June 3, 2008

Real Estate Isn’t As High And Mighty As It Used To Be

The Sacramento Bee reports from California. “As California voters go to the polls today in a low-turnout primary, those who bother to show up aren’t likely to be happy. With a teetering economy and an unpopular war, only 17 percent of voters in a new state Field Poll believe the country is headed in the right direction, the most dour view in 16 years.”

“Vicki Cabrera, of Sacramento, who plans to vote, directly feels the effects of a lagging economy. She lost her job as an administrative assistant for a real estate firm due to the weak Sacramento housing market.”

“‘I’ve never in my life gone without a job. Never,’ said Cabrera, who had to let go three of her family’s five prized Sacramento Kings season tickets and is contemplating selling her sports memorabilia collection.”

The Associated Press. “Robert Lindsey was not surprised by new data last week that showed new home sales have fallen more than 40 percent from their peak almost three years ago. He can tell from his company’s bank account.”

“‘We’re literally losing money every month,’ said Lindsey, general manager of Signature Drywall Inc., in Sacramento, which installs drywall in new homes and apartments in the Sacramento and San Francisco areas.”

‘In 2005, the firm raked in some $30 million in sales. Last year, sales were less than half that, and this year Lindsey hopes he can make $8 million. ‘It’s kind of like bleeding to death,’ he said.”

“In California, subcontractors have laid off, on average, up to 80 percent of their staff, according to the California Professional Association of Specialty Contractors in Sacramento.”

“Kelly Bice had been working as vice president of construction for San Diego real estate developer Keystone Communities Inc. for more than seven years before he lost his job in February when the company filed for bankruptcy. Bice, who lives in Murrieta, east of Los Angeles, was pulling in around $136,000 a year with bonuses. Now he’s scraping by on $500 a week as a consultant on a home renovation project.”

“‘I’m living on my savings,’ he said. ‘That’s just buying the groceries.’”

The Salinas Californian. “The rising cost of gas and groceries combined with fallout from home foreclosures means increased business for thrift stores in Salinas and around the nation, say those who track the industry.”

“More people than ever are shopping for furniture at the Salvation Army on 326 N. Main St., employee Stella Ponce said. ‘A lot of people are coming here because they have lost their homes,’ Ponce said. ‘They need smaller furniture to fit apartments they move into.’”

The Gilroy Dispatch. “Property foreclosures do not usually conjure up images of mosquito clouds carrying the West Nile virus, but for a handful of Gilroyans who live near abandoned homes, the sour housing market implies more than just tough economic times.”

“Unattended pools can become breeding grounds for mosquitoes and watering holes for crows and other birds susceptible to the West Nile virus.”

“‘My wife and I stay indoors now when sunset comes,’ Weiler said outside his home on London Place.”

“‘The last thing people are worried about when their house is foreclosed is the pool,’ said John Ballard, a vector control technician with the County of Santa Clara Department of Environmental Health. ‘They’re more worried about where they’re going to live next than draining their pool.’”

The LA Times. “It wasn’t long ago that Andy Krotik was selling houses to out-of-town investors who would sometimes buy two at a time. Now, Krotik spends his days warily entering abandoned houses, checking for angry holdouts or startled squatters.”

“Few places in California flew as high in the real estate boom and crashed as hard as Merced. Three years ago, home values were rising at 30% a year or better, making it one of the hottest markets in the state. Now it has one of California’s highest foreclosure rates.”

“Merced officials say they’ll need to cut spending by 5%, forcing them to leave 20 open positions vacant. ‘The whole foreclosure problem and the economy is our major concern now,’ city spokesman Mike Conway said. ‘Some people are torn between spending their money driving to work in Silicon Valley or on the house payment.’”

“Faced with that choice, he said, the job will come first. ‘If they don’t have the job, they won’t be able to make the house payment anyway.’”

The Bakersfield Californian. “Kern County supervisors approved a $1,000 fine on individuals caught participating in an illegal party on private property. The nuisance fine was triggered by a rash of teen-powered parties in homes left vacant or abandoned by Kern County’s high foreclosure rates.”

“The penalty ‘applies to any party held on any property without the permission of the owner,’ said County Counsel Bernard Barmann.”

The Desert Sun. “Fern Rudd is known to many Palm Spring High School students as the ‘work permit lady’ and though she’s issued more than 400 work permits this school year, Rudd has noticed an unprecedented trend in the Coachella Valley.”

“‘I’ve done this for 10 years and, usually by the end of the school year, we see a lot of employers asking about our graduates - but for the first time, I haven’t had any calls yet,’ she said. ‘Something’s changed.’”

“Jose ‘Junior’ Rodriguez, 17, of Palm Springs let out a sigh of relief when he landed his job as a cashier at Manhattan in the Desert last month - he had been searching since October.”

“‘Many of them said they didn’t have the money or the hours,’ Junior said of his past attempts. ‘I think it was because of construction stalls, the slump in the real estate market and everything else going on in the world. It really slowed things down.’”

“In 1999, Gary and Debra Magsam bought a house in the Coachella Valley town of Bermuda Dunes. They paid $140,000 for that house and sold it the next year for $170,000. The Magsams scored again with their next home, which they bought in La Quinta for $215,000 in 2000. Four years later they sold it for $452,000, more than twice what they paid.”

“Proceeds from that sale enabled them to buy their current house in late 2004 for $685,000. They took out a mortgage for $537,000. A year later, with the house worth an estimated $865,000, they took out a second mortgage for $100,000.”

“Now it has…a foreclosure notice. Barring a last-minute reprieve, the Magsams’ house will be auctioned June 27. They’ve begun to pack. ‘We’ve accepted the fact that it’s going to have to take place,’ Gary said of their impending departure. ‘For a long time we felt, ‘Why did this have to happen to us?’”

“They say they simply got caught up in the excitement of the real estate boom and the bad judgment that went with it — on the part of lenders and borrowers alike. ‘The banks loaned money to all kinds of people they shouldn’t have, including us,’ Gary said.”

The Redlands Daily Facts. “Tonight, the City Council will consider an ordinance that would require lenders to maintain properties that are vacant because of foreclosures or owners’ leaving the homes. Through the end of May, there were about 500 home foreclosures in Rialto in 2008. In all of 2007, there were 480.”

“Also at the meeting, members of the council will decide whether to purchase a piece of downtown property for $450,000. ‘(The owner) finally relented, realized that Southern California real estate isn’t as high and mighty as it used to be,’ said Robb Steel, Rialto’s economic development director.”

The Pasadena Star News. “Despite national housing woes that have slowed sales across the country, high-end residential properties in Pasadena continue to sell - often with multiple offers greater than the asking price, local real estate agents say.”

“‘Pasadena is very healthy, at least on the upper end,’ said Rosey Bell, a Realtor with Coldwell Banker. ‘Compared with the rest of California, we are A-OK. I don’t want to call it bulletproof, but it kind of has been.’”

“Homes listed under $1 million - many more of which are on the market - are taking longer to sell, said Gretchen Seager, an agent in Pasadena.”

The Weho News. “In a report to be formally presented to West Hollywood’s City Council tonight, the Rent Stabilization Department reports that the rate of foreclosures in WeHo stands at half that of Los Angeles County’s.”

“Eric Scott of WeHo’s Prudential California Realty told WeHoNews that now could be the best time in decades to buy property. ‘If you can get financing or can come up with the down payment,’ Mr. Scott said, ‘it’s your time to buy; prices will only go up from here as financing loosens up.’”

“Supporting Mr. Scott’s urgings, the staff report says that homes in the state now sell for approximately the same price as they did April 2004, with the median price 20% below last year’s market peak of $505,000.”

“Furthermore, they say citing the LA Times, county-wide median asking prices have declined while the county’s inventory of unsold houses increased this year. ‘Of the 32 properties in foreclosure on the study date of April 8, 2008, 5 were single family dwellings and 27 were condominiums,’ the report requested by Council in January says.”

“‘Of the 32 properties in foreclosure, 31 owner addresses were the same as the property address, suggesting that nearly all of homes or condominiums in foreclosure are owner-occupied.’”

“The report noted that most of the properties in ‘pre-foreclosure’ during the study period ‘progress[ed] into further stages of bank-owned or auction status.’”

From LA Observed. “The dream of home ownership has long been part of life on 92nd Street and similar South Los Angeles working class neighborhoods. But making the dream come true has never been easy. The dream was the topic Saturday May 30 when ACORN, the community activist organization, held a press conference-demonstration in front of a small house at 755 East 92nd Street, a home headed for foreclosure.”

“Millicent (Mama) Hill, who was an English teacher at Crenshaw High School before she retired in 2000…set up a program in her home to help young women and men avoid the gang life and crime. ACORN volunteers, most of them older men and women, gathered in Mama Hill’s front yard, all of them wearing the organization’s bright red t-shirts.”

“Mama Hill has been operating the program on her pension, small donations and with the help of friends and supporters…in a neighborhood that is pretty thick with gang action despite its peaceful appearance on a Saturday.”

“With expenses exceeding income, and house prices rising fast, Hill refinanced her house. ‘I needed a loan quickly,’ she said.”

“She was promised one at 7.5 percent interest but before she signed the final papers, she was told the interest would be 10 percent ‘but they promised it could be renegotiated.’”

“When she obtained the loan, the house was appraised at $405,000 but has since dropped far below that. She fell behind in her payments, and the mortgage holder is now foreclosing.”

“One of her supporters, Cedric R. Brown, president of Youth Incentive Programs Inc said Hill got the loan at a time when housing prices were exploding, even in this modest neighborhood, and mortgage brokers flooded the area with tempting refinance offers. ‘The predatory lenders took advantage,’ he said.”

The Voice of San Diego. “I left off Thursday telling you I was trying to find out how much those condos up for auction had sold for, the ones that were once hotel suites in National City.”

“I heard Friday from Manoj Chawla, a regional manager at Pacifica Companies, the project’s developer. He said the auction should not be construed as a sign of insolvency at the company. Rather, hiring REDC, the auction company, was a marketing decision for a project that was not selling well, he said.”

“‘We have to do what the market says,’ he said. ‘As you know, housing is not a pretty picture.’”

“He said before the auction on May 17, 50 units had been sold. Add the 32 sold at auction — pending sales, not closed escrows yet — and the 172-unit building is about half sold. ‘We are not enjoying the price reductions — it’s unfortunate,’ he said, ‘but it’s better to have an occupied building than an empty one.’”

“Chawla said the units at auction sold for prices between $145,000 and $325,000. The units being auctioned in the building were once listed between $218,000 and $522,400.”

“Friday, Chawla told me if Pacifica would’ve known how tough the market would be, the project wouldn’t have happened. ‘We would have never converted them,’ he said. ‘That’s the reality. … It’s not a pretty picture. Housing is just tough anymore.’”

“I heard back from Mayor Ron Morrison in National City today with his reaction to the eye-catching banner hanging from BayView Tower in that city, advertising condos for auction bids starting from $59,000.”

“Morrison didn’t mince words. The auction’s over and the city has demanded the company take down the advertisements.”

“‘They’re causing us nothing but heartache,’ he said, ’cause there are people who are saying, ‘Gee, you can’t give condos away in National City.’ Those stupid signs.’”

“Morrison pointed out…the ’starting bid’ advertised is usually a lot lower than what the company will actually let the unit sell for. There’s a hidden reserve price that has to be met before the sale is made.”

“And in the meantime, the sign still hanging there makes it seem like condo prices in the city are scraping new lows, he said.”

“‘We’re demanding they take those signs down,’ he said. ‘It’s nothing but a marketing ploy that has nothing to do with the market, by a company that does this around the United States.’”




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113 Comments »

Comment by aladinsane
2008-06-03 15:37:11

mission acCOMPlished

“I heard back from Mayor Ron Morrison in National City today with his reaction to the eye-catching banner hanging from BayView Tower in that city, advertising condos for auction bids starting from $59,000.”

“Morrison didn’t mince words. The auction’s over and the city has demanded the company take down the advertisements.”

“‘They’re causing us nothing but heartache,’ he said, ’cause there are people who are saying, ‘Gee, you can’t give condos away in National City.’ Those stupid signs.’”

Comment by Wickedheart
2008-06-03 16:20:32

It’s not the signs that are stupid. Luxury and National City do not even belong in the same sentence…………….

Comment by Cardbordbox
2008-06-03 18:35:04

The sign isn’t in Spanish. That’s probably why they haven’t sold.

Comment by Jerry D
2008-06-04 10:38:59

Perhaps Bank of America credit cards for all illegals isn’t enough any more? Those down payments with B of A cards with high balances makes it hard to buy anymore. B of A should increase all cardholders credit. It’s the only fair thing to do.

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Comment by reuven
2008-06-03 16:30:45

“Morrison didn’t mince words. The auction’s over and the city has demanded the company take down the advertisements.”

I’m hoping the developer has the balls to take the town to court for 1st Amendment rights violations!

Comment by grumpy realist
2008-06-03 17:13:47

Ads and similar commercial stuff has much weaker protection. Or were you making a funny?

Comment by reuven
2008-06-03 17:23:26

No, I’m serious! This local government wasn’t concerned that the ads were misleading by not mentioning reserve, it was concerned that they were contributing to the decline in R-E prices!

They have no right to limit the developer’s speech. I think this is outrageous.

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Comment by Wickedheart
2008-06-03 16:51:11

Bidding may start at $59k but they have a reserve. Which, judging by the selling prices of the 32 condos they sold and the fact they still have half the condos left unsold is about a $149k for the 480 sq ft *cough, choke* luxury condo. Still beyond ridiculous.

Comment by mikey
2008-06-03 17:08:58

“‘I’ve never in my life gone without a job. Never,’ said Cabrera, who had to let go three of her family’s five prized Sacramento Kings season tickets and is contemplating selling her sports memorabilia collection.”

…the Horror…the Horror :)

Comment by BubbleViewer
2008-06-03 18:51:39

I have always thought of most professional sports events as huge wastes of money. I mean, something like US Open golf or Wimbledon or Kentucky Derby are great to attend, but the average sports event is just a giant roller designed to squeeze money out of you at every turn. Manyof the people you are watching are talented athletes, but a-holes as people.
On top of that, when you buy Kings’ season tickets, you are supporting the Maloofs, who are also a-holes.
Having said all that, I wish more arenas were like Arco.
As far as the sports memorabilia collection, I bet Cabrera’s estimate of its value is higher than the market’s. Come to think of it, I think sports memorabilia’s performance as an investment over the past 20 years speaks for itself, unless you happen to have a Honus Wagner card or something.

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Comment by Rintoul
2008-06-04 11:58:29

The events are meant to be entertaining to some degree.

 
 
 
Comment by bayparkwatcher
2008-06-03 20:06:14

We don’t call it Nasty City in SD County for nothin’.

 
 
Comment by Big V
2008-06-03 17:24:10

The city is in no position to demand that anyone take down advertisements that do not violate existing ordinances. If they demand the removal of one such sign, then they must demand the removal of all such signs. Why are cities so upset about housing becoming more affordable again? Don’t they WANT their young residents to be able to buy houses.

Comment by Wickedheart
2008-06-03 17:52:19

Big V

Those condos aren’t going for $59k. They have a reserve of about $149k and that’s for the bottom of the line *cough, choke* luxury condo. Those condos are still beyond ridiculous. That’s why only 32 of them sold at auction and the building is still half empty. Like I said the words luxury and National City don’t belong in the same sentence.

 
Comment by hoz
2008-06-03 20:11:11

“Why are cities so upset about housing becoming more affordable again? ”

Fewer revenues to squander.

Comment by hoz
2008-06-03 20:12:20

Crescentem sequitur cura pecuniam
maiorumque fames

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Comment by Houstonstan
2008-06-03 20:20:17

Bigus Dickus?

 
Comment by Happy2Rent
2008-06-04 12:29:52

In other words:

“Worry and hunger for greater things accompany money as it grows.”

Horace, Odes 3.16.17-18

:-)

 
 
 
 
 
Comment by SMF
2008-06-03 15:41:01

“In 1999, Gary and Debra Magsam bought a house in the Coachella Valley town of Bermuda Dunes. They paid $140,000 for that house and sold it the next year for $170,000…”

Morons, just plain and simple morons.

I bought my first house in 1994 for $115K. Judicious use of equity (meaning not used unless for home improvement to the tune of $15K) has now allowed us to move into a house that sold for $415K in 1999. (Yes, we are prepared to lose equity in our purchase)

We are the ‘poor’ people in that neighborhood, the house is very-well built, and we don’t plan on moving for 20 years. We have literally millionaires living all around us.

In the meantime, I personally know people who owe a little less than we do, yet they live in the same starter home from years ago.

At least we are very happy with the house our ‘liberated’ equity allowed us to purchase.

Comment by reuven
2008-06-03 17:25:18

“In 1999, Gary and Debra Magsam bought a house in the Coachella Valley town of Bermuda Dunes. They paid $140,000 for that house and sold it the next year for $170,000…”

This is a deal? The 6% agents fee means they got $159,800.

 
 
Comment by aladinsane
2008-06-03 15:43:38

They were too busy draining their finances, rather than the pool…

“‘The last thing people are worried about when their house is foreclosed is the pool,’ said John Ballard, a vector control technician with the County of Santa Clara Department of Environmental Health. ‘They’re more worried about where they’re going to live next than draining their pool.’”

 
Comment by autechre78
2008-06-03 15:45:47

“‘I’ve never in my life gone without a job. Never,’ said Cabrera, who had to let go three of her family’s five prized Sacramento Kings season tickets and is contemplating selling her sports memorabilia collection.”

She’s not the only one, attendance has been down noticeably. It hasn’t had much coverage lately, but during the regular season there were all sorts of commercials about Season ticket holders renewing their membership, weird incentives too. Maloofs refuse to lower ticket price, says it devalues the product. I don’t know how an Admin Asst could afford season tickets though, they’re so flippin expensive. Even for the cheap seats you’re talking several thousand dollars. I think they offer financing too, which is insane. We can only afford to go to the games on special occasions (birthday’s, Christmas etc).

Comment by aladinsane
2008-06-03 15:55:09

Imagine the plight of the professional sports team owner. (in this case, the unlucky owner also has a couple of condo development in Vegas, a Bad-Luck-Trifecta if there ever was one?)

When you sign physical freaks of nature to 10 year-$75 million contracts in the boom times, you still gotta pay them in the bad times, even if the public can’t afford to go anymore…

I expect an awful lot of contracts to be null and void, once bankruptcy rears it’s ugly head~

Comment by autechre78
2008-06-03 16:18:41

That reminds me of a great picture I saw recently of a Florida Marlins game (could be another team). It was taken from the nosebleeds looking down at the field. Nothing but a sea of empty orange seats.

Comment by Muggy
2008-06-03 16:32:17
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Comment by krazy bill
2008-06-03 18:01:03

I like the way the cup holders look like grinning death heads.

 
 
Comment by BubbleViewer
2008-06-03 18:57:50

What a picture of the Marlins’ park! The only thing comparable was the Giants at Candlestick in about ‘75. just before Bob Lurie bought the team. I seem to recall attendance of about 600-900.
Geez, I remember when I was going to SF State, you could get a bleacher ticket for literally $2 or $3. Never had to plan ahead. Just head to the Stick when the mood suited us.
Also, the Indians, at old Memorial Stadium, in late 70s or early 80s had some paltry crowds. I distinctly remember listening to a Bill King broadcast for the A’s, and the crowd was so quiet, except for one guy in dead centerfield beating a bass drum all game long.

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Comment by SanFranciscoBayAreaGal
2008-06-03 20:02:47

Ah Bubbleviewer,

I remember on certain days at the Stick you could get bleacher seats for 50 cents.

I also have memories of sitting in center field wearing a ski jacket and gloves during the summer, watching the paper and peanut shells swirling all around you. “Oh yes, I remember it well.”

Ben, do you know what musical the phrase above in quotes came from?

 
Comment by desertdweller
2008-06-03 22:00:55

Gigi.

Singing about when they first met.

 
Comment by SanFranciscoBayAreaGal
2008-06-03 22:36:00

Excellent desertdweller.

Have you heard back from the state about your CD?

 
Comment by sleepless_near_seattle
2008-06-04 01:39:52

Bubbleviewer,
Not to nitpick, but the stadium the Indians (and Browns) played in was Municipal Stadium.

I was at a Tribe game there in summer of ‘89 and I think the announced attendance for a doubleheader was approx. 300! And that was an 80K seat stadium!!

Looking back now, me and the girlfriend at the time coulda made our own history and no one would’ve even known…

By the way, I think there was a game there once during a freak winter storm in Aug or September. I believe 50 people showed up, not unlike the Marlins photo.

 
Comment by gab
2008-06-04 09:45:01

“Ah yes, I remember it well…”

Charles Boyer

 
 
 
Comment by sf jack
2008-06-03 16:41:33

Well, with Bernanke Bucks induced inflation, at least the Giants contract they gave to Barry Zito looks a little better every day!

7 years, $126 million, with about 5 and one half seasons to go…

*****

It will be interesting to see if Pedro can still pitch tonight.

As for his big money contract, a lot more than inflation is need to make that mistake right.

Comment by ThomasPS
2008-06-03 17:04:05

“7 years, $126 million”

And they said the CEO of Exxon is over paid!

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Comment by sleepless_near_seattle
2008-06-04 01:43:50

Pedro’s a headhunter. It’s a shame a guy with all that talent can’t seem to play the game without purposely endangering others. I don’t even follow baseball that much, but that guy’s a chump.

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Comment by Not Mssing It
2008-06-03 16:04:20

She’s not the only one, attendance has been down noticeably

LOL Well you can certainly blame THAT on more than just the economy.

Comment by autechre78
2008-06-03 16:10:35

No joke, they’re so bad lately. It’s painful to watch. The most exciting Kings news to come out lately were the Cheerleaders (not meant for distribution) photos.

Comment by Blano
2008-06-03 17:42:35

Yes….very nice. :)

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Comment by OCDan
2008-06-03 16:08:45

Can’t help but chime in on the sports memoribilia item.

As some of you oldsters know, I collect sportscards. Well, have times changed. Scouring eBay, one can now find high-graded cards for literally pennies without an attached reserve.

I realize they could be removed. However, how nice to see these yokels selling cards that once would have gone for tens of thousands at several hundreds of dollars.

Might just pick up a few. Needless to say, but the deflation spiral on non-essential items has begun to hit the sports memoribilia dept.

 
Comment by Not Mssing It
2008-06-03 16:10:18

We can only afford to go to the games on special occasions (birthday’s, Christmas etc).

By all means keep on trading aluminum cans for game tickets!! You don’t really want to see the players have to live in non-gated communities do you?

Comment by autechre78
2008-06-03 16:15:48

By all means keep on trading aluminum cans for game tickets!!

Hey that’s a great idea! Reducing my carbon footprint AND going to a game! Thanks for the tip!

Comment by holytrainwreck
2008-06-03 17:05:52

I don’t have carbon on the bottom of my shoe, therefore, I don’t leave a carbon footprint.

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Comment by Big V
2008-06-03 17:32:56

I dunno, I’ll betchyou if we IR’ed your shoe, we’d pick up a carbon signal.

 
 
 
 
Comment by ex-nnvmtgbrkr
2008-06-03 17:10:25

Oh boo-dee-frickin’-hoo!! If that statement doesn’t reek of an entitlement society, I don’t know what does. Oh my, what are we to do when we can’t go to a Kings game?? god help us- the end is nigh!….. I hope that bag ends up selling her anus somewhere down in the seedy bowels of that god-forsaken city.

Comment by lurknomore
2008-06-03 20:31:33

If you haven’t lived in Sacramento, you can’t understand how obsessed everyone is with the Kings.

There is NOTHING else to do in that town, NOTHING. There is a little zoo, a little art museum, a AAA baseball team and… some Targets.

Comment by RoundSparrow
2008-06-03 21:39:54

Drive north to Chico and get some good beer ;)

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Comment by davisdave
2008-06-03 23:01:22

nothing special about sac. it is a great place to live if you want to be close to the mountains, rivers, lakes, and desert. I love THAT.

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Comment by aqius
2008-06-03 23:05:57

all you people complaining about how boring Sacramento can be really make me laugh. boring people are bored no matter where they live. the location isnt a reason. it’s an excuse for an empty lifestyle always dependent on others to entertain you.

lazy oafs. go watch some celebrity gossip tv already. I’m sure Britney is on some channel, somewhere, 24/7.

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Comment by Incredulous
2008-06-04 07:10:00

I remember the phrase, “A bored person is a boring person.” I thought it was a bit of southern quaintness. Guess not.

 
Comment by Rintoul
2008-06-04 12:41:23

Another one along the same lines: “Only the boring get bored”.

 
 
 
 
Comment by Arizona Slim
2008-06-03 17:18:31

I seldom go to sporting events. For one thing, the tickets are so bleeping expensive. Not to mention the refreshments at the games. (I make it a point to have a good meal before I enter the stadium.)

 
 
Comment by SDGreg
2008-06-03 15:49:22

“Chawla said the units at auction sold for prices between $145,000 and $325,000. The units being auctioned in the building were once listed between $218,000 and $522,400.”

The smallest units, in what was formerly a Red Lion Inn, were less than 500sf and have a kitchen that consists of nothing more than a single basin sink, small counter top, microwave, and dorm fridge. The prices are still at least $300/sf - outrageous! Whoever bought these units at auction way overpaid.

Comment by SDGreg
2008-06-03 17:09:33

I should have also noted the “big” units (2 bed/1 bath) are under 1000sf and also have the same tiny, crappy “kitchen”. Only 6 months ago, there were buyers that paid more than $500/sf. The kitchen should come with cayenne-tipped Joshua trees for bar stools rather than chairs.

Comment by Big V
2008-06-03 17:35:47

Ever heard of “ojo rojo”?

 
 
Comment by Mole Man
2008-06-03 17:55:18

one half million dollars to live at a former Red Lion Inn with luxury granite counter tops and an HOA composed of whoever the sales agents could find

Comment by SD to LV back to SD
2008-06-03 20:06:35

Half a million bucks to live in a closet. Is that the side that faces the Naval Station, or do you get the breathtaking view of eastern National City?

 
 
 
Comment by laonlooker
2008-06-03 15:54:35

“Proceeds from that sale enabled them to buy their current house in late 2004 for $685,000. They took out a mortgage for $537,000. A year later, with the house worth an estimated $865,000, they took out a second mortgage for $100,000.”

I wonder what they did with the extra 100k? These stories always leave out the juicy part.

Comment by edgewaterjohn
2008-06-03 16:55:47

“I wonder what they did with the extra 100k?”

They kept some of their fellow countrymen (and untold Chinese) employed for a little longer, that’s what they did.

Uh oh!

 
Comment by holytrainwreck
2008-06-03 17:02:53

Went to Tahiti?

 
Comment by Big V
2008-06-03 17:39:15

More to the point: If they could afford to pay back a $637,000 loan, then wouldn’t they have just bought a better house to begin with, rather than gettting a $537,000 mortgage followed by a $100k HELOC? The bank should have known that these FB (and countless others) would never be able to pay back their HELOCs. That’s why I hate FB and banks so much; it’s because they stink like bugs.

 
 
Comment by Saint Barbara
2008-06-03 16:10:56

OT–
In Goleta, just north of Santa Barbara, asking prices for short-sale homes — and there certainly are enough of them — are averaging about 20 percent under the most recent same-property sales prices. This week at the Santa Barbara Housing Bubble Blog: a virtual bus tour of some distressed Goleta SFRs.

Enjoy the ride,
Saint Barbara

Comment by Jas Jain
2008-06-03 16:23:54


BTW, I am quite familiar with the area (I worked in Cisco, SB, office for three years).

“I don’t want to be late for my job interview at the Spearmint Rhino* tonight.”

Isn’t that a nudie bar near downtown? I wonder if she is interviewing for a bartender or for a “dancer.” Part of the “service” economy ripe to take big hit.

Jas

Comment by James
2008-06-03 22:52:05

I’m thinking of picking up the SR club in my area if it goes under. Total cash cow unless you really overpaid like the current idiot.

 
 
Comment by grumpy realist
2008-06-03 17:20:22

I bet my ex-boss is so happy that he and his wife sold at near the peak in SB and got out….totally unplanned. He got fed up with how the company was treating him, his wife had some very good reasons to move, and they upped stakes and left for the East Coast. I think they netted roughly $300K in profit, even including the purchase of a new place. (Of course, they had lived in SB for roughly 20 years…)

 
 
Comment by MacAttack
2008-06-03 16:31:50

There is hope for families after all.

**********************************************

“Vicki Cabrera, of Sacramento, who plans to vote, directly feels the effects of a lagging economy. She lost her job as an administrative assistant for a real estate firm due to the weak Sacramento housing market.”

“‘I’ve never in my life gone without a job. Never,’ said Cabrera, who had to let go three of her family’s five prized Sacramento Kings season tickets and is contemplating selling her sports memorabilia collection.”

****************************************************

Maybe ticket prices will fall from the stratosphere, and FAMILIES will be able to AFFORD going to a game once in a while. Here in Portland, we have a nice minor league team, and a junior hockey team. I DO NOT WANT MLB or NHL teams to replace them, since ordinary folks won’t be able to attend.

Comment by autechre78
2008-06-03 17:52:44

In the last major recession, did sporting events get cheaper?

 
Comment by sleepless_near_seattle
2008-06-04 01:58:30

“I DO NOT WANT MLB or NHL teams to replace them…”

I agree completely, although my reasons are more intangible than yours. I simply love the fact that major (and majorly overpaid) sports teams aren’t the focus of the locals.

 
Comment by Incredulous
2008-06-04 07:13:34

Since most of the stadiums are built with taxpayers’ money, these taxpayers should be allowed to attend free.

 
 
Comment by sold in 04
2008-06-03 16:37:24

the banks allowed the borrowers to get into all those goleta properties w/ no money down,and these properties were close to a million bucks,multiply that by the rest of the usa thats upside down,and we have a lot of walkers.Invest in public storage cause thats where they put all the stuff after they walk or run from an upside down mortgage…

Comment by Arizona Slim
2008-06-03 17:00:42

Good idea. I know a fellow who’s so wealthy that he has his own private jet. (But you’d never know that unless someone else told you — he’s a very modest guy.) I’m told that his wealth is derived from his investments in public storage.

Comment by Big V
2008-06-03 17:42:42

Maybe he just steals stuff out of the storage units.

“Oh look, I found a private jet in this one.”

Comment by Greg
2008-06-03 21:37:32

Seriously LOL - even with what little crime there is in my area, there has been a recent rash of burglaries from public storage units.

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Comment by desertdweller
2008-06-03 22:06:49

GF in Escondido had garage sale this past wknd, terrible results. It would seem, at least in this neighborhood, that people aren’t even buying much, operative word, Much, at garage sales. Unless it is 1$ or free, it is going to have to be repacked.

Wonder what is going on around the states for garage sales, which used to be fairly lucrative in getting rid of stuff, and getting instant cash.

 
 
 
 
 
Comment by holytrainwreck
2008-06-03 16:59:23

“Unattended pools can become breeding grounds for mosquitoes and watering holes for crows and other birds susceptible to the West Nile virus.”

“‘My wife and I stay indoors now when sunset comes,’ Weiler said outside his home on London Place.”

“‘The last thing people are worried about when their house is foreclosed is the pool,’ said John Ballard, a vector control technician with the County of Santa Clara Department of Environmental Health. ‘They’re more worried about where they’re going to live next than draining their pool.’”

Just like Casey Serin whose green, West-Nile breeding, algae infested pool could be seen on Google Earth, then he went over to do a half-assed cleaning job…

Comment by diemos
2008-06-03 19:35:34

Isn’t it about time for a “Where are they now.” post on the blond ukranian who cannot be named.

 
 
Comment by gal
2008-06-03 17:09:57

“Supporting Mr. Scott’s urgings, the staff report says that homes in the state now sell for approximately the same price as they did April 2004, with the median price 20% below last year’s market peak of $505,000.”

If we are still in April 2004 , we could reach 2001 maybe in April 2010, if things move with this speed …

Comment by dude
2008-06-03 18:04:38

We are way past 2004 in my area already. With the gas prices what they are I fully expect the Socal exurbs to return to mid-90s pricing at this point.

 
 
Comment by Big V
2008-06-03 17:17:50

Bay area housing bulls stink like a bug. Why are they so annoying? How can I make them stop?

Comment by mad_tiger
2008-06-03 17:32:25

As a Bay Area renter I wish it were otherwise, but the Bay Area bulls have a point. In some areas (West Menlo Park, North Palo Alto) 2008 prices are at least as high as they were in 2006-2007. While sales are taking longer, inventory is still reasonable, so there is no indication that the market will change in the near future.

Comment by Big V
2008-06-03 17:51:28

No indication? One indication that a housing bubble will turn down is that it closely resembles other housing bubbles, which have also turned down. In small, dank corners of one or two neighborhoods, the bubble is shifted by a couple years due to the following:

- A lag in the adoption of exotic financing
- The move-up effect

There is no reason to believe that the course of those bubbles will not mimic the course of all the other bubbles. Slowing sales are the crack in the ice.

 
Comment by SiO2
2008-06-03 19:59:11

I Stink!
The tech companies and stocks are still doing ok, so… not much if any downturn in los altos, saratoga, palo alto. Still see the cycle of open house, and multiple offers the next week, unless the house is freeway adjacent or powerline adjacent. Even dumps, like one in Los Altos that was advertised “priced for the land value, the house is free”. But prices are not really up from 07 either.

Also contributing, the agency jumbos ( under 729k) interest rates have declined.

From Dataquick
CAMPBELL 22 $640,000 $740,000 -13.51%
CUPERTINO 38 $918,500 $900,000 2.06%
GILROY 32 $550,000 $710,500 -22.59%
LOS ALTOS 24 $1,656,500 $1,710,000 -3.13%
LOS GATOS 31 $1,335,000 $1,200,000 11.25%
MILPITAS 38 $558,000 $652,500 -14.48%
MORGAN HILL 30 $623,500 $774,250 -19.47%
MOUNTAIN VIEW 43 $654,000 $733,750 -10.87%
PALO ALTO 12 $1,137,500 $1,200,000 -5.21%
SAN JOSE 576 $557,750 $670,000 -16.75%
SANTA CLARA 79 $605,000 $686,000 -11.81%
SARATOGA 35 $1,480,000 $1,550,000 -4.52%
SUNNYVALE 72 $745,000 $750,000 -0.67%

Range from -5% in PA to +11% in Los Gatos for y-o-y. But then -22 and -19 in Gilroy and Morgan Hill, and -17 in SJ. Gilroy and MH will probably be hit harder due to long commute + gas prices, plus much more new construction. (I am stating the obvious, please flame away if you like!)

Having said that, I did see two foreclosures in Los Gatos. So maybe that’s the crack. Still hoping.

Comment by SiO2
2008-06-03 20:05:08

By the way, even though I often disagree with what I read here, I have to say that the overall quality of comments is pretty good. I’m talking about thoughtfulness and ability to communicate, as compared to many newspaper comment sections. A little pat on the back for you all. Before you flame me :)

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Comment by Big V
2008-06-03 23:08:50

Yes, that IS the crack. If prices weren’t declining, there would be no need for foreclosure.

And tech stocks are not doing well at all; certainly not well enough to fund the average HELOC. In order for tech stocks to hold up an area, they have to be owned and operated by A LOT of people in that area, and they have to be returning gang busters. Furthermore, if tech stocks were holding everything up, then the rest of Silicon Valley would not be fading, since the same industry is prevalent all around.

The only difference between the areas you mention and the rest of the Valley is their housing composition, which has contributed to the 2 factors I listed above. The Bay Arean uppity-crusty crowd is eventually going to have admit their losses to their siblings; that will be harder for them than actually parting with their funny money.

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Comment by edgewaterjohn
2008-06-03 17:47:06

Don’t you think you’re being a little harsh on our insect friends this evening? After all, they’ll be needed to pick clean the bones of all the FBs who will expire while waiting for that last golden GF to come along.

Comment by Big V
2008-06-03 17:55:00

Oh, you’re right. Where are my sensitivity skills? The FB stink like bugs ani.

 
 
 
Comment by mad_tiger
2008-06-03 17:34:41

Gilroy is garlic toast. Over 500 SFRs on the market and only a handful pending.

 
Comment by aladinsane
2008-06-03 17:39:17

teen-powered Party On The Patio…

http://www.youtube.com/watch?v=a5_iYMWLAb0

“Kern County supervisors approved a $1,000 fine on individuals caught participating in an illegal party on private property. The nuisance fine was triggered by a rash of teen-powered parties in homes left vacant or abandoned by Kern County’s high foreclosure rates.”

 
Comment by hwy50ina49dodge
2008-06-03 17:48:47

‘…It’s nothing but a marketing ploy that has nothing to do with the market, by a company that does this around the United States.’”

This could well be said of the FED! :-)

Comment by vozworth
2008-06-03 19:37:31

nke

 
 
Comment by Wickedheart
2008-06-03 18:00:36

Be kind to a realtor week.

http://tinyurl.com/4uy3ak

Comment by dude
2008-06-03 18:09:15

See my comment before it gets deleted.

Comment by edgewaterjohn
2008-06-03 19:31:30

Dude, that sh*t is cold - I love it. Still there at 21:25 CDT.

Seriously though, taken as a whole, all those comments are freaking schadenfreude city - the agents are getting up the bum from their own side!!!

I don’t care what software they have or don’t have, no one is going to need an agent to find for sale properties anytime soon - just follow the trial of tears to the feet of the distraught sellers and cut your own deal.

 
 
Comment by Big V
2008-06-03 18:57:23

I put in a comment too.

Comment by SanFranciscoBayAreaGal
2008-06-03 20:13:00

Both of your comments are still there as of 8:12 pm PST.

Comment by Big V
2008-06-03 23:18:26

11:15 PM, comments gone. I posted another one, but copied it here for posterity:

Realtwhores unite! Ha ha, no one needs you or your stupid information, which is easily available to everyone. Hahahahahahaha!

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Comment by Wickedheart
2008-06-03 21:37:41

I can’t see your comments either but I’m happy you enjoyed the tale of realtwhore woes and misfortune. I especially enjoyed that the new software blew up at least one computer. :)

 
 
 
Comment by Ouro Verde
2008-06-03 18:02:49

“Pasadena is very healthy, at least on the upper end,’ said Rosey Bell, a Realtor with Coldwell Banker.”

I went to school with Rosie bell. She was the prettiest girl in Mckinley. We hung out alot back then. I think she dated my brother. Oh those Pasadenans.

Comment by hwy50ina49dodge
2008-06-03 18:19:24

He said:
That’s…Rosie “who rang my” bell :-)

 
Comment by Ben Jones
2008-06-03 18:21:22

That one was for you OV.

Comment by vozworth
2008-06-03 19:46:00

find one on amarillo tx, boone pickens,

 
 
 
Comment by Wickedheart
2008-06-03 18:07:40

Be kind to a Realtwhore Week

http://tinyurl.com/4uy3ak

Comment by Ouro Verde
2008-06-03 19:47:51

Im sorry wicked heart, Realtors have ruined everything.
I wish I could drop kick the whole clan.
Up in Arms against the scumtors.

Comment by Wickedheart
2008-06-03 21:41:44

You didn’t honestly think I was sincere, did you? Really you should read it first.

 
 
 
Comment by indigo
2008-06-03 18:54:57

This is quite a nice read on the big picture of the perfect storm: overbuidling, lax mortgage oversight and skyrocketing prices.

http://tinyurl.com/3q5yna

But be forewarned: you may actually become a bit less critical of my local congressman (whom some here delight in bashing).

Comment by edgewaterjohn
2008-06-03 19:58:02

What’s with that “exotic buyers” bit?

1. Foreign buyers, targeted immigration? Lindsey has an awful lot of faith in the ability of foreign markets to decouple from ours and allow their citizens to remain prosperous enough to help buy up our inventory.

2. Inflation-hedgers? How would they be any different from the typical late phase boomtime buyer? In a sense, weren’t most buyers 2003-2007 inflation hedgers?

3. The government? Today’s gov’t is not in the same shape as the one that formed the RTC - too much blind faith in the power of a BK gov’t.

 
Comment by reuven
2008-06-03 21:16:37

I agree that Frank is one of the smarter Democrats. But face it: the fastest way to get affordable housing for people is to let things crash. Subsidized cram-downs, as Frank proposes, merely keep more homes from foreclosing, keeping prices propped up.

Just let it crash!

I’m already sickened by the tax forgiveness FBs are getting.

 
 
Comment by WhatOnceWas
2008-06-03 19:32:09

Probably posted awhile ago,but worth another look…Pretty incredible Bank reserve rate chart at iTULIP.com

http://itulip.com/forums/showthread.php?p=35614#post35614

 
Comment by barnaby33
2008-06-03 20:30:14

If you think luxury and National City have no place in the same sentence, luxury and that building belong in different lexicons. I live 15 minutes from there and have NEVER gotten off the freeway there. I remember seeing the signs when they started converting that dump. It right across the freeway from 32nd st naval station, not the high rent district by a long shot.

 
Comment by reuven
2008-06-03 21:01:21

The Sacramento Bee reports from California. “As California voters go to the polls today in a low-turnout primary, those who bother to show up aren’t likely to be happy. With a teetering economy and an unpopular war, only 17 percent of voters in a new state Field Poll believe the country is headed in the right direction, the most dour view in 16 years.”

I asked both of my candidates for State Assembly what they thought about the “housing problem” (without trying to lead them on my point of view, which is “no bailout for individuals, including tax breaks on forgiven debt, increase lending standards of all gov backed mortgages to 20% down and no more than 3.5x income, etc)

Both of them want to punish me for being a responsible citizen. Dominc Caserta says his plan is to

Subsidiz[e] the rates of buyers who bought homes under subprime rates; A statewide program that provides lower rates for first-time buyers.

His oppenent Paul Fong also wants to subsidize specu-vestors. He claims to be “the green choice” yet among the major planks in his platform is “promoting open space”. “Open Space” is one of the worst forms of government taking, and discouraging dense development is one of the worst things you can do fo the environments.

So on the ballot, I kid you not, I wrote in “Mickey Mouse”

 
Comment by reuven
2008-06-03 21:45:20

It looks like “Dominic Caserta” will win the primary in my Assembly District. So I decided to introduce myself by sending him this letter:


Dear Mr. Caserta:

My primary residence is in your district.

Your platform is obscene and immoral. I am sick of Democrats like you taking my money to subsidize irresponsible specu-vestors who lied on their mortgage applications and bought houses that they knew they could never afford.

Your platform statement includes the following:


To help families keep their homes and the life savings invested in them, Dominic Caserta proposes:

* Subsidizing the rates of buyers who bought homes under subprime rates.
* Launching a statewide investigation into which institutions committed fraud and outright theft against unsuspecting home buyers, with a goal of financial restitution.
* Temporary housing subsidies to help people through this difficult time. If we can give Exxon tax breaks and subsidies, we can certainly help struggling homeowners.
* Legislation that allows first-time buyers with low incomes to set up an account, like an IRA, where they can put aside tax-free-money for a home purchase. The law would include a program in which the government matches the savings up to $5,000 a year. The money would come through a bank tax on the purchase of higher-cost homes.
* A statewide program that provides lower rates for first-time buyers.

I moved to California in 1987. We lived an extremely frugal life and saved up, on two ordinary salaries, enough to put 20% down on a house in Sunnyvale. In 1991 we bought our house, with a 15-year fixed mortgage. The house was paid off two years ago. How did we do this? We didn’t live beyond our means. We now have no debt.

I don’t care what my house is “worth”. It’s a place to live in. Please stop trying to prop up house prices by taking money from me and giving it to irresponsible borrowers. You want affordable housing? Let all these houses go into foreclosure! Prices will drop fast, and houses will be affordable for everyone.

I agree you need to go after institutions that committed fraud. But you also need to go after individuals. Look at the original mortgage applications, especially the “stated income.” Make sure these people paid CA State income tax on the income they stated. If not, give them the option to pay up, or go to jail. If they argue that they lied, make sure that these individuals are prosecuted for mortgage fraud.

Exxon is a publicly held company. If you want to share in their profits, buy their stock (as I did.)

Our President signed into law a terrible piece of legislation called the “Deadbeat Specu-vestor Tax Forgiveness Act of 2008″ (well, that’s what I call it), that eliminates income tax on forgiven mortgage debt! So someone who walks away from a house that gets $200,000 less than what they paid saves $70,000 in taxes. (Or, more accurately, the rest of us have to pay $70,000 more) In many cases, they’re still driving around in the Hummer they bought with a home equity loan, while I pick up the tax tab for them.

Just because the IRS doesn’t want this money, doesn’t mean California shouldn’t get it. California can and should collect taxes on forgiven mortgage debt. This will be a good start to closing our budget gap.

You say you don’t want people to lose their “life savings.” People who put no money down and paid teaser rates lost NOTHING if they have to give the house back to the bank. Meanwhile my life savings, built from hard work, dedication, and patience, is being eaten away with taxes, inflation, and artificially low interest rates.

You are ruining America and chasing away people who would otherwise be Democrats. Most of these underwater homeowners are just as greedy as Exxon! They thought they were Donald Trump and could get-rich-quick in “real estate”. Please don’t confiscate my hard-earned money to subsidize an immoral lifestyle of greed.

Sincerely,

Reuven S*****
Sunnyvale, California

 
Comment by Housing Wizard
2008-06-04 00:54:37

A normal real estate markets value is based on a willing and “able” borrower buying a property with it being a arms length transaction .

When the Lenders decided to breach their duty to underwrite loans and allow unqualified buyers to created a market ,they ended up cheating many people . No entity has a right to create a false market . Wall Street and their lenders cheated the following people .

(1) The qualified buyers who had to compete with unqualified fraudulent buyers and pay higher prices for homes who eventually had their values crash
(2) The borrowers who were priced out of the market were cheated out of home-ownership .
(3) The people who had their property taxes raised that was based on fake value that was based on unqualified buyers.
(4) People who were forced out of their homes because of property taxes going up to much in a short amount of time based on fake values .
(5) The public was cheated out of a balanced home budget when real estate was allowed to skyrocket based on unqualified buyers and speculators .
(6) Many people were cheated out of jobs because they could not afford the bogus prices of rent or home prices near jobs .
(7) The Fed Chairman is cheating people by allowing run-a-way inflation and keeping the interest rate to low to help bail out the banks .
(8) The public is being cheated by tax dollars for bail-outs of this preventable fake housing bubble .
(9) The public is being cheated by having a tight money market as a result of the prior faulty lending and the fact that the entire financial systems are discredited now ,(to the point that the government needs to back mortgages ).
(10) The people have to endure the fall out from ghost town tracts ,underfunded HOA’s ,health and safety problems from pools and vacant houses ,along with a increase in crime .Foreclosures and brown lawns are not a pleasant sight in neighborhoods .
(11) The public has to endure the tie-ups in the Court System because of increased cases ,which will result in the lack of speedy Justice and increased taxpayers costs just to handle the filings .

I could go on and on , but the right parties should be held accountable .

 
Comment by smathis
2008-06-04 04:56:05

“‘I’ve never in my life gone without a job. Never,’ said Cabrera, who had to let go three of her family’s five prized Sacramento Kings season tickets and is contemplating selling her sports memorabilia collection.”

Somehow anecdotes such as this just don’t have the same punch as stories of the ’30s do…you know, when people ate their own shoe leather, lived under tarps, etc.

Maybe it’s just me…kinda hard to get all worked up over “heart-rending” tales of selling off some of your family’s season tickets to make ends meet.

Comment by Eli
2008-06-04 05:29:54

Yeah. I was really bleeding for that executive who had only $2K/month of “grocery money”.

Like hell, I’m an American student in Holland, and I spend less than $200/month on groceries, even with the 50% penalty for my money being in worthless U.S. dollars. (It helps if you only buy stuff that’s 35% off ’cause it’s expiring in a day or two…)

And I’m not exactly poor, I worked as a Silicon Valley engineer for 10 years — I just don’t like wasting money.

 
 
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