The Bubble Had To Burst Some Time In California
The Sacramento Bee reports from California. “There was a time when all that Sacramento County Sheriff’s Deputy Mark Habecker knew about mortgages was his own monthly payment. He had never heard of subprime loans or the term ‘cash for keys.’ The deputy could count on one hand the times he’d evicted homeowners. Then came the housing crisis. Now, Habecker converses smartly about adjustable-rate mortgages.”
“He knows all about home values. And while most of his evictions still involve landlord-tenant disputes, he has new layers of paper in his stack of eviction notices. They’re from banks taking back houses.”
“‘We used to do one (bank eviction) a month and maybe 12 all year,’ Habecker says. ‘I have 10 in my stack today just for me, and there’s six of us.’”
“Most of Habecker’s evictions from bank-owned homes are in Natomas. ‘They’re all real nice and big and brand new,’ he says of the residences.”
“Inside the (Del Paso Heights) single-story house, Habecker offered a warning: ‘Never open a refrigerator. It’s the law of the land,’ he said.”
“He doesn’t have to explain why. The home’s interior is ruined. Garbage and trash cover the floors. The couple had been living in the garage. The back and side yards are filled with tires and bicycle parts. A chicken pecks for food, a discarded ham is covered with flies.”
“Real estate agent Allen Griffin says the foreclosed house appears to be owned by an absentee owner. The evicted occupants, he suspects, are friends of the people who actually rented the house or perhaps friends of their friends.”
“Placer County, too, is seeing a ‘huge rise’ in requests for tenant evictions when landlords lose homes to banks, says Ellen Caraska, a Placer County Sheriff’s Department staffer.”
“‘Lincoln has a lot. Roseville has a lot,’ she says. ‘Rocklin, too. Those are our biggest areas.’”
The Manteca Bulletin. “With 1,500 homes in various stages of foreclosure in Manteca that represents about 1 out of every 14 single-family homes in the city’s housing stock.”
“Central Valley Association of Realtors President Bev Marlow noted that even though home sales have picked up to double of last year’s pace with nine out of every 10 of the 410 existing homes that have sold in Manteca since Jan. 1 being foreclosures, there is a serious concern about how many more people will be able to take advantage of the housing market to become homeowners.”
“For now, more foreclosed homes are being sold than those that are being taken back by the banks. The biggest wave of foreclosures, though, has yet to hit.”
“Edward Parcaut, a mortgage planner out of Modesto who has been working with the non-profit No Homeowner Left Behind effort…said some lenders understand that concern which is why they are now willing to deal aggressively.”
“Staff is executing the City Council’s directive to take steps to do what can be done to ease the impact on the community and affected families. ‘Obviously, the redevelopment agency doesn’t have the resources to intervene on a (large) scale,’ said Deputy City Manager John Nowak.”
From Westside Connect. “Assessed property values in Newman plummeted nearly 20 percent from a year ago, dramatically reversing the phenomenal gains recorded in years past when home prices, new construction and sales activity soared at the peak of the housing frenzy.”
“Homeowners whose property was reassessed will see savings on their property tax bills this year. In some cases, the savings will be substantial. With base property taxes equivalent to 1 percent of a home’s assessed value, a $100,000 reduction in the assessment saves the owner $1,000 a year in taxes.”
“City officials had been prepared for a sharp decline in the assessed values, said City Manager Michael Holland, but were taken aback to learn that the values had fallen so dramatically.’
“‘We had built our budget for the coming fiscal year on a 14 percent decline in property taxes,’ he explained. ‘We were told by the county assessor at a meeting that 14 percent would be the number.’”
“The downturn in the housing market was most pronounced in West Side communities. Only Patterson, with a 22.5 percent drop, recorded a steeper decline than Newman in a comparison of the county’s nine cities.”
“‘The assessment roll is based on activity that occurred during 2007. Dramatic declines in the housing market, especially toward the end of 2007, resulted in the assessor’s office lowering values on over 40,000 properties in the county,’ County Assessor Doug Harms commented.”
“Those reductions ranged from 5 percent to 50 percent.”
“‘The assessor’s office is ready at all times to give courteous answers to questions regarding taxation and valuation assessments,’ Harms said. ‘Before owners call, however, they should understand that any further declines in value after Jan. 1, 2008, will not be calculated until the 2009-10 assessment roll which will be determined as of Jan. 1.’”
The Bakersfield Californian. “They say during Bakersfield’s triple-digit summers, a swimming pool isn’t a luxury. It’s a necessity. But a growing number of homeowners are opting to go without. Swimming pools, it seems, are yet another casualty of the real estate slump.”
“‘We’ve had customers with excellent credit back out because they couldn’t get financing,’ said Larry Hamilton, owner of Neudeck Pools Inc. ‘Their homes aren’t worth as much, and the banks don’t like to loan to anyone with low equity.’”
“Larry Kritsch considers himself lucky. The owner of California Fiberglass Pools & Spas saw the housing crisis coming and diversified just before the industry took a dive. ‘I’ve been through business cycles before, so I knew the bubble had to burst some time,”‘ Kritsch said.”
“Now he’s got a side business doing industrial coating, although it’s not really a side business anymore because RLK Coatings has become his primary source of income.”
The Press Enterprise. “The ideas some Inland-area governments are mulling to solve their empty piggybank problems may ring familiar to anyone who has been told to open a window or put on a sweater, but under no circumstances to touch the thermostat.”
“With sales taxes and housing fees plummeting, cities across Riverside and San Bernardino counties are trying to cover the shrinkage of their main revenue sources by laying off workers, trimming services and cutting back on extras such as travel and conferences.”
“For the past couple of summers, Temecula city workers have endured offices that are a few degrees hotter to save the city on cooling costs.”
“Starting around the end of May, city maintenance Superintendent Kevin Harrington bumps the city’s thermostats about three or four degrees above the 71 or 72 degrees where they’re typically set. They stay there until October.”
“The tradeoff is they get to ditch the suits and ties and make every day a casual Friday. Though dress codes are relaxed, employees don’t go completely native. Harrington said they wear slacks and city-logo polo shirts. Open-toed shoes are still forbidden, so flip-flops and sandals are out.”
“‘It’s not like we’re running around in Hawaiian shirts,’ he said.”
The Union Tribune. “Since the Senate’s nine-day holiday began, an estimated 17,000 American homeowners defaulted on their mortgages, mostly because they were unable to keep up with rising payments on adjustable-rate loans. That translates into nearly 1,890 defaults per day, or nearly 80 per hour, based on data from RealtyTrac.”
“In San Diego County alone, homeowners are defaulting at a rate of more than 30 per day, according to DataQuick.”
“Some mortgage brokers say it could be more than a year before the wave of defaults and foreclosures abates. ‘This could easily go into late 2009,’ said Dave McDonald, president of the San Diego County chapter of the California Mortgage Brokers Association.”
“Leonard Rosen, who runs the Pit Bull Mortgage School in La Jolla, predicted ‘very tumultuous times over the next two or three years. We haven’t come close to seeing the effects of the credit crunch.’”
“‘What we have now for the first time that I’ve seen in my 30 years in the business is that people can have credit scores of 720 or 740 and still not be able to get loans,’ Rosen said, referring to the FICO credit-rating system devised by Fair Isaac Corp.”
“Rosen said most lenders are not willing to give credit to any borrower without complete documentation of employment and income. If they were unfortunate enough to take out an adjustable-rate mortgage a couple of years ago, there is little option for moving into a more affordable loan.”
“‘It’s not that the borrowers are no good,’ Rosen said. ‘It’s that there’s no product for them. As a result, a lot of good people are going into foreclosure.’”
The Los Angeles Business Journal. “L.A.’s housing market, pushed along by lower prices and sharply higher condo sales, is showing some signs of life -whether the upswing is permanent remains to be seen.”
“There were 1,254 condo units sold in June, up 115 percent from May. That was the largest number of condos sold in one month since July 2007, though sales were still off 4 percent year over year, according to HomeData Corp.”
“One reason for the surge: price. The median price of a condo that changed hands in Los Angeles County fell 12 percent year over year to $386,000. Meanwhile, there were 3,332 new and existing homes sold in June, up 30 percent from May, but down 28 percent from year-ago levels. The median price fell to $429,000 - its lowest level since October 2004.”
“One key reason condo prices have fallen: Many condo units have gone into foreclosure as first-time buyers eager to enter the real estate market got slammed by rising interest rates on adjustable rate mortgages and were unable to make payments.”
“Foreclosures also have the effect of driving down prices on surrounding units within complexes. This also holds true for single-family homes, where prices are now off 30 percent from their peak in mid-2007.”
“Indeed, the number of L.A. County ZIP codes with a median single-family home price under $400,000 shot up to 85 in June from just nine a year earlier.”
“As for L.A. County’s median home price, which has fallen nearly 30 percent in a year’s time, Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate, said there isn’t a whole lot more room for prices to fall to return to the historical norm of being in line with monthly rents.”
“‘The last time home prices corrected 20 percent or more in L.A. County was in the 1990s, and that took six years. This is happening very quickly,’ she said. ‘There’s probably still a little ways to go in this correction before we turn the corner, but the cost of home ownership is now starting to approach the average rent.’”
“However, Conway added there is one big wild card: the prospect of substantial job cuts.”
“‘If the bottom falls out of the economy and we have significant job losses, then everything will come down: home prices, rents, everything. That could take quite a while to work through,’ she said.”
The Redlands Daily Facts. “Over the last 19 years, Tami Barr spent June planning for the fall gift season. This year, she found herself planning the closing of her State Street store, Crackerjack Gift Co.”
“Barr said the closing has been emotional for some of her faithful customers. ‘I’ve had people come up to me crying and giving me hugs,’ said Barr, who will close the store by the end of July.”
‘Redlands Chamber of Commerce Executive Director Kathie Thurston also expressed sadness at the closing. ‘We’re always sad when we see any business close,’ Thurston said. ‘And we’re starting to see more of that downtown.’”
“Barr said the state of the national economy took a toll on her business. ‘Even an established business can have a hard time hanging on through this kind of economy,’ Barr said.”
“Collective Journey, Barr’s scrapbooking and stationery store on Orange Tree Lane, is staying open.”
“Barr’s Crackerjack hasn’t been the only business on State Street to close up shop. In mid-May, the Barking Frog, a home décor retailer, also closed its doors. Lastraw, a Christian clothing store, closed in late spring.”
“In May, economist John Husing, owner of Redlands-based Economics and Politics Inc., was chosen by the City Council to draft an economic development plan for Redlands. The plan will contain specific action recommendations that should help the city steer its business growth in the right direction.”
“In the meantime, as Husing devises ways for Redlands’ economy to thrive in the future, Barr had advice for keeping State Street businesses’ doors open.”
“‘What people don’t realize is if they don’t come in and spend money on a regular basis, they can’t survive,’ Barr said. ‘If people want to keep these kinds of stores downtown, they have to go shop there.’”
‘Editor:
I read your article (“Century 21 CEO: ‘Window Right’ for Buying Residential Real Estate,” June 23) and I challenge several points that had few facts to back them up.’
‘Over the past seven years, 80 percent of San Diego mortgages were adjustable-rate (ARMs)…According to The San Diego Union-Tribune, 60 percent of the loans across San Diego County were interest-only ARMs during the 2002-2007 timeframe…Right now, it is impossible for most of these people to refinance because they are 20 percent upside down on their loan and lending standards have tightened. How many people do you know can afford a double mortgage payment? What percentage of 60 percent of homes sold over the past five years will foreclose? One can only assume most of them.’
‘It seems like Century 21 CEO Thomas Kuntz and Alan Nevin missed a few current and historic events in San Diego County: Did they miss the fact we built four times the amount of housing we needed during the last six years? Did they miss the fact they quadrupled the numbers of condos downtown in four years and there aren’t any lights on in those towers at night? Who is paying as much as $700 in HOA fees without a perceived return on investment?’
‘Did they miss the fact we have almost as many foreclosures as sales?
Did they miss the fact 95 percent of people aren’t qualifying for mortgages over $417,000? Did they miss the fact employment has been flat or negative over the past five months? Did they miss the fact that all of the first-time homebuyers in the past 15 years probably bought over the last five years, and that killed your demand moving forward?’
‘Did you miss the fact that all of the late 20-something, first-time homebuyers are sitting here laughing at you? Do they have any clue what is going on in this San Diego housing market?’
Devastating!
Doubtful that the late 20-something first-time homebuyers are doing a whole lot of laughing… (assuming they’ve already *bought*)
Where I work most of the late 20-somethings did not buy. We were early to mid-20 somethings in the early parts of the bubble. I guess it depends if you bought or not!
To confirm your suspicions, I am not laughing. I’m 28 and regretting buying a condo in the Boston area in April 2006. At least I bought on a fixed rate… although my ‘equity’ from my downpayment has evaporated.
Its funny, I used to read this blog when I was thinking of buying. And I followed price correlations. I kept telling people in 04 that the housing prices seemed way too high. It was scary. Eventually I started to lose faith in the housing market; realtors were right, I was going to get priced out.
Course, all my neighbors foreclosed, the other houses near my condo are all being rented out to jerks. Kinda wish I did get priced out. And now the home I wanted in the first place (a modest single family) is cheaper than what I paid for this condo.
Those who didn’t buy and now can afford aren’t exactly thrilled. Sure, they can get their homes finally, but prices are only where they should be and not exactly steals compared to relative incomes. And they lost 6 years they could have been in the home they wanted, making neighbors, building roots in a community, but couldn’t because of the insanity of the runup.
“…but prices are only where they should be…”
Not quite there yet…not even close…
I’m totally sympathetic. We bought a house in 2005. I also knew in 2003 and 2004 that prices were getting out of hand. But we were newly married and had just had our first baby. We got a very low interest loan from my parents. So it didn’t break us. But we decided to move just as prices were starting to take a sharp dive earlier this year. We had to sell for around $60,000 less than we paid. Factoring in what we would have paid in rent for three years, etc, we probably lost around $35,000. It’s not the biggest deal or the biggest loss. But that’s $35,000 that we could have put to better use –invested, bought nicer furniture, could have rented a way nicer home in those three years, etc. We’re looking forward to buying a house again. But when we get excited about a house, we just remember how it felt to be on the wrong end of buying and selling a house. That’s not where I want to be again. With banks being more warry lenders and people having less money –due to housing losses, job loss, gas and food prices, etc– I’m pretty confident that we won’t see a price jump like we just experienced for a long time (if ever in my lifetime). So I’m comfortable saving money and waiting this out a few years. I’m watching the neighborhoods I like and I waiting for prices to come down another 20%.
You came out all right only losing $35k, I’d say.
Ben,
Do you ever get any response from your comments to the people that write these articles?
I have written to several reporters pointing out incorrect statements or faulty logic or incomplete data, and I am always respectful and try my best not to be sarcastic.
My experience is that they rarely, if ever, respond.
I actually wrote this article. I got a response because of my creditentials mostly (PE, MBA, President). Many times I find the email addresses of everyone in the article and body slam them left and right. The response has been all over the board, but usually the public figures get uncomfortable. I had a phone call from the San Diego County Accessor about 3 weeks ago and he basically agreed he didn’t have all the facts and took what I said to heart. This is the extremely edited version of this w/o attachments, ”
Subject: Century 21 CEO: ‘Window Right’ For Buying Residential Real Estate
Sender: Mark McMillin - CodeComply
Recipient: anevin@marketpointe.com , rvalone@marketpointe.com , nrandolph@sdbj.com , amills@sdbj.com , rcarr@sdbj.com
Date: 23.06.2008 10:40
Ned,
I read your article in the San Diego business journal and I found it
disturbing. I will submit the following evidence and I request a
correction.
1. Please review the attached graphs and information.
2. 60% of the loans across San Diego country were ARM interest only loans
in the 2000-2006 timeframe as reported by the tribune.
-Another 20% were conventional ARMs.
-When an interest only loan on a 4% teaser rate resets to 6% and the home
owner has to pay principal the monthly mortgage payment will LITERALLY
double.
-It is impossible for most of these people to refinance. How many people
that you know can afford a double mortgage payment? What percentage of 60%
will foreclose, one can only assume most of them.
3. The mortgage reset graph is offset by 9 months at a minimum. This is
because it takes 9 months to completely foreclose on a property, if not
longer. We are only now seeing resets from October 2007 coming into the
market. There is a minimum on 2 years left of subprime pain and then comes
the ALT-A liar loans and the option ARMs out in 2010-2012 will be just as
bad. Do you think those people are actually going to survive when their
mortgages reset? They will be down 40% by then!!
4. Quoting a CEO of a real estate company is idiotic. Do you really
expect him to point out real facts and numbers like a quoted above? He has
his shareholders best interest in mind, that is to sell houses and increase
his stock price. I wish I had his email address.
5. Alan Nevin is a fool. He has several quotes over the past 4 years
saying that the market is just fine and dandy and has been wrong every
time. The guy is a crook. He has no idea about economics either. Let me
refute his stupidity:
-”The high rate of foreclosures is expected to peak this summer and run
its course by year end”, said Alan Nevin, director of research for
MarketPointe Realty Advisors in San Diego.
-Disproved by my points and data above. He clearly has no idea
about the economic conditions of this market, the financial restraints, the
bond market, etc.
-”And housing will eventually rebound locally, because of a chronic
shortage of housing and a strong, diversified economy”, he said.
-Are we all complete fools? Haven’t we seen the data on job sector
in San Diego and the Country?:
http://piggington.com/may_employment_negative_again
Anemic and bleeding out quickly would be the appropriate quote.
If eventually meant 2013 he might be correct.
- We should be building 15,000 to 17,000 new housing units a year,
(but) last year we built 6,000,” said Nevin. “As the economy really
turns around, we will (have) a housing shortage.”
-Yet another lie from an Economic Simpleton. Did you miss the fact
we built 4 times the amount of housing we needed during the last 6 years?
Did you miss the fact they quadrupled the numbers of condos downtown in 4
years and there aren’t any lights on at night? Do you remember the Harbor
Club in the early 1990s, imagine that times 50? Did you miss the fact we
have almost as many foreclosures as sales? Did you miss the fact nobody is
qualifying for loans over 417k? Did you miss the fact all of the late 20
something first-time homebuyers are sitting here laughing at you? Did you
miss the fact that all of the first time homebuyers for 15 years probably
bought over the last 5 years and that killed your demand moving forward?
Do you have any clue what is going on in this market?
Mr. Carr and Mr Mills,
Please make the corrections above and please have your staff quote real
independent economists who called this far in advance such as Shiller,
Toscano, Thornburg, etc.
v/r,
–
Mark McMillin, P.E., MBA
President - Codecomply.com
619-997-2446
Mark.McMillin@codecomply.com
WOW,
very good.
Tkae it from me who worked in Televison stations and news rooms…NO NO NO, its damn near impossible to get anyone to listen to “alternative” thinking. You would think differently.
He!! NO …. i was even tempted to sue Dan Rather for age/sex discrimination because hd.net had a production assitant job for a recent college grad only…..
And my dj partner worked for Walter Conkite for 3 years…And i worked at court tv all during the OJ trial…yet they wanted a clueless 22 year old….
————————————————-
Do you have any clue what is going on in this market?
But aren’t you glad you didn’t work for Dan Rather now? Especially after that a$$ kissing interview he did with Saddam. I’m kind of surprised he was still working for a few years after that interview, because it just so shameful.
Nice job, Mark! Thanks for holding them accountable.
Mark,
Great letter!!!
Did you get a response back from any of the receiptients? It would be very interesting to see how they respond back to you. Would you mind sharing those responses?
not yet…hopefully tomorrow.
Mark-One of the best posts ever, IMO.
Sorry, my mistake. I though you wrote that….
(note to self…first click on link…read…then post on Ben’s blog)
I’m glad someone’s mentioning HOA fees.
There are several big problems with HOAs.
1. A significant portion of people will simply stop paying the fees, so the common areas will start to rot. (Of course, responsible people who have sensible mortgages and have to suffer under a defunct HOA aren’t considered “victims” by Dodd-Frank-Obama. Only deadbeats are victims!)
2. When traditional mortgages, with 20% down, fixed payments, and sensible income requirements return, people will start to realize how much extra house a $350/month or more HOA fee will get them!
For example a 30-year-fixed at 7% on a 300,000 mortgage is $2000/month. For $2350/month, you would cover $375,000 on a 30-year-fixed at 7%.
Once the flippers and specuvestors are all back to living in their parent’s basements, and real people start buying homes to live in again, homes in new “HOA” deed-restricted developments are going to be worth at least 25% less than a house outside a development in an established community. Not to mention that the older houses in established comminities are more likely to be near shopping, transit, etc, than some house in the middle of a gated community is.
And of course, in a deed-restricted community, you can’t paint the house the color you want, your kids can’t have a basketball hoop, you can’t work on your car in the driveway, etc. Who the hell wants that?
I’ve been telling people for the last few years that the McMansion developments will be boarded up ghettos in a few years…the HOA will just accellerate the process.
Re: HOA and condo fees
We pay $380 in condo fees monthly. It covers: heat, water, hot water, sewer fees, trash collection fee, exterior electric use and exterior painting, roof repairs, and porch repairs.
What on that list would we not have to pay for in a single family house?
You are lucky if your HOA covers utilites. Most don’t. Of course, your actual cost for the things on your list probably only comes to $100-150/month or so on average. Do you live in a co-op?
“‘
If[When] the bottom falls out of the economy and we have significant job losses, then everything will come down: home prices, rents, everything. That could take quite a while to work through,’ she said.”Ding ding ding ding…We have a winner!
“‘The last time home prices corrected 20 percent or more in L.A. County was in the 1990s, and that took six years. This is happening very quickly,’ she said. ‘There’s probably still a little ways to go in this correction before we turn the corner, but the cost of home ownership is now starting to approach the average rent.’”
“‘If the bottom falls out of the economy and we have significant job losses, then everything will come down: home prices, rents, everything. That could take quite a while to work through,’ she said.”
You got it, lady. The bottom is already falling out, and Americans are just figuring out that their economy is sinking into a depression. This economy is going to produce misery most Americans to an extent most Americans have never experienced.
As for the “little ways to go in this correction,” try about 4-5 more years. Then the cost of home ownership will be well below the average rent. Then the people with any money left will be able to buy homes and stocks for pennies on the dollar.
Keep the popcorn popping,
Red Baron
Driving on the 880 this morning headed south, I had the misfortune of trailing a black humvee. As I merged onto the road behind the ugly pile of junk, I spied the advertisement for REMax on its back windshield. “Can’t sell, refinance, or HELOC your house? Rent it!”
sigh
Big V — rents are going up and up in San Jose and the Bay Area. There is no such thing as an economy downturn here. My son rented in what is considered a low income apartment complex a year ago for $1050. They are now charging $1295 for that same 1 bedroom POS.
When it crashes here, it had better crash good because the arrogance is unbelieveable.
It is terrible, but I don’t understand why so many people stay in the bay area and put up with this BS, let alone all the other negative aspects of life in the bay area. Why not leave?
Certain careers are only possible in the Silly Valley.
I thought the same thing until I went looking. I have friends who work in the PC gaming industry from the BA and SD that have offices being moved to Kansas! I sh!t ye nay.
Personally, I thank my lucky stars each morning I wake up in St Louis and not BFE California (davis, ca).
We just got here to Kansas and bought a new house. Kelly Bennett posted us on her blog here if you’re curious.
Anyway, there still seems to be a lot of hiring. MEs, AEs, EEs, first try a google search of the Wichita aviation openings. All (and I mean ALL) of the major aviation companies are here. Then, second, check out a cost of living calculator. You might be pleasantly surprised.
I disagree also. I work remotely for a bay area company here in Austin, TX. I imagine with cost of living taken into account, I make more than my coworkers at the corporate HQ. While I agree there might be _more_ opportunities in Silicon Valley, there are plenty of opportunities elsewhere that make better financial sense.
I’d actually like to move to the bay area and rent for a year or so, but when the cost for a rental there would be 60% more than what I’m paying for my PITI here (and that’s with a 2nd mtg!) I just can’t find any way to convince myself its worthwhile.
BuyerWill,
Did you ever get your MIL into the states?
Why in the world was she denied????
It’s so strange that when the U.S. govt basically welcomes drug traders from Mexico, they cannot allow a Chinese grandmother come to visit her daughter and g-child.
I certainly hope you were able to clear whatever hurdles were preventing her from coming.
BTW, do you miss SD, or are you VERY happy about moving?
Aviation companies? I love the industry (it’s where I work), but I wouldn’t take a job with an aerospace manufacturer for all the tea in China. The aviation industry is suffering in a HUGE way. Not just the Part 121 airlines. The charters, sub-K fractionals, SE general aviation, VLJs, you name it. Those that are still selling are doing so to foreigners due to the weak dollar, but even they are going to be up a creek because overseas they pay $12/gal. or more for Jet-A or avgas and the global slowdown just hasn’t hit them as hard. Yet.
I fly in the busiest airspace in the world, and the traffic has slowed down dramatically. Frequencies normally packed with aircraft are so quiet that I have to check in with the controller to make sure my com radio hasn’t died.
CA renter,
Not only were we unable to clear whatever hurdles that prevent my wife’s mother from visiting…
Our shameful US government won’t even tell us what the problems are so that they can be cleared.
Our government is now capricious, closed, and corrupt. If we truly have an open, honest government of the people, then they would tell us what the problem is, so we could fix it. Yet they choose to be closed and corrupt. That’s OK too, we know how to deal with that. In the same way we have to deal with the Chinese, or Mexican governments. Just tell me how much to bribe your sorry asses. No problem.
Oh, and P.S. I don’t miss San Diego even a little bit.
By ‘busiest’, I assume you mean SoCal. I’ve been up flying twice a week for the last few months, and it seems as busy as ever, both in general aviation and the airlines. It’s perplexing, since avgas is around $5.60 these days, which has had quite an effect on aircraft rental rates. Lots of air traffic control delays to get IFR clearances to go anywhere. Doesn’t seem to be a major slowdown, at least midweek.
So nothing much has changed, except there are a lot more green swimming pools slipping past the wings as I cruise eastward.
BuyerWill,
Very sorry to hear about it. Hopefully, she will be able to visit soon, however you need to manage that (wouldn’t it be funny if you sneaked her in through Mexico?).
Best of luck to you!
I can actually save money right now, but believe me, I’m considering moving out of the area. Would like to take my family and close friends with me though and that’s likely not going to happen, sadly.
i totally agree with you…i am only in the bay area until my parents retire (so my kids can grow up seeing them frequently), then perhaps we can all migrate somewhere that is lower cost all around. Any suggestions? Not the desert where its 120 in the summer, preferably not in humid hurricane central of florida, also my wife refuses to consider any place that snows. i have live in CA my whole life and am starting the process of evaluating other areas.
Prescott, AZ ?? or SLC or mid Oregon?
They don’t get “much” snow and mild climes are nice.
Okay, so I have never been in SLC when it snowed. Just flurries.
If I was a Californian considering living in another state, i’d take careful notion of the fact that the inhabitants of every other state hate our guts already, and it’s only going to intensify once the hoi polloi flyover boys figure out that we were responsible for much of the housing bubble.
There are many out of the way spots in the Golden State that are worthy of moving to, and best of all…
Nobody’s gonna bag on you for being a Californian~
SLC can get quite a bit of snow during the winters, but not every year. The east benches can have a foot or more on the ground for a couple months. Three feet or more happens at least once a decade or so.
Those are the good winters. When there’s few storms, that usually means high pressure and inversions from about Thanksgiving to the end of February.
The snow’s not that bad, really - it doesn’t do that icy sleet thing that happens on the east coast in the Middle Atlantic.
What does SLC stand for?
SLC=Salt Lake City
Snow is not bad at all. In fact, we were skiing on July 4 in the mountains. Lots os small vallet storms past winter - so only 1 or 2 very short inversions as I recall. Think that is bad? Follow Cali’s air quality at http://airnow.gov every few days, and compare it to Utah.
There is amazing job and business growth; tops in the nation.
In my case, its because I’ve lived in the Bay Area my whole life (48 years) - my parents live here and everyone I know lives here. I don’t own - I have a rent-controlled apartment in the Inner Sunset in San Francisco and pay way below market rate. It still is a great place to live, in my opinion, but the housing prices are insane. I wouldn’t really recommend that people move here now.
I love the Bay Area. What are the problems with it? Of course if you live out in Manteca and need to commute to Palo Alto, you’re an idiot. But if you live and work in Palo Alto, Sunnyvale, Cupertino, etc., it’s great.
Of course, I’d welcome a 50% reduction in house prices! (And I’m no bitter renter–My 94087 home is 100% paid up.) There’s a bubble here just like everywhere else.
But Silicon Valley (which I take to mean the “Peninsula” and not the East Bay) is great place to live. Crime is extremely low. I can walk to three supermarkets, a park, about 20 restaurants (independent Indian, Afghani, Chinese, Vietnamese, Japanese) from my single-family-detached house. I can do 99% of my shopping within a 5 mile radius of my home. Tomorrow, I walk to my dentist, and on Thursday to my Optometrist. Try that in a gated community.
As I pointed out yesterday, I didn’t drive at all over the July 4th holiday. I put about 2500 miles/year on my car. (My last car, 11 years old, had 28000 miles on it when I sold it.) Granted, most of my work involves getting on an airplane and going somewhere and when I’m not on the road I like to stay put…
What sort of lamb or mutton do they serve in an Afghani restaurant ?
Rents will drop substantially when people decide that they can’t afford to live in the Bay Area anymore.
Rents are already flat in Marin as the shadow rental market gets bigger.
Keep the popcorn popping,
Red Baron
I keep expecting all of these apartment complexes that converted to condos to convert back…. but so far they don’t… instead all I see are empty buildings everywhere and rising rents. Ya, it makes no sense in the Bay Area. This one building I drive by has been empty for over two years now. Makes no sense. Are people here just loaded to the gills with cash and willing to burn it away on stupidity?
The main reason for staying is the job, but even that anchor is starting to lose its weight. What other areas of the country have good tech jobs? Just seeing where other people have gone or are going to.
Potential Buyer:
I have to disagree with your rosey assessement of the San Jose economy. What I see is asking rents going up, but actual rents just rising with inflation. Your son was paying very, very low rent last year. I think your typical 1 bedroom POS was about $1200/month last year, so he probably just fell victim to the ond bait and switch. We moved into a new rental in February. At first, we were scared by all the wishing rents on craigslist, but now we realize that those were just FB houses, and they don’t count. We rent a very nice 2200-square-foot house with a view on a quiet street for only $2400/month. That is less than twice what your son pays for a 1-bedroom POS, so houses are still a better deal than apartments. He should look for a roommate situation.
Jobs are getting scarce. Unemployment in the Silicon Valley is over 6% and rising. Compare that to last year, when it was over 5% and rising. Last time I went looking, I had multiple offers within a week. This time, I have been looking for months to no avail. My current job is starting to seem real cushy right now.
House prices are plummeting all over the Bay Area (and how in San Jose) according to all the data sources I know of.
By all of the above measures, it seems to me that the San Jose economy is in an obvious downturn.
Big V:
If you don’t mind, can you mention which town your new rental is in? I am in Fremont looking to move to the peninsula and want to get some idea of what houses are actually renting for.
Thanks
Semper Fi,
Try Craigslist, click on “pen”. Take a look at the asking prices there.
Hi Semper.
I live in Newark, which is not (obviously) the peninsula. It could be a reasonable commute for you though, depending on where you work. Personally, I am scared of driving over bridges, so I wouldn’t do the Dumbart thing, but it may be OK for you.
Wow $2200/month in Newark. I thought that was high for the coast for 3/2…guess not. I’ll stop whining now (though I don’t pay near that). I do notice lots more of the outlaying areas (La Honda/San Gregorio coming available on craigslist. Also noticing more apts and room shares. I guess the surfers & young people are deciding it’s cheaper to live over the hill where they work than near where they play. It works for me because I work over here too.
Some of my co-workers come from the East Bay because housing is cheaper (I thought-until tonight) at least that’s what they told me. Yikes can’t imagine what they are paying for gas cost a month.
Hi Suzy:
The house is a 4/2.5. To what hill do you refer?
Sorry about the caoastside reference. The “hill” is the approx 9 mi. on Hwy 92 between Hwy 1 & I-280. When you get there it’s still another 10 to 15 miles to most employers. If you work in the city it’s about the same 20-30 miles. These are not “highway” miles. Mostly two lanes for the first 10 miles or so. BTW the 4/2.5’s are going for 2800 to 5000 (golf course) depending on where they are…..
Can anybody figure out a timeline, as to when we degenerated into a nation of ÜberSlobs?
_______________________________________________________________
“Inside the (Del Paso Heights) single-story house, Habecker offered a warning: ‘Never open a refrigerator. It’s the law of the land,’ he said.”
“He doesn’t have to explain why. The home’s interior is ruined. Garbage and trash cover the floors. The couple had been living in the garage. The back and side yards are filled with tires and bicycle parts. A chicken pecks for food, a discarded ham is covered with flies.”
http://www.bostonherald.com/news/regional/general/view.bg?articleid=1105329&srvc=rss
RE: Provincetown
Any families stupid enough to be takin’ the kiddies to the beaches which are known to serve as the summer homosexual playground of New England deserve what they get.
Um, or maybe the cops could actually enforce the law so that public beaches can be used by families instead of being taken over by criminals.
Sacramento is a sty, but Del Paso Heights is probably its trashiest part.
Oak Park and South Sacramento may have more violent crime, but the most disgusting of Sacramento residents seem to congregate in Del Paso Heights.
Nahh, you just haven’t had a tour of Sacramento in a while >; )
It gets really trashy all over in pockets. Heck I was tempted to go around and take photos of some select homes in Davis that were beyond craptastic with weeds, trash in the yards, and buildings that had seriously fallen into decay before I left.
I think Walt was calling the people of Del Paso Heights trash, not their houses. I agree with Walt, Del Paso sheep have a lot to fear when the farmer is away.
Right, the residents of Del Paso Heights are a pretty loathsome sight. I agree that the Sacramento area is pretty foul throughout with very few redeeming qualities.
FWIW, I’ve lived in Sacramento for 6+ years (3 in Davis, 3 in Arden-Arcade).
Del Paso is crappy. But I was just out at Town and Country Village on Fulton and Marconi. It’s been only a few years since I lived in that area. It used to be an upscale little shopping area. I was surprised by how many gangster types I saw walking around the Save Mart. One guy was even talking very loudly on his cell phone about how everything in his life got messed up when he shot someone in the head.
And I just saw an article in the Sacramento Bee from last week about all the crime in the Natomas area, one of the areas hardest hit by foreclosures –and they’re getting a lot of home invasions, robberies in the shopping area parking lots in broad daylight. Bad news for that area.
Del Paso Heights is a very low income (welfare, food stamps, etc) area of Sacramento, the likes of which I’m sure can be found in any city.
Haha, the ‘no open the fridge rule’ is famous among those who make a living going into abandoned/vacant properties. Until you’ve been hit with a blast of rot-fungi-stank-nasty in the eyes, nostrils, mouth and ears, you can’t imagine why opening that door is such a no-no. I’ve heard of people going home and taking a shower after breaching the seal.
When a customer put their hand on a fridge door the other day I yelled like a bomb squad tech. And ran. He didn’t stop and now he is one of the converted.
“Leonard Rosen, who runs the Pit Bull Mortgage School in La Jolla, predicted ‘very tumultuous times over the next two or three years. We haven’t come close to seeing the effects of the credit crunch.’”
Word!
What else can I say. It will take years to work this off. I predict the next, next wave of foreclosures are from the knife-catchers of 2008.
Knifecatchers are getting tapped out. The number of qualified buyers is decreasing far faster than prices now. IndyMac just dropped out of the mortgage business today, and I suspect we’ve got a few more shoes to drop by the end of the summer.
Larry Kritsch considers himself lucky. The owner of California Fiberglass Pools & Spas saw the housing crisis coming and diversified just before the industry took a dive. ‘I’ve been through business cycles before, so I knew the bubble had to burst some time,”‘ Kritsch said.”“Now he’s got a side business doing industrial coating, although it’s not really a side business anymore because RLK Coatings has become his primary source of income.”
I nominate Larry Kritsch (of Bakersfield) for a Nobel Peace Prize.
Alan Greenspan (only see bubble in the past), Bush (Strong Dollar), Bernanke (it all contained) and all the great the Titan of the Industry (CEO of: Countywide, Bear Stearns, Goldman Sachs, Bank of A., NAR, UCLA, USC, Harvard, ) did not see this happening. But Larry K. of Bakersfield recognized this as a bubble and took precautions and now is successful. Can we put Larry on the phone with Senator Dodd?
Crisp and Cole: Can you interview this Real Man of Business Genius and see what his secret, formula, software or derivative method of calculations are?
The world waits with baited breath to see and know what Larry Kritshc (of Bakersfield) knows that our Over-Lords of the world do not know!
Sorry if this is a repost. My comments are not showing up after 30 minutes?
Don’t you know, his actuaries are better than theirs…
The one thing coppers fear the most is domestic disputes, and landlord-tenant ones in this day and age is like hitting the daily double of bad ju ju…
How much longer before the Mark Habeckers of the world don’t want to do the dirty work of the banks anymore, out of fear for their lives?
____________________________________________________________
“There was a time when all that Sacramento County Sheriff’s Deputy Mark Habecker knew about mortgages was his own monthly payment. He had never heard of subprime loans or the term ‘cash for keys.’ The deputy could count on one hand the times he’d evicted homeowners. Then came the housing crisis. Now, Habecker converses smartly about adjustable-rate mortgages.”
“He knows all about home values. And while most of his evictions still involve landlord-tenant disputes, he has new layers of paper in his stack of eviction notices. They’re from banks taking back houses.”
“‘We used to do one (bank eviction) a month and maybe 12 all year,’ Habecker says. ‘I have 10 in my stack today just for me, and there’s six of us.’”
Houston, we have lost all control!
Reply from Houston…
You NEVER had any CONTROL…
That Joystick is just a COSMETIC touch
Control: We have flame out,and we’re going in…gravity sucks.
“‘We used to do one (bank eviction) a month and maybe 12 all year,’ Habecker says. ‘I have 10 in my stack today just for me, and there’s six of us.’”
Foreclosure evictions go from 12 a year to 10 a day - GDII?
Did everyone miss the part about the suicides? That’s what I found to be very telling.
I’m hearing from reliable sources that suicides are up in San Diego, as are homicides and violent crimes.
There are a number of stories about people who’ve been on drinking binges (literally days on end, morning ’til night)…because of their economic situations.
Marriages are unraveling and things are looking grim, and this is in some of the better areas.
This is the sad part of the housing bubble. Much as I want it to pop, there is no satisfaction is seeing people spiral down the black hole of depression and despair, even if they did bring it on themselves.
I guess I generally feel sorry for people, but folks who choose to drink themselves into oblivion instead of getting up in the morning and tackling the day really have to take some responsibility for their own sorry state. I get depressed too, but I realized at some point that the only way to unpress myself was to do something productive, regardless of my lousy mood. Why can’t today’s FB do the same?
Because they finaly realise life is a b!tch. Earning your wealth is tough and most of the “I want it now” croud can’t hander that.
When I started reading this blog last year I was one of the “debtor for life people”. The people on here and the information I have read has changed that. I will be debt free Sept 10, 2008 as long as I still have my job. But im definatley looking forward to the dsy I psy off my last debt. THe only thing I will finance again in my life time is a house but that won’t be before 2012 or later. Thanks for all the great comentary everyone. I just wish more of america would wake up and see whats really going on.
And then there is my BBF’s mom who was a career alcoholic. She also worked a nine to five job, raised 3 kids as a single mom (husband died - had to get that out there before the misogynists start up), never on the public dole, never took sick leave or vacation unless they made her. Retired after 37 years in the same company, ins underwriter, commerical lines.
She could hold it together all day but come 6pm and all weekends, she was hammered. One weird lady.
Congratulations, sailor!!!
That’s fantastic you could dig yourself out of debt within that short time.
——————-
Big V,
There are people who have lost their jobs, lost their spouses (and kids, in many cases, because of divorce which is due to financial problems), lost their houses, can’t find new jobs, etc., etc.
Not excusing alcoholism. The stories I’m talking about are when they just start drinking/doing drugs like that out of the blue…because of what’s going on financially (and all the consequences of thier poor decisions). Sad.
I’m going to verify your post on depression being ‘Up’ in SD. I work all over the county in psychiatry, and the amount of sob stories of FB or people who HELOC’D themselves into the financial death spiral is very high-probably a high % of patients.
Talked one of the other doctor’s out of buying into a gated community in Poway that is now about 40% less than it was when they were looking at it. We joke about it now, but sometimes I feel like asking for comission for them NOT buying the house.
Larry Kritsch considers himself lucky. The owner of California Fiberglass Pools & Spas saw the housing crisis coming and diversified just before the industry took a dive. ‘I’ve been through business cycles before, so I knew the bubble had to burst some time,”‘ Kritsch said.”“Now he’s got a side business doing industrial coating, although it’s not really a side business anymore because RLK Coatings has become his primary source of income.”
I nominate Larry Kritsch (of Bakersfield) for a Nobel Peace Prize.
Alan Greenspan (only see bubble in the past), Bush (Strong Dollar), Bernanke (it all contained) and all the great the Titan of the Industry (CEO of: Countywide, Bear Stearns, Goldman Sachs, Bank of A., NAR, UCLA, USC, Harvard, ) did not see this happening. But Larry K. of Bakersfield recognized this as a bubble and took precautions and now is successful. Can we put Larry on the phone with Senator Dodd?
Crisp and Cole: Can you interview this Real Man of Business Genius and see what his secret, formula, software or derivative method of calculations are?
The world waits with baited breath to see and know what Larry Kritshc (of Bakersfield) knows that our Over-Lords of the world do not know!
Live in Victor Valley area , does not seem as if the economy is slowing people down up here. What gives?? I mean the Victor Valley mall was packed, the Best Buy shopping Center adjacent was packed and movie parking lot was full. I had to park damn near a quarter mile to finding parking spot at the movie theater. Inside the mall ppl were shopping too. Big bags..multiple big bags in hands or hanging off of baby strollers.
What is it,the heavy gov’t employee base up there?? I know within 75 miles of Victorville is Edward AFB to the West, Fort Irwin Base to the North, 29 Palms Marine bast to the East, BLM and many other gov’t entities. It just bedazzles me to see ppl in the VV(Victor Valley) still driving full size SUV’s, lifted I might add, big V8 Chargers, Magnums, Mustangs and 300’s.
Can someone please explain what is going on this to this desert boy.
Ye olde credit cards
Livin’ la vida HELOC
They had a fresh strike of Fools Gold at the Victorville Narrows ?
Even during recessions, malls are always packed in California, I think just because it’s so crowded here. There are enough people in California to fill up all the malls and suffocate each other in the process. Unemployment could go to 25%, and the malls would still be packed, especially if there were a sale.
Yes, the malls are packed (So Ca), but look at the “package index”, and you’ll find it’s the AC, and a place to walk, nosh, and get out of the house.
When I see a full mall parking lot I naturally do the “package index”. I graduated shopping center school in the 80’s.
It’s hard to deny what your eyes tell you. If anyone cares to look for indications that the economy is chugging along more or less as usual, they’ll find them.
The economy took one below the eye and was staggered, but just then the bell rang. The cut-man (the fed) stopped the bleeding. Now, between rounds, the odds (wall street) are shifting back and forth because nobody really knows how much damage was done.. no one’s even looked for the towel, much less being ready to throw it in.
The misanthropes will get their jollies but a very, very few people have anything real to gain by economic collapse..
Everyone from the Fed to banks, to Wall street, to homeowners, government at every level, businesses of all sorts including their employees, have a vested interest in doing all they can to suppport the economy. If it falls it will be despite their best efforts, which are considerable in terms of time, effort, money and manpower, all willingly spent.
Among things that are almost guaranteed, housing prices will return to the level of affordability. A general economic slowdown has been evident in the last months, but it’s ultimate destiny is unknown. I believe we’ll just end up tossing the last decade out the window and move everything back to around 1999..
Hi Joey:
1. Of course, if one looks for evidence of anything, they’re likely to find it. It’s much more useful to start with a hypothesis, and then try to disprove it. If you try and try, and still can’t find a way to disprove yourself, then you may increase your level of confidence. You may even graduate your hypothesis into a theory, but you will never be right until after the fact.
2. It doesn’t matter whether you will have anything to gain by an economic collapse. If you have chosen to ignore the ensuing downturn because the downturn doesn’t benefit you, then you have made it even harder on yourself. If you acknowledge the fact, then you will be much better able to deal with it. Do me a favor. Even though you choose to deny the problem, why not agree to keep your job and save your money, just in case. Maybe plant a vegetable garden if you have an available yard.
3. Yes, when the economy falls, it is always despite everyone’s efforts, and it happens time and time again. Things will get better after they get worse.
All i was trying to say is it’s way too early to count the economy out, and there’s no reason to be suprised at what is apparently normal activity in sectors not directly associated with the housing problem.
I know it would be difficult for many on this blog to admit that the Fed’s and other PTB maneuverings might have had a very positive effect, perhaps to the point of preventing a serious recession (or worse), but they may have… time will tell.
Larry Kritsch considers himself lucky. The owner of California Fiberglass Pools & Spas saw the housing crisis coming and diversified just before the industry took a dive. ‘I’ve been through business cycles before, so I knew the bubble had to burst some time,”‘ Kritsch said.”“Now he’s got a side business doing industrial coating, although it’s not really a side business anymore because RLK Coatings has become his primary source of income.”
I nominate Larry Kritsch (of Bakersfield) for a Nobel Peace Prize.
Alan Greenspan (only see bubble in the past), Bush (Strong Dollar), Bernanke (it all contained) and all the great the Titan of the Industry (CEO of: Countywide, Bear Stearns, Goldman Sachs, Bank of A., NAR, UCLA, USC, Harvard, ) did not see this happening. But Larry K. of Bakersfield recognized this as a bubble and took precautions and now is successful. Can we put Larry on the phone with Senator Dodd?
Crisp and Cole: Can you interview this Real Man of Business Genius and see what his secret, formula, software or derivative method of calculations are?
The world waits with baited breath to see and know what Larry Kritshc (of Bakersfield) knows that our Over-Lords of the world do not know!
“As for L.A. County’s median home price, which has fallen nearly 30 percent in a year’s time, Delores Conway, director of the Casden Forecast at the USC Lusk Center for Real Estate, said there isn’t a whole lot more room for prices to fall to return to the historical norm of being in line with monthly rents.”
Really? Tell me more!
“‘The last time home prices corrected 20 percent or more in L.A. County was in the 1990s, and that took six years. This is happening very quickly,’ she said.”
Wow, thanks for telling us what we already knew. Can I have your job?
“‘There’s probably still a little ways to go in this correction before we turn the corner, but the cost of home ownership is now starting to approach the average rent.’”
Now I really want your job. If an idiot can do it, just think how great I would look. The house next to mine wants 985k, but would rent for 3k, but who am I to say anything?
“However, Conway added there is one big wild card: the prospect of substantial job cuts.”
OMFG, its fricken Einstein! Are you telling me that everything depends on JOBS! Wholly frick your smart!
I’ve said it before, the Lusk Center is an embarrassment to USC. Bought and paid-for by the REIC. I don’t know why we have them here:
http://www.usc.edu/schools/sppd/lusk/membership/
Trojan Horse?
er, Trojan House
Still can’t get near the good houses here in Riverside, CA (yes, there are a few). There are multiple offers and people are bidding 20% over asking price! We don’t know what to do.
Sarah Conner?
LOL
There has been at least 30 years of brainwashing regarding real estate for the people that live in California. Real estate never goes down here, so a 10 or 15% decline in a year seems like manna from heaven - a once in a lifetime opportunity. That is why you are seeing this behavior. I see it near me too.
The interesting thing to me is whether the homes those buyers are purchasing will appraise for the price they are paying. I have heard that is becoming a problem in many areas of SoCal.
Bought tiny grandma home in TL,CA ‘84 @ $125,ooo.
In late 80s was $37o ish.
‘96 was $210k as is. And I was lucky to sell.
Well then it went up. Same house,3 yrs ago 890k.
Something is totally wrong there, and now prices are more in the 500’s and not selling.
So, when it continues to go down to the 200’s, which it will, then we can all say, CA re never goes down. heeheee
TL…Toluca Lake?
There are multiple offers and people are bidding 20% over asking price! We don’t know what to do.
Wait 1-2 years.
Sellers are listing houses way under recently perceived values to generate bidding wars. They did it on the way up too.
The current buyers were frustrated that they missed the boat during the bubble and are speculating that prices will quickly rise again. They will be wrong. They will now MAKE A COMMITMENT. When prices don’t rebound only the more patient buyers will be left to buy, for the impatient ones will then be out of the market.
Only when the (emotional/impulsive) bubble-logic thinking dies will prices actually stabilize. Bubbles neither appear nor disappear overnight.
The interesting part of this discussion is that even if prices that the buyers are paying now stayed flat for the next five years, a large percentage of these buyers would be moving for some reason such as divorce, job, medical, and they’d be underwater when you add up the costs to buy, the costs to sell, taxes and maintenance. No matter how you cut it, they are and will be FB’s.
There are lots of people that still don’t get it.
I was at a party and someone brought up thinking about buying this foreclose and of course everyone agreed it was a great deal. Well, except for me. Half of way overpriced is still overpriced.
The 20 something started in on how it was half the price of others listed on the street and how it had “instant” equity.
That “instant” equity comment caused me to walk away for another beer.
You cannot fight the instant equity that has been drilled into these sheeps heads. They consider it extra money just like they consider a raise in the limit on their credit card is extra money they were just given.
They will keep buying and Bk’n until they can do it no more.
What to do? One word - DON’T. Riverside isn’t even close to being at bottom. Nasty ex boss bought in 2/06 in Riverside @ nearly $1 million. Then he did a $200K renovation (it’s old house). I told him not to buy and he basically told me to STFU. I’m enjoying my last laugh hugely.
Sarah:
When the bank is asking 50% of peak price for their REOs, and they end up getting 20% over asking, that means that the value of their inventory has dropped to 60% of peak.
When reviewing sales history of older houses, you’ll see multiple waves of foreclosures during the downturns.
This is our first dead-cat bounce; as predictable and expected as the sun rising in the morning.
When prices have dropped 25-50% in many areas, (and experts had predicted **maybe** 10-15% drops at worst!!!), you will see many of the buyers who’ve held out for 5+ years jump in.
Wait until Q4 2008, and we’ll probably see more weakness again.
Just sit back and enjoy the show. We have a long way to go, IMHO.
Outta the way pirate store, we have found something even dumber…
“Lastraw, a Christian clothing store, closed in late spring.”
Sackcloth and ashes?
Chastity belts?
Rapture ready to wear?
rhinestone crown of “thorns” or tiaras?
Damn, I bet they’ve sold out of wings.
Herringbone patterns. (fish)
prairie girl dresses.
Here in Tucson, a Christian dance club opened two or three years ago. When I went by that strip mall this past Friday, I noticed that the club’s space is now vacant.
I guess all those dancers got swept up in the rapture.
Still waiting to hear about Christian strip joints.
no worry
bid 21% over and you should get in. just make sure you are not planning to sell for next several years!!
related to sarah’s post
“‘It’s not that the borrowers are no good,’ Rosen said. ‘It’s that there’s no product for them. As a result, a lot of good people are going into foreclosure.’”
If they were good, they would not be reneging on the loan terms to which they agreed.
No shite. And there most certainly is a product for them. Prices simply need to drop in half from the peak for them to get access to and afford it.
Product? These lucky borrowers are not the ones who will be needing a product. No, it’s the screwed FB (i.e., people who get approved for mortgages) who will be needing “product” to soothe their worn and torn bungholes.
What’s truly amazing is that people still think FICO scores mean a borrower is “qualified” to borrow large sums of money.
As a lender, I would NOT make loans to people unless they had significant downpayments (with reliable collateral, appraised by MY appraiser), and/or I would have to check every single aspect of their finances. FICO scores mean very little WRT a borrower’s ability to pay off large loans.
“For Habecker, the weekday patrols through Natomas, Rio Linda, Del Paso Heights and North Highlands have been a front-row seat to the personal dramas behind the numbers.
Twice this year, he says, homeowners about to be evicted have committed suicide as he approached to do a lockout.
In another case, he said a fellow Sacramento deputy found a note in the home that told him where to find the foreclosed homeowner’s body.”
OMG it’s not that serious. People must not invest themself so deeply in to little box made of ticky tacky. And they all look just the same.
Yeah, this whole dream house lotus land stuff is really freaky. If you want to see a whole other side of life, check out this amazing new documentary, “Surfwise”, about a family of 11 who lived off the grid in a 20 foot camper, surfed, and survived to tell the story. Truly fascinating. http://www.surfwisefilm.com
OMG! My fantasy! No the 9 kids but the life.
IIRC, that song was written about Daly City, California.
IndyMac stops new loans, to cut work force by half
http://apnews.myway.com//article/20080707/D91PAB300.html
Real estate - its not just location, location, location. Its also jobs, jobs, jobs!
Sounds like they are dead in Indymac… waiver from FDIC about deposits exc exc.
Wamu should be soon as well.
And the once High and Mighty House slid down from upon the Mountain and spake.
“SELL if you can, if you can’t…RUN like Hell”
HHB Proverbs 2.00.8
Mark to Lard
“With 1,500 homes in various stages of foreclosure in Manteca that represents about 1 out of every 14 single-family homes in the city’s housing stock.”
“He doesn’t have to explain why. The home’s interior is ruined. Garbage and trash cover the floors. The couple had been living in the garage. The back and side yards are filled with tires and bicycle parts. A chicken pecks for food, a discarded ham is covered with flies.”
And my daily Google News alert (admittedly not a complete search) has yet to show ONE instance of a foreclosee being prosecuted for destroying bank property….
Reuven, I think it was stated before..It is technically his house and can do what he wishes, only after he is gone and all papers duly posted does it become the banks. sad, and sick, but probably legally correct.
A pool is a hole in the ground you throw money and chemicals into…
________________________________________________________________
“They say during Bakersfield’s triple-digit summers, a swimming pool isn’t a luxury. It’s a necessity. But a growing number of homeowners are opting to go without. Swimming pools, it seems, are yet another casualty of the real estate slump.”
Hear that flapping noise? That’s the sound of Clownifornia “equity” money “invested” in DFW flying away to money heaven.
Dallas-Fort Worth pre-owned home sales down 20% in June
04:40 PM CDT on Monday, July 7, 2008
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
Hot summer weather isn’t heating up the North Texas home market.
June sales were down 20 percent from a year ago. And for the first six months of 2008, the number of pre-owned houses sold in the area is off 15 percent from the same period last year.
The good news: Prices are holding up relatively well.
North Texas real estate agents sold 7,371 pre-owned homes last month, the North Texas Real Estate Information System and Texas A&M University’s Real Estate Center reported on Monday. That’s the lowest sales total for June since 2003.
The fall-off in June home sales “may be a tad higher than we expected,” said Dr. James Gaines with Texas A&M University’s Real Estate Center. “We’ve seen the high-end market decline significantly with the high cost of financing for jumbo mortgages (over $417,000).”
Indeed, some of the biggest local home sales declines so far this year have been for properties priced over $700,000, Realtor statistics show.
Most of those “Clownifornians” probably were from Texas originally, sweetie. : )
Just comin’ back home to where they fit in.
Seems the Asians are bailing at the moment..1am EST
down 3-4% already.. should be interesting tomorrow
In May, economist John Husing…was chosen by the City Council to draft an economic development plan for Redlands.
Redlands wasn’t all that great to begin with. This report should spell doom for that little corner of the Valley.
Frankenstein had nothing on our banking system.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0TGMrBy2PyE&refer=home
From your link:
Commercial banks and savings-and-loans held more than $370 billion of non-agency mortgage bonds on March 31, according to Federal Deposit Insurance Corp. data. Much of that can only be sold at fire-sale prices after record subprime-mortgage defaults and home-price declines sparked losses on the underlying loans.
“This is an attempt to shake things up,” said Scott Kirby, who manages about $20 billion of structured-finance securities at Ameriprise Financial Inc.’s RiverSource Investments LLC in Minneapolis. “There’s a lot of paper floating around that’s having difficulty finding a home.”
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They’re claiming they can turn Alt-A and lesser-quality loans into AAA debt so they can “enhance” the value of their junk…all this so they can sell it off to pension funds and insurance companies. (sound familiar????)
If the pension funds & ins companies actually buy this crap without SUBSTANTIAL discounts, they execs deserve to be hung in public.
I’m saying it here and now on the HBB: these securities are crap and will be worthless within a few years. No excuses from these jackasses who let this game continue apace.