It’s REO Speedwagon, California-Real Estate Style
The Voice of San Diego reports from California. “The county’s housing prices logged a 22.4 percent drop compared to the same month a year ago, according to the most recent Standard & Poor’s/Case-Shiller index for April 2008 released Tuesday. Compared to the peak in November 2005, the county’s overall house prices were down 27.9 percent. Prices sunk to a level last seen in late 2003.”
“A total of 6,201 foreclosure-related notices went to county households in May, marking a 17 percent increase from the month before an 84 percent increase compared to May 2007, according to RealtyTrac.”
“Longtime real estate broker Jim Klinge’s listings are either for banks, who just want the repossessed properties sold, or for sellers who are willing to lower their prices to attract buyers, he said. He predicted the index will show another 20 percent drop in the highest tier by the end of the year.”
“‘That’s probably going to be a result of sales slowing to a crawl and the only things that are going to be selling are the things that are selling for nothing,’ he said. ‘Because that’s what everybody is willing to pay. Statistically, it’s a mess.’”
“Some sellers in the region have decided to wait, expecting better conditions in a year. But they might face a struggle if they’re expecting the statistical measures like the median price or the Case-Shiller index to support higher prices in a year, Klinge said.”
“‘They’re crazy, especially if they’re hoping for statistics to help them,’ he said, ‘because statistics are going to be showing the foreclosures.’”
The Union Tribune. “San Diego County foreclosures and defaults remained at historically high levels last month, with troubles spreading to previously untouched coastal markets, DataQuick reported. Foreclosures reached a record 1,556, up from 1,143 in April and nearly triple the 553 posted in May 2007.”
“‘It’s still mainly a problem for South County and certain inland areas,’ said DataQuick analyst Andrew LePage. ‘But it’s not as if the coast is clear. The problem is worsening a bit on the coast and in much of inland North County.’”
“Jan Terry faces foreclosure on a $935,000, 2,300-square-foot house she bought a couple of blocks from the coast in Carlsbad early last year.”
“Terry acknowledges that she made a mistake in getting a high-risk loan for the investment property, but she thought beach properties should have been a no-brainer money maker.”
“‘Based on the way I could see the market going,’ said the one-time real estate agent, ‘I would make a few bucks.’”
“But then the mortgage market tanked, her tenants left, she moved back in and her business partner skipped town. Terry now faces bankruptcy, eviction and possibly living on the streets.”
“‘My confidence level and credibility are probably shot,’ Terry said.”
The Monterey County Herald. “California’s foreclosure tide isn’t ready to start ebbing just yet. With additional waves of adjustable rate mortgages due to reset later this year, the state’s default numbers aren’t likely to level off in 2009, Leslie Appleton-Young, chief economist for the California Association of Realtors, said Tuesday at the Monterey County Association of Realtors’ annual meeting.”
“Come August, California will be three years into its down cycle, said Appleton-Young, and 2008 won’t likely be the bottom.”
“‘We still have a significant number of foreclosures ahead of us,’ she said. ‘We probably about about two years before we work ourselves through the foreclosure situation.’”
“In April) Monterey County median prices dropped to $399,900, a 7 percent decline from March and 47.4 percent below the median price in April 2007.”
“The numbers don’t indicate that property values in Monterey County are plummeting, said Appleton-Young. Rather, they’re an indicator of where the most sales activity has shifted, as first-time home buyers and investors begin to take advantage of deals at the lower end of the price spectrum.”
The San Francisco Chronicle. “A closely watched real estate market analysis found regional home prices fell at an accelerating pace in April, setting yet another record low, but some experts warned that the growing sales of foreclosed properties are skewing the numbers.”
“But the overall direction of the market remains clear: downward. A third study released Tuesday found that U.S. homeowners have lost more than $4 trillion in real estate wealth since the market peak, or about $50,000 each. Last month, foreclosures represented 43.3 percent of all home sales in Contra Costa County and 26.8 percent in Alameda County, according to DataQuick.”
“Case-Shiller is a repeat sales index, meaning it tracks only the actual price gains or declines for homes that have traded hands at least twice. In the current market, the homes that have done so recently increasingly tend to be foreclosed properties, said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at UC Berkeley.”
“‘It’s biasing the numbers in a way that makes it look a lot worse than it really is for the typical homeowner,’ Rosen said. ‘I’m a bear, so I’d go with it if it were true.’”
The Press Democrat. “A year ago, Linda Elliott could only afford a condominium. On Wednesday, she closes on a foreclosed three-bedroom Santa Rosa home, paying $303,000 for a house that sold for $540,000 four years ago.”
“‘It feels wonderful. I don’t have to rent. I have security for my children,’ she said.”
“Elliott is not alone in finding deep discounts at the lower reaches of Sonoma County’s housing market where distressed properties dominate.”
“While she feels sorry for the family that lost the home to foreclosure, Elliott seized the opportunity, finding plenty of company among buyers looking for bargains. ‘If you don’t show up to make the offers on these homes, you’re not in the game. You’ve got to jump in,’ she said.”
“A frenzy of sales at lower price ranges has created bidding contests among first-time buyers and investors alike. Those who miss out on their first choices often find ample alternatives.”
“Elliott was outbid on two homes. The first time, the bank listed the home for $240,000 and it sold for $280,000. The second home was listed for $255,000 and sold for $279,000. The lender sought $299,000 for the home Elliott purchased for $4,000 more, a relative bargain in that price range these days.”
“‘I feared I missed the boat, but I didn’t,’ she said. ‘There’s more and more foreclosures coming on the market every day.’”
The Manteca Bulletin. “It’s REO Speedwagon, Manteca-real estate style. REOs - or foreclosed real estate owned by banks - are rocking the Manteca housing market just like the Midwestern band of the same name did the power ballad rock scene of the 1970s.”
“‘REOs are driving the Manteca market today, that’s the way it is,’ noted Sid Reams who has been tracking Manteca resale housing stats for almost a quarter of a century.”
“In the past week in Manteca…thirty-two of the 50 new listings were foreclosures. Eight of the 13 homes that went back on the market were foreclosures. Eighteen of the 29 homes that had reductions in prices were foreclosures.”
“Forty-three of the 53 homes that went pending were foreclosures. Twenty-seven of the 30 homes that closed escrow were foreclosures.”
“Of the 456 homes now available in Manteca, 165 are foreclosures and 199 are short sales which are, for the most part, essentially a step away from being repossessed by banks. Foreclosures account for 264 of the 375 homes that have closed escrow so far in Manteca this year.”
“Reams said he’s the busiest he has ever been with 10 sales pending. He noted that seven out of the 10 buyers are Manteca residents. ‘That was unheard of even 20 years ago,’ Reams said of the concentration of Manteca buyers thanks to the big drop in prices. ‘It’s a once in a lifetime opportunity for many Manteca residents to own homes.’”
The Sacramento Bee. “California Attorney General Jerry Brown filed a lawsuit Wednesday against the nation’s largest home loan lender, charging Calabassas-based Countrywide Financial Corp. with deceptively pushing homeowners into risky, mass-produced loans that have caused thousands of residents across the state to lose their homes.”
“Brown joined the state of Illinois, which filed a similar lawsuit Wednesday against the lender. Both states are alleging that Countrywide’s practices are liable for thousands of foreclosures that have damaged their economies and housing markets.”
“‘Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market,’ Brown said in a statement Wednesday.”
“Now thousands of borrowers across California are defaulting on those loans. The lawsuit notes that 20,000 Californians lost their homes in May alone and 72,000 were in default, meaning they were at least two months behind on payments, though not all were Countrywide borrowers.”
“The lawsuit also cited Countrywide’s own February 2008 records that 27 percent of its subprime loans were delinquent.”
“Six pages of the lawsuit deal with an especially risky type of Countrywide loan called pay option ARMs. The lawsuit says that 19 percent of Countrywide’s 2005 loans were pay option ARMs, many made in California.”
“In 2005, pay option ARMs were 18.7 percent of all purchase loans and refinancings in El Dorado, Placer, Sacramento and Yolo counties, according to data from First American Core Logic, LoanPerformance.”
“That rose to 26.7 percent of all loans in the first nine months of 2006, according to the firm.”
“Brown’s lawsuit alleges that Countrywide lowered its lending standards to place large numbers of its loans in the ’secondary market,’ a term for packaging them into profitable mortgage-backed securities and selling them to global investors. The suit alleges that the company set up a division in Texas to grant exceptions to even those standards.”
“Countrywide and its affiliates was the largest home loan lender from June 2005 to June 2007 in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties. The lender made 34,304 loans during that period, 7.5 percent of all home purchase loans, refinancings and home equity loans, according to DataQuick ”
“About 20,000 homeowners in the region have lost their homes since the beginning of 2007, according to Foreclosures.com and DataQuick. Thought not all are Countrywide loans, the foreclosures have caused home prices to plunge throughout the region.”
“In May, more than half of all existing home sales in the region were heavily discounted bank-owned foreclosure properties, DataQuick reported.”
“In April) Monterey County median prices dropped to $399,900, a 7 percent decline from March and 47.4 percent below the median price in April 2007.”
“The numbers don’t indicate that property values in Monterey County are plummeting, said Appleton-Young. Rather, they’re an indicator of where the most sales activity has shifted, as first-time home buyers and investors begin to take advantage of deals at the lower end of the price spectrum.”
Prices are off by nearly half since April 2007 and a 7 percent decline over one month occurs at an annualized rate of
((1-0.07)^12-1)*100 = -58.1 pct.
Exactly what is LAY’s definition of plummeting?
See, now that the median price is going DOWN, they want to talk about how it’s not always a good measure of individual property prices. Did she open her fat greedy mouth about that on the way up? Not a chance.
And she’s right, if you suddenly sell a lot of 100k properties and stop selling many 500k properties, you’ll see a massive shift in median price.
If you had 5 houses sell last year in may for :
220k
240k
330k
400k
500k
and this year you get these five selling :
180k
185k
200k
260k
460k
You see the median drop from 330k to 200k, a huge drop, whereas an actual house may have dropped only 10ish percent, not 40%.
“‘That’s probably going to be a result of sales slowing to a crawl and the only things that are going to be selling are the things that are selling for nothing,’ he said. ‘Because that’s what everybody is willing to pay.”
In the depression that has already started, nothing is all most people are able to pay. Finally the Realtors (TM) are figuring it out.
It is very simple. When you can’t earn any more, you can’t borrow any more, and you can’t save any less, that is called hitting the wall, and that is what consumers all over America are experiencing.
Keep the popcorn popping,
Red Baron
“nothing” = actual property value……well, almost.
rotflmao
See, now that the median price is going DOWN, they want to talk about how it’s not always a good measure of individual property prices. Did she open her fat greedy mouth about that on the way up?
Yea… on the way up when we talked about homes becoming larger/fancier it was “bitter renters.”
A dark night is approaching. It wasn’t the prepared who hit the bread lines in the 1930’s. Note: I still think deep recession. But man am I getting nervous about the economy going forward.
Got Popcorn?
Neil
From Wisconsin…
The Great Summer Toy Sale continues…
On one high traffic street in nice suburb near Milwaukee, the following where parked along side the street with For Sale signs.
A late model GMC Yukon with a big boat and trailer combo package.( with pretty flag rope all along the boat railings no less)
A red BMW 325xi something or other.
A 2006 Lincoln towncar.
An older Dodge Stealth.
Two big Harley’s.( off street-driveway)
These are people from nice neigborhoods(220k-275K homes) sneaking out early in the AM’s and PMs in the HOPE of making a Sale. This is just ONE street
What are you seeing ?
Three blonds under the Christmas tree: Ho, Ho, Ho
“You see the median drop from 330k to 200k, a huge drop, whereas an actual house may have dropped only 10ish percent, not 40%.”
Your argument is correct, but moot, as the Case-Shiller index is showing comparable drops without suffering from the confounding effects of changing quality of homes that are selling on the measured price level.
Oh, I’m not cheerleading at all. I’m saying it’s hilarious how suddenly the median price should be pooh-poohed according to the NAR when they’d scoff at people pooh-poohing the median price increases back in 2006-2007 when it was obvious that nobody was buying on the lowend because credit had just gotten that tight.
But you’re right, I should have said “Check out Case-Shiller for a much more accurate view on price declines.”
Unfortunately, Case-Shiller doesn’t break down by more than giant metro regions, so you can’t check out the Case-Shiller for say, Palo Alto, or Beverly Hills.
Good call, SFBB. That had been discussed here 2 years ago and is now happening.
You don’t know how many “discussions” I got into with people who couldn’t understand how the median could be affected in this way.
My argument was that a neighborhood median along with $/sf was a better measure.
OK, I’m beginning to lose my grip on reality. There is so much BS out there coming from every angle I see conflicting stories on the SAME PAGE on Google only to have the less desirable one be removed shortly thereafter.
So I am unofficially dubbing this website my “Sanity Circle”. I must read from the pages daily to remain free from the perpetual stupidity barrage on both my consciences. I pledge to remain JT free now and forever never to partake in the kool-aid communion, and will not buy a home until the bottom is reached AND we are on the UPSIDE SWING.
Thank you my anonymous friends i have never met in person.
I think what she is saying is that the numbers are skewed in that the value of the average house has not really fallen by such percent, but rather that what is selling the most right now is foreclosures in inferior neighborhoods (e.g., if you rated house desirability from 1-10 there are more 1’s selling right now than historically, messing up the mean). Evaluating the average price drop by comparing apples to apples would require much more work than taking the median.
I was not ignoring the other responses but didnt see them. I guess we were all writing simultaneously.
–
“Exactly what is LAY’s definition of plummeting?”
LAY’s definition is taking the plunge and getting screwed. That is also the definition of most marriages.
Jas
Remember the days when getting screwed only happened after marriage?
I lived a lifetime of fear at 20 when my now-wife of 35 years was late for 2 weeks - followed by a sheer happiness. I never knew Kotex was just another name for freedom.
Funny
***** “Come August, California will be three years into its down cycle, said Appleton-Young, and 2008 won’t likely be the bottom.” ****
As soon as I see the name”Leslie Appleton-Young” I just disregard anything at all she says. and I cant believe after her cocky “marin real estate wont drop .. yadda yadda … not in my lifetime ” comment, that anyone else would either.
how the hell she keeps her job is a mystery? or maybe not if she used plan “M” as a last resort to her handlers. (plan Monica Lewinsky) I know as a realtor I would be leading a pitchfork mob calling for her resignation, embarrased to be associated with such a clueless spokesperson. btw, has she ever even published a retraction? admitted to an error? see, thats what rankles me about such egotistical blowhards; they are NEVER wrong, and rather than just admitting they are flawed mortals like the rest of us they will spend so much wasted time thrashing about for excuses to justify their mistakes.
like farakhan. (what he REALLY meant was … no I mean it was actually thisaway .. no wait, you heard it wrong, my brother ..) !!!
And of course LAY knows all about Case-Shiller, and knows perfectly well that house values ARE plummeting, but she can say with a straight face that the median statistic alone does not MEAN house values are plummeting! …since we all agree, it does not mean that.
As to how she keeps her job, she keeps it with the subtle lie and the not-so-subtle lie. That’s what she’s paid FOR!
I guess she’s just trying to say that only the crappy houses are selling, and that’s skewing the numbers. Well, if only the crappy houses are selling, then I guess most of the demand is for crappy houses. And if all the demand is for the crappy stuff, then nobody wants the good stuff. And if nobody wants the good stuff, then what do you think will happen to the price of said good stuff? Will it continue going down; will it … PLUMMET? Hmmm, isn’t that special?
–
A better indicator of the trend…
6-Month Annual Rate Change, Case-Shiller Home Price Index:
Las Vegas -36.8%
Phoenix___ -35.4%
Los Angeles -34.1%
San Francisco -33.6%
Miami_____ -32.7%
San Diego__ -30.8%
The usual suspects all — areas are full of Foreclosurevilles.
Jas
Herd it from a friend, who heard it from a friend that Lardtown’s been foolin’ around…
“‘REOs are driving the Manteca market today, that’s the way it is,’ noted Sid Reams who has been tracking Manteca resale housing stats for almost a quarter of a century.”
“But then the mortgage market tanked, her tenants left, she moved back in and her business partner skipped town. Terry now faces bankruptcy, eviction and possibly living on the streets.”
Time for you to fly, Ms. Terry.
They’re riding the storm out: Waiting for the fallout and watching for the snow.
REO will drive the market for many moons.
I’m thinking of buying an REO Speedwagon shirt to wear when I go to open houses!
“But then the mortgage market tanked, her tenants left, she moved back in and her business partner skipped town. Terry now faces bankruptcy, eviction and possibly living on the streets”
935k for a house on one income is retarded.
Can she not rent a rental like the rest of us?
Everyone “knew” she was going to be a gazillionaire by buying a house.
BWAHAHAHAHHAHAHHHHHHHHHHHHHHHHHHHHHH!!!
Can she not rent a rental like the rest of us?
Answer:
“…said the one-time real estate agent”
Probably not in Carlsbad now that she’s no longer pulling down six-figure commissions.
She might be able to afford rent on a studio in National City.
Or Tijuana.
I guess she should come to Maine. Whole houses for under a thousand a month, if you don’t insist on an ocean view.
You can rent for a thousand a year in TJ, if you have the guts.
“But then the mortgage market tanked, her tenants left, she moved back in and her business partner skipped town. Terry now faces bankruptcy, eviction and possibly living on the streets.”
There’s a Country Western song in there somwhere!
All it’s missing is a broke-down pickup and the hound dawg running away.
Jan Terry will soon be JaniTor-ry. I’m sure she can get a rental by scrubbing toilets for a living.
“‘REOs are driving the Manteca market today, that’s the way it is,’…”
REO LardWagon!
Die-Lard
Staring Bruce Willis
“Of the 456 homes now available in Manteca, 165 are foreclosures and 199 are short sales which are, for the most part, essentially a step away from being repossessed by banks. Foreclosures account for 264 of the 375 homes that have closed escrow so far in Manteca this year.”
Would Mr. Bruce Willis ever visit Manteca? I bet they use a studio somewhere in Canada.
–
“…but she thought beach properties should have been a no-brainer money maker.”
No-brainers are for no-brains dimwits.
Jas
Peter Schiff described it well on his radio show last week. We were told that the way to get rich was to buy a big house and fill it with expensive stuff. And that really appealed to people, on some deep psychological level.
One of the Deadly Sins: Gluttony.
“‘It’s biasing the numbers in a way that makes it look a lot worse than it really is for the typical homeowner,’ Rosen said. ‘I’m a bear, so I’d go with it if it were true.’”
It is difficult to say what has become of the market value of homes which have not sold twice in recent years. However, I suggest that homes whose values have not declined by much or have increased in recent years are more likely to have sold twice than those whose value has gone down. We saw this after the .com crash in the early 2000s, when East Bay homes sold like hot cakes and Silly Valley home sales ground to a near standstill. My guess would be that Silly Value homes had dropped much more in market value than East Bay homes, leading to a great reluctance of their owners to sell them.
Further, which homes are foreclosed is much more likely to depend on when the home was sold and with what kind of financing than on by how much the market value of a home has changed. For example, flipper-owned I/O-option-ARM-NINJA-subprime-mortgage financed deals at the 2005 bubble peak typify homes likely to be foreclosed. By contrast, homes whose values have dropped by a great deal but which were purchased before the start of the bubble are less likely to be currently showing up on the market as foreclosures, as the owners are likely to still retain positive equity.
All told, while it is clear that there is a possible bias in using the sample of homes which sold twice to characterize market values for the entire housing stock, it is somewhat unclear whether the Case-Shiller index measure of price change is biased up or down from the underlying change in latent market values.
‘I’m a bear, so I’d go with it if it were true.’”
…he said as the horns conspicuously protruded from the head of his bear suit.
“Pay no attention to the ring in my nose.”
“Pay no attention to my ever-lengthening nose,” said Pinocchio.
Upon further inspection of Mr. Rosen’s bull horns, it was discovered that they were not really bull horns at all, but rather … (scroll down) …
DEVIL’S HORNS
Also note that homes that have been sold twice in relatively quick succession could have been improved and flipped. So there has always been a possible upwards bias, since money was added to the house to improve it that doesn’t show up between the two transactions.
Yes, I know a lot of those “improvements” were dubious at best, but still, real money was in fact spent improving them to enable them sell for a higher price, which is in fact the point of legitimate flipping.
The untold story is how much money was spent improving houses that then stayed flat or declined in value…
“‘My confidence level and credibility are probably shot,’ Terry said.”
No Terry, I think you should be shot. Also, I don’t think you had much credibility in the first place. Come to think of it, don’t ladies usually spell it Terri, dotting the i of course. I guess your gender is probably shot too.
Terry is her last name.
But thank god for Jan Terry. She provides such laughter to the rest of us. A realtard that drank the koolaide and it bit her on the ass.
Even worse. People whose last name is a first name has to be in my top ten list of pet peeves.
Seriously, that’s a peeve of yours? Its not like they had a choice in it - should they change their name? How about this, the parents can give them a first name thats a typical last name, like O’Brien or Smith - a naming convention for a parallel universe. Would that satisfy you?
And don’t worry, I’m not defending myself, just attacking stupid peeves. For today.
Hey Hey Hey! I’m a first name Terry and you’re hurting my feelings. Therefore, I’m going to need some sort of government bailout.
Yes, they should change their name. It assaults my sensibilities. I guess you would say that my pet peeve of “blondes, especially fake blondes, who have brown eyes” is stupid and outrageous. My aesthetic sense of justice is denied in these cases…we all have our cross to bear and I accept mine and don’t question it.
This all reminds of the Seinfeld episode with george’s father asking a simple question…
FRANK: Let me understand, you got the hen, the chicken and the rooster. The rooster goes with the chicken. So, who’s having sex with the hen?
GEORGE: Why don’t we talk about it another time.
FRANK: But you see my point here? You only hear of a hen, a rooster and a chicken. Something’s missing!
MRS. ROSS: Something’s missing all right.
MR. ROSS: They’re all chickens. The rooster has sex with all of them.
FRANK: That’s perverse.
Indeed. Now you understand my dilemma. Perversity, peeves, it’s all the same to me.
I didn’t realize I was tangling with the bastard son of Frank Costanza. My apologies!
How ’bout a list of your peeves? I think your madness needs broadcasting. Or do you have a website for them?
Well Friar, that’s kinda funny coming from a guy who’s last name is John.
Wouldn’t she want to really be unique and spell it Teri? Once had a neighbor who spelled it that way. I nicknamed her “Tee-rye.”
“‘My confidence level and credibility are probably shot,’ Terry said.”
In at least acknowledging what happened and the current state of her situation, she has more credibility than many that are still in the industry. Not that I’d trust her for advice on much of anything, but she doesn’t come off as delusional and/or calculating as do many in the industry.
“‘My confidence level and credibility are probably shot,’ Terry said.”
And it’s my bet she won’t learn a damn thing from the experience. Judging from her comments (like the one that said “with the direction the market was headed”….that’s direction of most markets head just before they plunge!) I would say that if Terry had any cash or credit left she would most likely be out right now catching falling knives. He ruined credit is a godsend. It will probably save her from herself.
I think her credibility was shot the day she purchased the house in the spring of 2007. By then any reasonable buyer would have seen the danger. Banks were already in trouble, Bear Stearns had already reneged on its Hedge Funds, interest rates were rising and there were daily news articles about the housing bubble in the LA Times.
Nope, you didn’t miss the boat Linda. But now that you’re on the boat, you may notice that it’s starting to take on water and is listing to one side. You might want to start bailing now.
aH…to catch a boat to StupidTown, and to be so happy! When her stunning buy is worth 200K, I really wish we could visit her, and see if the happy still applies.
…to catch a boat to StupidTown,…
♪ “Won’t you take me to, StupidTown…..won’t you take me to, StupidTown…” ♫ (Lipps Inc)
Don’t you just get that feeling that a lot of people that jumped into the market this spring are now uttering a collective “uh-oh…”.
I had a chance to talk with a guy last night who sold his Palmcaster home at the absolute pinnacle of the bubble. He netted 200K. He’s since pissed it away on deadbeat kids and absence of employment, but that’s a story for another day.
He told me about an aquaintance of his who also sold about 50 properties in the AV at or near the top. Well, this guy who had about a cool million in cash just couldn’t wait to spend it, so last summer he got back in big time, specializing in the highest end properties, so as to maximize gain.
He’s now lost everything, and is sleeping in his ex-wife’s spare bedroom. HAHAHAHAHAHAHA!!! Did I say HA!
What’s even funnier? This friend of mine told me this story and then said, “What a great time to buy!”
To your “HA” I’d like to add “HO HO”
He’s now lost everything, and is sleeping in his ex-wife’s spare bedroom.
——————————————
i betcha 1000-1 that he ain’t gettin no HO HO now.(:>
From the original post:
“A year ago, Linda Elliott could only afford a condominium. On Wednesday, she closes on a foreclosed three-bedroom Santa Rosa home, paying $303,000 for a house that sold for $540,000 four years ago.”
“‘It feels wonderful. I don’t have to rent. I have security for my children,’ she said.”
“Elliott is not alone in finding deep discounts at the lower reaches of Sonoma County’s housing market where distressed properties dominate.”
Remember, you read it right here: $300k-plus for a house is a deep discount.
And by taking on a huge debt, she now has “security” for her children! Yes, I know it seems paradoxical, but there you have it.
She can get even more security for her children if she gets married!
“ I have security for my children,’ she said.” I’m not sure what she means here.
“I don’t have to rent” - Buying a house is basically renting until you pay off the mortgage. After ten years, you only paid down $40,000 of your 300K principle.
The principal rule of thumb is to pay down your loan principal as soon as you can.
The principle behind this is that as you pay down the loan principal, by additional payments etc., the effective interest you pay is reduced.
If everyone adopted this principle, the principal outcome would be that we would not be in the mess we are today.
Now, get to the Principal’s office, and accept your gramattical punishment. As a matter of principle, of course.
grammatical
According to CAR “Calif. home sales soar 18% as prices swoon”.
I could have sworn sales were down in ALL states. Mind you, this came from CNN/Money and I’m not even too sure whether I believe that site anymore.
up 18% from May.
YOY, down like crazy.
You EXPECT an uptick into June. Peak of the selling season. But putting out the YOY numbers wouldn’t convince people that now is a great time to buy, of course.
“Home sales increased 18.1 percent in May in California compared with the same period a year ago..”
My bad. I didn’t read the article. So the knife catchers really have come out in force! Interesting! They should be setting the stage for the next wave of defaults, then.
“It’s REO Speedwagon, Manteca-real estate style. REOs - or foreclosed real estate owned by banks - are rocking the Manteca housing market just like the Midwestern band of the same name did the power ballad rock scene of the 1970s.”
My favorite song of theirs was “I can’t fight this foreclosure feeling anymore”
Cause I can’t fight foreclosure anymore
I’ve forgotten what I started fighting for
I’m gonna go and rip up all the floors
And vandalize the doors
Baby, I can’t fight foreclosure anymore…
Nice.
Hahaha, great stuff!
Riding the storm out
Waiting for the bail out
On a full moon night in the
SoCal real estate winter
My wine bottle’s low
Watching for the market low
I’ve been thinking about what
I’ve been missing by renting not owning
But you’re not missing a thing.
Laughing as FBs stretch for the ring.
Riding the storm out
Riding the storm out…
Bloggers beside me,
They’re here to guide me.
Letting me know that home is where your place is.
The news out there is frightening
But it’s kinder than the lightning bolts or the J-Tree.
It’s a good life to live when you don’t need a loan for the mortgage.
But you’re not missing a thing.
Laugh as FBs pawn off their bling
Riding the storm out
Riding the storm out
Riding the storm out…
OK, so when the Case-Shiller index was using flipped properties to represent comps, then the data were good. But when the same flipped properties go into foreclosure, thereby revealing the true value of said properties, the data are skewed. That makes no sense. If foreclosed properties are not true comps for nonforeclosures, then flipped properties are not true comps for nonflips. By this guy’s own reasoning, the bubble values were never real to begin with.
Shhh! Don’t start talking sense the lemming herd! We haven’t gotten them all off the cliff yet!
This is a very good sign, it means that banks are capitulating. And as the banks accelerate their losses, the only ones left will be the homeowners that are trying to hang on for max profit (lol). They will ride their losses down.
There are 6 more weeks of functional sales left this summer. Every banker is aware of this and will be blowing out anything they can get rid of. Maybe there is a reasonable buy or 2, but I would not count on it.
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CA SFH Resales “increased 18.1 percent; median home price fell 35.3 percent in May”
Wednesday June 25, 2008
C.A.R. reports sales increased 18.1 percent; median home price fell 35.3 percent in May
LOS ANGELES (June 25) – Home sales increased 18.1 percent in May in California compared with the same period a year ago, while the median price of an existing home fell 35.3 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.
“Home sales exceeded 400,000 last month for the first time since early 2007. While this is a welcome sign for the market, it was due in part to the large share of distressed homes for sale in many parts of the state,” said C.A.R. President William E. Brown. “Sales also rose above their year ago levels for the second month in a row after 30 consecutive months of year-to-year decreases. The lower prices associated with distressed sales along with favorable interest rates both contributed to higher sales levels.”
Closed escrow sales of existing, single-family detached homes in California totaled 423,700 in May at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Statewide home resale activity increased 18.1 percent from the revised 358,640 sales pace recorded in May 2007.
…
http://www.car.org/index.php?id=Mzg1MzE=
Jas
So, sales are rallying. Be interesting to see where they end up or if this is an abberation.
I’d be shocked if the values get close to stabalization for at least two more years.
Data is what the data is though… people comming back to the markets means price declines will slow or stop in those areas.
Just like falling sales signaled the top was at hand, or at least very close.
That is unless they are swamped out quickly by even more forclosures because the new comps send everyone into negative equity.
Did we see two legs down in the last bubble?
“people coming back into the markets means price declines will slow or stop”
“unless they are swamped out quickly by even more foreclosures”
I’ll bet on Numero Dos in this case.
I made a lowball offer on a short sale in a good neighborhood of Sacramento. I was outbid by four other people.
It was falling prices, not falling sales, that signaled the top of the market. The first m-o-m drop in 5 years in CA happened in July of 2005.
You’d think the Realtors would get the hint… falling prices is GOOD for them. Low sales volume is what kills them, not low prices. They didn’t buy these houses on margin, they get their commission on the full price even if the owner/bank loses. If they were smart (yeah, I know) they would be trying to get this standoff over in as many cities as possible as quickly as possible so they can go back to collecting their 6% commissions on as many houses as possible.
Nah, you’re assuming they want to work hard. What do you think they’d rather do, sell ten $200K houses or one $2M house? The last 8 years made them lazy. And why do think so many people became realtors in those years? It was like shootin’ fishies in barrels. That’s why.
Twenty-seven of the 30 homes that closed escrow were foreclosures.”
“Of the 456 homes now available in Manteca, 165 are foreclosures…”
If you own your home and attempt to sell it aqainst the backlog of REO’s in Manteca, you’re as illiquid as lard on a winters morn.
The only thing liquid in Mateca is in the seller’s shorts. (That’s why it’s called a short sale.)
The lender sought $299,000 for the home Elliott purchased for $4,000 more, a relative bargain in that price range these days.”
“‘I feared I missed the boat, but I didn’t,’ she said. ‘There’s more and more foreclosures coming on the market every day.’”
There is a never ending line of willing fools ready to catch a knife. Her last line creaks me up… Yep, more foreclosures coming on the market, ergo you just screwed yourself!
creaks = crakes
Creaks = cracks
Damn can’t hit the right keys, two cats in my lap and a beer in one hand…
Don’t spill the beer on those cats. They’ll never forgive you.
Wait a second, if creaks=crakes, and creaks=cracks, then the commutative property would indicate that creaks=crakes.
Did I do that right?
Actually a=b and b=c => a=c is the transitive property of equality. You did spell commutative correctly though which is light years ahead of my old calculus students
Well, mathman, and poor “dude” didn’t even get the transitivity right, what he meant was to conclude that crakes = cracks. But he is just not typing well this evening.
LOL dude. Just had flashbacks of all the Algebraic properties.
What do you expect from an engineer 15 years out of school?
Don’t worry though, I don’t design bridges.
Indeed. When you see more foreclosures coming on, you LOWER, not raise your offers.
‘But it’s not as if the coast is clear. The problem is worsening a bit on the coast and in much of inland North County.’”
In the movies the phrase ‘the coast is clear’ is only used by criminals who have just committed a crime…here the phrase is being used by…never mind.
Actually, the ‘problem’ is what it is despite how he looks at it. Perhaps what he means is that he is starting to concede that the problem is worse than he originally imagined.
Old Old Math:
Rising Prices = Buy Now
Old Math:
Falling Prices = Buy Now
New Math:
Problem = Known Knowns + Known Unknows + Unknown Unknowns
Future Buyer’s Ability to Wait > Current Seller’s Ability Wait
Current Seller’s Problem = Future Buyer’s Solution.
Seller’s Perception of Problem < Problem
Given:
Known Knowns = Massive Neg-Am Option Arm Wave Just Starting, Unemployment Rising, Wages Stagnating, Financial Institutions Over-leveraged, Foreclosures Increasing, Sales Dropping, Insurers & Lenders Buckling, Dollar Falling, Oil Increasing
Known Unknowns = When the Bottom Is, Magnitude of Bottom, Magnitude of Political Intervention
Unknown Unknowns = Who Knows
Falling Prices = Crazy to Buy Now
Hey Scoob,
LOL!
I know you were serious, but that was funny. I love that whole unknown unknowns thing. Gotta love Rumsfeld. How did he ever get that job. I know, cronyism. Geez, I wouldn’t trust him to run a Del Taco in Beverly Hills during the graveyard shift when it is drive thru only.
You ever take a look at the guy? Looks like the kind that’d kill his own mother to further the influence of his overlords, to me…
How did he ever get that job.
It’s popular now to bash Rumsfeld, but I don’t think you can really say he wasn’t qualified for the job. He had experience: he had already been Secretary of Defense under Ford! This wasn’t a case where they made him Secretary of Defense because he was a good campaign fundraiser or Bush’s drinking buddy or whatever.
“The Union Tribune. “San Diego County foreclosures and defaults remained at historically high levels last month, with troubles spreading to previously untouched coastal markets, DataQuick reported. Foreclosures reached a record 1,556, up from 1,143 in April and nearly triple the 553 posted in May 2007.”
(Scooby to Shaggy)
Ruh Roh Raggy!!!
Evidence of blogosphere kismet…
I cut that quote when I read Bens’ digest, and already new what my comment would be, the I read through the comments to find the first mention of toast on the coast, the rest is history.
Hey Scoob, thank’s for proving to me once again that there is a higher power, and he/she has a sense of humor.
“San Diego County foreclosures and defaults remained at historically high levels last month, with troubles spreading to previously untouched coastal markets, DataQuick reported. Foreclosures reached a record 1,556, up from 1,143 in April and nearly triple the 553 posted in May 2007.”
That upward slope must be getting pretty steep with last month’s increase of nearly 40%. But, good news anyhow with the troubles spreading to the coastal markets…May Gray and June Gloom have arrived just in time.
Where the hell has June gloom in SD been? Hotter than $hit a few days ago.
I went to beautiful desert getaway Yuma this weekend for a basketball tourney. 115 degrees.
Ugh, it was hot as hell. I love the marine layer. May-Gray and June-Gloom is like a season to me.
“REO Speedwagon”
LMFAO. It’s REO Speedwagon time, all you pet essay writers!
The most important part of that article to me was that $7T,T,T,T, Trillion of lost equity number.
Hey Hoz, as per your previous post this morning, I’m sure you are in bed already. If not, how does this drastic reduction in household wealth measure up against the idea that inflation is inevitable? Where are the “more dollars” going to come from?
I read today that higher energy costs will impose $1 Trillion of added costs on our economy THIS YEAR. I think if we are going to inflate our way out of this we will need to outsource the printing of dollars, or start printing $1000 bills.
Forgive me, the number is 4 Trillion, not 7. I was thinking about the number in relation to GDP when I posted.
Read Mr. Samuelson’s editorial in yesterday’s Washington Post.
“Inflation is too much money chasing too few goods.”
There are $10 T overseas looking for a home, in lieu of buying Japan Yen or Euros the money has been buying commodities including but not limited to oil. Hoarding. Massive hoarding of key metals.
China’s surplus for May was preliminary report at $40.3B - this is a huge number admittedly a lot smaller than Aprils 74.5B, but 15% higher than the average from last year.
Stop thinking in terms of what is happening in the US. The world does not care if we starve. The seeds of the dollars destruction were sown when the current account deficit hit $9T.
A substantial portion of that debt is in MBS/CDOs and other fun things that will evaporate into nothing.
“Jan Terry faces foreclosure on a $935,000, 2,300-square-foot house she bought a couple of blocks from the coast in Carlsbad early last year.”
Maybe I should offer her $150,000 for that house, take it off her hands.
Well, this old discussion again.
We’ve talked it to death but the reason people don’t lower prices is they can’t. You have to talk to the real owner, the bank.
Also someone remarked on why realtors(r) are unhappy about declining prices even though sales are going up. Who do you think the biggest class of speculators are? We all know most of the realtors(r) are cheerleader types and bought into all the hype.
A few days ago, my work took me driving through long swarths of New Mexico. While going through miles and miles of empty land, I just kept thinking “they aren’t making any more land”. Of course, there were a few periodic abandoned buildings in small blip towns on the map that now are basically abandoned places. Naw, we’ll never see that again. Hahaha.
As a side note, visited the Very Large Array (nearest town with some real population, Socorro - 50 miles away and 150 miles from Albuquerque). 27 large satellite radio dishes arrayed in a V. Largest of it’s kind in the world. Very interesting to see. Together they take up more land than all of Washington DC. They don’t look that big. And they are purposely place in the middle of nowhere. Nearest town over 20 miles away of any size (Magdelena). Seeing this place put a lot of this bubble and land crap talk in real perspective.
“While going through miles and miles of empty land, I just kept thinking “they aren’t making any more land”.”
Yep, I was thinking the same thing everytime I travel by air for business (which takes to me to all parts of the US). I see millions and millions of acres of emtpy land. The reality is that there are a butt load of empty land surrounding the metro cities. When people say that line, I just say, “you don’t fly much do you”….
Jan Terry faces foreclosure on a $935,000, 2,300-square-foot house she bought a couple of blocks from the coast in Carlsbad early last year.”
“Terry acknowledges that she made a mistake in getting a high-risk loan for the investment property, but she thought beach properties should have been a no-brainer money maker.”
“‘Based on the way I could see the market going,’ said the one-time real estate agent, ‘I would make a few bucks.’”
“But then the mortgage market tanked, her tenants left, she moved back in and her business partner skipped town. Terry now faces bankruptcy, eviction and possibly living on the streets.”
To quote Buddy (villian in The Incredibles) “Is this funny, or what?”
Let me point a bunch of knifes at me and be surprised when one gets me. Unfrickinbelievable that someone is this stupid?
Here’s a gem from three years ago…
http://www.signonsandiego.com/news/business/20051215-9999-1b15outlook.html
“Despite “air leaking out of the tire,” there are no major economic triggers, such as massive job losses, to cause the housing market to crash, said Joe Anfuso, chief financial officer of Shea Homes San Diego.”
It looks like two tires have had blowouts, the other two aren’t looking too good, and the hairpin turns are up ahead, downhill, with the brakes out.
“Several speakers at the conference addressed the use of new lending products that had enabled middle-wage consumers to attain financing for high-priced homes. Many “creative” mortgage loans have low, introductory payments that adjust upward with prevailing interest rates after several years. In general, they shift risk from the lender to the borrower.”
“Anfuso said fears that such loans would trigger defaults were misplaced. Many borrowers “are going up the wage scale” and will be able to handle rising payments, he said.”
Defaults are surging and wages are flatter than Kansas. No one, even then, was forecasting rising wages and no one credible considered these new loan products low risk.
Yea - pretty amazing. Having a babe that cannot stoop as low as taking her husband’s name (i.e., needs hyphenation) makes it real easy to search on her former forecasts…there’s a real boat-load of them out there.
In the article:
“Appleton-Young called California real estate a market in transition. “I think we’re in for a soft landing,” she said.”
Yep, Classic…..
Thanks, Got, for a stroll down memory lane. What a bunch of asshats.
REPORT FROM BEL AIR
Driving down Mulholland today nea Coldwater –2 FOR SALE signs advertising they were BANK OWNED.
There are also 2 foreclosures for sale on my street in Bel Air.
Plantinum triangle, you’re the next contestant on YOU LOST YOUR HOUSE
Wow.
I’m officially scared. Not because of this. Because of the accumulation. of information.
Watching the Posers foreclosed? Oh… Popcorn and Port wine.
Got Popcorn?
Neil
I thought it was merlot! Dude, I hate port. If you read this (although I know you won’t), tell your wife I said hi, and that I’m drinking extra now since she can’t.
California Attorney General Jerry Brown filed a lawsuit Wednesday against the nation’s largest home loan lender, charging Calabassas-based Countrywide Financial Corp. with deceptively pushing homeowners into risky, mass-produced loans that have caused thousands of residents across the state to lose their homes.
This guy needs to have his ass kicked up and down the street, for two reasons: 1) No one put a gun to any “homeowner’s” head when they sign for their loans. 2) He needs to get himself a real job in the private sector, instead of being the equivalent of a tapeworm in the intestines of California.
Brilliant analysis and conclusion. ?
Hey, the more State Attorney Generals that pile on Mozzillo the happier I am. Here’s to hoping the Tan Man’s lawyers get every last dime of the stock fortune he made selling Countrywide while claiming all was well.
The more the merrier. These greedy, sleazebag lenders deserved to be crushed, even if it is by grandstanding attorneys general. Better late than never. Tan in orange! Will there be another convenient “heart attack” before appeals are concluded and damages awarded?
A complete BS case. I doubt it will ever go to trial.
Prediction: just like Kennyboy Lay, Angelo the Tan Man will die just before his delivery to prison.
Sorry, SDGreg, I didn’t read your post before posting mine.
You mean die and then be cremated before anyone can see the body.
What is also great is this should lead to further credit contraction!
That means cheaper houses!
“Jan Terry faces foreclosure on a $935,000, 2,300-square-foot house she bought a couple of blocks from the coast in Carlsbad early last year.”
“Terry acknowledges that she made a mistake in getting a high-risk loan for the investment property, but she thought beach properties should have been a no-brainer money maker.”
A no-brainer, like…you had to have no brains to try that stunt.
As we all know, Surfer Dudes have the money to buy $935K houses. Gnarly Man !
“…the only things that are going to be selling are the things that are selling for nothing”
Since when does $600,000 “nothing”?
Arnold was going to buy the dump from Ms. Terry. And I also hope the Tan Man loses his A$$ from all directions.
In case I can’t get it in bits bucket tomorrow:
For sale at $629K
For rent at $1995 ROTFL!
Anything in the 600s here is way, way over median, which is about 211k I think.
My landlord is even better
Just put the duplex on the market for close to 1.2 mil.
Rent for duplex 3250.
He paid 760 at the peak of the market.
He admits when it’s fully rented he looses 15-1800 a month.
He hasn’t been able to rent the other unit for 1 year as he raised the rent, eventually moved in himself.
House needs a ton of work.
Now lets see if we can find an investor who is willing to loose 2500 +++ a month in a down market. Any takers??
Let me guess….the flyer says one or more of the following:
“Perfect for owner occupied!”
“Excellent Investment!”
Of course both of these statements equate to, “Horrible investment!”
I have to tell this story to someone. I can’t post it to my blog because it’s about family.
My in-laws own a house in Santa Maria (north of Santa Barbara, CA). Father in law had a liver transplant about 6 months ago and is doing great, but is not back at work (yet). Mother in law is a receptionist. As far as I know they have no savings and no retirement plan. They also have a lot of bills from the transplant surgery. They’re having trouble getting state money because they own the house. They plan to move down to LA and rent a place from another family member.
Six months ago, I advised my MIL to sell the house and bank the money. I told her prices were going down and the faster and more aggressively she sold the house, the more money they’d get. The longer they waited, the less they’d get back. The other day my wife told me they’re going to move down to LA and rent out the house “because they don’t want to lose money on it.”
WTF!? I told her that if they waited another two years, they’d lose ALL their appreciation. But no one listens to me.
Being right is so bittersweet.
Can’t you just call them up and badger them about it? Who cares if they get mad? You have to TRY!
What’s up with the “over bidding” on foreclosures? That KILLS me! A friend of mine just lost an offer on a bank owner in Tracy yesterday because he was outbid, and he bid $30k over the banks asking price! What gives?
Knifecatchers coming in.
You gotta realize that a good chunk of the people who didn’t buy couldn’t afford to, and now think they’re geniuses by picking up foreclosures at 10-15% off what they were selling before.
You’ll see a lot of stuff not make sense for awhile as these Real Financial Heroes re-establish the market price for homes, leading to a glut of people trying to get out before it gets worse and walking because it’s already too bad.
It’ll probably be more like a ‘dead cat skip’ than a ‘dead cat bounce’ as it will likely take two waves of knife catchers before we REALLY get down to 50% off. Then one more as we undershoot.
Would it make sense to hold off on this sale, in order to give Countrywide a fair chance to clear its good name?
Countrywide’s Pressures Mount
Three States File
Legal Actions;
Holders Clear Sale
By RUTH SIMON
June 26, 2008
The legal and financial pressures on Countrywide Financial Corp. mounted Wednesday as officials in three states filed separate legal actions against the mortgage lender.
The actions, by the attorneys general of California and Illinois, and the Washington State Department of Financial Institutions, came on the same day that Countrywide shareholders voted to approve the sale of the company to Bank of America Corp. The all-stock transaction was valued at $4 billion when Bank of America agreed to buy Countrywide in January. But Bank of America shares have since slipped, and the value has fallen to about $2.8 billion. The transaction is scheduled to close on July 1.