More Speculators Abandon Their Investments In California
The Union Tribune reports from California. “Nearly 50 San Diego County dwellings per day were lost to foreclosure in April, as the tally of mortgage failures rose 169 percent above last year, DataQuick reported. ‘Some of the people have lost their jobs and they can’t afford their payments, but a lot of them just don’t want the home anymore,’ said Linda Ring, a real estate agent who specializes in foreclosures. ‘They don’t want to ride out the storm.’”
“April was the county’s 37th consecutive month of year-over-year increases in foreclosures and notices of default. There were 1,413 residential foreclosures countywide, a 35 percent increase from March but a rise of nearly 170 percent over April 2007.”
“Serafina Jahries has been searching unsuccessfully for a foreclosure home for six months. The 38-year-old stay-at-home mom said she and her husband Chris are renting a home in Encinitas and shopping for bargains among foreclosure homes.”
“The couple owned a townhome in nearby Santaluz, but sold it near the peak of the recent housing boom. Their goal was to wait until prices dropped, then invest their $100,000 profit in a house.”
“The problem is they can’t find North County foreclosure home in their $400,000 price range that doesn’t need extensive repairs, Jahries said. In the meantime, she feels like she is wasting the $2,300 per month she is spending to rent a single-family home.”
“‘Here we are just throwing our money away,’ she said.”
The Press Enterprise. “Foreclosures are pushing down home prices, but the real long-term solution for providing affordable housing in Southern California is to encourage home construction and increase the availability of financing for builders and buyers, said speakers at a conference of government and housing officials held Wednesday in Riverside.”
“Richard Lambros, CEO of the Building Industry Association of Southern California, said in the current housing recession, the region is not building enough homes to keep pace with population growth.”
“‘We are not going through a slowdown. We are going through a shutdown,’ he said.”
The Desert Sun. “By this time last year, Desert Hot Springs had issued 382 building permits with revenues from those building fees totaling about $1.6 million, said City Manager Rick Daniels.”
“But as of April, the city had only issued 155 building permits, resulting in the collection of fees totaling just $140,907, according to city documents.”
“‘These are the hard facts,’ Daniels said. ‘The new building construction has been stifled by the bad economy and probably over-building to the point where there is a surplus of supply.’”
“‘The housing market was overheated and the sub-prime loan allowed people to get into houses they couldn’t afford, which increased demand beyond normality,’ Daniels said. ‘That led to all these foreclosures and people not buying new houses anymore.’”
“About 990 homes within Desert Hot Springs’ city limits are in various stages of foreclosure, according to city documents.”
From The Sun. “Insurance fraud appears to be the key reason behind an uptick in torched vehicles - many of them the high-end variety, local fire investigators say. Frank Huddleston, Ontario Fire Department arson investigator, said an increase in such cases seems to correspond with harder economic times.”
“‘We have a real problem right now with newer-model, high-dollar cars and gas guzzlers being reported stolen,’ Huddleston said. ‘Nothing is taken from them, but they’re taken to a location and torched.’”
“When the housing market began to take a nose-dive, investigators in the area saw that many of those responsible for the fires were deep in debt.”
“‘It’s been people overextended in their finances or who face reduced income or loss of jobs,’ Huddleston said. ‘I’ve seen many people the past few years who were in residential construction or in real estate.’”
“The most common cars burned of late are SUVs, trucks and Escalades at an average of $13,000 loss each, he said.”
“‘Our vehicle arsons always, always spike when the economy goes in the tank or when it starts getting bad,’ he said. ‘Most times, when I get on the scene of a vehicle fire, the cops are just getting the call the car is stolen.’”
“Mike Huddleston said he’s witnessed a jump from three incidents in March to 12 in April, which indicates a rising state of financial panic.”
The Recordnet. “Matthew and Zoila Toth just bought a home in Stockton in order to save money. From the couple’s perspective, the foreclosure crisis has been a blessing.”
“By recently buying a foreclosure property in the Country Club area of west Stockton, the young couple, with a young son, was able to move from a $1,100-a-month apartment into a $132,000 home carrying a monthly mortgage and insurance payment of $950.”
“‘The house was so cheap, we even had a little money to do upgrades,’ Matthew Toth said.”
“The median price of new and existing houses sold last quarter countywide stood at $262,000, compared with $390,000 a year earlier - a sales price drop of almost one-third.”
“Robert Rivinius, the home building association’s CEO, noted that the bulk of those affordability gains were in communities most affected by the subprime mortgage and foreclosure issues, especially Central Valley communities.”
“Affordability in most major metro areas, he said, remains at or below 25 percent - depressingly low. He expects prices to rise again once the large supply of foreclosed homes is sold off.”
The Carmel Pine Cone. “After nearly three years of declining values, sluggish sales and overall pessimism, the Monterey Peninsula real estate market has made a significant upturn in the past few months, according to realtors.”
“Paul Lecce, mortgage broker in Carmel, said many of his customers are first-time home buyers who want to purchase a home because they believe home prices will not fall much farther.”
“‘They actually have an opportunity to get into the market,’ Lecce said. ‘The prices here haven’t been this low since the early ’90s.’”
“First-time home buyers Karen and Eric Sonne looked at about 10 homes in Seaside ranging from $300,000 to $350,000. ‘I think the prices have dropped as far as they will go,’ Karen Sonne said.”
“‘There were five offers on each home we called on,’ she said. ‘A lot of people are hoping to get these homes as investment properties and rent them out because they know the real estate market is turning.’”
“The Sonnes were able to get 0 percent financing through an online lender for a small two-bedroom, one-and-a-half bathroom house in Seaside.”
“Realtor Michael Kirch, who specializes in selling foreclosures in the Seaside area, said he has 10 houses in escrow. While he’s seen an upswing in the sale of homes in the $200,000 to $400,000 range, homes in the $500,000 to $700,000 range are not selling as quickly.”
“Canning said he sees little change happening for the remainder of 2008. ‘I think the bottom of each of the markets will suffer all the way into late 09,’ he said.”
Bay Area Newsgroup. “The housing market quagmire has unleashed more misery on the East Bay economy. Washington Mutual Inc. and a Citigroup Inc. unit are cutting jobs in the East Bay. E-Loan, a subsidiary of Irwin Financial Corp., and Fremont Investment & Loan have exited large offices, which has created additional empty space in the area.”
“‘This is the fallout from the mortgage meltdown,’ said Bill Nork, a manager of (a) commercial realty brokerage’s Emeryville office. ‘The worst part is people have lost their houses. But in addition, a lot of people have been laid off and mortgage companies don’t need as much office space.’”
“Even worse, the employment cutbacks and real estate-linked empty offices are symptoms of an ailment that is unlikely to abate in the near future, warned Jeffrey Weil, a senior VP with the Walnut Creek office of a commercial real estate firm.”
“‘This is going to continue,’ Weil said. ‘We have not seen the bottom yet. Another million or two million foreclosures are possible.’”
“‘This is something we have to work through,’ Nork said. ‘The mortgage problems are like the dot-com meltdown. The subleases have an effect on the office market because the space is empty.’”
The Los Gatos Weekly Times. “Pamela Simmons, an attorney in Soquel, said at a recent Silicon Valley Association of Realtors tour meeting the number of California homes going into foreclosure continues to increase as the market works its way through declining home values and a pool of at-risk mortgages.”
“Simmons started seeing the first flow of cases pertaining to foreclosures about a year and a half ago. Those affected in this first wave were homebuyers ‘who had no business buying a home in the first place,’ she said.”
“These were people without steady jobs, who were targeted by predators with offers of zero down payment loans. She indicated these homebuyers have lost their homes.”
“Included in the second wave of foreclosures are homebuyers impacted by subprime borrowing, many of whom entered into loan agreements with adjustable interest rates. Those rates have now adjusted upward, and the homebuyers cannot keep up with the higher house payments.”
“Today, Simmons is seeing more of the third wave of foreclosures–homeowners with negative amortization loans. Included here are homeowners who could not afford their debt and took out too much equity from their home.”
‘Some of these homeowners have payments that have increased by as much as $3,000 a month. Homeowners with multiple properties, popularly known as ‘flippers,’ also belong in this third group.”
“‘It’s like playing musical chairs, and the music has stopped and these people are left without a chair,’ Simmons said.”
“These days, cases involving lenders going after homeowners for misrepresentations on loan applications and lenders going after agents and brokers are on the rise as well, Simmons said.”
“She said, at least for much of the state, ‘I see a continuing market for people losing their homes.’”
The Sacramento Bee. “Six months after it was announced, a plan by Gov. Arnold Schwarzenegger to help struggling California homeowners appears to have had limited impact on preventing foreclosures. A key reason: Things were a lot worse than anticipated.”
“Foreclosures, nonetheless, remained stubbornly persistent and rose sharply in California during the same quarter. More than 47,000 households surrendered their keys to banks during the period, a 49 percent jump from the previous quarter, according to DataQuick.”
“State officials acknowledge that changes in the mortgage market have overshadowed an agreement forged in a different environment. It was hatched amid fears that 500,000 adjustable subprime loans in California would reset within 18 months and sharply hike monthly payments.”
“Since then, though, rates have fallen, meaning that in many cases new monthly payments won’t reset significantly.”
“‘Events have overtaken the initial effort, in that interest rates were then the big bogeyman,’ said Preston DuFauchard, commissioner at the state Department of Corporations.”
“Other problems have plagued the voluntary effort by lenders, some of them cited last November by skeptics doubtful about the governor’s agreement. ‘Declining prices are the current threat, and people upside down on their homes (owing more than a house is worth) are the big issue,’ DuFauchard said.”
“The commissioner said falling prices encourage more speculators to abandon their investments. Buyers who tapped out home equity or paid little money down are walking away from homes. More owners also have defaulted on loans before their interest rates reset, he said.”
“‘The level of default even before resets has been a little of a surprise,’ said Michael Krimminger, special policy adviser at the Federal Deposit Insurance Corp. ‘The level of delinquencies and problems even before rates reset has kind of swamped some of the benefits.’”
“Krimminger and others also worry about pending resets for other types of loans popular during the boom years, particularly those known as ‘Alt A’ and ‘pay option’ loans that offered initial low monthly payments. Those could pose trouble in California after its subprime mortgage problem begins to subside late this year, they say.”
“Meanwhile, nonprofit loan counselors are seeing new trouble for borrowers with conventional loans, said Martha Lucey, president of a Fresno-based statewide loan counselor.”
“‘It’s related to declining property values,’ she said. ‘You can’t refinance out of your health care crisis, job loss or divorce.’”
‘Declining prices are the current threat, and people upside down on their homes (owing more than a house is worth) are the big issue,’ DuFauchard said. The commissioner said falling prices encourage more speculators to abandon their investments. Buyers who tapped out home equity or paid little money down are walking away from homes. More owners also have defaulted on loans before their interest rates reset, he said.’
‘The level of default even before resets has been a little of a surprise,’ said Michael Krimminger, special policy adviser at the Federal Deposit Insurance Corp. ‘The level of delinquencies and problems even before rates reset has kind of swamped some of the benefits.’
Well, surprise, surprise, Gomer. People don’t want to pay thousands each month for a declining asset. And guess what? These knife catchers will do the exact same thing once they are underwater.
From Rich Toscano:
‘I’ve been using Notices of Default (NODs) as a proxy for must-sell inventory…By dividing the number of home sales by the number of NODs in a given month, we can see how demand stacks up against likely must-sell supply. The accompanying graph shows that it pretty much doesn’t stack up at all. April’s 1,707 single family home sales, while a huge improvement from the prior month, were dwarfed by that month’s 3,601 NODs for a sales-per-default ratio of .47. This compares quite poorly to the early-1990s bust, in which the sales-per-default ratio bounced between 1.25 and 2.25 for the bulk of the time.’
‘Including condos, the total number of April existing sales was 2,475 homes — only 69 percent of April NODs. (I do not include new home sales in this calculation as new homes are their own type of must-sell inventory not measured by the NOD proxy)’
BTW, the Los Gatos link has some interesting detail on the foreclosure process in California.
Compare that to the number I stated below for NOD-sales ratio for Palmdale 93552 of (drumroll please)
9
Recovering market my arse.
“April was the county’s 37th consecutive month of year-over-year increases in foreclosures and notices of default. There were 1,413 residential foreclosures countywide, a 35 percent increase from March but a rise of nearly 170 percent over April 2007″”
OK - Math is fun.
Any fun math here?
Weeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee!!!
Ya just can’t make this stuff up!
Leigh
oh dear
It was just another debt end…
“When the housing market began to take a nose-dive, investigators in the area saw that many of those responsible for the fires were deep in debt.”
Billions of dollars of somebody elses money vaporized and nobody in jail.
Auuh…We Americans loves the smell of the GAAP(Generally Accepted Accounting Principles) of Enron and Arthur Anderson in the morning
“‘Here we are just throwing our money away,’ she said.”
———–
Still irks me how people will spend $3500 a month on PITI, taxes, insurance and HOA and not consider it “throwing money away”. But I guess they just figure they’re “writing it off”.
Grrrrr….
I guess four walls and a roof over your head is not a tangible benefit of renting?
Plus, 30-day notice and you are free as a bird.
Negative amortization always did sound like something that was going to burrow into the ground.
–
Yes, the same here. These people don’t get it that a home is a cost no matter if you buy for all cash, or rent, or purchase with a mortgage. It is a consumption item like a piece of furniture according to the master, Adam Smith.
Jas
Seriously folks, why oh why do people think rent is throwing money away….as if they aren’t getting anything for it. GAWD. A friend of mine had to admit today that they purchased a home in Murietta a couple of months ago (after I asked what he was doing for the long weekend…’working around the house’. Hmm oh really I thought you rented? But it such a good deal he pleaded……4/2 for ‘only’ 280K and gee it was listed last year for 450K and they threw in a 10K carpet allowance AND it has really nice tile and wood floors (I guess this is the ONLY home around there like this!) and claims it’s ‘cheaper than what they were renting a house in Lake Elsinor” (um yeah right). Oh and it was reassessed for 310K so they already have equity!
I give up! This makes SEVEN dumbass friends or aquintances I’ve tried to save from themselves to no avail. Note to self……get smarter friends. ARRGGHH!!!
>>>>Note to self……get smarter friends. ARRGGHH!!!
—————–
I’m so with you. I have a friend who just bought a townhouse in Redondo Beach for 700k. It’s quaint , well done, nice appliances, granite counter but puhhhleaze, worth maybe 350k IMO.
“My name is Serafina, and I’m a knifecatcher.”
“Hi Serafina!”
I pay $1950 monthly for rent, and my current conserved equity gain calculated since I sold my home in 12/04 is $2110/month based on median sales data.
How could anyone who sold at or near the height of the bubble feel they’ve been throwing money away?
I have a friend who made, all told, $400k on a lucky bit of buying/selling in San Diego. Afterwards, he was renting and was dying to get back into “home ownership” ’cause income taxes were killing him. I was speechless.
So, your friend thinks spending a dollar to get back 28 cents is a good deal, eh? (And that’s assuming he’s part of the AMT MID phase-out crowd.) I would recommend you steer him into Amway, or Scientology, or just encourage him to enter into any business arrangement with Casey Serin. That way, he won’t have long to worry about protecting all that loot from Uncle Sam.
GO DIAMOND!!!
Theres a Amway song but I cant remember it.
Sounds like he is addicted to gambling and he was jonesing to get back into the real estate crap game and score another big win.
Really strange comment coming from someone who made a 100K profit by selling their townhome before the bubble burst.
You want to see what money thrown away would look like? Check out the value of that Townhouse today.
I have estimated that for the money I saved not buying at the peak in 2005 here in San Diego, I could not only pay all my rent through that time period, but also buy enough big screen TV’s to line every wall and every room in my apartment.
Better yet, I could have bought $150K in Gold in 2005 and have well over $200K today etc etc etc …
I am pretty sure a “$400K” for a home in San Diego today will be selling in two to three years at $300K or less.
That is “free rent” for that whole time period, particularly, when you consider 100% of your payments would be interest and taxes anyway during this time.
“‘Here we are just throwing our money away,’ she said.”
Er, you just admitted you waited for prices to drop while you rent. You’ve lost no equity, you don’t own an asset that is falling price and you have to have a place to live, how is that throwing money away ? This lady will buy way too soon.
I swear, I don’t understand this thinking. Do they feel that shelter should be free if they don’t own something?
No, they have a “burning” feeling that renting is throwing your money away, and paying for someone else’s mortgage.
It’s the UTI of the housing market.
They also forget that when they are “buying” they are actually renting the money from the bank….and paying up front to fix something that breaks….and paying landscape maintenance….etc, etc. Plus, there are always a lot of misunderstandings as to what and how much can be “written off”.
I can’t figure out the real downside of renting a house if you have the space that you want, can have someone else fix stuff that breaks, and even (with prior agreement from the landlord) paint rooms the color you prefer. I don’t know….am I missing something?
BayQT~
Not missing anything at all SFBayQT. We have the same arrangement with our landlord. Have been able to paint the rooms in this house in any color we prefer. He just requested politely no hot pink or neon purple. I told our landlord we would paint the house back to landlord white.
Yes, sfbayqt, you are missing A CONDESCENDING MANNER. That is precisely what buying a home gets you, and you can’t get it from renting.
Or there’s the “we’re going to refurbish your apartment and give you 24 hours notice to be gone for a week, oops, no we won’t, yes, here you have to go immediately, oops, no you don’t, sorry about that….”
After Round Three of this I got fed up enough to walk next door and purchase a 1-bedroom condo. Since the price was already 20% off the peak (the sellers were intelligent enough to get ahead of the curve) and I’m planning to stay at least through law school, I figured I’d probably break even. This also gave me the opportunity to tailor a place as I liked: wooden flooring and built-in shelving strong enough for all the books…
One problem is where I am (where I don’t want to move from), there isn’t much good quality rental.
V, that condescending thing gets me. It’s a shame that some folks have to have a reason to look down on another.
Growing up in Chicago, we lived in an apartment until my Dad bought a house when I was 16. Shared a bedroom with my sister until I was 19. In fact, almost everyone we knew….friends, relatives, both sets of grandparents….all lived in apartments. No biggie….it was all we knew. But when, one at a time, Dad, uncles, aunts, etc, had their money for the down payment and “bought” their homes, it didn’t change how felt about those who couldn’t do the same. Of course, that was back when people still saved for their down payments, had mortgage burning parties, and it made since (fundamentals) to rent from the bank than from the landlord.
Oh, yeah…and after we moved to the house, guess who got yard duty and snow shoveling detail? My sister and I. LOL! Hated it! Dad supervised. We could have done without the house as far as I was concerned…but that was a 16 year old’s point of view.
BayQT~
Yeah, and to really perfect the CONDESCENDING MANNER, one must be a house owner in the Alt-A Bay Area.
Better yet, to really amp the smug level, make sure you’re in SF, Berkeley or Marin.
We’ve been renting the same 4 bedroom house with a front and back yard, small garden and garage for $1,800 for almost 5 years in the East Bay. Nice landlord who hasn’t raised rent because we take care of the place. Honestly, it feels like my home with the understanding that I can’t actually stay indefinitely because he bought the house for his son who is now in his first year of college. That won’t matter because by then we’ll likely be in another state with house paid for. Our cheap rent has allowed us to so far save up enough to buy outright elsewhere. I’m only sticking around because due to the crappy economy, I want to also have enough saved for retirement so that even if we move elsewhere, we could get joe-jobs and still live debt-free.
“throwing money away” hardly, if you invested that money you would be making money, the real “throwing money away” would be to purchase a house now. No point, its not going to appreciate anytime soon!
Don’t forget property taxes. (I know you didn’t FPSS, just a figure of speech) Many state and local gov’ts are getting closer and closer to slamming their capitves with unprecedented property tax hikes.
Hey big badd ownazzz, try not paying your property taxes for a while - and see who owns what (or whom).
Still, if they have a median income, $2300 is a lot to pay in rent every month. San Diego is scary. Does PBear pay that much?
I pay that much in Dallas Freaking Texas.
Hubby looks - a loose - at $5300/yr tax housing - and people wonder why I lock him in the closet?
I do let him out weekly for sun, I do love him so!
Leigh
I pay almost that much and P Bear is in a better neighborhood 10 miles away. My landlord hasn’t raised my rent in 4 years because I actually not only pay on time, I pay early.
$2,000 per month in Thousand Oaks, CA for a 3+2 apartment with regular annual increases….
Ugh and I’m thinking of moving back to TO, just expensive and I will want a house not an apartment.
1200 a month in Ahwatukee AZ 3+2 house
I am also in the area renting (newbury park). Prices are off a bit but nowhere near where I would consider buying (gotta move in 3 years). Million dollar homes e v e r y w h e r e… my guess is 15% off peak (peak - bubble plus tons of ourtright f r a u d).
I dont know who is buying these homes….
I pay a little more than that in Newark, CA.
That’s for a 4-bed, 2.5-bath, 2-car garage house with 2,200 sq.ft. and a very nice view.
I pay $1500/month to live right here:
http://maps.google.com/maps?f=q&hl=en&geocode=&q=7988+Camino+Jonata,+San+Diego,+CA+92122&sll=37.0625,-95.677068&sspn=28.058077,58.974609&ie=UTF8&ll=32.865206,-117.214229&spn=0.007245,0.014398&z=16&iwloc=addr
with my wife and 18-month old daughter.
Please tell me you didn’t just post your address here.
Looks like a nice area Rintoul.
I pay 239,000 Yen/month (2300 USD) (paid before I’m taxed) through my companies housing program.
It’s a 3bedroom apartment in central Tokyo (outside of the main train loop though) and it’s 700 square feet. Yes you read that right 700 square feet and three bedrooms. I didn’t leave a one off of that. If it was in fact 1700 square feet, my apartment would be around 1,500,000 yen/month or just under 15,000.00 month.
Tokyo is stupid expensive and people here are not any smarter than in the US. Cheaper to buy here though, but with Japan now introducing goofy loans (1.1 variable for the first 10 years) then 2.8+% afterwards. A lot of people are paying 10-12 times salaries here.
In the spirit of Rintoul, I’ll post my location.
Here is what it looks like from the side:
http://www.newcityrent.com/rentapp/buildDetail.do?buildId=shinagawa_east&lngId=en
I’m paying just a smidge less in Chicagoland.
“I’m paying just a smidge less in Chicagoland.”
But you have skydiving there, so it’s worth it!
I pay 3600 $/month in Manhattan Beach, CA. For a decent sized 50’s tract home. Of course, it is better than the PITI on 1.5-M dollar wishing price!!!
We pay 1165/mo for 1bd/1ba (big enough to comfortable fit our king size bedroom furniture) 1 car garage flat with a big backyard and three blocks to the ocean. Utilites included (even cable & Internet). We’ve owned large/med & small homes and but now that the kids are grown we’re concentrating on saving and paying cash someday soon. It’s so nice to not have the outgo required to run a larger home. After living so downsized, we’ve downsized our plans for the next house as well. We’ve realized we just don’t want or need the overheard required for a large place. Next home will be 3/2 one story, max 1500sq ft plus BIG backyard/patio since that’s where we spend most of our time. Got our eyes on a couple of perfect parcels.
$1350/mo for a 1600 sf 3/2 2 cg 1970s ranch in the middle of Tempe. About a $300/month bleed for my landlord, who bought at the top in 2005. The house is nothing special, but even in rush hour traffic I’m 20 minutes away from anyplace in the valley I want or need to be.
we pay $2200 for the 3+2 1/2+2 with beautiful front and back yard and 180 degree ocean view in central coast cali. Owner bought it for 997K in 2005..
Year round ocean breezes:
I rent a house for $2100.00. 1800sq. 3 bd. and garage. It has a wrap around backyard overlooking virgin hills in
S. O’side/Fire mt. It is ten minutes to coast, one hour thirty minutes to Pasadena (mom)and the best damn climate in “merica. Landlord takes pets and the rent does not go up.
I pay $1750 for a 3BR 2 BA 1380 sq ft house in Serra Mesa in San Diego.
Seems my previous post was “lost” ? Sorry Ben if I post twice.
I’m living in central Tokyo in Shinagawa Ward in an area called Shinagawa Seaside.
I pay around 240,000 Yen/month in rent which is about 2400 in dollars (100yen/dollar) and that is payed from my salary which is paid BEFORE taxes are applied.
The apartment is around 700 square meters and is a three bedroom. yes that’s a three bedroom in 700 square meters! But it’s brand new and fairly nice. Just way too small.
Japanese are nuts to live like this, luckily for me it’s only short term. Wife (Japanese) hates Tokyo.
We used to rent a 2bedroom place in Culver City, near Jefferson and Sepulveda for about 1600/month. But I make considerably more here in Japan, so it’s not too bad.
I’m about 45 minutes door to desk, I take the train and subway (two changes due to the goofy location) to my office which is in the heart of Tokyo. So I don’t have a car, half of me LOVES it, 4.00+ gas in LA or 6.00+ in Tokyo for a gallon of gas. Bleah. But then I don’t miss being squeezed on the trains with 35 million of my closest friends.
So, somewhat in the spirit of Rintoul….
The building I live in now, looks like this and yes it has the address.
http://www.newcityrent.com/rentapp/buildDetail.do?buildId=shinagawa_east&lngId=en
And no I’m not easy to find, there are quite a few foreigners living in my building. So good luck finding me!
I pay $865/month for a 5-6 year old, 3br/1 1/2 duplex…..eat your hearts out.
The problem being, of course, that the reason rents are so cheap (”affordable”), is that NOBODY WITH HALF A BRAIN CELL voluntarily lives here.
A “move to a better job” around here means quitting the $8.50/hr landscaping job, to take a 12.50/hr job making truck tires at the local tire plant. Or getting on the payroll with the city, county or state government.
I don’t get that mentality either. You’re not ‘throwing your money away’, you’re getting a place to live. Sure, you’re not building equity, but the days when most people bought a house and stayed put for 40 years, paid off their mortgage, then sold at a nice profit are gone for the most part.
These people had it half right by selling at the top of the bubble, but they are not doing their research. They are trying to re-enter the market way too early (as we all know). These people are going to lose their $100K profit.
All the data shows that we are not at the bottom. These are the kind of people who talk to friends and family and get vibes from them of when to buy and sell. I know first time buyers getting into the market this year. They think this “dip” is a great opportunity. I tried to warn them.
They should talk to people that are still trying to sell a house, not fishing for someone to pay a wishing price, but really trying to sell the house. It should then be obvious that it’s still way too early to buy.
Ok, take 6 on suspension of disbelief…
“Six months after it was announced, a plan by Gov. Arnold Schwarzenegger to help struggling California homeowners appears to have had limited impact on preventing foreclosures. A key reason: Things were a lot worse than anticipated.”
Rolling cameras, action!
“Six months after it was announced, a plan by Gov. Arnold Schwarzenegger to help struggling California homeowners appears to have had limited impact on preventing foreclosures. A key reason: Things were a lot worse than anticipated.”
Arnold needs to go back in time to prevent the housing bubble. Ahh you Alan Greenscam?…
I usually read, but this article so too Great to not share:
Congresswoman Defaults On Sacramento Home
http://cbs13.com/local/sacramento.home.foreclosure.2.730026.html
Disgusting. I hope she gets voted out in the fall.
I hope so too. And I’m a Democrat.
I hope she stays and everyone follows her leadership. It would cause all the right behavior in finance for several generations (high downpayments, low DTI, etc.)
“Disgusting. I hope she gets voted out in the fall.”
Fat chance from the district she represents, the 37th congressional districit, which is westside Lb, Compton, Carson Gardena. 100% democrat, heavily minority, 20-25% black. They will grant her victim status & blame it on the corrupt wall street financial system, shady lending of banks, ect. Letters from bloggers are currently 10 to 1 outraged over this, but i doubt that many from this district give a rats ass.
just another note on this slimebag Richardson. She owns a home in long beach and foreclosed on one in Sacto, two areas which are major Re disaster zones. Lb and sacto are toe to toe as far as worst Re meltdown regions in CA. LB is about 30% neg yoy for all 11 zips and has as much crime & gangs per capita as any city in CA.
Great capture in todays Bits and Ben’s finacial thread.
The … er…woman voted for saving the poor FB’s. (herself)
Ya just can’t make this stuff up!
Leigh
this is Leadership.
this is the leadership walking away. This is how the leaders treat clownbucks.
Urine for trickle down economics.
Ahhhhhh…sorry, had to relieve my self of some economic theory.
tap off/
LOL Voz.
“Congresswoman Richardson released a statement, saying, “I have worked with my lender to complete a loan modification and have renegotiated the terms of the agreement, with no special provisions. I fully intend to fulfill all financial obligations of the property.“”
Yo Ms Richardson, I know he’s good look’n, but I didn’t take him out for air.
I guess im just use to renting. 20 years in the military and transfering(moving) every 3-4 years is not a good recipe for buying a home. Now that I am retired (not really still working a full time job) and not going anywhere I do want to settle down into my own home. But definatley not it a hurry to buy in the next 2-3 years.
Swabie:
looks like you missed the boat, HMS Bubbles has sailed.
“Swabie:”
LOL and im glad I missed it this time.
‘I think the prices have dropped as far as they will go,’ Karen Sonne said.”
‘A lot of people are hoping to get these homes as investment properties and rent them out because they know the real estate market is turning.’”
ahhh yes… these people have talked themselves into buying only on the premise of guessing. They ‘think’ the prices have dropped as far as they’re going to go. Basically, they’re just trying to feel good about their decision. I enjoy their timid anecdotal guesses. They must be experts!
“Paul Lecce, mortgage broker in Carmel, said many of his customers are first-time home buyers who want to purchase a home because they believe home prices will not fall much farther.”
Where are they getting this info? Probably Greenspan et al. Also, people believe interest rates will start going up and so will requirements for down payments. There is a perception that lenders are doing workouts that may slow the rate of foreclosures and therefore stabilize prices.
Maybe their gut says “Buy now or get priced out forever”?
-”because they believe home prices will not fall much farther.”
Statements like that clearly show that everyone is still in bubble mentality. If you’re buying and can afford it, then whether the price falls or not isn’t a concern. But the premise of buying ONLY because you feel prices won’t fall much further suggests that this couple still views a home as a mere investment device. Stupid reason to buy.
Where are they getting this info?
This is classic psychology research: they have adjusted their frame of reference to the recent past and think they are getting a screaming deal. It takes people a few years of seeing a pattern to believe in the ‘new reality’–such as real estate going up 15% a year or real estate going ’so far’ down. They rarely expect trends to reverse.
Humans are just monkeys who wear clothes and put financial chains around their necks (vs. organ grinder monkeys).
-John
What really burns me with these “investment” people is that if things don’t work out they all want to run to a BK attorney to protect their assets.. Here in Fl homestead protects them from taking your main home if you foreclose on other properties..How is it in CA? I think they should be allowed to go after your main property if you default on real estate invesments..too many of these guys have McMansions and are just walking away from the rest after making money during the boom years..
If there was FRAUD involved, there’s a chance that existing law already allows going after your primary residence. But nobody has the balls to prosecute individual FBs for lying about their income, owner-occupancy, etc.
Isn’t this ‘renting out till the market turns’ not the other side of the similar coin that started this trouble anyways?
The problem was excess perceived demand due to all the flippers.
Now it has changed into buying a house to rent out till the market turns around and you call sell it at a hefty profit.
Same end result, excess housing inventory.
Sure you ‘may’ actually purchase a home that can cashflow. Of course, no renters (due to excess demand), no cashflow.
And when these new flippers realize that home prices won’t go back to 2005 levels, watch out!!
Watch out is right, SMF. As in, watch out for a lot of “rented out until the market turns” houses being dumped on the resale market. I predict that this will happen within a year.
I’d like to call it the dead-cat bounce double-rebound effect.
Yes, they “think” that prices have bottomed, yet “know” the market is turning. How we get from think to know is anyone’s guess.
Here’s my question to you: Do the government’s rebate checks make you more confident in the U.S. economy?
http://tinyurl.com/4zarfe
The natives are getting restless………
“The most common cars burned of late are SUVs, trucks and Escalades at an average of $13,000 loss each, he said.”
Hey, who threw an SUV weenie roast and didn’t invite us ?
Rats…I was having so much fun poking housing Fb’s with my hot dog stick that I missed ANOTHER weenie roast ?!?!
While probably inadvertent, it was funny to see him specifically mention the Escalade apart from other SUVs. Shows what a rep those beasts have.
Am I the only one who wants to get a group near a burning Escalade and, upwind, get a group singing Koombaya?
Got Popcorn?
Neil
How bout if we all get together and burn an Escalade in effigy?
I know: Let’s all get together and hold a sign up on a bridge overlooking a freeway (say, the 101). We’ll do it at 9 AM. The sign will have an image of an Escalade on fire and a stick figure being hauled off to jail, and it will read “HAAA, Haaa”.
“‘We have a real problem right now with newer-model, high-dollar cars and gas guzzlers being reported stolen,’ Huddleston said. ‘Nothing is taken from them, but they’re taken to a location and torched.’”
Many of my repos were found burned or stripped-clean, and if they had insurance on ‘em the lenders were more than happy to let the insurance company close out the loan and eat it.
And it was only a few years ago they were being burned at the dealers. Now the dealers are probably praying for a visit from the neighborhood eco-terrorists.
“Affordability in most major metro areas, he said, remains at or below 25 percent - depressingly low. He expects prices to rise again once the large supply of foreclosed homes is sold off.”
Uh-huh. And I expect the supply to rise again once another wave of layoffs, bankruptcies and
foreclosures is touched off.
My expectation is based on the fact that shrinking incomes, a sagging stock market, a dwindling jobs base, overall evaporated savings and tighter lending standards have gutted the pool of would-be buyers like so many catfish on a stringer.
BTW, the “affordability index” is constructed in such a way as to GROSSLY OVERSTATE “actual affordability”. So the situation is MUCH MUCH WORSE than just depressingly low. Try Depression low.
–
In Santa Clara Co. the sales are increasing as the prices are going down steadily, at 17% Annual Rate, though at lower rate than in most other areas.
Lot of knife-catchers are thinking that the lower prices, especially foreclosures, are bargains.
Jas
and amazingly enough I keep running into these people in real life. So what if it dropped 30% from it’s height when it ran up 300% from it’s low ?
This is a good weekend topic — FB:The Return.
The question is how to constructively explain this concept to folks we care about? Not everyone can carry around a pocket whiteboard for the necessary illustrations — bar naps, anyone?
“Affordability in most major metro areas, he said, remains at or below 25 percent - depressingly low. He expects prices to rise again once the large supply of foreclosed homes is sold off.”
I’m not understanding this statement. There’s basically no affordability for most people, so prices are going to go up once the foreclosures have disappeared? So who’s going to buy the homes at those higher prices?
Oh, I get it, lending standards are going to return to 2005 levels…..LOL
–
I am sure that you know that most of the time the affordability across the US has been above 100%. We may have that right here in the Golden State.
Jas
It pains me to say it, Jas, but what looked like a huge mass of inventory building at the beginning of the year around Silicon Valley appears to have cleared quickly due to buyers rushing in. Unfortunately, the Valley seems to be stuck in that Wile E. Coyote moment: we’re off the edge of the cliff, looking down, looking into the camera, holding up a sign, but not yet falling.
Prices in Silicon Valley are down about 15% from peak. It’s more in some areas and less in others, but everyone is down.
Palo Alto is down about 25%.
San Jose is down about 15%.
Los Gatos is down about 5%.
–
No, inventory is still building and is at multi-year high. Sales have risen, but new inventory keeps coming to the market.
Jas
Jas,
Some know how well over stocked inventory is helping our great lands.
Best,
Leigh
‘A lot of people are hoping to get these homes as investment properties and rent them out because they know the real estate market is turning.’”
Yeah it’s turning into a market of cheap rental properties that won’t pay the mortgage. No bottom until the foreclosure newbies crowd gets snookered.
Yeah it’s turning into a market of cheap rental properties that won’t pay the mortgage.
Very nice.
I think buying should be encouraged right now by housing bears. The faster the market completes this transformation, the sooner we get to a more stable bottom.
–
‘They don’t want to ride out the storm.’
Who could blame them, especially when we have only faced the leading edge of the CAT 5 hurricane.
Jas
I was affected by the housing bubble today in a scary way. I received a threatening email from a former patient blaming me for the loss of their home. I couldn’t support their disability claim.
Does this mean that they’ll have to stop faking a disability and go to work like the rest of us schlubs?
Hey Doc, I’ve been unable to spend beyond my means, don’t lease a BMW, and haven’t taken a HELOC out to support my lifestyle. Clearly I have some disability, can I get a note for that ?
The lawyers here can weigh in, but I would report this to the police.
Definitely report it to the police.
From the original post:
“By recently buying a foreclosure property in the Country Club area of west Stockton, the young couple, with a young son, was able to move from a $1,100-a-month apartment into a $132,000 home carrying a monthly mortgage and insurance payment of $950.”
Okay, Californians, how about some firsthand reports of what this area is REALLY like?
Nasty, but good on them! I personally would never live in Stockton (gang/crime central) but that’s just me. It goes to show that if you don’t “need” to live in some fancy place, you can still do all right.
“Okay, Californians, how about some firsthand reports of what this area is REALLY like?”
Stockton is flat, gloomy, stinky and has nothing to do for entertainment. And those are its good points. When visitors arrive and ask what to do, the usual response is “Have you ever been to Sacramento?”
In Stockton, one can listen to the sound of gunfire every night while drifting off to sleep.
“stockton is flat, gloomy, stinky and has nothing to do for entertainment. And those are its good points. When visitors arrive and ask what to do, the usual response is “Have you ever been to Sacramento?”
Sounds like most of the IE. I am referring to Chino, norco, sanberdoo, fontana, hemet, perris, most of riverside, mira loma, ontario, pedley, morenio valley, sun city, ect.
These areas of IE are indeed flat, gloomy and stinky but maybe witht a bit more sunshine so that gloomy would be replaced by scorching/barren.
You left out Phelan…
Stockton is a giant, worm-ridden blanket of gurgling scum crawling with hell holes and slowly re-extending into it’s gentrified exterior.
Hey V, tell us how you REALLY feel!
BayQT~
“$132,000 home carrying a monthly mortgage and insurance payment of $950.”
Taxes and insurance are missing. I’ll also bet this is a no down loan for low income persons and variable interest or something like a 5/1 with the idea that property will be up 5yrs down the road.
That looks pretty close to me give or take 100 bucks. Depending on down payment and interest.
–
“Richard Lambros, CEO of the Building Industry Association of Southern California, said in the current housing recession, the region is not building enough homes to keep pace with population growth.”
Who said that housing demand is equal to population growth? Even NAR acknowledged that the household formation in 2007 declined by 50%. BTW, how many vacant homes are there in SoCal?
“‘We are not going through a slowdown. We are going through a shutdown,’ he said.”
No, we are not. Stop whining and complaining.
Jas
–
‘I think the prices have dropped as far as they will go,’
That remains to be seen, lady. Don’t be surprised by another 50% haircut from here.
Calling Tops and Bottoms is tough even for professionals.
Jas
Each home “lost” to foreclosure is another one gained for potential buyers.
Thought you all might enjoy an email I received:
“I read your blog about the mortgage brokers. You must be one cold hearted snake to be soo harsh about people loosing their jobs and going broke. Have you ever lost your job, your house, your assets, and as a result have to live out of your car…or on someones couch? OR have you had to pull your children out of college because you cannot pay for it anymore? You are making A HUGE generalization about Mortgage professionals and Bankers…..summarizing them as all liars and cheaters…I have many friends who were wonderful members of society and who had the title of loan officer or mortgage broker and many of them lost their jobs. It sounds like you were burned by a mortgage professional but to say they are all liars and cheats is a bit ridiculous don’t you think? And to be making jokes about the kind of jobs that the mortgage professionals are now engaging in is really harsh…these people are trying to pick up the pieces of their life and move on. I guess you have never had to suffer such a hardship or you would never ever write such a horrible article you should be ashamed of yourself.”
Hiss..hiss
This e-mailer is a fart sack.
When he/she (it) has to suffer due to circumstances beyond its control, then is forced to give in to the whining, self-centered demands of bunch of irresponsible sputa, then it will have earned the right to criticize you for being sickened. Until then, it has no right to talk shitt.
Dear Cold-Hearted Snake,
Where is your blog? I already checked coldheartedsnake.com, but found only ads. Enquiring reptiles want to know…
“Enquiring reptiles want to know…”
This is the post. When I started it, coldheartedsnake.com wasn’t available!
http://cheryl-lynne.blogspot.com/2008/04/money-hungry-pigs.html
”I read your blog about the mortgage brokers”’
Er…which blog?
Respectfully,
Leigh
ahh, back in the day…
http://www.lyricsfreak.com/p/paula+abdul/cold+hearted_20106109.html
I don’t like hijacking a CA thread but just thought that I would let ya’ll know that the whole damn country is caught up in this BS. I will bet you real money that she moved here from FL.
Note at the bottem:
For sale by agent/broker
Hope that Sharon looses her a$$!!!
http://greenville.craigslist.org/rfs/691187711.html
That house is worth 1/4 of what they’re asking.
If this is such a great home, and almost new, why are you selling it already???
I’ve had it up to my eyeballs with these “dream homes” that are on the market only 1 or 2 years after construction. Too much dreaming and too little cash.
Oh my gosh! Almost $2 million! I know what you mean groundhogday. I keep an eye on the new homes coming up for sale in the Sacramento area, between Granite Bay and El Dorado Hills. These newly built million dollar homes are coming up for sale in droves. And I keep thinking “Hey these people should be rich and smart. Don’t they KNOW that this is a bad time to sell??” Either a lot of millionares have lost their fortunes –or they are trying to sell ASAP and cut their losses before the value of their homes plumet. So many of these mansions were built in the last 3 years. Though the funny thing is that when I look at the value on Zillow for any particular million dollar home, they are rarely priced under the 2005 price.
I must be brain-dead because now, whenever I see one of those huge monstrosities, the only thing that comes to mind is: “but just think of the dusting!”
well, honestly, that house is actually a lot nicer looking than a great deal many of the Mcmansions I see in the Southeast. On second thought, I realized that I actually mis-read the as and thought it said 192,000…. not 1,092,000. Over a MILLION bucks in Greenville??!! Whoa nelly! That things just breathes equity locust fodder.
But a lakeside home, with an island in the driveway? Who could resist.
Er it’s $1925000.
Roidy
Dusting? When I see homes with more than two bathrooms–I faint when I see something with 4 bedrooms and 4.5 bathrooms–all I can think of is all that toilet bowl cleaning that needs to be done! Ewww.
Unless someone has oodles of kids taught to wield toilet brushes by age 7 or 8, 2 bathrooms is plenty!
I did say EW, right?
Warren Buffett doesn’t live like that.
No he doesn’t. But he has a nice big pretty yard, in town (Omaha), not so much driveway (driveway island nonetheless!)
Even though these guys sounded like HBBers at first, I realize now that they aren’t. Apparently, the two were in the “shoot right back up” camp, because it would only take about 3.5 years of renting to use up that $100k profit (unless they’re willing to live in a cheaper house for a while). Besides, who in the world only made $100k during the boom? They must have bought it about 1 year before they sold it.
Right! There weren’t risk-takers betting they could find a greater-fool before they were left with a hot potato; they were “get rich quickers” who thought they could repeat this success over and over until they had more money than Bill Gates.
Sheer luck gave them a 100K profit! But are they happy? NO! They’re bitter that they have been denied their God-given right as Americans to get E-Z credit and ever-rising house prices.
“By recently buying a foreclosure property in the Country Club area of west Stockton, the young couple, with a young son, was able to move from a $1,100-a-month apartment into a $132,000 home carrying a monthly mortgage and insurance payment of $950.”
Given the math here, it seems to me they were paying way too much on rent. The only other thing I can think of is that new payment must include property taxes and some PMI.
They were probably renting in a better city before.
“Affordability in most major metro areas, he said, remains at or below 25 percent - depressingly low. He expects prices to rise again once the large supply of foreclosed homes is sold off.”
Does he realize how idiotic it is to have these two thoughts back-to-back? If affordability is low, prices have a lot to drop…
Do you think I could be quoted in the paper if I said “I expect Ford Motor Company stock to rise as soon as there are no more people willing to sell it for 7.15?” Of course not, put that way, it sounds like I’ve said nothing.
That large supply of foreclosed homes is going to get even larger!
Considering house prices in Riverside are down about 25% from peak, Richard’s logic is hard for me to swallow.
Are you sure it is Richard’s “logic” that is hard to swallow?
Even better - Riverside County median price is down about 33% from the peak, according to Dataquick’s numbers: $295k in April 2008 against $430k in fall of 2006.
It’s still a disgusting place that I wouldn’t live in if you PAID me $295k per year.
Trying … to … twist … brain …
How can “depressingly low” affordability in most metro areas lead to price gains? The only way this works is if prices drop a lot before gaining later, but surely the REIC wouldn’t pull a trick like that on us.
I thought you were well versed in active low logic Big V. Throw out some of that technical wizardry and voodoo magic, something like…
x == low affordability
y == no foreclosed homes
z == price gains
z = 1; // NAR position
z = ~x & y; // sure, why not as long as wages are rising
z = ~y; // lenders and MBS holders position
What is “active low logic”?
I thought “active low” referred to voltage. My training is not in logic; it’s in science.
active low logic is just the opposite of what you’re used to thinking. Instead of 0 is off and 1 is on/active, now 0 is on/active and 1 is off. Sometimes useful for designing low power circuits.
Some more speculation that Countrywide deal may fall apart leaving countrywide to go bankrupt. What will the ripple effect of this meteor hitting the ocean be????
http://www.rgemonitor.com/blog/roubini/252665/
“‘It’s like playing musical
chairsbrains, and the music has stopped and these people are left without achairbrain,’ Simmons said.”Going after them with what? Ex: I need your help on this one.
“First-time home buyers Karen and Eric Sonne looked at about 10 homes in Seaside ranging from $300,000 to $350,000. ‘I think the prices have dropped as far as they will go,’ Karen Sonne said.”
Anything in this price range at this time is a piece of crap. The whole article on the Monterey Penn is a piece of crap put out by the RE industry. Prices are not dropping unless the property went into foreclosure and then they are being bought up by idiots who think values are going to be back to peak value in a year. The big question is who is lending and under what terms. There is no industry in the area and gas going to $4/gal should wreak some havoc this summer as I expect to see many move out of the area when the current school term ends.
IMO, in any area with that many foreclosures, prices must have dropped.
Prices are down about 33% from peak in Seaside.
Anything in
this price range at this timeSeaside is a piece of crap.Fixed it for you.
Zillow has turned into a source of ironic entertainment for me, as they show Seaside prices down ~20% from peak even on houses listed ~40% down from peak. That area (with bars on windows and broken down junk cars in every driveway) has always been the weakest. The strawberry pickers and dishwashers buying $500K houses lost them reeeeeeeealy fast.
I’m waiting for the loan resets to take full effect, followed by a fair number of retirees selling to move into rest homes (or going 6 feet under). That’s when the good areas around Monterey will return to reality. I give it 2-3 years for the bulk of the decline to occur.
Next bubble: cemetery plots.
Roubini suggests Countrywide deal will fall apart.
http://www.rgemonitor.com/blog/roubini/252665/
I wonder what kind of ripples a meteor like this hitting the ocean will cuase?????????????
“In the meantime, she feels like she is wasting the $2,300 per month she is spending to rent a single-family home.”
There is tons of inventory priced below $400,000 in SD these days. In fact, the median sale price last month was $400,000, meaning half the homes sold went for less than this. If throwing away money on rent is so terrible, this lady should go buy a home tomorrow and stop complaining.
“Since then, though, rates have fallen, meaning that in many cases new monthly payments won’t reset significantly.”
“‘Events have overtaken the initial effort, in that interest rates were then the big bogeyman,’ said Preston DuFauchard, commissioner at the state Department of Corporations.”
It’s the principle, stupid!
“‘This is going to continue,’ Weil said. ‘We have not seen the bottom yet. Another million or two million foreclosures are possible.’”
With home prices still being high, and people yet to be laid off from work –the foreclosure market should be even more interesting next year. Any guess how another million or two million foreclosures will affect the economy? How will it affect people who are buying right now when their homes are worth 20-30% less in a year or two?