won’t plan ahead for a down payment doesn’t understand the costs of deferred maintenance either.
Gullible Gopal?
“‘We expect the market to stabilize in the third quarter of 2008 and start picking up in 2009. With a decline in housing inventory and rising demand, home prices are likely to start moving up in 2009, thereby impacting affordability,’ said Gopal Ahluwalia, VP of research for the National Association of Home Builders.”
Also, since I am VP of banana research at Whole Foods, let me tell you about what I saw today at WF. Last two times there, it has been about as quiet as it can get. The one thing that struck me was the banana section. They have both organic and regular bananas. Usually this merchandise moves quickly and most times the bananas are definitely on the green side as they ripen within a few days. Today, both kinds of bananas were stocked completely and the bananas were ripe, about a day away from getting the brown dots. WF usually prides itself on the freshness of its produce, but either their shipment was delayed and ripened quickly or people aren’t buying one of the cheaper fruits that they sell. Curious. Doesn’t portend good news for the WF stock price.
You should publish Friar John’s Banana Index, and correllate it to the S&P 500. Who knows, could be a winner!
I know! It will be a winner for I am friar john, lord of bananas, though personally I like my bananas firm and a little on the green side. Never been a fan of the mushy bananas or for that matter extremely large bananas. I like them just the right size for a lunchtime snack, preferably with blackberries. The tartness and sweetness of the blackberries livens up that rich, dense banana mass in one’s mouth. An orgiastic feast for the senses some might say, but no mackinaw peach for those who swing that way on the fruit tree. Yes, bananas and indexes, two great tastes that taste weird together.
Where’s my Kumquats ?
Kumquats have seeds and I am friar john, lord of seedless fruit with inedible skin. I do admit sliced kumquats go excellent in salad and are quite delectable when poached. Hail to Mo Money, lord of kumquats, and quite the zesty capitalist to boot!
Big loquat fan here…
They grow all over the city of angles, but you seldom see them in stores for sale, for some reason?
http://en.wikipedia.org/wiki/Loquat
Ah - a childhood memory. We had a loquat tree at our house in WLA. Have never seen them in a store and don’t know many people from outside LA that have heard of them.
loquats grow in the south, too; we have big one in my dad’s yard in south carolina, and they’re all over as street and park trees in savannah, georgia. no one knows to eat them, much, it seems, so I used to go around gathering them from all the trees around my grandmother’s house. yum-ola. they are raised and sold in china, so we get them here in singapore, but they’re not as good as in georgia!
WFMI is already down over 50% from its early 2006 peak.
I’ve had my eye on it for close to a year now - as in an eye on it watching for it to drop. A no-brainer, really.
..might be due to delayed shipping.
The TV i wanted was out of stock. I asked when they would receive more inventory. The clerk said a truck used to arrive daily, but not anymore. With the high price of diesel they wait for a truck to be full before sending it out. This was either Target or WalMart .. can’t remember.
Comments like this from NAR Gopal Ahluwalia make us all go bananas here.
I drove a banana truck. What most people don’t know is that the local supplier is actually the one that determines what shape your bananas are in when you see them in the store. So you may not be seeing a sign of the economic apocalypse so much as a glimpse into the sordid world of the banana trade. To wit:
When bananas are shipped to the U.S. they are kept relatively cool and arrive “hard green.”
After being trucked to local banana companies such as the one I worked at, they are taken off the truck and placed into ripening rooms, and stacked off-center, pyramid-style, like the Purina logo — this allows the ethylene gas, which is sprayed into the room after all the boxes are stacked, to reach the individual hands of bananas and get them to “break” or start showing yellow.
The ripening rooms are climate controlled and precise temperatures are required to encourage the ripening process, which takes about 2-3 days.
A good banana company foreman will be able to put his boxes of bananas on the truck when they are “on the turn” meaning about 80% green with yellow tips. Produce managers don’t like this, as Miss O’Lady wants her bananas ripe and ready to eat.
The dilemma for the banana foreman is that if he waits too long to ship the boxes, they will be 3/4 yellow, and then the produce manager will complain that he can’t take his full allotment of boxes, because they will go rotten before he can sell them all.
So between the competing needs of the banana foreman, who prefers to sell “on the turn” and the produce manager who desires “full yellow” we see a microcosm of the human condition. Thrilling!
Understand these boxes of bananas are 40 pounds each, and with a good Magliner handtruck, a strong dude can run six high into a store — that’s 240 pounds of bananas at about 10-15 miles an hour. You see, we got paid by the day, so the faster we got done, the more free time we had. Literally, we used to load the boxes on the freshy Magliner, and barrel into the store, yelling, “BA-NA-NA-MAN!”
This would let the produce manager know we were there, because we had to get him to sign the invoice; it was also an intimidation tactic, as we didn’t want him checking the boxes, when, from time to time, we had to stiff him with a box of “soft yellow.”
So because it was a drag to have to cart boxes back to the truck, we worked fast, and invariably, we would be back at the warehouse to listen to the voice message from the irate produce manager for dumping him with a box of #$%#. And then the banana foreman would give him a credit or a free box on our next trip.
Again, because I lived it firsthand, I wouldn’t be so quick to use the banana stand as an economic indicator, as there are other forces at work.
I have long thought bananas to be the best bargain in food. Until recently, it was .99 for a bunch at Sam’s Club; now up to 1.32 or something. I assumed it was just inflation and fuel cost to transport them from jungles to our discount supermarkets
Frank, it seems you grew up in a different time, a time when sex with robots and anal cavity probes were just a figment of one’s imagination. The world has changed, no more milkmen or banana men. Did you wear yellow uniforms to differentiate yourself from the men wearing orange uniforms delivering tangerines? Then the topper was that statement of yours “we had to stiff him with a box of “soft yellow.””, sounds like you were part of some male prostitution ring. Next thing you’ll be talking about the good old days delivering twinkies and those pink balls.
John, I definitely had a little fun there, but bananas are a specialty fruit that require the specific process I outlined to get to your local store. Granted, I drove the truck 20 years ago, but I still see the Suffolk Banana Co. truck rolling around my hood from time to time, so they’re still in business.
The profits used to be so good that companies could be stand alone — now I suppose banana operations have been rolled into bigger produce ops.
But there’s no getting around the fact that they have to be put in refrigerated ripening rooms, gassed and timed to get to your store. Unless the science has changed…
Aha! A quick search while writing this yielding the following article from 2007 — and the guy quoted is the same dude I used to work for! And yes, sports fans, his nickname was Johnny Banana:
It is passion fruit for Suffolk Banana in Yaphank
If Frank the banana man can write like that, America does have hope.
My grocer tells me there was some sort of flooding in Bolivia or Equador or one of those banana-producing countries, and that is sending banana prices way up. Of course, bananas were extremely cheap to begin with and still are, so it seems like people should still be buying them.
Even in light of this, WFMI is toast.
–
PPSF For SFH In Palmdale, CA Down 54% From the Peak
Price Per Sq Ft For Single Family Homes, New & resale
City_____ Zip Co PPSF PPSF From peak
Palmdale 93550 $113 -61.4%
Palmdale 93551 $121 -45.2%
Palmdale 93552 $116 -48.1%
Palmdale 93591 $97 -61.2%
Average ALLZIP $112 -54.0%
The peak PPSF was only 12-15 months ago. For All SoCal the PPSF is down 37% from the peak.
Jas
Yep, I saw that.
I love the smell of Napalmdale in the morning!
I love the smell of Napalmdale in the morning!
ROTFLMAO
And the foreclosures really haven’t hit the market in the numbers they have too…
Down 54% and that isn’t within 18 months of the bottom!
Yikes!
Got Popcorn?
Neil
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“‘I can’t even buy right now because prices are decreasing so fast,’ he said, explaining he can’t turn over a property before it becomes less valuable than what he paid for it.”
Thanks, Nick. I would have never figured that out on my own.
Jas
That was the money quote for me too, Jas. This is a sign of another inflection point, the time when the husslers can’t make a deal work anymore.
Second leg down, anyone?
The article about the Congresswoman is priceless.
And, I’ve never seen a 1400 sq foot 4 bedroom…I can’t even imagine the layout.
Think sardine can, you have to wear a girdle and apply axel grease so you can squeeze around the house.
Sounds like a party I went to some years ago.
But that’s another story….
Dude, I want to hang with you some time…….
Sounds like a party I went to yesterday, except there was no goat handy. Other than that, yes.
And, I’ve never seen a 1400 sq foot 4 bedroom…I can’t even imagine the layout.
Neither can anybody else since the two houses mentioned in the article were a 3 bedroom 1600 sf. house in Sac. & a 4 bedroom house in LB with no sf given.
That article is confusing. Did she buy the house in January 2007 or January 2008? They say something like, “which she bought in January.” Well, to me, that means five months ago. Or am I wrong and she bought in Jan 2007 and has never made a payment? Geesh.
A guy and his gal are going at it in the back seat of his car and it’s getting hot & heavy when she breathlessly utters “Kiss me where it’s dirty”
So they drove to Long Beach…
“Kiss me where it stinks”
So we drove to San Pedro
“Kiss me where it’s HOT”
So we drove to Arizona….sorry Ben
Goates noted a bank-owned house last week sold in less than four hours for $115,000 — a snug 1,400-square-foot, four-bedroom home.”
During the boom, some genii hired Mexicans to install partitions in mid-sized bedrooms. This was to increase the value of the property, since FB were willing to pay much more for a 4-bedroom house than they would have for a 3-bedroom house of the same size.
In Tokyo you can! Actually I’ve seen 4 bedrooms in under 900 square feet.
No kidding! And they go for nearly 800-900k here at least in central Tokyo. Even more in so-called trendy areas.
yeah but, everyone weighs 100 lbs,proportionally same as here.
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“While Long Beach Democrat Laura Richardson walked away from her loan, she bested Oropeza in a June special election, and moved on to Congress.”
Now she can say, “I feel your pain.”
Jas
There ya go perfect example of what we have running this country. Sad thing is she will get re-elected because of her “being one of the victims of the system” and all.
–
We need to send Hillary to the WH. She sure was “one of the victims” of the system!
Jas
it would be hilarious if it turns out that she lied on her loan app.
At least she didn’t kill her girlfriend like that Kennedy guy.
bad taste…
he’ll be explaining himself for that soon enough.
Hey Sailor (oooh I love saying that) - that’s what the people wanted - regular citizens representing them. No political insiders - no one that knows the system or how to get anything done. No one that understands who you have to shmooze or that you have to start fundraising the day you get elected. No one that has already served, may have good connections or networks. It’s sort of like juries - I would rather have a judge trial - a jury of my peers - now that’s a frightening thought - the same folks that drive on the roads or bought houses in the last few years. I think not.
Hi Crazy
Unfortunatley I don’t think most voters know why they vote for someone. How can you unless you really pay attention to whats going on and do your own research. J6P goes by what he see’s on the news or what thier local paper say’s.
No I don’t have any referneces for my opinion it’s just what I see from talking/listening to people I work/live/shop around.
“There ya go perfect example of what we have running this country. Sad thing is she will get re-elected because of her “being one of the victims of the system” and all.”
She be reelected because she comes from a heavily minority districit where most of the polulation is :
a welfare section 8
b work for the gov’t
c 20 % black 40 % hispanic, 15 % recent immigrant asian, 25 % other
d is on the gov’t dole
e 3/4th are fb’ers
f 95% vote democratic
g 80 % of the voters in this district believe OJ was innocent
and it was a police conpiracy.
h. 50% are food stamps or food bank recipients
Her district includes western part of Lb, carson, gardena, domingues, part of gardena, part of compton. I know this districts composition quite well. FYI carson and compton
have been two of the most corrupt- run thieving-infested city administrations in CA . This is a fact. Gardena is nothing but overrun with ugly urban developments both in housing and malls with much city graft & corruption .
This district will support this slimebag 100% guaranteed for re-election. Not only that but she will get a free pass from the local MSM press as she is female, black,minority& democrat . The local voters will put the blame on the whitey crooked banks and lendars. Look in vain for this story in PC’ed LA slime: it will be buried in back pages in small hidden section.
Last I checked, David Vitter (R) Louisiana was still in the Senate…
“while Long Beach Democrat Laura Richardson walked away from her loan, she bested Oropeza in a June special election, and moved on to Congress.”
I live in Long beach, it is my district, amd both are ultra leftist . In fact this district in LB is so far left that no republican even runs there. It is heavily minority and 100% guaranteed the residents are so politically stupid & ill-educated that they will most likely not give a rats ass about L Richardsons RE financual irresponsibity and possible crookedness. BTW i do not participate in LB politics and did not vote for this schmuck.
I have also reposted the following from bits & buckets as it probaby got lost in the 500+ comments from b&b. It should have originally been included in Ca thread anyway.
‘There will be water rationing imposed in LA city/county/LB by this summer. Long beach already has restrictions on water use:
U can only water lawn 3 days of the week(Monday, thursday, sat). No watering permitted from 9 to 4 . No driveway or sidewalk pressure spraying with water permitted’ ……
‘Just another in a host of problems faced in LA metro area which will get worse next several years. Cities/ State will reduce services, crime will spike, LA RE continues to fall, economy collapses, unemployment increases, good chance of an inner city race riot . LA is raising fees on everything to make up for budget shortfall, and cops will be aggressively ticketing drivers, more Red light cameras to steal $’s from citizens.
La will be a bad place to reside in next several years unless U are a ghetto punk, illegal, gangbanger, run a business operating in the black market such as salvage yard, a still employed municipal employee able to escape the budget axe, run a mom and pop donut shop or liquor store employing only relatives.
Also flourishing in bad times will be llegal- alien imported crime syndicate operations such as smuggling, drugs, pot growing, meth, money laundering, car theft rings, insurance fraud rings,all run out of an increasing supply of abandoned gutted REO properties in some inner LA nightmarish dump such as bell, cudahy, maywood ,sgate, vernon,hawthorne, lynwood, bellflower, norwalk, wilmington, inglwwood, Compton, la puente, pacoima, san fernabdo, sun valley, ect.
U will also escape the bad times if U are part of the 2% LA uberweathy in some exclusine cocooned westside enclave’
Reminds me of that movie “Falling Down.”
“Appleton-Young expects affordability to continue improving as more foreclosed homes come on the market and drive prices down further. ‘I think they are going to make a dent in the supply. Is it going to evaporate overnight? Absolutely not. It will be a slow workout,’ she said. ‘We’re still into the wave of foreclosures.’”
———————-
Is this capitulation?
Is this capitulation?
just a temporary cease-fire.. tend to the wounded.. then reload.
Think house-flipping is passé? Think again. Now at the Santa Barbara Housing Bubble Blog: a pair of high-desert high-rollers come to town, parlay up in the San Roque ‘hood, and exit with enough cash for a cab-ride home . . . well, maybe.
Thanks for reading,
Saint Barbara
“‘I would personally wait a year, but if you are a buyer, this would be a good time to buy a home,’ said Dennis Torres, director of real estate operations for Pepperdine University’s Graziadio School of Business and Management.”
Double speak. He says it’s still on the way down, but covers his a**, in case one of the REIC contributors gets angry. The REIC is a big financial supporter of university management schools.
Have you notice how much more real Christopher Thronberg has been, since leaving UCLA Anderson. I’m now a huge fan.
“‘Some people just walked away from their homes rather than be foreclosed on,’ Wojecki said.”
Ummm?
She also said “Some of their tenants were business owners and when the construction industry took a dive they were victims of the trickle-down effect.” Maybe she’s on medication. Or maybe HOA managers are of the same caliber as the on-site, rental-complex managers.
Maybe it’s just me, but I will never by a house with an HOA…… Im paying for my neighbor to tell me how to live in my own home.
Ooooops meant to say I am not paying for my neighbor to tell me hoe to live.
Actually, I live in a condo with a hoa, and it’s nice to be able to tell some of my neighbors to clean their fucking act(s) up. Cuts both ways.
“You can’t fire me; I quit!”
I have a dilemma. My wife and I are having a child and she is getting really serious about nesting in Corona, CA and it’s getting harder to say no. I have talked her into to waiting until December of this year before we start to seriously look for a home in Riverside County (Riverside 92506 or Corona 92879). I have been looking into some homes that she has been interested in and the prices are down by at least 50% of the peak (600K homes now at 275-300K), but I’m not sure if it would be a good time to buy. I know that the house that we purchase is going to be one that we stay in for a long time (at least I hope) and won’t be a starter home. Would it be that bad of a time to buy? I really think that we will hit bottom in the next 18 months, but do I really want to wait for a 10K? I need some help.
Do you have 20% for a down payment? Can you get a 30 year fixed loan? Would your payments then be close to what you can rent a similar place for?
If the answer to any of these is “no”, then keep renting, IMO. That’s what I’m doing.
Yes, I have the 20% down and the payements would be less than renting. I have been holding her back since 2005. It would be about 2,200.00 to rent a house in those areas, but the mortage would be around 1,800.00 (275K) to 2,100.00 (300K).
Tell her that the kid doesn’t go to school till age 3.
Post-partum or none, pregnant woman or none, tell her she has a choice between doing the “right thing for the kid” or “raising the kid alone”.
Grow a pair, man, fer cryin’ out loud!
Great, faster pussycat. It’s good to know that you advocate abandoning pregnant women for having the gall to want a stable life for herself and her family. Perhaps she disagrees with our assessment of the market, and would like her husband to discuss this with her in an intelligent, mature, respectful manner. Your wife must really hate you.
If she wants a “stable” life, she should pay for it by getting a job, not demanding a free ride because she popped out a sprog.
As I said, kids won’t even know what’s what till 3, and renting IS doing the “right thing” for the kid which is all that matters.
The weak tantrums of so-called adults do not particularly move me.
My wife makes as much money as I do and the time she is taking off for her pregnacy is paid for by her job.
You need to do a careful calculation, include PITI + the lost interest on the downpayment. There are decent spreadsheets out there on the web.
At first blush, if the mortgage is that close to the rent, then the taxes etc are going to push the number higher than rent. But do the calculation, and do it carefully.
Please remember to attach some value to keeping your wife happy. That’s not something you can input into a calculator.
Make no major decision in your life without doing thorough research about peak oil and its likely ramifications for your children’s future.
My honest opinion is at the moment what you can do is not the right way to make a decision. Will someone else in Corona be able to buy your house if you need to leave in the near future.
Look at the economy oil etc and global economic indicators. Buying a house right now for any reason is not a good idea.
Its smart to think about how many potential buyers may exist for your home. Area rents will probably drop significantly over the next year in many areas they are. In general things will get bad this year and next how bad no one knows.
Also and this is from past experience I highly suggest you wait till after the child is born and doing well. You will thank me both ways. Taking a large debt only to find your child has a serious illness is not fun. Later children are far less risk and you would have built up some more equity.
In my own case because of my experiences me and my wife had all the rest of our children close together and rented. They are happy and healthy and the carpet in the apt is stained and the walls drawn on and the Ikea furniture beaten.
But when I do buy in two years I’ll pay cash.
So my suggestion is wait if this is your first make sure everything turns out all right and your first house will be a home and your baby will never know she spent her first year or years as a renter.
My requirement’s for buying a home are even easier. I am retired from the Navy if my retirement check can’t pay the full cost of buying a home, im renting. 1300 a month after taxes should be enough for a pretty nice place once this is all over.
Show her an equivalent rental as well.
And do the math - down on paper where you and your wife can see it.
Then decide.
Best of luck.
“but do I really want to wait for a 10K?”
I think you are asking if it’s worth waiting for another $10K drop in prices. If as you say you already had roughly 20% a year drops in prices that would mean a possible additional $60K drop in the next year and that IS worth waiting for. Put that $60K in a education fund for the kid and the tyke is set.
I know exactly what you are saying, but I’m dealing with a pregnant women.
It only gets worse. Have you been warned about Post-Partum ?
Waiting until after the child is born would be wise, does she really want to be moving and decorating a new house until after the dust has settled and the baby is sleeping all night ?
rent a house w option………best of both worlds
December may be ripe at the rate things are accelerating
I haven’t followed the IE as closely as SD, but short of oil being discovered here or some other improbable miracle, I think SD is due for at least another 20-30% haircut. I can’t imagine houses in the IE going down only another 10K.
Tough call. The question is if the constant nagging is worth it. There is zero risk of prices going higher if you wait, yet a woman’s dream is for a family and house.
I would have her wait, and tell her that your job is not secure. I tell my wife all kinds of scary stories about co-workers getting laid off (white lies). My problem is that I am sitting on a large pile of cash and it is hard to tell her that we cannot afford the risk. I sometimes try to convince her that prices will be lower a year from now and we should wait, but that ploy never works. My wife wants to buy a second house and I get an earful, I could not handle the pressure if we rented. Again, a woman’s dream is a house and she won’t be happy until she has one.
If it gets really bad, ask her if she could live in that house for the rest of her life, because you know what, you might have to.
I tell my wife all kinds of scary stories about co-workers getting laid off (white lies)
That is not a white lie really. No job is secure, especially in the next 2-3 years.
Dear lord, not all women’s dreams are to have a house. And having a child shouldn’t be leverage for making whiny demands.
WELL PUT…men in this country need to grow some balls….bunch of sissy marys I tell you. Yeah….you wife can have dreams…but are you going to ruin your life for it too? FK NO!
It is not even out of the oven yet, and you guys are feeling pressure to buy? I would suggest waiting it out another year. The baby will not be walking or playing in the yard for another 14-18 months anyway. The nursery can wait another year.
I understand the fight you’re having with your heart vs. your head, but being upside down is a sinking feeling (We’ve been through two housing downturns.) I remember waiting 6 years for our house to come back up to a decent price, and it was in a very upscale pricey area of So Ca.
Tell your wife that you two will put together the perfect nursery and swing set in a year.
I don’t feel any pressure to buy, but my wife has been nagging me for years. I have to agree with her the apartments that we live in is driving me nuts. It kills me to pay 1,400.00 for a small two bedroom apartment and have to deal with all of the white trash (I’m white, so, I can say that!). Constantly being work up by someone reviving there beefed up trucks. I am hoping that when the December comes around that I can put it off at least another three or four months.
Inland Empire:
Please forgive me for my following comments. But, I am old and making unwanted comments are what the elderly do best.
As I read your comments, I see that you will be going from a $1,400 a month rental apt to a mortgage payment that may exceed $1,800. That mortgage payment will have a minimum of an additional $1,000 a month of unintended expenses attached to it. You will find that the costs of ownership are much greater than you can imagine when you consider all of the “we needs” that will follow during the early years of your home ownership and the addition of a child.
I am not trying to minimize your desire to escape from your existing living environment but I am suggesting that now, with the cost of everything that you will be purchasing for your new born and the extras that your new home will require will be more than you think.
Maybe you can handle it. Maybe not.
On a lighter note, all of your wife’s desires will not matter at some time in the future. You will be divorced and back living in an apt. much like the one you are trying to leave. Only you will still be paying for the house and the kid.
Statistically speaking, that is.
How true.
Move.
Rent a nicer place. Move out of your sucky apt.
Rent a condo from someone. We just did here in SD — a 2 BR / 2 BA 1,000 SF in a really nice ‘hood for $1,450. Because it’s a condo, and not an apt., it’s a much nicer living environment.
IMO, the baby needs two loving parents, not a room or house of its own. Buying a house doesn’t mean that your future or marriage is stable nor does it mean that if you rent that you are an irresponsible parent. There are no guarentees in life.
People need to be concerned about bringing up a child in a family that shows its members respect and love and emotional security, not whether or not they have a home that they can show off to family and friends, and decorate, and spend tons of money outfitting with the latest crap that doesn’t bring any meaning to their lives.
amen to that. the new kid will bring enough new stress. you don’t need to worry about a new house and a new mortgage.
and any people you socialize with that bug you about “taking that next step” and “providing a real home for your family”
kick them to the curb.
it’s you, and your wife, and your new son/daughter. the three of you are going to spend a lot of days and nights in the next 2 years figuring out how you’re going to make your new life work.
then you can think about borrowing multiples of annual earnings for a piece of dirt.
I think you should be concerned about what the neighborhood will look like a couple of years from now. Ask yourself who is likely to be living there in the near future. I think that buying into a fairly new subdivision is a very bad idea.
On the other hand, an older neighborhood that had little turnover during the bubble years might be a good idea. So if a house in a 20 year old neighborhood had a peak value of $600k and you can now get it for $275k-300k it may work out OK for you (especially at a 6% fixed rate loan). Before you commit; however, estimate what that house was worth in 1998. It could very well be worth that amount in 2010. Could you handle reselling, if forced to, for say $175-200k?
I know all about the nesting urge. It was driving me nuts! Nothing could be clean enough. Anyways, here is what you do.
Explain the changing demographics of the neighborhoods and show her the horror stories of school districts with 4 million dollar budget losses. Give her as many scary stories as you can find (but not obviously so) about once great communities that now have gang problems due to all the new rentals. Let it sink in that everything is changing. Suggest very quietly that you don’t need to worry about school districts for years and leave it alone. You want her to come around to thinking that waiting is her idea. Display a little protectiveness for her and the baby against the angry FB hordes and she’ll think you’re a hero.
Now, once she gets to the point where she’s willing to delay, she is going to start looking at shopping for a school district like she’s shopping for the perfect bassinet. This can go on for years. She will want to go look at all sorts of things and when she says go, you go or she will turn on you like raving banshee. If she starts to waffle, suggest renting in one of her top 3 areas and see how you both feel about the area later. You may have to move several times but at least you aren’t stuck in a house you can’t sell when she changes her mind for all the above reasons in a year or two.
Deflationary Jane: she is going to start looking at shopping for a school district
good advice Jane:
Inland Empire: Suggest you rent in a likely neighbourhood and see how you feel. It is going to cost more than you’re paying now.
That’s really brilliant, Deflationary Jane. If we had bought a house before having kids, I would have chosen the wrong floorplan and would have botched the school thing, totally missing the fine nuances. It’s very helpful to have kids and then think seriously for a couple years what kind of floorplan and materials are most suitable (no trendy cement floors for toddlers!). Also, the school and education thing is very complicated, and it’s very helpful to have kids already and hang out with other parents and talk about school stuff for a couple years before plunging in. What if you buy in the “great” school district, only to find that you can’t stand it, that the teachers are unresponsive and dim, and the reading and math curriculum stink? (For more info on what can go wrong in a “good” school, check out kitchentablemath.blogspot.com.) We have a kindergartener and a three-year-old now and are renting near my husband’s work and sending our daughter to a nearby private school, rather than living in the suburbs, having a relatively long commute, and using the “good” schools. Private school costs money, but we only have and need one car.
Sounds like “reverse nagging.” I like it!
“have a dilemma. My wife and I are having a child and she is getting really serious about nesting in Corona, CA and it’s getting harder to say no. I have talked her into to waiting until December of this year before we start to seriously look for a home in Riverside County (Riverside 92506 or Corona 92879″
Better riverside canyon crest 92506. One of the best communities in the IE, which has very few decent areas to speak of. Commute to LA/OC would be only a half hr more than from corona by using assxandro/arlington . I am not high on Corona as a decent livable community long term just looking at the deterioration and abundant homeless in old town corona. Corona is large and spread out with 6-7 zips so my comments may not apply to all corona but i defintely don’t like the old central dwtn corona core area.
Early 2007 they were putting up a spankin new large city hall and maybe a new entire civic center complex, which may be already completed and perhaps that will lead to revitalization of the Corona dwtn area. I would check the older indiustrail areas south of 91 and east of 15 to see evidence of whether corona is seeing a decay in the old industrail area around the railroads. Home gardens just other side of fwy from zip 92879 may be a ragged unincorporated part of corona but better check . Also check zip 92880 which is another industrail area and see whether lots of blgds are being leased or Corps leaving the area, or U see lots of modern new businesses springing up .
I would wait till fall or early winter as all IE will be another 10-15% cheaper. Bet a nice 3/2 reo will come up under $200,000 in that 92506 zip this fall.
in December she may change her mind-then they want to move agian when the kid get ready for school and then when……..
Been there, felt that (pregnant 3 times in five years 20 years ago). Wanted a house, afterwards was soooooo glad we had more time to spend with the wee ones and they had no clue whether we owned or rented… the house with the little garden, the house we didn’t have to worry about when they spilled every possible fluid/dye/toy down or on every surface everywhere. When the kids are 5 and up you can pick out the house together, it’s exciting for the kids as well. Tell her your house will be like a new baby, that you want to have the time to focus on your family. Worked on me and we were able to save money and wait for the 1999 lows in RE.
The median income in the Carona zip you mentioned is $65,040. That supports median house prices in the $200-250k range. You are not there yet. The median price right now is about $330k, and it is still in free-fall. Wait ’till December as planned, then reevaluate.
How do you find the median house prices?? All I kind find for my area is the median listing price…
For SoCal:
http://www.dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx
for some select cities in CA:
http://www.dqnews.com/Charts/Monthly-Charts/CA-City-Charts/ZIPCAR.aspx
Bay area:
http://www.dqnews.com/Charts/Monthly-Charts/SF-Chronicle-Charts/ZIPSFC.aspx
etc. etc. etc.
My $0.02.
Having a child is a big change in life. Does your wife work? Does she plan to go back to work? Are you sure? You won’t know until you get there.
In the past 1.5 years, my wife changed jobs, and we had our first child. For a while, we weren’t sure whether she was going back to work or not.
We aren’t dreaming of buying a place, but at the same time, the rent vs. own math isn’t even close to what you are talking about where I live (there is good advice here on those costs–pay careful attention to costs other than just interest/taxes/insurance).
The housing market will not turn on a dime. I saw some demographics on some of the newer areas of the Corona market a little while back (that sea of new homes between Downtown Corona and Chino). 37% of the homes in the area I looked were claimed to be greater than $500k in value, but only 6% of the people in the same zone made more than $150k.
In other words, there are lots of people in way over their heads, which is why you are seeing homes now being foreclosed upon and selling for $250,000-$300,000.
All that said, the market is just beginning to clear in the hard-hit areas. JUST BEGINNING. It is my belief that this “clearing” of the foreclosures will take 12-18 months, longer if foreclosures continue to pile up.
Anecdotally, I am hearing that prices have dropped enough in Corona that sales are picking up pretty dramatically. Inventory won’t clear overnight, but it does appear as though the current foreclosure prices are attracting buyers in Corona and other markets.
See if you can find data like this for your market: http://www.lodinews.com/realestate/local/2_market.txt
In Stockton (clearly a terrible market), prices have dropped to a point where sales have picked up pretty dramatically quite recently. 334 closings in April ‘08 vs. 134 in April ‘07, and 270 in April ‘06. Pending sales in Stockton are at 657 in April ‘08. The next highest number in the article is 602 in March ‘08. Other than these two, the highest number between 2004 and now was June 2005 at 485.
Take a look at how many foreclosures were in your market, and at the pace of sales. That will give you a sense of what to expect. Stockton is beginning to clear it’s inventory, but has a ways to go–prices have not stopped falling. I suspect that Corona is the same story.
Show your wife how home prices continue to fall in Corona and spend time preparing for the little one. Spend some time with your wife driving markets, exploring neighborhoods, and talking about what you want in a house. Wait to actually pull the trigger when you’ve seen home prices stop falling for 3-4 months.
Just spoke with a service engineer I work with, he’s out looking for a house
since prices have fallen by a third on REO’s and are now “ridicuously cheap”. His plan is to buy with a 7/1 ARM and then bail at year five and move out of state with all the money he thinks he is going to make “once things get back to normal”. I just kept my mouth shut.
that would be year 15
Year 15 is when the real price will be back at what he paid.
Here in Tucson, there’s a lot of talk that includes the phrase “until the market improves.” I’m tempted to ask the talkers how they define “improvement.”
Maybe something other than steady, uninterrupted price declines?
Who will give him the loan?
‘Their main priority is feeding their families. It’s not watering their grass.’”
Oh gimme a break. They’re not starving, they’re not so malnourished they can’t turn the sprinklers on or mow the lawn, they just don’t give a damn anymore and stopped taking care of their dream home once it became clear it wasn’t really theirs after all.
On a similar note, I find it funny how I am still passed by 90% of the cars on the road when I drive the speed limit. And I also haven’t noticed much carpooling… Can’t be all *that* bad then, eh?
Trying to drive 65 in San Jose is nearly a suicidal proposition, I had a hard time not getting run off the road yesterday even driving in the slow lane. Yeah, getting passed by speeding idiots in SUVs who are undoubtedly writing angry letters to the editor about high gas prices and sending e-mails urging a one day boycott would be funny if these clowns weren’t driving up costs for all of us.
Going 70..75..is turtle speed compared to the speed the idiots are going who pass me by. I can’t tell you how many times I’d turn my head to look at traffic in the lane on the right, turn my signal on (yesss, I use my turn signal!) and proceed to change lanes…I take another peek…then all of a sudden some jerk flies up like a bat out of hell! VERY close call. Pi$$es me off like you wouldn’t believe.
And they continue to bob and weave through traffic up ahead. One time I was delighted to find that one of those jerks was stopped by a CHP. That felt SO good.
I could go on, but suffice it to say that it does seem as if the rules of the road have been thrown out of the window over the last 15, 20 years or so.
BayQT~
Don’t worry. They’re on a ticket-writing campaign right now, so people should be slowing down. Trouble is, once that happens, I don’t know what the cops will do for money.
The rules will be back. Speeding tickets are easy revenue for hurting local govts.
That is going to take some time. Driver are so conditioned at getting where there going and don’t get in my way buddy. Were talking several decades of driving styles that are unlikely to change overnight.
You’ve got to remember that some of these people were ‘driving’ Water Buffaloes six months ago.
Mike
“‘These are people who are just barely making ends meet,’ she said. ‘Their main priority is feeding their families. It’s not
watering their grasspaying their mortgage.’”“Foreclosures continue to rise and new-home sales are struggling. Sales of new houses in Fresno County fell 27.2% and prices declined 13.6% from April 2007, DataQuick reported.”
You’d think with that comment there wouldn’t be polar opposite news like this on abc30 news the other day.
I like the old guy that says he put his house up for sale to test the market. LOL!!!
Man they just don’t let up for one moment. That Real Estate Agent Don Scordino has got his head far far up there!
It’s funny how they pretend to give both sides of the picture. The pessimist said we won’t see a major rebound for 9 months. That’s a pessimist, huh? When do Ben’s Bloggers get their shot regarding expert testimony in the MSM? That’s when I call a bottom.
“Redding real estate agent Rick Goates”
I wonder if he is any relation to Goatse? (Only dot.com nerds will probably get this-google it when you’re not at work).
DO NOT GOOGLE Goatse !!! I’m not kidding.
Mo Money is not kidding. I’m sorry I mentioned it.
All they need to do is to add some Joshua trees to make that site right on target for the housing bubble implosion…
goatse jousha tree pic …..
LOL
Photoshop here I come.
OH MY EYES, MY EYES!
I googled it.
I’m in pain. Ow. Now I’m gonna puke up a bit. Excuse me.
On January 14, 2004, the domain goatse.cx was suspended by Christmas Island Internet Administration for AUP[1] violations in response to a complaint, but many mirrors of the site are still available,[2] and the image is displayed on many websites.
In January 2007, Christmas Island Internet Administration put the domain goatse.cx back into the pool of available domains. The domain was subsequently registered January 16th through domain registrar Variomedia[3] and the current registrant tried to auction off the right to use the domain. [4]
The goatse.cx domain name was reported sold at an auction on 30 April 2007 to an unknown bidder. According to seobidding.com, the first auction ended with fake bids so the auction was reactivated.[5] This was again won by fake bidders, so Seobidding.com announced that the website would be sold for $500,000 and that legal action would be pursued against the fake bidders.[6] On 2007-11-25 the site was for sale on seobidding; “goatse.cx asking: $50200 minimum.”
Control of the domain was passed to the secondary market, and has since been taken by domain squatters who are trying to sell the domain name for 10,000 euros.[7]
Sounds just like a Lennar home
I’m not even going to try it. But this reminds me of Eddie Murphy’s act in Delirious when he’s talking about STDs and herpes and VD: “now they have this new thing, AIDS - you put your dick in, and it explodes!”
“The April spike in foreclosure activity comes as no surprise to Gabe del Rio, president of the Housing Opportunities Collaborative. Risky adjustable-rate loans are continuing to reset at higher interest rates, he said.”
And now the Fed is thinking about standing pat or maybe even tightening to contain inflationary pressures. Uh oh…
I think the foreign holders of T-bonds will make that decision for them.
And if they decide to do “quantitative easing” (what a wondrous word for “printing money”) we shall see an Argentina-like outflow of money.
It’s gonna be entertaining, that’s for sure.
A few suicides are “also in the bag”, to invoke of those NAR-CAR-people.
Here is yet another good reason to rent…
Foreclosures Take an Emotional Toll on Homeowners
Stress, Depression, Suicide Can Accompany the Loss of a Home
By STEPHANIE ARMOUR
USA TODAY
May 17, 2008
The comments are plenty and widespread too.
I think the foreign holders of T-bonds will make that decision for them.
They’ve already spoken with oil. It wouldn’t take much printing to push oil up to $150/bbl. Oil prices have doubled in a year. Few industries and only a few more individuals could adapt in time. Five years ago my coworkers were making fun of me for:
1) Not buying a home
2) Not buying a fancier car (read, gas hog).
I can afford $4.08/gal gasoline. Seeing $5/gal wouldn’t surprise me one bit. (Now, a year ago I would have ranted otherwise.)
We’re not done. There hasn’t been a grass roots demand for bus terminals… yet.
Got Popcorn?
Neil
test
I’m having posting issues.
Oh yeah sure, now it goes thru.
Carpooling is starting to take root in my bit of the Midwest, which is VERY auto-centric. $4.00/Gallon seems to be the tipping point. Traffic is running MUCH slower on I-75. My own insane commute is 55mi each way (don’t panic, it’s only 1 hour - honest!) so I’m going 63 mph. In years gone by this would have been a death sentence, now, very little passes me.
Really? In the Midwest? Sounds like anarchy!
INLAND
make no plans !
if she wants a house rent to own or some lose bs
“Marilyn Schutt, an agent in Fresno…attached a ’sold’ sign to a real estate sign in the Fig Garden neighborhood last week — after walking down Maroa and Rialto avenues waving it like those sign-twirlers at intersections in Clovis and Fresno.”
Ha. Ha ha ha.
Bwahahahaha!
HA! HA! HA!
What’s next Marilyn? Ya gonna pull a permit for a parade?
1997 prices Marilyn…….
Sorry, but there is no substitute.
The hangover comes hard and heavy.
Has there ever been a housing market that crashes and just comes roaring back again in the next 2 to 3 years?
Not that I’ve ever heard of.
Why should this one be any different.
Let the knife catchers get cut.
This thing must at least go sideways for a few years before any appreciation should be expected.
This thing must at least go sideways for a few years before any appreciation should be expected.
One businessman I know points out one shouldn’t try to time the bottom…
Its always smartest to invest after its clear its going back up.
There will be no V or U rebound. Appreciation will be slow for a long time.
Got Popcorn?
Neil
more for INLAND E
3even if the house you rent goes into foreclosure you live free for a while and buy direct from the bank= sweet
my good friend has had to move 3 times while renting homes in Corona, in one instance his house was robbed, cops said it looked like an inside job, as in the landlord prob stole his wife’s jewelry because the alarm never went off and no forced entry. He just closed on a home in Lake Elsinore… we will see how that works out, I suggested he wait at least another year.
West LA is still pricey (~50K drop from peak). We’ve been watching the Westchester area and homes that were 250K-300K in 2002 and were 800K at the peak are still ~750K.
Any predictions on when we will see the prices drop? I don’t get it, inventory does seem to be moving. This is for 1200-1400 sq/ft stucko crapboxes built in the 1940s and 50s.
“The number of Orange County homes going into foreclosure jumped 167% from the first quarter of 2007 to the same period this year. That represents a dramatic increase from 2,644 homes to 7,082 —”
The Real O.C.
There are many many deals right now that you can see when you search our local MLS.It’s a buyers Christmas comes early!