Whose Crazy Up-Market Idea Was This!
Some housing bubble news from Wall Street and Washington. MarketWatch, “The housing slump, already shaping up to be the worst in a generation, still hasn’t run its full course, according to Harvard University’s annual report on housing, released on Monday. And if job losses accelerate in coming months, it could take even longer for local markets to regain their footing, said Nicolas P. Retsinas, director of the university’s Joint Center for Housing Studies.”
“Real home equity (adjusted for inflation) fell 6.5% to $9.6 trillion in 2007. According to the report, the homeowner vacancy rate jumped to 2.8% in the last quarter of 2007, from 2.0% in the last quarter of 2005, as the number of vacant units rose by more than 600,000.”
“At the end of last year, the report estimates that the oversupply of vacant, for-sale units numbered about 800,000 — equal to 1% of the owner housing stock.”
“‘Builders overbuilt, lenders over-lent and borrowers over-borrowed — and we’re paying a price for that,’ Retsinas said.”
“In the meantime, maybe Americans need to redefine what a home is, he said. ‘After all, a home is to live in primarily, not for buying and selling,’ he said.”
From Reuters. “‘As investors demand a higher return for assumed risk and limit credit to riskier borrowers, costs are rising for all types of mortgage, consumer and corporate loans,’ the center said in a press release. ‘Many would-be borrowers are now finding it impossible to get loans at any price.’”
“‘Historically, housing markets recover only after the economy has entered a recession and a combination of falling mortgage interest rates and house prices have improved housing affordability,’ Retsinas said. ‘It will take longer this time to rebound given the unusually high levels of foreclosures and constrained credit markets. The slump in housing markets has not yet run its full course.’”
“To get home affordability back to 2000 levels, before a five-year record home price and sales surge, ‘would take some combination of large price declines, interest rate reductions, rent deflation and unprecedented real income growth,’ it said.”
“‘If foreclosures really ramp up and they’re starting to,’ Retsinas tells John Wordock, ‘that can only add to the inventory and delay the recovery.’”
“‘But the most serious challenge would be in the jobs market.’ He says. ‘If the economy really turns sour and we start to lose lots of jobs, the worst may be yet to come.’”
From Bloomberg. “Citigroup Inc. may begin another round of job reductions as soon as this week under a plan drawn up in March to cut the trading and investment-banking workforce by 10 percent, said a person with knowledge of the matter.”
“The largest U.S. bank has eliminated about half of the 6,000 jobs targeted since then, said the person, who declined to be identified. Citigroup employs more than 300,000 people worldwide and has announced about 13,000 job reductions this year.”
“More than two dozen financial companies worldwide have announced plans to eliminate more than 83,000 jobs since last July, or about 3.3 percent of their employees. Following the dot- com bust in 2000, 17 percent of banking and securities in New York were wiped out, according to the Bureau of Labor Statistics.”
“Citigroup’s $42 billion of credit losses and writedowns since last year account for about 10 percent of the global total, according to Bloomberg data. Citigroup has lost more than any company in the mortgage market rout and its shares tumbled 63 percent in the past year.”
“The economic slump that began in the U.S. housing market has spread to commercial real estate, Wachovia Corp. senior economist Mark Vitner wrote in a June 4 note. Retail vacancies in the first quarter were up 8 percent from a year earlier, he said.”
“Wall Street firms used commercial mortgage-backed securities, known as CMBS, to muscle into a market previously dominated by regional and commercial banks that often held the loans to maturity. Now the market has collapsed.”
“‘They didn’t have a good exit strategy,’ said David Hendler, an analyst at CreditSights Inc. in New York. ‘They felt there would be a market for the product they were producing, or they’d always come up with the next newfangled structured-finance instrument. Now they’re stuck holding the bag.’”
From The Star. “Amid the gloom and doom, it’s probably the best time to make a nice little killing as far as the property market in Britain is concerned. Bernard Tan, a Malaysian agent for Halifax - Britain’s largest mortgage lender - admitted it was a good time for Malaysians to enter the property market, especially if they’ve got the money.”
“‘In the long run, buying properties in Britain is a more steady way of investment as there are not enough houses to go around, particularly in London where no new ones are being built,’ he added. ‘How can prices drop a lot if there is a shortage?’”
The Evening Standard. “A new survey reveals that construction of new homes in London has ground to a virtual halt. Fewer than 1,000 new homes will be started in the capital over the next six months on top of the 11,300 built so far this year, according to London Residential Research.”
“This 2008 total - of 12,300 - is a dramatic 60 per cent below the 28,800 homes built in 2007.”
“Housing consultants London Development Research, which polled more than 200 developers, discovering a market on the brink of catastrophe, says: ‘If you have just put down a £2,000 deposit on an off-plan purchase, you ought to walk away - right now.’”
“Across Britain, house-builders are mothballing developments. It is the biggest crisis since the 1930s, says Roger Humber, from the Home Builders Federation, which is pleading with the Government to take action.”
“A veteran of housing crises stretching back to the early Seventies, Humber said: ‘We’ve not experienced anything like this post-war. It really is on a scale we’ve not seen before.’”
“There are plans to build more than 9,200 houses on the land semi-encircled by the Thames. Work has halted on a 22-acre site on the north-west rim of the peninsula. Here, a consortium has plans to build 3,000 new homes in a series of high-density blocks.”
“UK developer Quintain Estates and the Australian builder Lend Lease formed a joint venture last year to create the homes which - prophetically you might think - will have views across the river towards that other stalled development in Silvertown Quay.”
“But at a meeting earlier this month Quintain edged back from a commitment to build anytime soon. ‘We are preparing our premium product for the return of equilibrium in the markets… and will only develop and market this landmark development when propitious conditions return.’”
“Translation: ‘Whose crazy up-market idea was this! Shut the shop.’”
From Letting News. “New research by auction experts Essential Information Group and auctioneers Allsop, showed prices of new-builds in city centres had plummeted, with many sold for a fraction of their value.”
“It found that the value of the average new-build flat had plunged by 26 per cent. Only 20 of the 535 flats sold at auction, which were typically ‘distressed sales’ such as repossessions, were sold for a profit.”
“A three-bedroom flat in a Belle Vue Road development in Leeds was bought for £237,999 in March 2006 but recently sold for just £71,000 - a drop of 70.17 per cent.”
“In another case, a one-bedroom flat in Melbourne Street, Newcastle upon Tyne, was bought for £142,800 in May 2006 and sold at auction this month for £78,000 - just over half the original price.”
“David Sandeman, managing director of Essential Information Group, said there were hundreds of similar disasters happening across the country. ‘We are at a stage where there are now flats which are completely unsaleable. People believed all the hype and the marketing that they would be able to rent out their flat for £1,200 a month to a professional couple. But they could only actually get £800 a month renting it out to students who have trashed it.’”
“Mr Sandeman said the situation was likely to have worsened since February.”
The Miami Herald. “So how big was Miami’s downtown building boom? In the last six years, 22,737 units were built or are now under construction in Miami’s urban core — more than double the number built in the nearly 40 previous years, according to a new report.”
“‘The issue is, have we made this a more livable downtown and the answer is absolutely yes,’ said Jorge Perez, chairman of condo builder Related Group. ‘Will within a certain period of time 22,000 units be consumed? Yes.’”
“Perez, who is behind a dozen downtown condo towers, added that despite the current market pain, few observers deny Miami’s long-term prospects are bright. ‘If we are ever to have a viable, 24-hour downtown, this is a minimal amount of units,’ he said. ‘What is 22,000? It is nothing.’”
The Charleston Business Journal. “When it comes to architecture, Charleston is all about columns, dormer windows and crown moldings. Or at least it has been in the past.”
“Today there is a new contender in residential architecture popping up on city streets, laying claim to new construction as well as renovation projects. Loft living in the Lowcountry may still be new, but it has made friends quickly with both developers and home buyers looking for something with an urban edge in a historic setting.”
“‘A loft is more than a space,’ said Kristopher King, a project manager with Wecco of Charleston, a developer specializing in mixed-use projects. ‘You’re selling aesthetic, you’re selling a lifestyle. They’re sort of edgy. They’re urban.’”
“Wecco is building a 57-unit loft complex with a commercial component on the ground floor off upper Meeting Street on Cool Blow Street. The project, called One Cool Blow, has presold all but 10 units, with prices ranging from $240,000 for a 785-square-foot unit to $340,000 for a 1,125-square-foot-unit.”
“Katye Rhett is leaving her suburban James Island rental home for a 785-square-foot loft at One Cool Blow and plans to move in at the end of June.”
“‘It’s a lot bigger where I’m moving from, but that doesn’t matter to me,’ Rhett said. ‘I spend most of my time with friends downtown and I work downtown. I want to live where I work and play.’”
“‘In other markets, lofts have been there awhile and have done very well. In Charleston, sometimes things go a little slower, but it’s now hitting Charleston. I don’t want to use a cliché, but it’s kind of hip and open, an entertainment-type lifestyle,’ said John David Madison, whose investment company, Mad Investors, has fueled a number of residential and commercial projects in downtown Charleston.”
National Mortgage News. “Senators Chris Dodd and Kent Conrad…are still trying to explain how they were recipients of ‘Friends of Angelo’ loans and falling all over themselves in the process. As most mortgage industry veterans know, FOA loans are not new.”
“They’ve been around for years. I know of at least one other top 15 lender that had a ‘friends’ program.”
“Super jumbo lender Thornburg Mortgage is once again flirting with bankruptcy. The publicly traded REIT’s share price is down to 25 cents. It has offered to buy back its preferred stock for $5 a share. However, investors who bought the stock when it was first issued paid $25.”
“Many mortgage lenders REITs were taken public by Friedman Billings Ramsey and its CEO, Eric Billings…The Wall Street firm had this to say about the housing market in California: ‘We visited the Merced, Modesto, Stockton, and Sacramento MSAs and met with housing investors, realtors, and home builder representatives. The tour produced both good and bad surprises, but the degree of the price declines in these markets was our biggest takeaway.’”
“‘Sacramento is by far the worst hit of all the above mentioned markets, and unfortunately, it is also the largest market we visited. On a positive note, housing inventories are beginning to move across all the areas, and some houses are even getting multiple bids, but at prices 30% to 70% below FY05 peak price levels.’”
“The housing slump, already shaping up to be the worst in a generation, still hasn’t run its full course”, according to Harvard University’s annual report on housing, released on Monday.
Wasn’t it Harvard’s Joint Center for Housing Studies who said in the middle of 2006 that there was “no housing bubble?” A look at their donors (all real-estate related) probably explains why. It is a shame that our supposed flagship institutions of higher learning can’t even show due diligence and report credible information. My opinion of Harvard was already pretty low, especially given that they granted GWB a degree, but with this obvious collusion, I think a community college degree is worth more.
as they predicted of course
Harvard said everything was A ok till 06
2 years behind blogs
remember the 2004 UK dipladokis ?
they started down, lowered rates and prices came up a little
You beat me to it! The minute I read the news about Harvard’s release I immediately remembered the discussion of their study (and donors) back in 2006. Paid Analysts.
If you pull up that Harvard 2008 Housing Market study and read the last two paragraphs it suggests families of foreign descent and retiring boomers buying up vacation homes will be absorbinga lot of the excess inventory once this slump is over.
….oooooooo……kaaaayyyyyyy
Great, keep home prices up by selling second homes to aging boomers and foreigners, but what exactly, are the young, first time buying AMERICANS supposed to buy/afford?
Hey Anthony, Dubya is a Yalie. Not that it matters much. Look at any of these university-based Real Estate centers, they are bought and paid for by the REIC. Here at USC our Lusk Center has been a faithful counterpart to Lawrence Fun-Yun for some time. Let’s look at this nugget from the November 7, 2005 Los Angeles Business Journal:
Delores Conway, director of the Casden Real Estate Economics Forecast at the USC Lusk Center for Real Estate, sees a soft landing for the market. “It’s not at all going to be like the early 1990s,” said Conway, who disagrees with economists at the UCLA Anderson Forecast, who have repeatedly warned of a housing bubble deflating by double digits in some areas.
Ahem. Dubya got his MBA from the Hah-vahd Business School. He did his undergrad work (if you can call it that) at Yale.
He was a cheerleader at Yale(which prepared him no doubt for those difficult mission while squadron leader in the National Guard).
Mea culpa! I *was* thinking of just his undergrad years but I suppose the MBA thing matters too . . . not that he’s been all that great with money as far as anyone can tell.
Indeed, I have wondered why “Schrub I” has not asked for recourse from both Harvard and Yale as they obviously defrauded the old man.
But then again, I always wondered why “Schrub I” didn’t get spayed at an early age!
Anthony…
Given a choice between a book smart university/ college degreed individual, or somebody with practical knowledge and the powers of observation and the ability to make sense of it all, i’ll take the later everyday of the week.
And this applies to George Bush how, exactly?
“My opinion of Harvard was already pretty low, especially given that they granted GWB a degree, but with this obvious collusion, I think a community college degree is worth more”.
Well then, don’t fail to mention Obama’s - the token black candidate’s - affiliation, OK?
Harvard Law School? Did you forget?
My statement of GWB wasn’t an endorsement of Obama [I would vote Ron Paul, if I could]. But, at least Obama knows how to speak in public!
“But, at least Obama knows how to speak in public”!
Yes… But he doesn’t say anything, just a gas bag emitting the same old recycled crap.
I’ll be ‘wasting’ my vote on R.Paul.
“Yes… But he doesn’t say anything, just a gas bag emmiting the same old recycled crap.”
I think adding 7 states to the Union is saying something of note.
“I think adding 7 states to the Union is saying something of note”.
Well you are right, I had forgotten about that. Of course he’s a College graduate and I still have four years of College eligibility left. (To steal a phrase from a down South D.J.)
You CAN vote for Ron Paul. Why do you think you only have 2 choices?
Quote: You CAN vote for Ron Paul. Why do you think you only have 2 choices?
You could have voted for Ron Paul in the Republican primary. However, since Ron Paul isn’t going to run as a 3rd party or an independent, you won’t be able to vote for him in the general election. He has recently dropped out of the race for the Republican nomination.
Too bad, as he was the only decent choice, except maybe for Dennis Kucinich who is good on civil rights but is a big government socialist.
By the way, I can’t spell Dennis Kucinich’s last name. I kept trying to google “Dennis Cacentige democratic nomination” and similar terms hoping that Google’s search suggestion would fill in the right spelling. None of those terms worked. Then I tried “denis convention short hot wife” and the first hit was “How Kucinich Found Love”. Google is a great spell checker if you use the right search term, which is usually the most assinighn, er, popular.
Nothing’s stopping you from writing him in. I considered writing in Paul/Kucinich. How’s that for a throw-away!
Despite their faults, they’re the only ones who didn’t tell us what we wanted to hear. And the only two I know of that opposed the war with every vote.
Ron Paul and Peter Schiff would be my choice. They’d shut down the Federal Reserve and end inflation once and for all.
The housing crash certainly has not run its course and is likely to get even worse. Today I received the following on a postcard:
“You could buy a home, and be moved in within a week from today, even if you don’t have a large down payment (maybe no down payment), and regardless of whether you had good credit.
Imagine how great it will feel to own your home. You could stop throwing rent out the door every month! And you’ll even have more purchasing power when you buy (thanks to the tax benefits), so you can move up to the home you deserve without spending more.”
These scumbags are still trying to shear the sheep. I wonder how many of the homes these people are selling will be in foreclosure two years from now. It is unbelievable that this kind of crap financing is still being offered.
As for me, I will happily keep throwing rent out the door every month. As for the tax benefits, they know where they shove them.
Keep the popcorn popping,
Red Baron
My current rent vs. own calculator shows nearly $2400/mo. net average benefit for selling at the end of ‘04. (43 months) My average rent for the period has been $1600/mo.
When that number finally starts going down I will know it’s time to start looking.
Trump is gloating over Dubia and is going to build a Trump Tower.
Time to get out if you are in over their.
“Time to get out if you are in over their”
In over their heads?
‘On a positive note, housing inventories are beginning to move across all the areas, and some houses are even getting multiple bids, but at prices 30% to 70% below FY05 peak price levels.’
Sales at 70% below FY05 peak price levels will obliterate the comps. Affordable housing for everyone!!!
I know of at least one house in my area that quadrupled in “value” from 2000 to 2007. She put maybe $20K into improvements, and HELOC’d about half of its supposed peak value.
Her private lender isn’t foreclosing because he “feels sorry for her”. Lucky gal.
In the world of business, that rings a little funny. Just how private is her lender…?
lol…I was thinking the same thing
From the Harvard report:
“Economic weakness does not bode well for income growth in the short run, and housing cost pressures are unlikely to lighten in the long term. Much of employment growth will be in part-time and low-wage positions, the study said.”
There are 5 million new and existing homes for sale in the US right now, most of which are grossly overpriced relative to rents (more than 15 times annual rent) and incomes (more than 3 times annual income). Who will buy these homes when most employment growth is in part-time and low-wage positions as US companies continue to shift their footprint offshore? This country is in for a rude awakening as living standards decline more sharply than at any time since the Great Depression.
Do the following to survive the current depression: (1) Get and keep a job (2) Rent so you can be mobile for your job (3) Save at least 25% of your after-tax pay (4) Eliminate debt unless you can pay it off if you lost your job. For those who have seen this information, I apologize, but it is important, and it needs to be repeated.
Keep the popcorn popping,
Red Baron
go advice red barron which i have been following for years
actually i am saving closer to 30% of after tax income
““Across Britain, house-builders are mothballing developments. It is the biggest crisis since the 1930s, says Roger Humber, from the Home Builders Federation, which is pleading with the Government to take action.”
British builders are smarter than ours. At least they act in their own best interests.
They really didn’t. The UK saw a serious drop about when I started this blog years ago, but they got a false bottom and took right back off again. Just last week I posted an article with their lenders now taking multi-billion pound hits. IMO, the bubble is bigger in the UK, Spain, Canada, etc, than in the US.
spring 2004- it was wierd
bet BB thought he could do the same here
“IMO, the bubble is bigger in the UK, Spain, Canada, etc, than in the US.”
I thought ours was worse because we had more fraudulent practices in both lending and borrowing, but liar loans and straw buyers probably existed everywhere.
Is their Bubble bigger in the percentage of vanishing equity relative to GDP? or in terms of total housing inflation from baseline?
I thought ours was worse because we had more fraudulent practices in both lending and borrowing, but liar loans and straw buyers probably existed everywhere.
However, our base prices started out lower than most of Europe. Imagine that the entire US had California or NYC pricing–so we’d be paying something like $500K for 50 year old run down dump in Ohio.
The percentage increase from base pricing is more relevant than the actual amounts.
For example, I think a jump from 500K to 700K is not any worse than a jump from 100K to 300K in terms of eventual equity losses. However, in terms of inflation the 100 to 300 is much worse relative to eventual normalization of prices.
I don’t know about *worse* in Canada, but we certainly have one, for all the voices that keep shouting that we have no subprime here!
Worse in the UK and Europe, yes. London, in particular, has been insane.
Yes, we don’t have much sub-prime here, but we do have 40 year amortization mortgages here… Freedom 95 anyone? Get ready for 7 resets in your lifetime as a homeowner…
The whammy that the UK is facing, is the fact that everything is scary expensive ($10 gallon gas, $35 large pizza hut pizza, $10 pints @ the pub, and much more) and once real estate values start really dropping, things might resemble something out of “Oliver”, albeit updated a few centuries…
Harvard on restoring affordibility:
‘would take some combination of large price declines, interest rate reductions, rent deflation and unprecedented real income growth,’
1. Yep
2. Nope
3. Yep
4. BAWWWWWWHHHHHHHHAAAAAAAAAAAA!
Do academics ever venture outside?
i agree edgewater
incomes are flat to downward @ best
Inflation adjusted incomes were down 2000-2006. Weren’t they just great years?
I don’t get why they included rent deflation in this list. If rents decline, then house prices become relatively LESS affordable, not more.
Probably because declining rents would chase away more and more investors and keep them away - thus urging on further declines in prices.
Saw that on another thread this morning! Interest rate reductions?? Yeah, keep spiking the koolaid IDIOTS!
Are any MBS’s and CDO’s auction rate securities? It has come up at work. I thought they were pretty standard but subject to close out if the underlying debt obligations were refinanced and therefore taken out of the pool early but I could be very wrong. Auction rate is pretty darn complicated to me.
Is this the same stuff as what is shown on the ABX charts? Can someone give me a link? I need to do a little digging. I get suspicious when someone tells me that broker/dealers are doing something “out of the goodness of their hearts.” No, I didn’t collapse laughing. Yes, I wanted to.
Thanks a mil.
-Polly
P.S. - I love explaining mortage backed security tranches to my boss’ boss first thing in the morning….
Polly,
Wikipedia does a good job on ARSs. http://en.wikipedia.org/wiki/Auction_rate_security
Are MBS among them? Probably, I think a lot are (were) Ginny and Fanny bonds retooled into short instruments. No doubt private MBS issues were sliced and diced into them as well. i still have not seen a decent accouting of where all the morgtage debt has ended up–most estimates I’ve seen deal only with subprime or alt-A portions.
Will
“In the meantime, maybe Americans need to redefine what a home is, he said. ‘After all, a home is to live in primarily, not for buying and selling,’ he said.”
This is pure sacrilege. A home’s true value is not as place to live. Homes are for making money, loads of money.
Yes, I would never even bother buying a house unless some commissioned salesperson ‘assured’ me it would go up by at least double digits!
Yeah, uh.. guys a little late to insert sanity into the equation now, don’t you think?
That part got my attention too.
a home is to live in primarily, not for buying and selling
Yeah…what sort of Commie crap is this?? Living in a house is sooo 20th century. No one actually *occupies* the things any more. Houses are the new $500 poker chips in the grand casino that is 21st century capitalism. Step up, double down and roll the dice, my good suck–, uh, man.
“Loads” has been downgraded to “gobs.” Homes are now for making money. Gobs of money.
It is amazing how prescient Henry Ford was almost a century ago. When the “employees/serfs” of a corporation can’t buy your own product, who will? How much are we getting back from chindia? What exactly is the benefit of a “smaller” US footprint for the US company if, they are readily destroying their most profitable market?
I deal with India on a day to day basis… It adds 30-40% overhead to my day, and it is coming out of my employers paycheck. This is a direct relationship of how much it is really costing this company. BTW, If I could do things either on-line, or get them done through somebody who speaks english, it would not be like this… sigh.
Oh, well, I will keep on saving that 30-40% of my salary that comes from OT.
“‘A loft is more than a space,’ said Kristopher King, a project manager with Wecco of Charleston, a developer specializing in mixed-use projects. ‘You’re selling aesthetic, you’re selling a lifestyle. They’re sort of edgy. They’re urban.’”
No they’re pretentious and fake, especially built AS LOFTS, overpriced, and, generally, ugly as sin. They are incredibly cheap to build compared to anything requiring fine detail (or any detail for that matter). Boxes upon boxes filled with little China dolls (a.k.a. wannabes). Where are the aesthetics? And what is the lifestyle? Oh, I forgot, posing IS the lifestyle. Sorry. I take it all back.
I think the next edgy new housing trend for some of these poseurs will be to live in a cardboard box under the freeway.
Too funny. And I think you are all too right with this one. Edgy trendy people are often the first to get trampled, as people head for the exits. They are too busy making sure that everybody sees them wearing the right outfit, drinking the right drink and smoking the right cig. And never, ever let them see you sweat.
Hopefully they will have the sense to go to the local furniture store to find the right sized box.
Hold on now,
There are people living like that now. Nothing new, move along..
You know, *edgewaterjohn made a great observation in the previous thread about this very topic. This is where the developers really lost their way. By trying to brand the “loft lifestyle” as trendy, hip and sexy they completely lost their core customer ( empty-nesters looking to downsize simply and cheaply )
They’ll all be dead before the developers can even hope to get that turned around. What a waste of resources.
Prop 13 makes downsizing more expensive.
maybe this gay marriage thing will come in handy since, afaik, you don’t have to prove you’re gay… So, buyer just marries the seller.
They then transfer ownership of their property however they prefer. Since prop-tax under Prop 13 does not readjust on inter-family transfers, there’s no tax increase.
Then get a friendly divorced (unless they discover they enjoy that lifestyle..)
Some divorce or tax attorney might know if this is possible. If it is, do it quick because the state is sure to want to close the loophole.
Bigamy is still illegal, but if they aren’t already married, sure, why not? It’s legal for drunk heterosexuals to get hitched in drive throughs in Vegas and they don’t have to prove they’re mentally competent to sign a contract at the time.
It’s only illegal if you’re trying to scam the INS. I’ve heard of a lot of stories involving gay siblings… oh well, anyway… We queers could always move to Canada, I guess. Stubborn me, didn’t I know [your] “god” wants me to change my lifestyle… Wow, glad you know all about my life already and you barely know me… It’s like magic…
(Not directed at any of you… work got a little weird today.)
It’s cool, we take all types here. I just hope you don’t live in Bakersfield.
not a gator,
God wants all of us to change our lifestyles and nobody’s shortcomings are any worse than the other.
Lip
PS: I asked you this before but I think I ticked you off, sorry about that, but if you aren’t a gator, are you a hurricane or a seminole?
It depends when you bought. In CA you can carry over your property tax basis to your new home if you are over 55 (i think). If you bought way before the bubble you may be able to sell your $600,000 stucco box in Westchester that you bought in 1995 for $250,000 and buy a really nice condo in Palm Springs for $350,000 and keep paying the same property taxes……
….that is, if you can sell you Weschester house……I realize…….a big if……
Riverside does not recipricate with the property tax.
“Prop. 13 makes downsizing more expensive”
No it doesn’t.
If you still insist it does, convince me.
Mike
In their pure form, lofts are really big studio apartments. Recently, they are just studios with higher ceilings.
I thought lofts were always commercial spaces converted into residential. Since when did cookie cutter apartments become lofts??
I thik around the same time that new cars pretended to be classical cars of yesteryear.
Plus they used to be in buildings that previously had historical commercial usage but were converted for residential use. Now any new building in the city with ceilings 10 ft or higher, exposed ductwork, no walls to separate the bedroom, and/or concrete floors and/or ceilings, is automatically a “loft” while the term is still in fashion.
Talk about having to spend a lot of money on window coverings…
The higher ceilings mean higher utility bills. Or should I refer to them as lofty utility bills?
Here is a very sad example of ripping down something that makes a community charming and quaint and human:
http://www.signonsandiego.com/uniontrib/20060526/news_1mi26funky.html
and building bland lofts instead with the same “hip/cool” thing:
http://www.theloftsatmoonlightbeach.com/
These lofts are being built right now, very slowly, but moving along. They are now a wood framework with lots of obnoxious banners saying things like “Reserve your view now!” or whatever. I am actually repressing it and can’t recall these banners which indicate you can purchase the view, etc., although these lofts certainly do wreck the view that everyone had before.
That sucks! I used to be neighbors with Danny from the artists colony and he’s a great guy. Those condos have zero chance in hell of getting those prices. I moved away a year and a half ago, hopefully Lou’s records is still doing ok? SD is doing its
best to morph into a bland, soulless yuppie infested vortex of lameness like the rest of Socal. Glad I got out when I did.
Lous records seems to be doing ok:
http://www.lousrecords.com/
I haven’t been there in a long time . . . Unfortunately you are right about what’s happening in SD. VERY sad . . .
Man, that’s just the kind of thing I hate!
Locate what is kind of cool and attractive or interesting to people visiting the area or living there and DESTROY it, build overpriced condos and then sell the “cool.”
Lofts are homeless shelters for wayward pigeons and aging wannabe yuppie dingBATS
It’s not enough to say that lofts are edgy and urban. They neglected to say that lofts are hip.
Couldn’t have said it better myself, Az Slim.
“‘You’re selling aesthetic, you’re selling a lifestyle. They’re sort of edgy. They’re urban.’”
Cue up the homeless peeing on the sidewalks or with porta potties on the corner. Any minute now.
One hears the most amazing utterances and sees the most curious behavior when the meds wear off.
Those looking for the hip/edgy be forewarned - the building state/local budget crises will mean the meds will be in short supply.
Over at the Portland blog we’d just call that “urban grit”. You see, in Portland we are so smart and hip that it’s actually RUDE to say anything negative about the wino ( ’scuse me, “homeless” person ) lying in a puddle of his own urine on your building’s doorstep.
A caring, compassionate and enlightened citizen would offer to give him a few dollars so the poor fellow could call home and “get his life straightened out”.
Non-Portlanders can be so rude you know.
Unlicensed contractor tip: Just remove all the interior walls in your home/condo/apt and you got an instant edgy loft….just make sure none are a support wall….I’ve done that…..bad results.
Right, even the bathrooms. Just have a little room divider from Ikea to sort of ’seperate’ that “function”. Something sheer and silky so you can see your room mate is actually using… the facilities but not actually see his/her grunting facial expression. Because that would be gross.
Disabled unlicensed contractor says: Excellent idea DinOR….got 2 more walls to go on this job… and it’s still standin….then over to Ikea before they close….hope I make it…this limp slows me down kinda.
“National Mortgage News. “Senators Chris Dodd and Kent Conrad…are still trying to explain how they were recipients of ‘Friends of Angelo’ loans and falling all over themselves in the process. As most mortgage industry veterans know, FOA loans are not new.”
This isn’t even the best part of this story. Dodd has taken about 70 grand in donations from BOA and it appears that BOA pretty much wrote the Dodd-Shelby bailout bill.
FOA becomes FOB (friends of Bubba)?
BOA has king-kong sized brass balls. Trying to shift $300 billion woth of bad loans to the taxpayer. Do you think they’ll get away with it?
Not until GWB is out of office…..and the dirty little secret is that it will cost WAY more than $300 million once the new FHA refi loans (that replace the banks crap loans) start going bad….
Sheesh, like history is going to be kind to Dubya. Whatever. Anyway, I understand that it will probably cost a trillion in the end.
History, whose practitioners at least try to be objective (”wie es eigentlich gewesen ist” and all that), will be substantially kinder to GWB than the present conventional wisdom — shaped by partisans and borderline-illiterate journo-kids — has been.
The only way history will be kind to GW is if the neocons overthrow our democracy and appoint an information minister to re write our history books. It isn’t just partisan democrats who think this guy is a disaster. I’ll list his failures.
1. Putting partisanship ideology and religion ahead of science and reality. Brownie appointment (Katrina mismanagement are tip of the iceberg), supporting Rumsfeld, Abstinence only education, global warming,
2 Rolled back our constitutional protections from big government. A man who sacrifices liberty for security deserves and receives neither.
3. Taking the teeth out of regulation. Banks laughing all the way to the bank. I’d throw a lot of gov officials into this pile.
4. War in Iraq which depleted our military our finances, and our standing in the middle east. A war which drove up the price of oil giving Iran Venezuela Saudi Arabia and Russia ever greater power. Lac of controls on spending has meant billions upon billions have been lost to graft and corruption.
5. No F’n energy policy
6. As Dick Cheney said Deficits don’t matter to these guys. Tell that to the collapsing dollar and collapsing American standard of living.
PS: I wouldn’t throw illiterate as an insult when you are defending GW. Now you tell me why history should be kind to this utter disaster of a president.
FOBofA
“Katye Rhett is leaving her suburban James Island rental home for a 785-square-foot loft at One Cool Blow and plans to move in at the end of June.”
“‘It’s a lot bigger where I’m moving from, but that doesn’t matter to me,’ Rhett said. ‘I spend most of my time with friends downtown and I work downtown. I want to live where I work and play.’”
Wow another article where some clown gets duped into overpaying for one of these “hip” downtown condos/lofts. She even parrots the “live where I work and play” line from the recent Ga Tech grad.
$240k for a 785 sq ft condo in Charleston. That sure is a steep price tag for having a “lifestyle”.
One Cool Blow…….hahahaha!!!! Where do people come up with this crap????
Who knows….maybe that’s her idea of play.
That name sounds like something out of “Beavis and Butthead.”
Sounds like a name that sounds appropriate to me for Vegas Casino. Oh wait…
Ho strow?
http://www.onecoolblow.com/
OMG when i lived i Charleston before Hugo…this was primo ghetto area…and one of the worst area for flooding right near the cooper river bridge..hwy 17 crosstown
And Kayte you were duped that is NOT downtown below calhoun street was considered downtown…
OK maybe they got rid of the ghetto…and gentified the area…maybe wmbz can tell us more he lives there…
It looks like Stonehenge.
Stonehenge looks better.
First sentence says it all - it’s “different”.
aNYCdj… You are correct sir, that area was/is one of those places that you don’t stop at red lights at night if you happen to be driving through… Run don’t walk. It is not as bad as you remember though, much more taxpayer subsidization.
What’s with the name, One Cool Blow… Are they going to lay out ‘lines’ at the open house? Are all the guys going to be dressed like Don Johnson in Miami Vice?
The only thing getting ‘blown’ there is your money, you damn near live under the bridge, your river view is of a spoil island (the place where all the dredge material from the harbor bottom ends up). Ain’t no way in Hell you can walk to the market area of the peninsula(well you could,but not recommended) to ‘play were you work’. Charleston has long thought it was the Nexus of the South. Of course we are always a few years behind, so promoting ‘lofts’ as new and edgy would be par for the course. However they will sell them all, P.T. Barnum was right of course!
I wonder if she was renting from Richard C Davis of Trademark Properties. LOL
What happened to his show anyway??
Property Ladder, Flip this House, etc. have gotten much better recently and now show failures. I would love to see new shows going back and looking at how these ppl are doing now. I know I would watch. The problem is that it is harder to get sponsor’s. Perhaps viewership would be so high they could sell commercial space to those not in the housing industry.
Tim,
How about commercial REIT’s that own apartment complexes? And now a word from our sponsor:
“Don’t throw your money away on a mortgage when you_ can_ RENT! Visit us on-line at http://www.debtslaverysucks.com!”
Yep, Those clowns opted to paint the tables at the Charleston Crab House restaurant when did one of their hurry up re-dos. Of course it was for a friend, so he probably doesn’t mind watching the paint peel off of them.
HEY wmbz, i went to Nielsen Electronics on Meeting street and they had to have a security guard watch the cars….same area as the lofts….
i remember lots of strip joints for the navy base on spruill last time i was there was in 95 for my dj partners wedding….
i remember the new 24 hour walmart on rivers ave, and how they were tearing down the short stay trailer parks on Ashley Phosphate rd…yes you could rent trailers by the week…
My friend lives here in Yonkers, and she goes back 2-3 times a year..flies down and rents a car stays with family…..i was thinking or driving down with her maybe later in the year…just to see how things changed.
http://jettstarr.com/index.php
All the Charleston gifts you can imagine….its her website…
Dodd’s Housing Bill Again on Senate Floor
By Jesse A. Hamilton
on June 23, 2008 12:37 PM | Permalink | Comments (0)
The debate continues this week on the major housing bill authored by Sen. Chris Dodd (along with the ranking Republican in his banking committee, Sen. Richard Shelby), and the Senate could end up voting on the bill soon. (Though an approved bill may slam against the brick wall of a Bush veto threat.)
…
The bill also has its many critics, drawing the kind of slams we’re seeing every day in the On Background comments area. Most want to talk about the Hope for Homeowners portion of the bill, which would establish government guarantees on refinanced home loans.
Just this morning, readers were weighing in. Kathryn Modell wrote: “OK, That’s it! I am so disgusted with the Democrats handling of this issue that I will BE VOTING REPUBLICAN for the first time in my adult life. This bill absolves these criminal banks of almost all responsibility and lets TAXPAYERS pay billions for their bad bets.”
Another reader, John, said: “This $300 billion Dodd-Shelby bailout is an absolute crime.”
Much of the animosity toward this bill suggests $300 billion in your taxpayer money is being spent to help out the banks holding subprime mortgages. I have to point out that the money source for this loan guarantee of $300 billion actually comes from revenue of GSEs (loan giants Fannie Mae, Freddie Mac and the federal home-loan banks.) It’s not taxpayer funded, which was Sen. Shelby’s main contribution.
And the money is actually supposed to sit in a kind of fund that will guarantee newly refinanced fixed-rate loans that replace questional subprime loans (only on primary residences, not investment property.) Both the buyer and lender have to agree to refinance, and the amount of the financing must be less than the current market value of the home, so the chance of default is less. Those that do default will be backed up by the fund.
This stinks to high heaven. Of course BOA wouldn’t have taken on Countrywide if they didn’t have a bailout in mind so we shouldn’t be surprised. What kills me is the internal documents from BOA that essentially show BOA wrote the bill. How in the flippin’ hell do they expect to get away with this?
The Dodd Shelby bill limits the banks loss to 10%. 10 lousy percent, Cali is down 30% already and we are just getting started. This is a $300 billion bailout and they are saying probably trillion dollar bailout in the future.
Oh and they stuck a little stinker in the bill that each and every electronic financial transaction such as Ebay, Google Checkout, Amazon and all credit and debit transaction have to be reported to the federal gov.
I’m no fan of taxes but I’m tired of the entire “Undergound Economy” getting away with this stuff. We all know someone that makes their living off of Ebay etc. These wheeler-dealers have nice things, lots of them. Of course they don’t have IRA accounts because that would tend to imply that they had an income?
Collectors, scrounges and everybody from the guy that sells used appliances to laundry-mat owners and the whole cash economy getting over on the system. What do any of you want to bet if that portion of the bill survives Ebay’s traffic will be cut by about 75%? They’ll just crawl back under their rock and do it the old fashioned way or set up other sites.
Ebay is doing a fine job of effing themselves with their new feedback system, seller ratings, higher fees and so-called rewards for good sellers. A buyer can now only receive positive feedback even if the @sshat didn’t pay for his widget. Seller fees are beyond greedy. The star rating system for stuff like shipping is flat out stupid. You can never achieve “good seller” status. It’s like when Cinderella’s stepmother says “I said if”.
I’m not in favor of it because of the privacy implications. I don’t care for the goverment having ALL that information. It’s too intrusive. It does piss me off though that like you said there are people who make their living that way and never pay a dime.
DinOR
You know i am a fan of Pres Bush, he has made it easy to work underground, why do you think the economy took so long to start tanking?
Bush is the Greatest Pres we ever had in creating Undeerground Jobs…..gotta give credit when its due…right?
——————————————
I’m no fan of taxes but I’m tired of the entire “Undergound Economy” getting away with this stuff.
That’s so all those newly rescued home debtors cannot be bailed out again unless its proven they were not ‘frivolous’ with their money on ebay, amazon, etc.
Heaven forbid they spend on those sites before paying off their mortage - like that never happens!?
Oh I’d never thought of that? Kind of like when people go on a spending spree right before declaring bankruptcy. So if someone is off-loading all their “toys” for cash and then claiming they have ZIP to cover their short-sale or whatever.
Probably a lot of ’stuff’ already being pawned as we speak. The other day Ben’s post was about Rolex’s being sold at FL ‘garage sales’. Interesting.
Fine and dandy, but where is the outrage about the Wall St. bailout pushed by Helicopter Ben and Paulson? Especially since there doesn’t seem to be any conditions (CEO pay reform, transparency requirements, usury laws, etc.) coming with all the free money.
While we’re at it, the other party is attempting to bankrupt the Treasury with “preventative war” against Iraq and maybe even Iran.
I’m not fond of the Democrat bailouts, but if all one cares about is misuse of tax dollars, then there is plenty of blame on both sides of the aisle.
I don’t understand why anyone thinks voting republican or especially voting for John McCain is the answer. Republicans are just as bad. And I still remember Grandpa’s role in the Keating scandal. His sleazy banker buddies showered him with gifts, trips to the Bahamas and dirty money and he did his best to get the goverment off their backs. And McCain is still in bed with the lobbyists, one of them probably literally.
How many hundreds of thousands of dollars were in McCains bribe envelope?
Beats me, I know he made 9 trips to the Bahamas though.
Once again, if Sen. Obama is all about “change” he should jump on Dood, Shelby and this bill with both feet, if he had the stones to do it I would believe him and gladly vote for him.
Jeff,
How many hundreds of thousands of dollars were in McCains bribe envelope?
Wickedheart
Trust me I am not a McCain supporter.
If you do some research, you will find that there was no evidence against him. But he was the only Republican linked and the Democratic controlled committee would not let him out. The four others were Democrats.
Professor Bear, you’re overlooking the “federally insured” part of the deal: when everything goes under, it WILL be dumped onto taxpayers. There will not be enough money in those accounts to cover trillions, not hundreds of billions, in losses. The whole point of the bill is to allow banks and speculators to take minimum losses, and dump the rest onto the government.
Incidentally, most of the Republicans in the Senate say they will be voting FOR the bill, just like most of the Democrats. And they couldn’t care less about the appearance of impropriety. I suspect most are themselves upside down in their own mortagages. Note that Bernanke–the big pusher of bailout plans–bought his house at the height of the bubble, and has a vested interest in keeping prices from falling further. Most of the clowns involved are probably trying to save their own hides and fortunes by dumping the losses on everyone else. Unfortunately, they hold positions where they can do just that, with nobody to stop them. They’ve already said they enough votes to override any presidential veto.
It may all end up in court at some point. I wonder if the Justice Department is doing investigations on all the bill sponsers and co-sponsers and well as those claiming they’re going to vote for it. It shouldn’t take too long to see how many (and/or their relatives) bought or refinanced (like Dodd) during the bubble and are now in trouble. It also shouldn’t be too hard to find how many received recent contributions from BOA.
“I suspect most are themselves upside down in their own mortagages. ”
And this is why we need full disclosure from congress on the real estate they hold, and the mortgages we owe. Where is our intrepid investigative journalist of yesteryear?
we owe = they owe
“I wonder if the Justice Department is doing investigations on all the bill sponsers”
The Justice department was trashed by Gonzales, and in no way resembles its’ past self. Convenient, no?
It wasn’t trashed it was converted into a wing of the Republican party. They could use it to remove political opponents. Ask Georgia Thompson and Bud Selligmen about their time in jail on trumped up charges and ask Judges who had their careers ruined by this blatant political hack. Gonzolles should be dropped into Guantanamo.
Without even the semblance of an impartial judge, you will eventually get tyrrany or anarchy.
This is getting weirder than fiction, literally. Anyone read The Hitchhiker’s Guide to the Galaxy? Remember the part when they went to visit the legendary planet Magrathea, home to the now-collapsed planet building industry, only to find out it the entire planet was closed until economic conditions improved? Looks like the jokers at Quintain Estates are taking a page out of that book:
‘We are preparing our premium product for the return of equilibrium in the markets… and will only develop and market this landmark development when propitious conditions return.’
Oh, dang, you would have to mention Hitchhiker’s. Now I’m going to fixate on the number 42 for the rest of the afternoon.
Thanks a lot ;-).
(sigh) Time for another trip to Wikipedia.
Aren’t you glad you read this blog. I’ve made many trips to Google, Blano.
Can we then blame the insane run up on housing prices on the Infinite Improbability Drive?
‘We are preparing our premium product for the return of equilibrium in the markets… and will only develop and market this landmark development when propitious conditions return.’
I hope you aren’t paying interest and principal payments on any loans you used to buy this “landmark development”….you may be waiting for a while…..
At one point I’d read about some of the big public builders talking about “moth balling” homes. I guess the idea was that they would somehow “shrink wrap” entire subdivisions and sit on them “until the market improves”.
Didn’t go far.
How do you spell ZAPHOID BEEBLEBROX?
Umm… the same way?
Please hand me another Pan Galactic Gargle Blaster (the only drink in the Universe that comes with its own rehabilitation program!), stat!
“‘They didn’t have a good exit strategy,’ said David Hendler, an analyst at CreditSights Inc. in New York. ‘They felt there would be a market for the product they were producing, or they’d always come up with the next newfangled structured-finance instrument. Now they’re stuck holding the bag.’”
Old Dime bag: a toke’n amount of marijuana
New Dime bag: Wachovia’s leftover assets
‘If the economy really turns sour and we start to lose lots of jobs, the worst may be yet to come.’”
We have reached that point in most of the bubble states. No pain, no gain and there will be much more pain in the upcoming hosing news as more and more lose their jobs. Inflation, oil and gas and job losses will have a serious impact on the consumer this year and most of next year.
If anything is going to go wrong, it’ll happen at maximum velocity.
I don’t know who said that originally, probably someone like Oppenheimer.
Good luck in your new job and your move. Please keep posting as much as you can once you get settled. You and Olympiagal are true treasures.
hudson & marshall house auction report from june 23/08 here in Sacramento
full but not overly crowded room. I stood on the left side wall by an elderly bid prompter from 1:30 until the end at 3:45pm.
participants = 33% indians, 33% caucasions, 20% asian. rest were bottom feeders, vultures & assorted riff raff. present self included, naturally.
many brokers/agents working the room. in fact, one barney fife looking asian guy bought a great looking house for 180k. many people turned around to compliment him … then the indian predators mobbed him, showing him their own houses for sale & jockying for a deal until an auction official had to run em off. poor guy was looking fearful for his life. those indians can be ruthless where monehy in concerned. they also surrounded him when the auction ended until he finally just had to push past them.
I was standing not more than 3 feet away from all of this. (gray shirt/jeans/blonde hair/glasses . . . for anyone else who noticed.)
most of the homes in good areas (El Dorado Hills, Cameron Park) were skipped over & not presented for auction. no explanation given.
very reasonable prices during most of the auction. bad areas of South Sac houses went for average $50,000. some less. if you wanted a house for shelter this was not a badplace to be, as long as you did yer homework. bidding frenzy erupted over the last 7 or so homes at the end. I think they overpaid.
didnt seem like any shill bidders were there. it moved pretty fast. one property came back for re-bid later with the mandatory scolding lecture from the actioneer.
wells fargo, gmac, and a few other minor lenders had tables right outside the front door. wells had the most reps at table. didnt see BOFA or any other major lenders. auction staff also had an info table. they were very polite. free soft drinks & coffee was a nice touch.
overall pleasant experience. bought nothing myself as I just got back into town. looking forward to the upcoming REDC auction in July.