The Seemingly Relentless Nose-Dive In California
The San Francisco Chronicle reports from California. “In the San Francisco metropolitan area - which Case-Shiller defines as the counties of Alameda, Contra Costa, Marin, San Francisco and San Mateo - prices fell 22.9 percent in May compared with a year ago. That made the area the sixth worst-performing region in the country, according to the index, after Las Vegas (down 28.4 percent), Miami (down 28.3 percent), Phoenix (down 26.5 percent), Los Angeles (down 24.5 percent) and San Diego (down 23.2 percent).”
“‘On a relative total performance basis, San Francisco is still a market that grew quite a lot from the mid-1990s to 2006; its prices increased very sharply during that time,’ said Maureen Maitland, VP at Standard & Poor’s, which publishes the index. ‘I don’t want to undermine the fact that … San Francisco is not doing well; prices are in sharp decline, but most people who owned a home for five, 10 or 15 years are still in relatively good shape if they want to sell their home today - they just can’t sell it for (as much) as last year.’”
The Los Altos Town Crier. “In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from the MLS for the Silicon Valley Association of Realtors. The average price of homes in June was $922,149, down from $970,702 in May. The average price of homes in June 2007 was $1,066,610.”
“Today’s market offers long-term value for buyers, according to SILVAR President Leannah Hunt. ‘As home prices drop a bit, there are good opportunities out there for serious home buyers,’ she said.”
The Los Gatos Weekly Times. “Santa Clara County assessor Larry Stone has been in office since 1994, and he’s seen property values rise and fall as market conditions change. At a real estate tour meeting in Los Gatos last week, Stone admitted the current market is ‘rather a drastic market,’ but noted, ‘We’ve been through the downturns, but somehow the market always rebounds.’”
“Hardest hit these days are the condo and townhome markets, and Gilroy, Morgan Hill, Milpitas and East San Jose, which he described as ‘blood-baths.’”
Bay Area Newsgroup. “Lennar Corp. has jettisoned its ownership stake in two condominium projects near Marina Bay here, another indicator that the housing market has yet to escape its multi-faceted meltdown.”
“The company sold its interest in the 488-unit Marina Shores and the 224-unit Marina Cove, residential developments located in the Marina Bay area of Richmond. Both projects were launched as a venture consisting of Lennar and Emerald Fund. Kennedy Wilson bought Lennar’s stake in the two condo projects, which total 712 units.”
“‘Builders want to focus on the inventory they are sure they can sell,’ said Matthew Anderson, a partner with Oakland-based Foresight Analytics. ‘Builders don’t want to keep a project that no longer pencils out.’”
“About 515, or almost three-fourths, of the units in the two projects remained unsold as of a few weeks ago.”
“Kennedy Wilson’s strategy will be to auction some of the homes. The company plans to auction 40 of the condos in August for $140,000 to $255,000. The homes had been offered for $275,000 to $455,000 previously.”
“Despite this aggressive effort, the prospects for the managers for the Marina Cove and Marina Shores projects remain murky. That’s because of the seemingly relentless nose-dive in sales and residential property values.”
“‘We’re still in pretty uncertain territory right now,’ said Stuart Cramer, Kennedy Wilson’s managing director for residential investments and development.”
The Sacramento Bee. “The down payment-assistance programs pioneered by Sacramento nonprofit Nehemiah Corp. of America…and others like it, will be eliminated Oct. 1 under the new housing law. Federal officials had long complained that the program, under which the down payment is supplied by the seller, leads to more defaults because it effectively inflates the total price of the property.”
“Nehemiah CEO Scott Syphax urged President Bush on Monday to veto the bill.”
“‘Our leaders are ignoring a basic fact: Seller-funded down payment assistance is the only remaining safety net available to millions of families today seeking home ownership,’ Syphax said in a press release. ‘Killing these programs will not only negatively impact generations of low- to moderate-income Americans who would have been able to use homeownership as a tool to create wealth, stature and self esteem, but to our economy as a whole.’”
The Recordnet. “Terry Hull Sr. (who) operates Stockton-based Property Management Experts, said that even in the strong rental market, fed by people who have had to find other housing after losing their homes to foreclosure, landlords have been reluctant to boost rents because of the economic slowdown.”
“Stockton has consistently been at the top of metro areas nationally for home foreclosure activity. This puts many former homeowners into the rental market. But Thomas said that apartment occupancy numbers could be threatened in coming months by the rising number of foreclosure homes being snapped up by investors who intend to put them on the rental market.”
“As the number of rental houses in the county jumps, investor owners will probably have to lower their rents to compete for renters, Thomas said. ‘That spread can tighten, and that means it will ultimately impact apartments,’ he said. ‘Those homes will end up cannibalizing apartment rents at some level.’”
“Stockton area real estate brokers say that at least 80 percent of home sales this year are foreclosure homes and that as much as half of those sales involve investors.”
The LA Daily News. “Home values plunged by nearly a quarter-million dollars in the San Fernando Valley during June as a record number of foreclosures flooded the market and sales continued to lag, a trade group said Tuesday.”
“The median resale house price tumbled 34 percent, to $431,000 - a loss of $224,000 from the record high price of $655,000 the previous June, said the Southland Regional Association of Realtors. The price fell 4 percent, or $19,000, from May, and is now nearing the $425,000 median recorded in February 2004.”
“‘I think that’s indicative of the impact the (foreclosures) are having on the market,’ Jim Link, the association’s executive VP, said of the steep price decline. ‘It’s going to be a while yet before the (foreclosures) work their way through the market.’”
“Most of the foreclosures are concentrated in communities dominated by first-time buyers who got in as the market was peaking in 2005.”
The Orange County Register. “Four Santa Ana ZIP codes had the highest concentration of foreclosures in the county in the second quarter, according to an analysis by DataQuick for The Orange County Register. In some ZIPs, the ratio of foreclosures to the total number of houses and condos doubled from the first quarter.”
“In parts of Santa Ana in 2005, the peak of the housing boom, 75 percent of the money borrowed to buy homes was subprime.”
“Foreclosures also are spreading to areas not targeted by subprime lenders. Some South County ZIPs rank in the county’s top third for concentration of foreclosures, including parts of Lake Forest, Ladera Ranch, Rancho Santa Margarita and Aliso Viejo.”
“Steve Thomas, president of RE/MAX Real Estate Services in Aliso Viejo, said first-time homebuyers are scooping up bank-owned properties and other distressed sales in cities like Santa Ana. By his math, foreclosures and short sales make up about 75 percent of the homes for sale in Santa Ana.”
“‘Prices have come down to the point where the affordability is screaming, ‘First-time homebuyer, you can buy more home in Santa Ana, Garden Grove or Anaheim,’ Thomas said.”
The Union Tribune. “San Diego and many other metro areas around the country continued to see record home price declines in May, the Standard & Poor’s/Case-Shiller Home Price Index showed yesterday. According to Case-Shiller, San Diego’s index has dropped from a high of 250.34 in November 2005 to May’s 178.03, compared with a baseline of 100 in January 2000.”
“That means a house that sold for the county’s median price of $230,000 in January 2000 theoretically rose to a peak $575,800 before falling back to $409,500 in May.”
“Andrew LePage, an analyst for DataQuick, whose data shows similar trends to Case-Shiller, warned against drawing any conclusions about the immediate future. ‘It’s possible that the decline in prices in certain areas has subsided but that doesn’t mean it can’t pick up again,’ LePage said, noting that the proportion of high-priced home sales could grow and falsely suggest that overall prices are on the rise.”
“He said it will take another few months to see if overall prices are bottoming out. ‘Even the most pessimistic folks out there, I assume, don’t believe prices are going to zero,’ he said. ‘At some point, the curve has to change and we won’t be racing down as fast, especially in hard-hit areas.’”
The Daily Bulletin. “Kellee Hawkes is on the verge of losing her Upland home. She was laid off in December and isn’t making enough in her new job to make the mortgage payments and pay off the debt that she accrued when she was unemployed. She will have to be out by October unless she can do something to save her home.”
“Her credit score has been affected by the missed payments and although her house is on the market as a short sale, she does not think that she will be able to sell it before it goes to auction in October. She said that there are many homes for sale within her neighborhood and most are bank owned.”
“‘(The bank) seemed OK with short selling my home to a new buyer and writing off the total sum of my loan,’ Hawkins wrote. ‘Why not, in essence, do the same thing but with the person already in the home and motivated to keep it?’”
“Bruce Engles, a real estate agent in Upland, said it’s a situation he sees too often. It’s hard for people to consider all possible scenarios before committing to purchasing property, but it’s something that could save heartache in the end.”
“‘(They must) make sure that they can really afford it in the bad times, not just the good times,’ Engles said. The average price of a home in Upland (is) $403,529.”
“Nannette Miller has lived in Upland for most of her life and would like to buy a home in the city. The single mother of 13-year-old triplets is looking for a three-bedroom, one-bath house, but is finding it hard to find one within her price range.”
“‘In order to buy a house, there’s a lot of hoops to jump through,’ Miller said. ‘I’m wondering when the people in Upland that are selling their homes will realize that they need to lower their prices.’”
The Bakersfield Californian. “Multiple loan applications kept secret from lenders. Discrepancies in income and job statements sent to various mortgage banks. Such details, which will become the foundation of state real estate regulators’ case against Carl Cole, 61, and David Crisp, 28, continued to be laid into the record Tuesday during the second day of an administrative hearing in Bakersfield.”
“In one loan application, David Crisp’s gross income was listed as $350,000 a month. In another application made at the same time to a different lender, Crisp listed gross income as $99,000 a month, documents indicated.”
“Crisp, who is representing himself, went after lenders during cross examination. He questioned one witness about the large commission Crisp & Cole had received - $51,000 - for handling the sale of a Seven Oaks mansion Crisp himself bought.”
“An ongoing Californian tally has found nearly $78 million in troubled loans related to operations of Crisp & Cole’s employees, family members and business associates. Most involved homes in the Bakersfield area.”
“Of those home loans, 113 have so far been foreclosed on as of last week, the tally shows.”
The Manteca Bulletin. “Some advice from ‘The House Doctor’ might just help those struggling to make sense of the ailing Northern San Joaquin Valley housing market to get started on the road to recovery. Christine Papworth - aka ‘The House Doctor’ - fields questions from callers Saturdays from 10 to 10:30 a.m. on the Modesto news radio KFIV 1360AM on ‘the “House Calls’ show started six weeks ago.”
“Papworth - who is part of the Re/Max Executive team in Manteca - has 31 years of experience selling real estate.”
“Papworth doesn’t pull punches. She’ll tell you that this is one of the most challenging housing markets she’s ever seen but at the same time she’ll tell you it’s a good thing as the ‘cleansing’ taking place with problem loans, prices out of whack, loose lending standards, and a cavalier attitude of buyers was long over due and will be better for the economy and the housing market in the long run.”
“‘Every market has its problems,’ Papworth noted. ‘This one just has a lot more.’”
“Papworth agreed…that ‘houses are selling so that’s a good sign.’ But most of those homes - at least 90 percent of the 519 existing homes sold in Manteca through MLS since Jan. 1 have been under duress as short sales and banked-owned properties.”
“‘The House Doctor’s’ prognosis for Manteca is partciuarly upbeat. ‘It (Manteca) will be the No. 1 or No. 2 city in Northern California in terms of coming back first’ Papworth said. ‘Manteca is well positioned because of the growth.’”
“But even so, she doesn’t see the market bottoming out quite yet. Having said that, she noted buying makes a lot of sense as the good homes are going quick with multiple offers while interest rates are going to be a dicey gamble especially if the Federal Reserve Board decides to get tough on inflation.”
“Papworth also puts her money where her mouth is. She is going to…purchase another rental home for $100,000. She’s confident that in six years…she will have a home worth $350,000 that could then be sold to help pay for her grandchildren’s college.”
“‘You can’t go wrong on homes in California,’ Papworth said. ‘Prices will always come back.’”
“Papworth also puts her money where her mouth is. She is going to… purchase another rental home for $100,000″
No she doesn’t. Momentum players are completely blow’d up and can’t get a pack of gum on credit with $200 dollars down? She kept her powder good and dry and is now coming out from under her rock to bottom feed. Now that rental homes are less than MOTOR homes…!
“She is going to”
Going to and doing are oceans apart!!!
The agents think they’ve found a clever new trick.
They jump into the muck and quickly concede all the points that they can no longer deny (almost sounding like an HBBer at times) - then they spin around and spill out a convoluted version of “it’s a great time to buy”. This one just takes it a step further and in doing so shows their mounting desperation.
“Papworth also puts her money where her mouth is. She is going to…purchase another rental home for $100,000. She’s confident that in six years…she will have a home worth $350,000 that could then be sold to help pay for her grandchildren’s college.”
“‘You can’t go wrong on homes in California,’ Papworth said. ‘Prices will always come back.’”
I kept reading her name as Paperworth…how funny is that!
Funny, I kept reading her name as PapSmear……
Yeah, she doesn’t pull any punches especially when it comes to the “cavalier attitude of buyers”.
Well I wonder where they got ‘that’ from? Be it on AM radio or in person, realtors coming clean and cheering the “cleansing” is like crack dealers cheering the police for getting a problem street corner cleaned up?
Yo’ man, thanks fo’ git’n dat riff-raff outta’ here.
WTF?
Pap \Pap\, n. [Cf. D. pap, G. pappe, both perh. fr. L. papa, pappa, the word with which infants call for food: cf. It. pappa.] 1. A soft food for infants, made of bread boiled or softened in milk or water. [1913 Webster] 2. Hence: Any speech, writing, or idea lacking substance, or of trivial content; oversimplified, trite, or worthless ideas.
Just like the name Shoemaker has a history, maybe she came from a long lineage of UHS’s…
Shoemaker - a noble profession, that.
When I think of ‘Shoemaker’ I think of horse racing. Never bet at odds of less than 5 to 8. Housing is about 2 to -2 now.
that could then be sold to help pay for her grandchildren’s college.”
Ah so the kids will all be court reporters?
So why is it Boomers always feel the need to pay for everything for their kids: first cars, then college, now houses, et al. I guess it shows how little confidence these people really have in their relatives and in the world. And, I’m sure that in six years prices will manage to more than triple. I think not since people actually have to document their income now before buying a house…something that knocks 80% of the straw buyers of yesteryear out of the market.
Papworth better watch out or she might get smeared.
I agree she will have a $350K house in 6 years but then the minimum wage will be $18.95 per hour!
I don’t think you’ve seen Manteca. I drove through there last month. I could imagine $30k houses there someday. No offense to people that live in Manteca.
Anyway, I like to see UHS sticking their head into a bandsaw.
I lived in Manteca for a whole 2 months, not by choice.
There is a section along 120 between Interstate 5 and highway 99 that boomed in the last 6 years. 5 years ago, I was looking at a house up there and by the time I got back 2 weeks later, 6 of that model was gone. Prices where about 300 back then, and by the time I left the area, same houses in the 600s. even in the 300s it was coming of the 1998-2002 boom. I suspect those houses should be around 190-225.
You can see the sea of new houses from the freeway, but beyond that, it’s crap.
Manteca is just down the road from Stockton and is suffering the same fate. It’s the taint of the Central Valley. It’s a bypass between 2 freeways. Some day I expect it to be one long conveinence store/gas station. Until, of course the freeways just go another direction.
‘Manteca is well positioned because of the growth.’
Growth? In Manteca? Mooooooo!!!
“…Crisp, who is representing himself…”
This guy…geez
Crisp was the ’successful’ version of Casey Serin.
By the way, I wonder if Casey got nabbed in those recent arrests for fraud? Any info on him?
lmfao
These guys are now blaming each other and claiming the other was the fraudster.
Also, a CPA claimed today that Crisp’s father in law (also a CPA) forged his name on CPA related loan documents (comfort letter, job verification, etcc) and then sent a letter apologizing to him. Then this guy sent the letter to the state, who then sent it to the FBI…very interesting.
Is he in jail or out on bail…?
No everyone is free. No indicement or trial yet.
This hearing is for their real estate license only
Are you kidding…? Truly not the brightest bulbs in the closet..they should have relinquished the license and walked away…why keep putting your self in the glare of the spotlight…they have to know they have a target on their back and that’s a no win scenario…they are just bringing more attention to themselves…which makes law enforcement curious…especially if by some stroke of luck they are able to maintain their license…what a bunch of morons…they drank way too much of the kool-aid….
Oh, no problem then
Crispy, you must be having a ball. I gotta hand it to you, you’ve been doing a great job hounding these two turds. I hope they get to bunk somewhere reeeeeal nice for a few years when the guilty verdict comes down.
Can he call himself to the stand and ask himself a question ?
Yes, its bananas but it can be done.
An attorney friend actually saw this on the stand where a law student was representing herself and cross-examining herself as well. Her self-questioning got to be absurd, so much so that the Judge intervened and put a stop to it.
She lost her own case.
~Misstrial
That’s right. That is actually what you are supposed to do — ask yourself the question and then answer it yourself.
You have to obey all of the rules of evidence, too; on direct you can’t ask yourself a leading question!
“…Crisp, who is representing himself…”
Because he has no money.
Santa Clara… beautiful place.. sunny.. clean.
The average price of homes in June was $922,149, down from $970,702 in May.
Lets call that a drop of $50K in 30 days… or $1,666 a day.
The person who can afford a $970K home has an income of about $300K a year.. or about $850 a day.
$1,666 / $850 = ~2
So, home values are falling at twice the rate of the potential buyer’s gross income.
These $1M dollar homes were selling for under $350K 10 years ago… since when do $3ooK homes pop up to $1M every 10 years…
We are going to see these $1M homes drop to well under $500K easily… no one can afford these homes anymore… least your employer who is the really paying for it….
“…least your employer who is the really paying for it….”
Yepper, believers in a V shaped recovery are taking the employment levels of the past two decades as an absolute and unquestionable given for all eternity.
“In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from the MLS for the Silicon Valley Association of Realtors. The average price of homes in June was $922,149, down from $970,702 in May. The average price of homes in June 2007 was $1,066,610.”
Where the heck is she pulling these numbers from?? From Dataquick:
SANTA CLARA COUNTY through 07/08/2008
All homes $610,000 -12.2% $400 1,602 -17.3%
Total resale houses $665,000 -17.9% $417 1,094 -9.7%
Total condominiums $427,000 -20.2% $375 336 -26.2%
Total new homes $595,000 -2.5% 172 -36.1%
http://www.dqnews.com/Charts/Weekly-Charts/Mercury-News-Charts/ZIPSJMN.aspx
I think the price given may have been for Los Altos, though. I’m pretty sure santa clara is about 500k right now.
Not alot of new housing in Los Altos. Very well-to-do oldtimer residents over there. If they were building something out there, it would be a custom house paid for by a CEO of some sort.
I recall back in the mid 80’s, many houses in certain parts in Los Altos were already at $700+. You can double that if the houses were in the hills.
If a 30 something couple bought in that area within the last 3 years, they either bought it outright or put in a HUGE down and if they didn’t do any of the two, they are F*(_cked.
How about a 2500 sq ft in Los Altos Hills in Mid 90s going for $350K ..? my friend lived there until they moved out of CA… Yes you heard it right.. Right now over 2M
I was living in Los Gatos … 350K home ..near old town.. valued at $300K in 1997 sold in 2001 for 1.4M
No! this is unusual…even for Santa Clara County…
It doesn’t matter whether or not there’s “a lot” of new housing in Los Altos. What matters is that “almost all” of the people who bought there between 2001 and now did so with neg-am loans, just live everywhere else. That’s why Zillow shows houses in Los Altos that were last bought 8 years ago for $2 MM on the market today for $12 MM. The houses will not sell for that much becuase no one around here is willing and able to pay the price. Seriously no one.
just LIKE everywhere else, I mean.
“‘Our leaders are ignoring a basic fact: Seller-funded down payment assistance is the only remaining safety net available to millions of families today seeking home ownership,’ Syphax said in a press release. ‘Killing these programs will not only negatively impact generations of low- to moderate-income Americans who would have been able to use homeownership as a tool to create wealth, stature and self esteem, but to our economy as a whole.’”
Yes sir, pillars of the community, all of them low to moderate income homeowners. Nice to see him going for the jugular and combining wealth, stature and self esteem into the ultimate trifecta. Does this guy preach the gospel of prosperity or what? Soon I expect to see renters to be not so subtlely associated with the spawn of the Devil himself.
Yea, that’s a lie…low and moderates will find a way just like they did before the programs were available…
Yeah, like wait for prices to crash, then buy a house they can afford for instance.
Makes sense to me…
He meant to say that Seller-funded down payment assistance is the only way for his company to make money. Of COURSE he’s incensed that it’s going away. Killing the program will negatively impact his paycheck.
‘Killing these programs will not only negatively impact generations of low- to moderate-income Americans who would have been able to use homeownership as a tool to create wealth, stature and self esteem, but to our economy as a whole.’”
“Will impact generations”? WTF? So every one else will be riding RE to vast wealth while the mid/lower class will be reduced to poverty and low self esteem? Give me a break, do these ‘tools’ even read what they write.
Just read parts of the ‘Bail Out’ housing bill the pres just signed. The tax payers are giving a down payment ($7500) to first time buyers. The best thing about this BAD bill is that the buyers have to pay the giveaway back. If you ‘die’, however, you are excused from paying it back. hehehehehehehe
Yes, buying a house for which the seller has to give me money because I don’t have a down payment will greatly enhance my self-esteem.
“‘You can’t go wrong on homes in California,’ Papworth said. ‘Prices will always come back.’”
Where have I heard this before…this time we shall see…
“‘You can’t go wrong on homes in California,’ Papworth said. ‘Prices will always come back.’”
I think the reason that “prices will always come back” more has to do with the reality of “bubble” Capitalism, that are creating FBs every 5-10 years. There are very smart people in high places of the economic hierarchy, who know how to exploit FB psychology for their own interests. In every cycle of this “ballooning the bubble” their main target are the new arrived immigrants, who have little knowledge of financial cycles, value of money or simple laws of the country were they live. To this big group of people are joining FB s, who grew up in this country but did little to read a newspaper or anything about money and economics. In my opinion, it wasn’t greed that created this “bubble”, but their big ambitions just to “keep up with Joneses” and “statues” psychology, to look successful on the eyes of their compatriots or just in society. Unfortunately in our “bourgeoisie”, peoples values are not what they read (Jack Kerouac, France Kafka or Jorge Borges), but stupid, Hollywood made stars with their dresses, cars …
I am immigrant myself and know the “statues” psychology first hand in my community. I think this story of FBism is going to repeat over and over again, since materialistic roots of Capitalism are in the foundation of our society…
That would make a good weekend topic. I have been thinking about the long-term future of the US housing market a lot lately. Given that we have already blown past anything in modern history as far as price declines and foreclosures, it is fair to say this is going to stick in the collective memory for a while. And that includes lenders. Note the Texas lender quotes from this past weekend. When a person goes through that, it is always in the back of the mind.
True financial manias are rare, in part I think because the situation has to be just so for it to catch on. The Japanese had two big ones much like the global stuff we see now. Stocks and RE. But try as they might, they haven’t been able to even spark normal growth since.
IMO, there will likely always be beanie-baby crazes, and the like. But what we just went through may not be repeated in our lifetimes.
“Given that we have already blown past anything in modern history as far as price declines and foreclosures, it is fair to say this is going to stick in the collective memory for a while.”
Ben, I agree but only if we return to some of the old credit standards of passing out money. Mortgage, car loans, CC’s all have to be adjusted to what a person can reasonably pay back relative to their income. If not, we will be off to the races again with a lot of funny money floating around. After the dot.com bust people were still of the mind set that stocks would return but the big money shifted into housing and took the little guy along for the ride; now the little guy is just hungry for the next quick fix to riches.
Dear Ben, first I want to thank you for your creation, for this wonderful blog.
Unfortunately I am not as positive as you are, since I am convinced that those people in our economic hierarchy will always be interested to buy anything (stocks, houses, commodities…) when there is a blood on the street and sell when bubble is ballooned…
You can already read in media that “bottom is here and it is time to buy…”
In my opinion rich are getting rich motly because there are plenty of poor FBs …
Hi gal:
I don’t know what country you’re from, but it sounds like you are accustomed to an aristocracy. We don’t have that here. There really is no economic hierarchy. People who make a lot of $$ at something (gold, oil, whatever) are able to give their kids an easier life, but most kids of rich people will squander it within 1 or 2 generations. If you are looking at things as a matter of “class”, then everyone has the same opportunity to make or lose money as everyone else. It’s not just the rich who strive to sell high and buy low. Everyone esle is trying at it too. The ones who succeed will be rich tomorrow.
Dear Big V, you are right I am from aristocratic country called X Soviet Union, where Communist aristocracy turned Russia and became new Rothschilds and Rockefellers, Waltons and Kennedies. Big riches tend to monopolies economy and keep their power as much as it possible . That is why they created Federal Bank, their main weapon to control the financial institutions. I don’t believe that Mr. Greenspan did not know what he was doing 6 years ago by keeping interest rates so low. People who own Fannie Mae and Co. are sure for their revenues, because people like you and me will subsidies them with our taxes, and all of this equally based on our free opportunities some day to become Rothschilds and Rockefellers. I am really happy to have free opportunities in this wonderful country, especially to freely express my opinion and opportunity to travel around the world.
Hi again, gal.
I don’t know what Greenspan was thinking, honestly. I do know that Bush didn’t cooperate with him, which made things a little hairrier than expected. Also, those who sit on the board of the Federal Reserve are not allowed to invest in anything, since that’s a conflict of interest. While I do not agree with the way that our PTB have handled things over the past decade, I also do not believe that they will eventually established a ruling class amongst themselves. They are obviously trying. This “blank check” thing is stupid. The people don’t want it, and Congress must be mad.
“Also, those who sit on the board of the Federal Reserve are not allowed to invest in anything, since that’s a conflict of interest.”
I didn’t know that. Does that mean they have to keep their money in mattresses?
Dear Big V, one small comment, Mr. Greenspan and all Fed’s board of directors work for people who own Federal Bank, people who live in old Albion. They do according the owners interests that is why they were put there to “think”. See it is not a coincidence that all billionaires American, Russian even Indian live there, or have residence there, have big financial interests and appetites… Have you heard about lobbeists in a Cogress, who are they ? I think 4 th of July is symbolic Independence day… sorry if I hurt anybodies feelings.
Dear “gal”…
I from former KGB and work now for DHS. Nice to see former Revolutionary Comrade in Arms in same hemisphere.
It is clear you have taken liberty with meaning of First Amendment. It is also clear you have maken mistake. Free Speech does not mean you may talk against Capitalist Institution of United States. Only, you may speak freely about Freedom in the Free State, free of cynicism of authorities and popular political-economic system.
You will be visited in morning by my strong comrades in DHS for who will educate you on true Freedom Knowledge and Speech. You shall learn errors of your interpretation of America Theory, or otherwise you shall spend time in gulag, I mean Gitmo.
Your Comrade,
BackToBank
Darn those Knights Templar!
It’s no coincidence that the peak of the housing bubble and Peak Oil in conventional crude oil both arrived at about the same time - mid to late 2005.
Correction in crude oil is done. Price action today in energy stocks said it all. Demand destruction, yes, but depletion is moving faster.
Kunstler explains it all so well. Suburbia is toast. People just can’t get it through their heads that an economic model of infinite growth on a finite sphere just doesn’t work in the long-term. Short-term, like the last 50 years, sure, but not long term. Last 50 years were not normal
BJ, funny you use past tense. U think this thing is almost over?
“‘You can’t go wrong on homes in California,’ Papworth said. ‘Prices will always come back.’”
I am sure last year Papworth’s words of wisdom was “You can’t go wrong on homes in California, Prices never drop.”
Next year we will hear, “You can’t go wrong on homes in California, this is a great way to escape rent inflation and a great way to spend your money on a hard asset before inflation makes your dollars worthless.”
–
I agree with your assessment, gal. I have been saying it for years that the vast majority of Americans are brainwashed to serve the interests of the economic elite who have mastered the art of manipulation using all the latest “science and technology,” psychology included. America’s favorite pastime is speculation!
Jas
Papworth is most likely someone from out of state who came to California pimping RE… like many others. We never had this propaganda about CA real estate before. Fact is RE was as cheap in Norcal as it was in many other states… do research
and you will find the fact…
More fantastic news emanating from the bowels of downtown San Diego…
350 W Ash #103
San Diego, Ca 92101
MLS# 080053205
Price: $280,000
Beds/Baths: 1 / 1
Square Feet: 1,219 sf
PPSF: $230
bank owned. Let us see what it last sold for…
Sales History
Date Price Held Return Annual
07/28/2005 $689,763 n/a -
If that’s not a kick in the nuts, I don’t know what is.
I never imagined Joshua Trees could grow that big.
Someone robbed the bank for 409K, legally.
Now, multiply this by 100s and 1000s.
Greatest re-distribution of wealth to J6Ps.
“Greatest re-distribution of wealth to J6Ps.”
Are you sure that’s supposed to be a “to” and not a “from”? This is so far from over.
I want someone to strangle that women
her website
http://www.centralcaliforniamls.com/
Spiky hair, straight teeth, blonde and buff…sorry, but she does not represent any Manteca I know. Where the hell is that trout?
Can’t tell if she had her boobies done. Oh well.
“Prices will always come back.” One of the great all time lies!
The Chicago School of economics should be soundly whipped for perpetuating the notion that value and price are synonymous. That things may be rational in the long term does not mean these things are rational in the short term.
And I’d like to trout-whack her for the retro-coding of that website. Talk about code bloat!
Whoa - stop the insanity! Susan Powter has moved into real estate!
Looks like Dolph changed teams to me.
David Bowie’s bastard child !!
Christine looks like a ‘butch’.
“‘(The bank) seemed OK with short selling my home to a new buyer and writing off the total sum of my loan,’ Hawkins wrote. ‘Why not, in essence, do the same thing but with the person already in the home and motivated to keep it?’”
Yes, yes, yes, Ms. Hawkins and just what is your definition of ‘MOTIVATED’?
You should have used a straw buyer, yourself; mother, father,boy friend, to do just that.
Motivated:
I will keep this house as long as I don’t have to pay for it.
The down payment-assistance programs pioneered by Sacramento nonprofit Nehemiah Corp. of America…and others like it, will be eliminated Oct. 1 under the new housing law
The more I hear about this housing bill, the less upset I am about it. Nehemiah downpayment pass-through scam going away? YES! $7500 “tax credit” turning out to be just another loan? OK! Loan modifications being voluntary on the part of the lender? Not so bad.
So basically, a bunch of congressmen got to look like they were doing something about housing. I doubt it’ll amount to much.
Unless someone wants to explain to me exactly what the Fannie/Freddie backing was all about and how bad that is. Actually, the credit card reporting provision is pretty ridiculous and scary too.
F+F can stick their head in a noose if they want to.. otherwise they’d better run a tight ship from here on in, and ignore the govt’s housing bill offerings..
As for the IRS reporting, as i read the provision, it says some businesses must submit total amounts charged by some card holders during the calendar year.
And, peeps, this is dead-nuts simple. As you’re receiving customer payments, you log them into your accounting system.
If it’s like the system I use, it will ask you what kind of payment it is: cash, check, credit card, etc. For credit cards, you can even specify which card.
And, for added entertainment, you can generate reports. In addition to keeping the IRS happy, you can also track card usage. In my experience, Visa was #1 with MasterCard trailing way-far behind in second place. Amex was a very distant third, and they charged merchant fees out the gazoo. So, I dropped them.
The $7.500 tax credit is a loan you have to pay back in addition to your mortgage payment. In other words it’s nothing different than a questionable cash incentive to drive people into loans they can’t afford. Then these loans are bundled again and get junk status again, but the difference is that these loans are guaranteed by the taxpayer, not to the commercial banks anymore. This program can’t reverse the direction of markets, it makes things only worse, since it imitates essentially the same as all the commercial banks did in the past.
Right.
The new law also gives the banks a reason to pursue inflated appraisals, as the loan must be written down to 90% of the current appraised value. Any losses after the new loan takes effect are absorbed by the taxpayer.
It would bother me less if the IRS could go after those delinquent on government owned or guaranteeed loans.
Most homeowners will sooner or later go into foreclosure anyway, since they can’t afford homes at inflated prices. This bill stinks since it is an easy way for the bank to pass on the junk loans to the taxpayer.
This bill stinks since it is an easy way for banks to pass on the junk loans to the taxpayer. Most homeowners will sooner or later go into foreclosure anyway, since they simply can’t afford homes at inflated prices.
Housing bill is alot of smoke and mirrors. It’s based on banks cooperating to modify the loans AND if the borrowers are able to make payments for the life of the loan. I suspect 80% or more FB won’t even qualify. It is best for them to walk away.
And can’t you just hear the FBs singing, “These boots are made for walking, that’s what they’re gonna do…”
Speaking of walking away…
http://news.bbc.co.uk/2/hi/business/7529277.stm
Tango In Uniform,
Then consider further the tax implications of actually having to live in your multiple investment homes and PROVE it to get ANY capital gains exemption and I’m marking it up in the “Win” column! The MarketWatch article said:
The Free Ride is over.
( You’ll have to divide the days you actually lived there by the days you owned it to arrive at a formula… which obviously will ( at the same time ) diminish the benefit you’d get from your other residence! Does it get any better than that?
I was of the understanding that capital gains exclusions always ONLY applied to one’s primary dwelling and not to second or investment homes. One could deduct mortgage and tax expenses for second homes but not get an exclusion upon the sale.
People who were holding a second home , if they lived in it 2 of the last five years ,they qualified for the exemption of up to 500K
The way they wrote the exclusion write off was really sloppy IMHO.
I think when they wrote the bill ,they didn’t expect that it would help foster a housing mania and many two year property holding plans to get repeated tax free gains . When you think about the
exclusion ,it was one of the most generous tax exclusions on capital gains on a investment that has ever come along in years .
I don’t know how it ever got passed in the first place . The real estate people really sold that benefit .
Well, with all due respect HW, that second home was a primary home for those two years that they were living in it full time. I don’t think that changes with the new bill does it? Does anyone have the new language? I’m curious to see what has changed.
‘It (Manteca) will be the No. 1 or No. 2 city in Northern California in terms of coming back first’ Papworth said. ‘Manteca is well positioned because of the growth.’
The only thing Manteca is well positioned for is getting out of it on I5. Tracy, Manteca, Stockton etc have all boomed on the back of people doing mega-commutes to Silicon Valley. Those commutes aren’t looking so sensible these days.
The Los Altos Town Crier. “In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from the MLS for the Silicon Valley Association of Realtors. The average price of homes in June was $922,149, down from $970,702 in May. The average price of homes in June 2007 was $1,066,610.”
Why is it when you compare the local realtors number and S&P/DQnew.com … the REA numbers are always higher vs no realtor numbers… if Congress whats to help why not investigate
the NAR and their local state cronies…
“In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from the MLS for the Silicon Valley Association of Realtors”
I live in Santa Clara Co. (which includes San Jose) and believe me, prices are dropping like crazy here. Plus I’ve noticed more and more short sales creeping closer to the ‘nicer’ part of the valley.
How can their info. differ so much from everyone else’s? What a bunch of dumbf……!!
“‘(The bank) seemed OK with short selling my home to a new buyer and writing off the total sum of my loan,’ Hawkins wrote. ‘Why not, in essence, do the same thing but with the person already in the home and motivated to keep it?’”
Geez. What kind of thinking is that. Kind of like a drug dealer giving more drugs to the drug addict (that never pays) hoping to get paid the next time around.
And, sooner or later, that drug dealer comes looking for that deadbeat addict. What’s worse, the dealer’s toting his/her equivalent of a Joshua tree…
Uh, because you burned the bank once with your lack of motivation to pay your original loan terms, whats to stop you from trying again ?
it’s just crazy that any bank or lender would ever be thinking about giving a break to a defaulting party ,(there are good exceptions ). But, if a bank wants to do it ,than find ,but shouldn’t they carry that risk paper on their own books instead of passing this on to the taxpayers risk ? The housing bill is just crazy . And what happens if more than 300 billion worth of homeowners qualify for that provision of the Housing Bill,if lenders decide that going along with this in a
declining market is smart for them to do ,(contrary to some posters saying the lenders won’t do it ). And lets not forgot the potential for mickey moused packages and appraisals .
And ,more important ,with each passing day lenders know that values are going down ,so the desire for lenders to pass the junk borrowers along in a declining market will be strong .My biggest question is how many borrowers will want to do it ,rather than a
question of lenders wanting to take advantage of the bill .
According to Dataquick, the median price of homes in the Bay Area, which includes Santa Clara Co. fell to $485K!
Exactly! and we still have a long way to fall… prices are still unaffordable…
I’m still feeling pessimistic about San Francisco proper ever being affordable. Who are all these people buying these 700K houses? One just sold on my block (and we are NOT in a fancy neighborhood, by any means).
Damn those Googlers buying all the homes in SF
He said it will take another few months to see if overall prices are bottoming out. ‘Even the most pessimistic folks out there, I assume, don’t believe prices are going to zero,’ he said. ‘At some point, the curve has to change and we won’t be racing down as fast, especially in hard-hit areas.’”
I think these guys should look at Detroit and Buffalo and Cleveland and the Roman Empire…
Zero isn’t out of the question for much of the IE, east of San Diego, Apple Valley, Riverside, Moron Valley… Heck, all sorts of central valley areas.
Outlying areas that are hard to develop for business… Northern parts of Marin county. Plenty of pretty areas like this in PA, West Virginia, Upstate NYC that got developed in booms too. Became ghost mansions. Not to mention all over the South East. Plenty of Malibu.
There are other areas even more worthless ex. Las Vegas, any town in Arizona.
So many of those homes are too large to mantain. People will move to lower cost areas where the resource stresses are lower.
Particularly water resources and fuel.
Also note that this article mentions falling rents. In the last bust, as people lost their places many moved back home. They also moved in with freinds. Falling rents is another deflationary sign and should tell the Fed inflation is low.
I agree the central valley is falling back to year 2000 prices. If you add what it costs to cool or heat a home with PG&E price ,those bigger homes will continue to fall hard.
In the early 1980’s - the “Devil’s Night” years - it cost about twice as much to build a house than what it could be sold for if it was located in the City of Detroit. We called it “negative land value”. A possibility in the places mentioned - hot, dry, long commutes, overbuilt with too-large homes, and a shaky economic base?
Got Water?
Marquis Dee
“In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from the MLS for the Silicon Valley Association of Realtors. The average price of homes in June was $922,149, down from $970,702 in May. The average price of homes in June 2007 was $1,066,610.”
An upward trend “June was $922,149, down from $970,702 in May” That is friggin hysterical. “Great news honey, we didn’t lose as much as we thought,” Tom upwardly said.
What an oddly constructed paragraph that is. The topic sentence and the sentence that follows it appear to convey opposing sentiments about the strength of the housing market. Or is the price decline the evidence that the Realtors are using to suggest that sales volume “appears” to be up? Wouldn’t sales numbers be better evidence that sales volume is actually increasing?
Who writes this drivel?
Ah, OK. Here is the actual paragraph from the article:
“In Santa Clara County, single-family home sales appear to be on an upward trend, according to information from MLSListings Inc., the Multiple Listing Service for the Silicon Valley Association of Realtors (see article on page 38). There were 927 closed sales of single-family homes in Santa Clara County in June, up from 873 closed sales in May, 654 in April and 583 in March. The average price of homes in June was $922,149, down from $970,702 in May. During the same period a year ago, there were 982 closed sales of single-family homes in Santa Clara County, and the average price of homes in June 2007 was $1,066,610.”
My money says that upward trend is seasonal, and will disappear quickly in another month or two. Once kids start getting ready to head back to school, selling season is done and it’s all downhill from there.
“My money says that upward trend is seasonal, and will disappear quickly in another month or two.”
Agreed, the 2Q is always going to be an active quarter even in the worst of years because of external factors like the school year, as you’ve cited.
It’s a long, long way to the next 2Q…many layoffs lie between us and it.
Then of course we have the ‘Google’ factor. Buy a house near the Google pickup site.
The prime selling is done. There is little chance of buying and closing before school starts for families with kids. There is tremendous job insecurity.
SC Realtors already are getting busted for fraud…
Liar loans … fake multiple offers to pump prices…
I/O fraud.. you name the criminal activity … they done it…
how else did prices inflate nearly 400% over 10 years …
never had that before…
Its time for a reality check for SF Bay Area prices…
what people think is normal for the bay area…isnt…
these were normal prices…. from DQnew.com…
over the long run prices only appreciation at rate of inflation…
very few homes were even over $500K… very few…
Med($K) Jan-97
Alameda $203
Contra Costa $199
Marin $322
Napa $176
San Francisco $257
San Mateo $285
Santa Clara $275
Solano $135
Sonoma $190
Bay Area $233
Check DQnews.com archives for details..
I just had the most refreshing convo with an old-timer out by the lake. He said that if I wait a year, the price of the house I rent will have dropped by at least $100k. I could tell he really thought it would be more, but it’s not PC to say so. He thought the government can’t do anything to stop it. This whole town used to be one farm. It’s grown up now. People grow food in the central valley. Why are they building houses out there? Where do all the people work? The dot.com bust, now the housing bust. Not sure about oil. How can people commute all the way from the central valley, which is the last place to grow food?
All this stuff came from him, completely unsolicited. I was just trying to talk about storks, or pelicans, or whatever those things are.
you didn’t mention black swans in there did you?
For what it’s worth, I was talking to a Bank of America investment representative today. He says that the Countrywide purchase was very wise on his company’s part. He says they’re going to create a company called Red (Something) and unload all of Countrywide’s garbage there. Then B of A can grab all of Countrywide’s former market share and expand. Sounds plausible.
–
Crooks are good at scheming but not all the schemes work out. Some schemes take the crooks out of their game. We do have a wonderful system for crooks to operate in.
Jas
Red Bull.
Red Dog?
Is this “Red Company “usually called F&F or the Housing Bill provisions Company ?
Joey:
I just want to continue yesterday’s conversation, where you said that the only thing you care about is making money for yourself. You know, it seems that every economic or moral conversation that I have ever had with a Republican/conservative ends up that way. The Republican party loves to hide behind the curtain of the “moral majority”, but when it comes down to it, it is a party of self-serving, short-sighted “I’ve got mine” types.
Look, you may support the F-word bailout because you own F-word stock, but think about what it will do to our system. The worst-case scenario is that the government spends all the money it doesn’t have to try to bail the Fs out, but there is not enough $$ to go around. In that case, the Fs fail and the US Treasury fails. That means you fail too.
The most probable scenario is that moral hazard is realized, causing the GSEs and every other irresponsible financial/building/RE company out there to take on so much risk that they all become entirely hopeless. The government will spend $$ to try to stem the tide, but to no avail. Inflation will get even worse, and the only people to benefit will be the rich people of OTHER COUNTRIES, who will see this as an opportunity to usurp us. If we don’t play our cards right, we will all suffer, including you. The fact that you own stock in F’n'F will not save you from a major recession or, yes, possible depression.
you’ve got it backwards.
I don’t support the bailout because i own the stock.. I am thinking of buying more FNM because of the passage of the housing bill.
The “bailout” makes those corporations virtually bulletproof. The implicit/implied govt guarantee (which was nothing but smoke) will solidify into genuine support if the companies choose to take advantage of it.
I like FNM because the management lobbied the politicians with large dollars. F+F have friends in high places. This give the stock added strength.
I’m not completely convinced F+F will take the govt handouts.. to do so means radical changes in the corporations and i do believe management prefers to avoid that a all costs. If i thought they’d do it, I’d see it as more encouragement to buy.
—
Some day i might be wealthy enough to bypass a money making oportunity just for the sake of someone else’s moral values.. but in the meantime the law is plenty enough of a moral-guide for my tastes and budget.
–
There are ethical ways to make money and there are unethical ways to make money. Our government promotes unethical means by always punishing the honest and hardworking people and coming to aid of the rest. The housing bubble and its aftermath has exposed our govt and the Fed for what they really are – agents of the crooks.
Jas
“homebuyers are scooping up bank-owned properties ” - I love this! buyers are ’scooping’ them up, not to be confused with ‘Banks are dumping POS properties for whatever they can sell them for.’
I guess buyers fingers must be tired, hence they scoop instead of “snapping them up”
HAH! Great line.
Its time for a reality check for SF Bay Area prices…
what people think is normal for the bay area…isnt…
these were normal prices…. from DQnew.com…
over the long run prices only appreciation at rate of inflation…
very few homes were even over $500K… very few…
Med($K)
Jan-97
Alameda $203
Contra Costa $199
Marin $322
Napa $176
San Francisco $257
San Mateo $285
Santa Clara $275
Solano $135
Sonoma $190
Bay Area $233
http://archive.dqnews.com/AA1997BAY02.shtm
It wouldn’t surprise me at all if we see those median prices again (not even adjusted for inflation) by the time we hit bottom.
Its time for a reality check for SF Bay Area prices…
what people think is normal for the bay area…isnt…
these were normal prices…. from DQnew.com…
over the long run prices only appreciation at rate of inflation…
very few homes were even over $500K… very few…
Med($K)
Jan-97
Alameda $203
Contra Costa $199
Marin $322
Napa $176
San Francisco $257
San Mateo $285
Santa Clara $275
Solano $135
Sonoma $190
Bay Area $233
Check DQnews.com archives for details..
I remember late-20 yos waiting in line in Sunnyvale eateries talking about 300K houses back in the late 80s. Seemed ridiculous back then (being from the NW). Not so much, now.
I doubt the 300K in Sunnyvale.. I grew up in the region…
Alameda $203
Contra Costa $199
Marin $322
Napa $176
San Francisco $257
San Mateo $285
Santa Clara $275
Solano $135
Sonoma $190
Alameda Coco Napa and Sonoma are already getting there.
Many buyer are getting into declining regions and draining
any future buying from Santa Clara and San Francisco.
You can pretty much live in CoCo and Alameda and take
BART to work . No point living in the city.
Did we mention ALT-A resets yet to hit.