The King Of Sub-Prime Foreclosures
The North County Times reports from California. “As economists debate whether San Diego County has entered a recession, homeowners have lost $118 billion in equity, thousands have lost their jobs and fewer from out of the area are visiting. Many analysts look to jobs as a primary indicator of local economic recessions.”
“By that measure, a recession is here. For the first time since 1993, the county in March employed fewer workers than the year before.”
“The first wave of job losses came from construction and real estate workers, such as Patricia Hunter of San Marcos. ‘When I was laid off, they offered a (health insurance) plan,’ she said. ‘They were talking about $400 a month. I can’t even make my house payment, much less $400 a month.’ She missed her first mortgage payment in January.”
“The sabotage of San Diego County’s economy by just one sector blows apart assertions by regional economists that the economy was too diversified to suffer a recession.”
“‘That’s total hogwash. … People grab it because it sounds good. The entire U.S. economy is way more diversified than any city, and we’ve had lots of recessions, so how could you possibly say that?’ said Christopher Thornberg, an economist with Beacon Economics in Los Angeles.”
The Orange County Register. “Roberta Lacken fears her retirement is in jeopardy after her lender slashed the amount she can borrow against her Anaheim home. Lacken said Washington Mutual reduced by about $20,000 the amount she can borrow on her home equity line of credit. She had planned to use that money to make a balloon payment on a second mortgage she and her husband have on an apartment building in San Bernardino.”
“Now she fears they won’t be able to come up with the $28,000 they have to pay next year. ‘We don’t know what we are going to do,’ Lacken said. ‘We could be just another number on the foreclosure list.’”
“Laymond Wiseman said Bank of America cut the HELOC on his Stanton home from $150,000 to $89,000, which is just $2,000 more than the amount he has already withdrawn. He is upset because he was considering using the money to help his daughter and husband by a home. Yet he doesn’t plan to fight it.”
“‘It may be a blessing in disguise,’ Wiseman said.”
“Riverside County appears to have tipped into an economic recession, as homeowners have lost $71 billion in equity. The county’s median home price reached a high in December 2006 at $432,000 and had tumbled 33 percent to $290,000 by May, according to DataQuick”
“Today’s jobs contraction has put people such as Gary Huber, of Corona, in an unexpected place: the unemployment office. A mortgage underwriter for 25 years, he was laid off in August 2006 and has been struggling to find work.”
“Since losing his job, Huber has exhausted his savings, sold his car and worked toward landing a job with the city government, even if it pays less, he said. ‘It’d still be a tremendous pay cut, but it’d be enough where we could make ends meet,’ Huber said.”
The Daily Bulletin. “A house that once brought joy and comfort to a family now sits vacant. It has become an eyesore. The one-time owners are long gone, forced out by the mortgage crisis, and local cities are stuck footing unexpected bills.”
“‘The reason so many cities are concerned right now is because of so many foreclosures,’ said Rex Gutierrez, inter-governmental relations officer for the San Bernardino County assessor and a Rancho Cucamonga councilman. ‘People are just abandoning properties.’”
“This year alone, Ontario has had 464 foreclosures, Rancho Cucamonga 321, Chino 221, Upland 127, Montclair 92 and Chino Hills 53, according to statistics from the San Bernardino County Assessor’s Office.”
“Three years ago, the market was smoking hot, said Robb Quincey, Upland’s city manager.”
“‘Homes that someone bought for $500,000 were selling for $800,000,’ Quincey said. ‘Now, with the foreclosures, a house that was $500,000 is going for $350,000. It’s the new houses built a few years ago that are going into foreclosure, and that doesn’t make us feel good’”
The Press Enterprise. “Work on the entrance sign at Meadowview’s parking lot will have to wait. The sign and other improvements in the Temecula neighborhood are being delayed because revenue from the homeowners association’s dues is lagging, according to Meadowview Community Association President Debra Thomas.”
“In Meadowview, which has about 900 homes, at least 40 families ‘just up and left,’ Thomas said.”
“‘As soon as someone has financial problems, the association fee is the first thing they stop paying,’ Thomas said. ‘(They think) ‘I’m not using the facilities, so why even pay for it.’”
“In April, Riverside and San Bernardino counties combined had 14,081 foreclosed-related filings, one for every 99 households and the fourth-highest foreclosure rate in the nation.”
The Desert Sun. “The biggest drag on the valley’s economy in the first quarter of 2008 was construction spending, which plunged more than 41 percent compared to the same period in 2007. Chapman University economist Esmael Adibi said the desert economy began slumping last summer, and the Inland Empire of Riverside and San Bernardino counties entered recession in the final months of 2007.”
“‘The country may not be in recession, but the Inland Empire definitely is - and so is the Coachella Valley,’ agreed John Husing, economic consultant to the Coachella Valley Economic Partnership. He has been studying Southern California’s economic trends since the 1960s.”
“The prices we’re seeing are abnormal, Husing said. ‘We’re not looking at a regular supply and demand market: We have home buyers now who might be described as bottom-feeders, and sellers who are under pressure given information from DataQuick that 56.6 percent of all sales in Riverside County in May were foreclosures,’ he said.”
“‘We went from being one of the fastest-growing counties in the state to being the king of sub-prime foreclosures,’ said Larry Ward, the Riverside County assessor-clerk-recorder.”
The Manteca Bulletin. “It is without the doubt the largest housing-related foreclosure yet in the Manteca-Lathrop market. Hundreds of lots in Beck Properties’ highly-touted Oakwood Lake Shores and two sister developments in Mossdale Landing are now in the foreclosure process.”
“It marks the first, major development to start the foreclosure process and is a clear sign that a significant up tick in home sales since March may not be enough to rescue large segments of the collapsing real estate economy.”
“Beck Properties started building what it touted as luxury homes built around man-made lakes filled with natural groundwater. The recorded message from Bella Lago at Oakwood Shores describes the homes on sale at this community as lakefront homes ranging in sizes from 2,600 to 4,600 square feet.”
“Prices for the Tuscan-style homes at Tra Vigna originally ranged from $644,990 to $764,990 with additional $100,000 to $200,000 for those with lakefront locations.”
“The employee contacted on the phone Thursday hung up before this reporter could ask the current prices for these homes.”
The Santa Cruz Sentinel. “Affordable units set aside for low-income buyers at 2030 North Pacific Ave. in Santa Cruz were snapped up quickly this year, but fewer new projects are on the drawing board since the subprime mortgage mess last year triggered a credit crunch.”
“The median price for condos sold in May was $380,000, down more than $100,000 from the levels in 2005, 2006 and 2007.”
“Seb Frey, a real estate agent in Capitola, is starting to see lower prices. He said a condo foreclosed at Capitola Shores in the Jewel Box neighborhood recently sold for $300,000, about the same price as in 2001.”
“Condos on River Street in Santa Cruz across from Lumbermens are selling for $250,000, he added. He expects prices to fall with more foreclosures. ‘You might be able to get something for $225,000,’ he said.”
The Press Democrat. “More than 19,000 Sonoma County homeowners — a record number — will see their property tax bills fall this year because of declining home values.”
“Most of the affected properties were purchased at the height of the housing boom, and they now are worth $100,000 less on average, said Bill Rousseau, the county’s chief deputy assessor.”
“The number of homes dwarfs those that received property value reductions a year ago, a reflection of the ongoing toll from the region’s housing downturn. Last year, the county lowered values on about 2,500 homes. The average reduction was $70,000.”
“The review centers on homes purchased between January 2004 and September 2007. The hardest-hit areas of the county have been northwest and southwest Santa Rosa, Windsor, Rohnert Park and east Petaluma, Rousseau said.”
“Those communities often were hotbeds for subprime lending that stoked an already sizzling housing market, which peaked in summer 2005. Foreclosure rates now are highest in many of the same areas.”
“The reassessments are the first the county has initiated since the mid-1990s housing slump. About 15,000 homes had values lowered throughout that downturn, which lasted several years, Rousseau said.”
“During the last slump a decade back, homes didn’t regain values for several years, Rousseau said. ‘This downturn is worse,’ he said.”
Not a very profound observation, but the word recession seems to be everywhere now. IIRC, it was only a short time ago that I saw it used mainly on this blog and rarely in the MSM. Now we’re hearing recession stories that are postdated way before the MSM or anyone used that word.
So now I hear the word depression used somewhat, but mostly only on this blog…
I think maybe we’re in for it big time.
‘San Diego County homeowners have lost $118 billion in equity…Riverside County homeowners have lost $71 billion in equity…More than 19,000 Sonoma County homeowners — a record number — will see their property tax bills fall this year because of declining home values…About 15,000 homes had values lowered throughout that downturn, which lasted several years, Rousseau said.’
This is already the biggest RE bust in modern US history, and the swiftest. These numbers are what people that go on about bail-outs never seem to grasp. It’s over, done. Already happened. Passing some loan bill is meaningless now.
The size of this correction was, is and will continue to be too large to be affected by anything the Fed or Washington can do.
Here’s a little tidbit I copied from a pay site newsletter.
“The latest Case-Shiller index shows a fall of 15.3 percent in US house prices since the start of this year.
The size of this can be appreciated when it is applied to the peak valuation of $US 23 TRILLION in total
value of US housing stock set last year. It reveals that $US 3.52 TRILLION of this paper wealth has been
written off valuations. This is HUGELY deflationary! Housing lenders in the US are being cut off at the
knees as if these falling valuations were a sickle swung horizontally. When the write-offs arrive on their
books and balance sheets in the second half of this year, there will be sheer hell to pay and no money.
US construction and development loans, a specialty of regional and local banks, hit a delinquency rate of
7.18 percent at the end of March, the highest in 14 years, according to the FDIC. In October, the rate was
3.22 percent. US auto loans issued through car dealers have a delinquency rate of 3.13 percent, the
highest since at least 1990, according to the ABA.”
All the more reason to do something, anything, to make sure the people know that they care about us. Of course the name of the bill will be something like
“Homeowner’s Mortgage Protection Act”
And then it will only save the largest morgage companies.
Realestate Trust Worldwide Homeowner Official Rescue Effort (Real-T-WHORE).
‘San Diego County homeowners have lost $118 billion in equity’
Now that estimates of the damages are coming in larger than my own deliberately-conservative estimates, I wonder if we are finally leaving the denial stage of the bubble?
And I am wondering if anyone in Congress is looking at that $118 billion dollar figure for San Diego County, alone, and wondering how likely a $300 bn foreclosure rescue for the entire country is going to be enough to prop up real estate prices on a permanently high plateau?
It also suggests that the $4 trillion number mentioned recently is too low. Think about the places with well documented, wide-spread declines; MA, CT, NJ, MD, DC, VA, DE, NC, SC, GA, FL, TN, KY, MO, AR, CO, MN, IL, WI, MI, ID, OR, UT, NV, AZ, and CA.
I bet there is a trillion or more in Florida alone. This is history folks. I doubt we will every see real estate prices fall this much again in our lifetimes.
Except maybe in the next 12 months!
Right you are. The biggest drops will be in the next 18 months. What’s that smell? Is that Big Sur or the American Dream of the glutonous 90s and 00s going up in smoke? I’m gonna miss Big Sur. You can take the culture from 95 to 05 and flush it.
Having just driven from Palm Springs to Escondido through Temecula today, I can tell you that in Temecula there are so many commercial sites that are not going to be finished, there are no trucks/worksite trailers etc around many sites. They are just fenced off.
And I also noticed many many REO signs, signs for sale on Horse real estates ,not on the wineries, but the horsey estates seemed to have several homes half built with 4sale signs on them. But I have to say the commercial sites were really a site.
Stopping in a gas station, I noted the front page of the
Riverside County ‘Californian’ newspaper that stated,
“It’s Official, Riverside Co is in a recession”.
The other thing I noted, was that on a gorgeous Sunday in southern California when many folks would be heading to the beach, there was virtually little traffic.
Seriously, not a normal holiday weekend, much less a summer weekend. Traffic was easily 1/3 of what it usually is from the desert, down the 79, then the 15 and back again.
About the traffic: love to hear it. Love it. Let’s clean this state out.
The part of the loan bill that concerns me is that which opens the prospect of lenders passing on their losses to those who had nothing to do with creating the housing mess. The rescue concept is a political smoke screen for bailing out REIC perpetrators of the situation at hand.
Fix flawed housing rescue Bill fails to match scope of market collapse
Published: July 5, 2008 12:00AM
Credit Congress with the best of intentions in crafting a massive rescue package for struggling homeowners. But legislation pending in the U.S. Senate fails to match the scope of the growing crisis, contains significant flaws and includes unnecessary tax cuts for the very industries whose bad judgment and business practices helped cause the housing bust.
From Wisconsin…a First for the NATION and almost frigging UNBELIEVABLE !
State Supreme Court rules fraud not grounds for home buyers to sue.
Madison - Home buyers who believe a seller has lied to them cannot sue for fraud to recover damages, a divided Wisconsin Supreme Court said Tuesday.The decision is bad news for homeowners and sellers and makes Wisconsin the only state barring civil fraud cases in real estate transactions, Justice Ann Walsh Bradley said. She was one of three justices who broke with the four-member majority
http://www.jsonline.com/story/index.aspx?id=768220
BUYER”S BEWARE….Wisconsin homesellers and RE agents are officially sanctioned to lie, cheat and steal with impunity NOW!
“State Supreme Court rules fraud not grounds for home buyers to sue. Madison - Home buyers who believe a seller has lied to them cannot sue for fraud to recover damages, a divided Wisconsin Supreme Court said Tuesday.”
Why would any legitimate buyer do business in Wisconsin? How many defrauded buyers will now trash their property before walking away? Of course, it’s punishing the wrong party. But the system is corrupt with those in charge able to defraud others with apparent impunity. This seems like a good recipe for anarchy on some level.
The Inland Empire is Toast. Anyone who purchased in that $hithole in the last 5 years is upside down. 100-105 degrees in the summer and a minimum of a one-2 hour commute EACH way. Adios amigos.
While in Escondido, I learned of one friend in Utah who was 3 months behind, and a MD in Escondido who was losing their home, got the trailer at the ready.
Seriously.
Allow me to comment on the above post:
1. Anyone who bought anything in Calif. in the last 5 years is upside down. The IE is no exception - but it is not unique.
2. 100-105 degrees. Uh, in case you hadn’t notice, the majority of California gets hot in the summer. In fact, anything east of about a 30 mile strip of land along the coast and the mountains gets pretty friggin’ hot. That’s California.
3. There are (perhaps were in this case) many more jobs in the IE than 10 years ago. People in general aren’t commuting like they had been.
So now I hear the word depression used somewhat I think people seek emotional stimulation any way they can. The Great Depression was not anticipated or covered breathlessly in the media prior to its onset.
But people aren’t starving. What is going away is a lot of fluff. So what if there are fewer pirate stores and $500 bottles of wine? Jas used to get on here and predict debt concentration camps. Now we see that debt is quite easily walked away from, and the lenders are losing their ass, as it should be.
And houses are getting cheaper by the day.
Girl in front of me in grocery store, paid $6.31 for a
generic bag of cookies, and a pint of milk.
WOW. I think things have gotten really expensive.
Milk prices just went up almost a dollar in a week here (I only buy organic because I am paranoid.).
A housing-led depression has never been encountered before, IIRC. What happens to us from here will certainly be analyzed by historians for generations to come.
IIRC? A little help here?
If I Recall Correctly?
If I Recall Correctly.
if I recall correctly
Ha! Reminds me of Echo Point on the Green River.
Best river trip I ever took. Right next to Dinosaurland National Monument.
We’ve been through this retrospective before on this blog, though perhaps not recently.
Crashes: The Florida Real Estate Craze
When: 1926
Where: Florida
Crashes: The Great Depression (1929)
When: October 21, 24 and 29, 1929
Where: USA
Some people have a hard time connecting these two events, despite their temporal proximity. The classic case was that of Groucho Marx, who ridiculed people who lost their shirts in the Florida Land Boom, only to subsequently lose a fortune of his own in the Great Stock Market Crash.
24 years until bottoming out time?
Site Last Updated: Jul 5 2008 6:50AM
Shades of Great Depression on Wall Street
2008/07/01
WHEN Wall Street slumped on Thursday, in response to the oil price surging above 140 a barrel and renewed fears about the banking system, the alarm bells rang more loudly than usual.
Barring a miraculous recovery, the Dow Jones industrial average is heading for its worst June since 1930, when it plunged by almost 18 percent.
That month is ingrained in the Wall Street psyche. After the crash of October 1929, the stock market continued to slide through the winter. By the spring the worst seemed to be over. Then shares lurched low in June 1930, signalling deep problems for the economy and the stock market.
America entered a depression and the stock market went into a deep freeze that lasted a quarter of a century, taking until 1954 to get back to its pre-crash high. Are there any parallels with today?
“America entered a depression and the stock market went into a deep freeze that lasted a quarter of a century, taking until 1954 to get back to its pre-crash high. Are there any parallels with today?”
While there are a lot of parallels, leading to the idea we could be headed into another depression followed by an extended period of little or no growth, there are also some important differences. While we currently have a standard of living much higher than in the 1920’s, one could argue that the underlying economy is much weaker.
Jim Kunstler had some interesting comments in this direction in his column last week:
http://tinyurl.com/4u4qp3
” We’re a very different country than we were in 1932. In that earlier crisis of capital, few people had any money but our society still possessed fantastic resources. We had plenty of everything that our land could provide: a treasure trove of mineral ores and the equipment to refine it all, a wealth of oil and gas still in the ground, and all the rigs needed to get at it, manpower galore (and of a highly disciplined, regimented kind), with fine-tuned factories waiting for orders. We had a railroad system that was the envy of the world and millions of family farms (even despite the dust bowl) owned by people who retained age-old skills not yet degraded by agribusiness. We had fully-functional cities with operating waterfronts and ten thousand small towns with local economies, local newspapers, and local culture.”
During a related discussion on this blog several months ago, someone said that if we suffered a similar decline in living standards this time versus the depression of the 30’s, that would take us back to the living standards of the 70’s. While that wouldn’t be awful, it would be quite noticeable. I’m really not sure how the current population would respond to that type of drop in living standard and a recovery that could take a generation or more to return to something that’s maybe somewhat comparable.
You got it, Lost in Utah. It will not be long before depression replaces recession in the vocabulary of the MSM.
THIS IS THE BIG ONE, FOLKS. What is happening now is a major, major deal, something that those of us under 40 will discuss with our grandchildren. We will tell them to get and keep a job, rent to be mobile or live in an RV, save at least 25% of their after-tax pay, and eliminate debt–my tips will start to become part of folk wisdom in the next three years.
“During the last slump a decade back, homes didn’t regain values for several years, Rousseau said. ‘This downturn is worse,’ he said.”
In California, I predict prices will not bottom before 2011 and that prices will not hit their 2005 peaks in real terms before 2025.
Keep the popcorn popping,
Red Baron
Why in the world would CA prices get back to 150% overvalued levels in only 20 years if we are headed into Great Depression II (which is even less than stock prices took to regain their levels - i.e., 1929 to 1952)?
Consider the following parameters:
Real income.
House values as a percentage of real income.
The depreciation of structures and infrastructure.
You are way too optimistic about future prices for someone who is saying that this is the big one.
There is the other little issue of long-term structural change in housing demand, due to the aging of the baby boomers. McMansions are built for a demographic which will dwindle over the next twenty-five years.
The true rational expectations equilibrium in the asset price cycle has a no-arbitrage condition which lasts about one investor life time (25 years or so). There is no way for an individual to profitably buy the dip if the duration of the dip is a quarter of a century.
That being said…if this is the ‘ big one’..( it is looking like a monster ). Why should I not go out and max my credit cards buying Gold/food/guns? What good will credit scores and debt level mean at that point?
Apparently many folks played this strategy. They are the prime candidates for the Congressional foreclosure rescue, which would make their choice look quite clever through the lens of the rear view mirror.
In California, I predict prices will not bottom before 2011 and that prices will not hit their 2005 peaks in real terms before 2025.
Forget 2025, I doubt that we’ll see 2005 prices in real terms again in our lifetimes.
We might not even see *nominal* 2005 prices again by 2025: if prices correct by 50% from the peak over the next five years, and then rise at an average 4% per year, then that will restore them to 0.5 * (1.04^12) = 80% of their 2005 prices by 2025. I don’t think that scenario is far-fetched at all.
“Now she fears they won’t be able to come up with the $28,000 they have to pay next year. ‘We don’t know what we are going to do,’ Lacken said. ‘We could be just another number on the foreclosure list.’”
*violins playing a somber tune*
I feel your pain……….NOT!
on another note - Hey IE people -
Hows that drive from the RC into LA? Fill-er up! The RC is my old stomping ground.
“…Hows that drive from the RC into LA?…”
I’m hearing numbers that are staggering $800.00 to $1000.00 per month just in gas…simply ridiculous…
Lots of people drive A LOT, as their jobs or businesses are dependent upon it. It’s close to $200 to fill up a diesel pick up truck now, and contractors can burn through that in less than a week, EASILY.
Contractors with big diesel pickups, yes. But commuters? What the heck are they driving that they need 200+ gallons of gas a month? Or is it how far are they driving?
That’s the thing, a lot of these “communities” make absolutely no sense because they are so far away from jobs. The local governments, more specifically the employees, who approved these massive developments should be subject to scorn and ridicule, never to be allowed to “serve” again. Sustainable communities would offer jobs, services, and locally grown food close by, a far cry from what’s been happening in this country.
My cousin says she’s in traffic 4 hours total (up and back) every work day. From Ontario to somewhere which I think is downtown. Crazy.
The bad news is that high fuel prices are probably here to stay. The good news is that here in the U.S. there is HUGE potential for fuel efficiency gains in private transport. Huge single-occupant vehicles are still commonplace so I guess gas prices price have further to run.
The question is: When will J6P finally be economically forced from his Hummer, SUV or pickup and into a sensible economy car?
A friend of mine traded her fuel efficient car for an SUV that she didn’t need a few months ago. The seven thousand she owed on the first car was added to the new loan. I don’t see how she can trade again anytime soon no matter how high gas goes. She has $400 a month payments for the next seven years. And she thought she got a bargin.
I predict that SUV and pickup loan walkaways will soon become commonplace.
Saw eight pickup/SUV repos in the lot of a local credit union. Initial bid prices way too high.
“…Or is it how far are they driving?…”
It’s how far…the places I am hearing about, where it takes 800 to 1000 per month in gas are an hour away from L.A. with zero traffic…but if they don’t make the drive then they can’t afford the house because there are no jobs where they are driving from that will sustain a house note…an evil catch-22 if you will…
Public transport can’t be efficient when people are going from [isolated location A] to [isolated location B]. Even losing only 30 minutes in commute time has to be worth at least $20 to the average commuter in time and hassle - even this very conservative estimate equates to about 100 miles worth of gas at current prices.
“Public transport can’t be efficient when people are going from [isolated location A] to [isolated location B]. Even losing only 30 minutes in commute time has to be worth at least $20 to the average commuter in time and hassle - even this very conservative estimate equates to about 100 miles worth of gas at current prices.”
I did another check to compare cost and time of public transit versus driving for my typical commute. Gas cost versus transit fares is about even for the 40 mile round trip commute (20 miles each way). Taking public transit would add about 3 hours to my total workday (work plus commute). At this point, public transit is still the fallback option if there are supply disruptions, rationing, or gas becomes sufficiently more expensive.
The cheapest price in gas today from the desert to Escondido via Temecula, was $4.39.
Most spots were around $4.57
And since I was nearly out of gas, I was conscious of gas signs everywhere!
I drive from Corona to Aliso Viejo everyday and I would say that gas/tolls are around 800.00 a month. I could not imagine what others pay because I have a small SUV that gets 31 MPG (actual around 27 MPG). It really eats into your budget; I would say that it takes up a least 10% of my after tax dollars a month. It’s Sunday and I am at work telling my boss that I need a raise to help with the gas expense (he seriously considering) or I need to telecommute more than one day a week.
Gas and tolls are $800/mo which is 10% of your take home? Means you take home is around 8000, so yeah, unless you’re wasting a ton of money somewhere, youre not hurting.
Why is it your boss’s fault/problem that you chose to live so far from work?
Yea, I’d love to hear a rational answer to that question…I’ve been waiting for that one for years…doubt you’ll read it here…
Why is it your boss’s fault/problem that you chose to live so far from work?
————————————————————-
well….uhh…errrr….That’s what my wife wants.
Years ago, I would try to explain to people who had to have a house and a yard (usually because their wife nagged them to death over it) and were willing to have a 2+ hour total commute to do it, that their quality of life would be higher if they had fewer possessions and lived in an apartment close to work.
And I wasn’t considering the expense then…simply the waste of time!
I went this entire three-day weekend without driving at all! I managed to walk to do my grocery shopping, go to the pharmacist, rent a movie, get a coffee, and visit with some friends on 7/4.
And that’s how I’ve lived for years. I spend about 30% of my time traveling (by air) for business. When I’m home, the last thing I want to do is get into a car and tavel somewhere.
Is yours the sort of place where you have no yard, like an apartment, or condo or something? Some people, like me, cannot live like that. I have never lived in an apartment in my life. The only in town situation with which I could cope, would be living near the coast of say, Maine, in a small house on at least a 6500 square foot lot. Then, I’d have some room to garden, and I could walk to the beach for my outdoors fix.
No! It’s a house, with a front yard and a back yard, in 94087. When I worked at Apple, I would walk there.
Reuven,
tavel somewhere.?
hehe.
I guess you are ‘taveled out’.
I come to work this morning…my boss is going on about how he dropped $700 to fix the pool cover and the pool pump and the pool filter, and how his washing machine hit the bed over the weekend so he needs a new washing machine…
Meanwhile I mentioned how my wife went to a friend’s apartment to use their pool, and I stayed at home (in the apartment) hanging out doing nothing…
And my boss thinks he has a better quality of life…
Remember that it was Bill Clinton who vetoed drilling in ANWAR in ‘96, and the Demoncrats in the senate sustained his veto. We would be getting another million or two barrels of crude here on the west coast. OUR OWN OIL, not from some rag head in the mid east.Let’s put a refinery in the Inland Empire. hehehehehehe
That’s for the 2nd on their investment property of course. She needs to think outside the box. At 5 a day for $20 a pop that’s $500/wk, she should have almost enough in a year. She needs to have her husband buy her the big case of mouthwash at Costco.
“She needs to think outside the box.”
This sentence fits quite well with the rest of your post.
Now which box are you talking about ?
I’d say she needs to think about inside the box for $40.
Are you kidding? These people are literally borrowing from Peter to Pay Paul.
Yeah, I’d also be worried about my retirement if I had multiple mortgages / major loans, no surplus of cash on hand for emergencies, and a majority of my investments in borrowed-money real estate.
OT, but big party being planned over under the previous thread (Giving Buyers Back To The Rental Market).
Check it out (search Northern Lights).
“During the last slump a decade back, homes didn’t regain values for several years, Rousseau said. ‘This downturn is worse,’ he said.”
Had this conversation yesterday with a gentleman…he claims in 2 years everything will be back to normal (06 peak pricing)…when I informed him that it will be 15 or 20 years before these prices comeback…he seemed to be heartbroken….I guess no retirement on the Islands for him…
earth to FM (f**cked moonbeam) - ‘06 pricing was not normal
There you go with that common sense theme again…stop it you’re making me giggle…and it makes it hard to have conversations with folks with those types of verbal phrases bouncing around in my head…it’s getting harder and harder not to burst into hysterical laughter…
“‘The country may not be in recession, but the Inland Empire definitely is - and so is the Coachella Valley,’ agreed John Husing, economic consultant to the Coachella Valley Economic Partnership. He has been studying Southern California’s economic trends since the 1960s.”
Husing is a disgrace to the economic field. Having the benefit of over 45 years (upto 2005) hindsight this McGreedy economist couldn’t recognize a bubble. He is still too early to talk about the bottomfeeders, they will come… in 2010-2011
Inland Empire in recession? How does a bedroom community have a recession. Another example of how messed up so cal is. You can’t have a recession w/o an economy in the first place, and I don’t think miles of strip malls with tanning salons and cold stones counts as much of an economy. that is what adam smith called doing each other’s laundry.
“As economists debate whether San Diego County has entered a recession, homeowners have lost $118 billion in equity, thousands have lost their jobs and fewer from out of the area are visiting. Many analysts look to jobs as a primary indicator of local economic recessions.”
Is it really correct to account for “lost equity” if the equity wasn’t borrowed against and the home wasn’t bought/sold during this period?
I certainly don’t think of myself as having lost any money because the prices on my block rose and fell during the last two years.
Your logic is absolutely correct and would most definitely hold sway in a rational world.
Unfortunately, …
Your logic is fine for folks who did not cash out their home equity and spend it, and not so fine for those who did. My reading of the situation is that lots of folks borrowed like crazy against the value of their home at the bubble peak, and these folks are screwed (though the foreclosure rescue may end up helping some of them).
By the way, that “North County” link is well worth clicking to see the chart of San Diego house prices from 1988 to present. Anyone who can look at that and say that it’s impossible that prices could plunge below $200k by the time the dust settles is quite frankly deluding himself.
That was my fault. Roller coasters with the highest hills go the farthest and the fastest on the way down.
More particularly, speed on descents of any significance would be more based on angle of decline, along with design of roller coaster, including track and car configuration. Even if the coaster came off its track and plunged to the earth, all heights of more than a few hundred feet (give or take) would give the same speed, due to terminal velocity resulting from friction of wind resistance.
Unfortunately, terminal velocity does not naturally apply to declines in individual housing prices, which can be marked to zero immediately.
“Laymond Wiseman said Bank of America cut the HELOC on his Stanton home from $150,000 to $89,000, which is just $2,000 more than the amount he has already withdrawn. He is upset because he was considering using the money to help his daughter and husband by a home. Yet he doesn’t plan to fight it.”
“‘It may be a blessing in disguise,’ Wiseman said.”
They would’ve trimmed it even more like down to $10,000 if he hadn’t withdrawn 80K. You know, 80K is quite a bit. I wonder what he used it for.
I’m glad the Banks are lowering the HELOC amount. Makes peple realize that you actually have to work to buy something.
Also, the concept of an individual borrowing money so he can lend it to someone else is the most idiotic thing I’ve ever heard! Why would you loan money you don’t have to someone?
Also, I think the should change his name from WISEman to STUPIDman.
Didn’t banks use to refuse to issue mortgages unless the borrower could prove that he DIDN’T borrow the downpayment? I miss those days.
He didn’t say he was planning to lend it to them, just “help” them with it.
That’s too old fashioned. Why with those rules, you would expect the borrow to KEEP the house. That’s un-American!
Anyone else think both his home and his daughter’s? If he had helped her buy, that would be two walking away in 2010.
This market has a long way to go…
BTW, hearing about reduced HELOC’s everywhere! I know of co-workers seeing their HELOC’s cut by $250k and so they ‘panic’ and withdraw every last penny they are allowed to. (Often on the order of $50k.)
Huh? If that’s your only cash cushion… We have a house poor nation.
Got Popcorn?
Neil
First rule of a CFO is draw the letters of credit down at the first sign of borrowing being impaired. The borrower has probably waited too long if the line is cut. That’s what you’re paying for in the LOC fees so you might as well draw it down.
“I miss those days.”
Stay tuned, those days are on their way back.
In 1990, when we bought our house (with 20% down…now paid up because we had a 15 year fixed)…they wanted past bank statements to see that we’ve been saving money and it wasn’t a gift.
This guy obviously thinks he is some kind of millionaire being able to give money to help his daughter buy a house. That’s part of the humor of this whole housing bust is how stupid people have been from the “wealth effect”.
Some of these idiots act like they have so much wealth that they can do all the things rich people do when in reality they are just burying themselves and, in this case, their children too into years of debt enslavement.
perhaps the HELOCER’s are the best philosophers of all. IMO, they, deep down in their hearts know that the system is rigged and that Wall Street and the pols put the f*cks to the working stiff as often and as much as they like. They know the system is one big ponzi scheme and that eventually it will fail. They know they can’t get ahead by playing by the rules because they rules are there to guarantee that you cannot get ahead. So what is one to do to game this system? Stealing physical stuff will get you in jail so the working stiff mimics wall street and steals legally. soooo, in my opinion, the HELOCER’s might be the smartest bunch of all us. Have you ever wondered how many HELOCER’s got their hands on the cash and say stuffed it in the mattress so to speak. and hey, if a depression does roll around and cash is again king the HELOC’ers will be living large again.
Sounds like his family had him over the barrel, basically guilting him into using his HELOC for the daughter’s down payment on her Dream House. By cutting him off, BoA came to his emotional/financial rescue.
“He is upset because he was considering using the money to help his daughter and husband by a home.”
Why is it that Boomers always feel the need to buy everything for their kids? First expensive vacations, first cars, college tuitions, and now houses. Is it that mommy & daddy have no faith in their children to make it for themselves? Or is it that their beloved housing prices have gotten so far out of reach that even professionals can not legitimately afford them? If so, people should be welcoming the housing bust rather than trying tooth and nail to fight it.
The boomers, or should I say the younger boomers have, and are coddling their kids like no-one has in history. Someone should write a book about it.
It started with $100 tennis shoes for 3 year olds and hasn’t stopped yet. Never paid $100 for a pair of shoes in my life. In fact I pay less now than I did 30 years ago.
I promise not to touch your corn.
(or even look at it too hard)
Someone here yesterday commented that the older 60ish boomer were more spoiled and spendthrift, and upon thinking about it I have to disagree. I know quite a few people around 60 now whom I guess you’d call aged hippies, who live quite simply and frugally, a carpenter, an electrician, a small contractor, a commercial forester, this and that. They live in modest houses in the older part of town and seem thrilled with a vacation consisting of long distance bike riding or ecotrip to Costa Rica.
Then there are the younger boomers and gen Xers who spend spend spend, rolling one truck/SUV loan into another, buying so much crap supposedly for the kids but I think all the ATVs, snowmobiles, games and fancy fireworks etc are really for themselves.
Maybe it’s just who I happen to know…
Wish I knew more like that.
$100 pair of shoes, no
$5000 birthday parties, no
New Car as a high school graduation present, no
Helping to pay for college education, Yes. One thing we strive for, is to make sure each generation is better off than the previous. Education gives them the foundation they need to do better. Whether they do it or not is up to them.
Someone the other week asked “Why can’t we expect the kids to earn their own way?” Each parent gets to make their own decision on this one.
Four years of college tuition and room/board for each was all we offered. They had to come up with money for books and expenses. No grad school, no help with buying the first house or first car (especially the first car). Amazingly they all graduated in four years.
A decade later one of the kids acknowledged our generosity, and told us stories about the student loans that friends and associates were still paying off.
How’d we pay? My wife worked hard and did very well as a realtor thank you. I can’t tell you how many dinners I prepared (not Domino’s!) while she was writing or presenting an offer late into the evening.
Worked while studying. Dad sent once a yr, 100$ for bks.
Worked harder/more. Studied harder.
Did you miss the chapter on pronouns?
Weddings…you forgot to mention exhorbiant and truly excessive weddings. What a friggin joke. My wife and I eloped to Vegas fourteen years ago and never regretted it.
Just an observation : In some aspects some people are talking about a recession and depression. That does not negate the significance of what is happening. We have more information today and understand more about what is occurring than we ever have in the past. We never really understood that back in 1929, although perhaps a handfull of people understood what a mania was. There was no blog or chat board that you could share your ideas with others.
I think we are in a recession, the loss of jobs that are starting to occur faster and in higher income families is what a recession is all about. However, usually a recession is limited to a small portion of the economy, a few sectors.
A depression occurs when the whole economy loses jobs, and it happens deeply. We are starting to see layoffs not only in finance, but construction, retail and manufacturing. I mean what sector is not getting clobbered right now, except perhaps agriculture and oil related business. However, what happens if oil prices suddenly collapse?
I think a depression is a distinct possibility, when a hurricane has a probability of hitting your area there is a warning. We have a credit crisis, lob losses the likes this country has not seen in our lifetimes. I think we have all been warned.
“I mean what sector is not getting clobbered right now, except perhaps agriculture and oil related business. However, what happens if oil prices suddenly collapse?”
Since the U.S. imports over 50% of its oil requirement, an oil price collapse is a net benefit for our economy, other things being equal.
Since the U.S. is a significant net exporter of grains, a grain price collapse is a net negative for our economy, OTBE (even though it may directly benefit more individuals than it hurts).
I think your belief in decoupling is showing…
Quote: “The median price for condos sold in May was $380,000, down more than $100,000 from the levels in 2005, 2006 and 2007.”
$380k for a condo? That’s 380 times rent! That’s 32 years of rent money excluding what you waste on
1. Mortgage interest
2. Taxes
3. Condo fees
4. Maintenance
5. Insurance
Anyone who buys that deserves what they get.
This is a frigging riot.
http://biz.yahoo.com/cnnm/080630/063008_personal_wealth.html?.&.pf=banking-budgeting
Plano TX has one of the highest bankruptcy rates in the US. Nobody saves anything there. 30K millionaires everywhere you look.
Wisconsin Supreme Court rules fraud not grounds for home buyers to sue.
http://www.jsonline.com/story/index.aspx?id=768220
The opinion opens the door for a home seller to “look the buyer in the eye, lie about the condition of the home, and escape legal consequences,” Bradley said.
Huh? I say it opens the door to a good inspection. Caveat Emptor!
I hope to hear more of this. Maybe that will make people think before buying.
Although it might take a public impaling with a JT on “flip this house.”
Got Popcorn?
Neil
Ok, it happened to me in january 2001. I bought a desktop computer and well you know all about the tech crash.
Well, Ouro got a desktop with her stimulation check today and here we are again. I figure if nobody is driving I may as well have a 22 inch HD monitor and dual dvd and etc. I threw in the extra 200.00 and my friend from Microsoft just styled me with publisher and office 07. Who wants photos?
Ranks a Rot Rorge!
I’m building a new desktop computer as well, and I don’t need no steenkin’ HELOC, or debt of any kind, to pay for it!
My co-worker who just bought a $950k house says, “I wish I had that kind of money lying around.”
A bank loaned him $950k and he can’t find two thousand (it’s a nice, high-end computer) to rub together.
Meanwhile he’s already making major renovation plans, with god knows what source of credit. $950k and it’s not even a house that he wants to live in as is.
My mind reels.
“Roberta Lacken fears her retirement is in jeopardy after her lender slashed the amount she can borrow against her Anaheim home. Lacken said Washington Mutual reduced by about $20,000 the amount she can borrow on her home equity line of credit. She had planned to use that money to make a balloon payment on a second mortgage she and her husband have on an apartment building in San Bernardino.”
How the heck can you have ANY debt if you’re retired? It doesn’t make any sense.
You don’t mean how. Instead, why?
She watched too many episodes of “flip that house” on TV and got entranced into thinking their retirement could get a make-over.
They bought Real Estate with “no money down”.
You remember the commercials, don’t you?
Does anyone have any experience with Foreclosure.com ? Would you recommend it for people looking to purchase foreclosures. I know its a bit premature but I do want to eventually buy something and I have no experience with buying a foreclosed property. I think its time that i start learning and attending public auctions.
I’m about 2 years away from pulling the plug on a foreclosure
Bob-
One word: Bookstore. Read a lot.
Also NoLo Press online (self help legal website and book series) is a good source too. I like their real estate books.
Foreclosure.com isn’t an objective source in my opinion.
“I’m about 2 years away from pulling the plug on a foreclosure”
LOL. Yeah, I’d be pulling the plug on the foreclosures right now.
Oh you mean pulling the “trigger”. Oh, ok, yeah, wait at least 2 years to do that.
Yep, the plug’s a-gettin’ pulled on them fo’closures. They are begining to circle the drain.
Yes pulling the trigger. LOL
Thanks, for the advice
beverly hillbillies theme
Come and listen to my story bout a man named Dodd
refied his house but it seemed kinda odd
saved eighty grand and he said he didn`t know
law makers get a break cause they`re friends of Angelo
Mozzilo that is…Countrywide…bad loans
Well the first thing ya know Angelo is in some trouble he said HEY DODD THEY SAY I CAUSED A BUBBLE
Dodd said fine I`ll just sponsor us a bill coat it with some sugar and I`ll sell it on the Hill
Well the moral of the story that you all should know
better vote the suckers out if they`re friends of Angelo
or pretty soon we`re gonna be a shootin at our food
Benankes got us lookin at two hundred dollar crude
Oil that is black gold OPEC tea
And now it`s time to say goodbye to you and all your kin and we would like to thank you all for kindly chippin in your all invited back again to this locality to get a heapin taxin from this bogus LTV
This has been a subprime presentation
Dang jeff, that there was gol darn good!
Thank you, but Professor Bear helped me change it from rap to straight hillbillie
“The prices we’re seeing are abnormal, Husing said. ‘We’re not looking at a regular supply and demand market: We have home buyers now who might be described as bottom-feeders, and sellers who are under pressure given information from DataQuick that 56.6 percent of all sales in Riverside County in May were foreclosures,’ he said.”
Ignorance. It is ALWAYS a supply and demand market. “Bottom-feeders” are people looking for bargains. Without them, there are NO buyers.
The Manteca Bulletin:
Interesting. If Oakwood Lake Shores is the place I think it is, then yeah, they’re foreclosing on lots because last time I passed there, there wasn’t a hell of a lot of finished houses surrounding the lake.