‘Anger Turned Into Laughter’ In The Housing Bubble
Inman News takes us back to California. “For months, Los Angeles-based aerospace consultant Doug Roberts has stewed over a real estate deal that went sour last November. It was bad enough that the seller first accepted but then rejected his full-price offer of $699,000 for the modest three-bedroom house near the airport, Roberts says, but even worse that the busy Realtor took three weeks to call him back to break the bad news.”
“‘I was in limbo for almost a month, not knowing whether I had a deal or not,’ Roberts says. ‘The seller was a real jerk, and the agent wasn’t any better.’”
“But Roberts’ anger turned into laughter last week, when the same Realtor he finally fired last December called to say that the previous deal with the other buyer had fallen apart and the house is now back on the market, for $50,000 less than he offered to pay last fall.”
“Despite the price reduction, Roberts isn’t biting. ‘I told the Realtor to get lost, and I told her to tell the seller the same thing,’ he says. ‘They treated me like garbage when the market was strong, but now it’s a different story that sales are tanking. A year from now, that same house is probably going to be worth $200,000 less and the agent will be working at McDonalds.’”
And from Rich Toscano. “In San Diego Magazine last year a well-known local housing analyst asserted that speculation in single-family homes is ‘essentially zero, and on condominiums it’s 10 to 20 percent, but that’s fairly normal.’”
“Given that San Diego rents are so low in comparison to home prices, non-occupying homeowners who bought in the recent past are probably losing money each month. The only plausible reason for owners to subject themselves to such repeated losses seems to be an expectation that future appreciation in either home prices or rents will make up the shortfall. These people are, without a doubt, speculating.”
“During both 2004 and 2005, 80 percent of San Diego homebuyers used adjustable rate mortgages. Consider the fact that those two years saw fixed mortgage rates lower than they’d been in two generations. Many buyers didn’t see the need to lock in low rates because they didn’t think they’d be in the mortgage for very long. Some assumed that they would sell their homes at huge profit and move to the next coach up on the housing gravy train.”
“The reasoning employed is presumably very similar to that used by standard ARM-holders. Almost half of all San Diego mortgages issued in 2004 were interest-only. Negative-amortization mortgages take the interest-only concept a step further. Once again, regardless of where they live, they are speculating.”
“Even if we ignore the outright purchasers of investment property, the bill is filled by all those over-extended borrowers who have put themselves into risky situations in the hope of commensurate rewards. There’s no shortage of housing speculation in San Diego.”
Related links:
The Union Tribune. “Major U.S. home-builder Lennar Corp. has decided (on) a significant downsizing of its downtown San Diego office. San Diego urban developer Sherm Harmer said that Lennar’s decision may be driven by the need to safeguard its earnings picture at a time when home sales are not as robust as they once were.”
“‘They’re a large public company, and across the country (public companies’) stock is down, so there’s a belt-tightening going on in almost all public companies,’ observed Harmer. ‘This is a time for public companies to be very, very careful.’”
In case you missed the SD sign spinner article.
‘Six months ago to a year ago all you had to do was put a sign up on a project and (condos) would sell,” said Ron Pennock, chairman of the East County Construction Council and head of the task force.
But now there’s a larger inventory of conversions and the market is flattening, Pennock said, “so we need to focus our attention on putting buyers into these units.’
Headed down to photograph that Brookfield subdivision. It’s not too late to get your photos in for this weekends update.
‘
“‘Six months ago to a year ago all you had to do was put a sign up on a project and (condos) would sell,’ said Ron Pennock, chairman of the East County Construction Council and head of the task force.
But now there’s a larger inventory of conversions and the market is flattening, Pennock said, ’so we need to focus our attention on putting buyers into these units.’”
Hey! Good idea.
Let’s focus our attention… on the inventory.
I say: “San Diego condos for everyone!”
I’d luv to live in San Deigo…but i’ll wait for the fall our on La Race an illiegal immagation. If Little Mecxico goes back home or turns the town in to shnati Tijuannna! ? ;>(
Vivala Amerciano revolution!
San Diego and Tiajuana may be neighbors… but you’d really never know it without looking out an office window at noon and seeing the haze on the southern horizon.
LA and the San Juoquin Valley are probably more related to the happenings of Mexico and Tijuana than San Diego. SD is just a pass-through for any illegal immigrants crossing here. Perhaps it’s too close to home and the border patrol?
Yes, San Diego is within the Border Patrol enforcement zone, so illegals tend to move further inward. However, the last time the Border Patrol tried driving down the street looking for illegals, they were ordered to stop. Then the order was reversed.. but the message was still clear.
OT Photo I won’t submit:
Anybody want a pile of rocks and a tree “island” for 50K? going, going, gone . . .
http://www.redmondrealtyltd.com/listings.asp?listing=944
“pitch a tent”……WHERE?!?!! this one is more like going, going, going, going, going, going……..
LOL! That is the best listing EVER!
You know, a “Devil’s Island” prison camp for realtors, mortage brokers, and the other co-conspirators in the Great Housing Bubble Ponzi Scheme might be an idea worth pondering. Preferably off the coast of Yemen….
That is officially the best listing ever posted here! It beats the 1 million dollar crack house in Parhump, NV. I can only imagine the looks on peoples faces as they boat by as you sit on your rock with only your stupidity for company…
I’m pretty sure the sucker who buys this island will also have a bottle of Thunderbird for company, and solace….
Hey is that in Canadian dollars? Then it is only half as bad! LOL
Half? Someone hasn’t been wathcing the path of the US$ recently . . . link
That’s ridiculous!!! That has to be a joke!
Hunt????
Your broker.
You’re sitting there with your gun, waiting for the wildlife. “That’s far enough, no landing on my island!” you say to the curious boaters. Maybe you could put a gate around it so it could be a “Gated Community”. The tree is perfect for a “Posted: No Trespassing” sign.
LOL!!!!!
Have to be waterfowl, I don’t think there’s much wildlife actually ON the island.
How does one retrieve it?
At least the taxes are only $38.
But, when the assessor picks up the ‘NEW’ sales price the taxes will go to $2,000.
When a wake from a kayak submerges the island do you get a refund?
LOL. “beach your boat” - metaphorically speaking, of course.
Would you actually need to buy it to do any of the activities listed? Who would know?
talk about being underwater…
SF Jack would say: “Submerged rockpiles for everyone!”
Assuming that the acerage listed is correct (which is fankly unlikely IMHO) that’s U.S. $19.25 /sq foot.
and if you follow the link to calculate your mortgage a great canadien mortgage company will get you a great loan at 322.00/month at that low payment you could hold it for a quick flip…I’m still laughing at my desk this is hysterical!
I followed the realtors link to see some of the other 999 islands for sale;
for a mere 850,000 you could buy this way pimped out island with a mcmansion.
http://www.redmondrealtyltd.com/listings.asp?listing=1032
yeah baby, tomorrow’s friday! desk-clearing time for ben, and fun at the open houses.
I just heard from Bubbles the Clown…he said there’s a new episode coming tommorow too…
This will be a quiet holiday weekend, starting tomorrow for many. I’ve noticed little change in the Northern VA inventory today.
Yep, San Diego is on a head start already, inventory from March 30 (18,160) today (18,710) keep them coming, I’m still undecided, nah, next Summer
This is too funny. The buyer should put a mailbox on it. I wonder if the mailman would deliver?
hehehehe
Actually I have a friend who owns one of these.
He goes fishing for weeks at a time. Trailers a small boat.
Of course it is 5 times as big, and is flat. He built a platform on it for tents and it only cost him $5,000 Canadian 7 years ago.
The rocks that are big enough for a permanent structure were $50,000 7 years ago.
Looks like there is a bubble in not completely submerged granite rocks in canada….hmmmmm can you call that a countertop??
And from Rich Toscano. “In San Diego Magazine last year a well-known local housing analyst asserted that speculation in single-family homes is ‘essentially zero, and on condominiums it’s 10 to 20 percent, but that’s fairly normal.’”
Twenty percent certainly is fairly normal — provided you are in the throes of a mania…
Except that the number is more like 40%
“During both 2004 and 2005, 80 percent of San Diego homebuyers used adjustable rate mortgages.”
Bubblefucius say:
Man who get risky loan sure to suffer broken ARM.
lmao
Bumper sticker and T-shirt time for that one!
Made a note of it
I’ll buy one of each.
Good one rainman…
“Even if we ignore the outright purchasers of investment property, the bill is filled by all those over-extended borrowers who have put themselves into risky situations in the hope of commensurate rewards. There’s no shortage of housing speculation in San Diego.”
The only shortage I foresee in the SD housing market over the next few years is that of money trees that have not shriveled up and died after having had too much fertilizer (esp. bull manure) applied for eight years running…
Doug Roberts, in the span of a few months, went from being one the greatest fools in the biggest Ponzi scheme in history to a total hero. Just when he couldn’t get any dumber, he goes and makes that McDonalds’ comment and totally redeems himself.
In all seriousness, he’s one lucky guy and hopefully more like him come to see the light.
He is one lucky guy. He would already lost some good chunk of money in a few months. I once read you know the market is topping out when the sellers and the agents get rude or don’t respond back.
Nah, he would have bought the house, then convinced himself its worth $50,000 extra on top of his note. He’s actually out $100,000!!!
Way back when (5 years ago) $600,000 was so much money, only rich people thought about borrowing it. Soon, that will be true again.
Right on.
And that’s “Common Sense”!
Man, those were the days, 600,000 could get u a killer beach front property!!! They’ll be back soon enough as these exotic loans start defaulting like crazy, 20% down anyone?
20% down? You have to be kidding!
More like 80% off. 20 cents on the dollar by 2010. You heard it here first.
Try 80% off, cash only.
Killer Beach Front?? 600k?? I’ll take 10 please
Yeah, it’s ridiculous to listen to people who make $80K/year talk about $600K as if it’s nothing. When we moved to noVA, friends of ours would say, “You should buy the house down the street from us - it just went on the market at $900 thousand.” as if nine hundred grand is just a regular sum to pay for a big vinyl tract house.
We had a similar experience here (Carlsbad, CA). One of my husband’s co-workers, knowing we were selling our house, told us about a “motivated seller” down the street from him. This was in summer 2004. We checked it out and almost fell out of our car when we saw the price on the flyer: $775,000!!!!!! WTF???? And obviously H’s co-worker knew our income (they are paid the same).
I can’t wait ’til reality slaps all these people back into common sense mode.
Given that San Diego rents are so low in comparison to home prices, non-occupying homeowners who bought in the recent past are probably losing money each month.
How long does foreclosure take, say from the first missed payment?
In CA your mortgage holder can send you a Notice Of Default, aka Notice Of Sale, after your third missed payment. That will list the date when they would sell it down at the court house. I don’t know what the minimum amount of time is between the Notice and the sale, but it’s certainly at least one month. I have a dim recollection from researching this a couple of years ago that it would be another three months.
Thus with a lot of suicide loans being made in the springtime, let’s say late-March to late-June, it would be late-September to late-December when the foreclosure sales will really be rising from whatever rate, however high, they are at this summer.
Typically it’s a six month process. If the lender is buried it can take upwards to a yr. During the last downturn when Moreno Valley, Ca. was next door to hell. I know of people who didn’t make payments for 6 mo’s to a year before the bank even sent a NOD.
I know of people who didn’t make payments for 6 mo’s to a year before the bank even sent a NOD.
Yeah, the mortgage O sleazes say they can close your loan in 30 days, but it’s a way different story when it comes to the idiots who bought the loan cleanin’ up the foreclosure mess.
Amazin’ how bad a freezer filled with rotting meat can be.
“Despite the price reduction, Roberts isn’t biting. ‘I told the Realtor to get lost, and I told her to tell the seller the same thing,’ he says. ‘They treated me like garbage when the market was strong, but now it’s a different story that sales are tanking. A year from now, that same house is probably going to be worth $200,000 less and the agent will be working at McDonalds.’”
I love this stuff! Way to go Robert, tell em to pack sand! Let’s hear more stories like this!
I agree. As Johnny Carson would say, this is “good stuff”.
Roberts has the right idea, let ‘em all choke.
I’m no expert, but my gut feeling is this will be far worse than the majority of “experts”, economists, the media and even some of the posters here are predicting . Personally, I can’t wait.
“this will be far worse than the majority of “experts”, economists, the media and even some of the posters here are predicting”
…because most experts, economists, and the media “predict” by looking at the last couple of data points and using a ruler to eyeball a best-fit line through them. The occasional economist might even run a regression which often amounts to the same thing. But when the market is changing rapidly those “methods” are worthless.
but my gut feeling is this will be far worse than the majority of “experts”, economists, the media and even some of the posters here are predicting
I don’t know about that. I’m pretty pessimistic, but D.O.B.A.
Personally, I would’ve strung them both along for a few weeks while the price dropped even further. Revenge is a dish best served cold….
That is a great line.
Another good one on revenge is:
Revenge is kinda like horsepower. You can never get enough until you get too much.
Isn’t this great? We can cuss realtors and loan officers because we don’t need them.
Hey, hey, calm down there…… Even loan officers hate realtors.
Nice one, Sammy!
“A year from now, that same house is probably going to be worth $200,000 less and the agent will be working at McDonalds.”
Hee hee.
One of the nice things about the bubble bursting is the end of a silly self-importance as inflated as home prices. It’s going to be fun watching Generation I-Got-Mine cope.
The Top 5 Signs Your Realtor Is Crazy
5> Wants to augment the listing of your mobile home to include
“top speed” and “miles per gallon.”
4> She asks if you have any hang-ups about squatting.
3> “Fixer upper” advertised in paper turns out to be 78,561,230
Popsicle sticks and 10 gallons of white glue.
2> His sales pitch normally ends with “… and from *this*
window, I bet you could pick off ten, fifteen people before
anyone gets suspicious!”
and Number 1 Sign Your Realtor Is Crazy…
1> Screams, “Feel how plush this carpet is!” then takes off
shoes, moon walks and shocks your earlobe.
We need to start a new blog of loan officer speculation, I’m a loan officer going into my 4th year and all the people in my office are less than 4 months old, all heard thru there buddies of great richess in the industry, this job is nothing more then a telemarketing junkie. The reputation of a loan officer is worse than a used car sales man now
what kind of speculation are you seeing?
Any news from Bakersfield?
Inventory continues to climb everyday. Big article in the front page of the paper today about how hot the building market is, after a bunch of RAH RAH, they discuss the MASSIVE build up in inventory at the very end of the article and then quickly dismiss it.
You work with toddlers?
Infants, you mean. Silly boy.
The reputation of a loan officer is worse than a used car sales man now
Better than bein’ Bubba’s “ho” in a FED penitentary which is where allot of your sleazebag bretheren belong.
Mr. IS-
Aye, matey, and a more worthless gaggle of miscreants, rogues, liars, and cheats you will not find anywhere else.
Count me in!!!
Maybe SoCalmtgguy has something to that effect on his site?
soon they will become used car salemen
I think they’ll have a worse reputation in the near future since none of these loan officers have any ethics anymore. Half of the loans done in here are fraudulent and the statistics on fraud I guarentee is a lot higher than anyone can really believe. From writing your own referrence letters to making fake business cards, I know many homeowners are FUKED, because everyone that I have been dealing with seems buried or desperate, or save my house loan, I dont care what u charge, I need to skip the next 2 months in mortgage payments b/s
WOW. Socalmtgguy has been beating this drum for a while. It seems like the Federal regulators could care less.
That’s a great point, C&C. Where are they?
I totally agree, fraud is a HUGE problem. There are only a few loan officers I will work with because I REFUSE to engage in the crap that many loan officers have going on. It runs from me showing up with docs where the payment is totally different than what they had been told it would be, to the borrower reviewing the 1003 and saying “that’s not how much money I make” I wonder how many sets of docs I have signed where the borrower was in on the game and ok with fudging income? It’s funny, last year it seemed like everyone made betwween 9-10,000 per month and this year everyone is making 12-13,000 per month. I guess as the median goes up, so does everyones stated income.
I have been in finance for 30 years+
Attached are a series of emails from friends from college. I apologize to all if this is boring, just my normal thoughts as a loan originator.
Wed, 5 Apr 2006
Have fun tonite. What the heck do you do anyway, for
> a living anyway?
Sun, 9 Apr 2006 08:45:57
I have a little fun originating loans for
residences, but mostly it is drudgery. I get the most
fun out of doing commercial loans for businesses -
(residential is more profitable). At the current time
I am very concerned about the long term economy - I
have never lived thru a “great depression” and, yet,
every customer loan I see is going to be in tremendous
difficulty. If gas gets to $4.00 a gallon - there
will be massive foreclosures. My average residential
borrower(s) make 50K per year own a 200K house, owe
190K on the mortgage and have 20K in credit card debt
as well as auto payments of ~350/month. For the last
few years they have been surviving on the appreciation
in their house and APPRECIATION HAS STOPPED! Should
the economy tighten further … This does not make
residential loans fun. On the commercial side,
getting a business up, running and expanding is really
satisfying. The biggest problem is all borrowers are
liars - no surprise in that. It is difficult to find
the truth from any borrower, even family. On the
positive side.
You are better off without a Texan. Texas is gorgeous
in the spring and fall, but the summers are hell
holes. Besides Texas men are rumored to like
Brokeback Mountain. So you are lucky you didn’t
lassoo one.
Did you ever hear the old car drive refrain “sun has
riz and sun has set and we is still in Texas yet”?
Tue, 11 Apr 2006 19:38:53 EDT
Phew. I can feel your compassion and concern coming through for these people in major debt. I am undoubtedly one of them. I actually appreciate your telling me this. I am building my practice but building a business takes a lot of advertising capital and it’s scarey.
What I do is hear the words: “Trust us,” coming from what I call the “upstairs department.” Also, I am fortunate enough to have some family money coming in every year, not much but enough to pay off some of the debt. Mostly, I just want to earn the money to pay it all back and try not to go out much since that means spending money. Can’t spend money at home!
It sounds like you really care though which is really pretty sweet.
Now about Brokeback Mountain: I haven’t seen it yet. Waiting for it to come in on DVD so I can see it at home but I have a lot of gay acquaintances. I live in a little section of very liberal xxxx that’s in my mind not at all like Texas.
So I am wondering if you don’t think much of gays and will that stop the e-ing?!?!?
Anyway, thanks for the insights.
Take care. I still am not sure if I’d want someone from Texas but I suppose as long as he’s somewhat cute and loving and SUPPORTS HIMSELF (ALL MAJOR CAPITAL LETTERS!!!!UNLIKE ANYONE I HAVE EVER BEEN WITH!!!!!), it would be fine.
Tue, 11 Apr 2006 19:39:19 EDT
You were kidding weren’t you? I forgot that about you!
Duh.
Tue, 11 Apr 2006 17:57:06 -0700
Come on - About people and places I kid e.g.
Brokeback Mountain and Texas. About poor sclemiels
about to go into foreclosure - iT JUST DEPRESSES ME.
I could go on but I get upset. My rant
In LA, they fake, er, make 50k and have a 900k mortgage.
Selling the repo’ed luxury cars belonging to their former RE brethren.
Hi, everyone, I used to post here awhile back. Then I got bored waiting for the damn thing to pop, and left.
Thought I’d stop in to see whether things had started to deflate yet.
This article pretty much gives me my answer.
Sure, just walk on back in here like nothing’s happened…And we cooked a nice dinner for you…and now it’s COLD! You find another blog to sleep in tonight!
LOL, I love hearing stories in which the would-be buyer gets the final word!
Bearmaster,
Isn’t this in your neck of the woods? I realize everyone is saying LA will be one of the last to go, but maybe not?
Quote from the article:
“The softness in several California markets has also spurred more interest in “price-range marketing,” in which sellers offer their homes in a range — such as $475,000 to $525,000 — instead of setting a fixed, predetermined offering price.
The concept was introduced in the mid-1990s but was largely ignored for the last several years, when sellers could instead set a firm price and often found multiple buyers willing to pay even more.
Perhaps the biggest proponent of price-range marketing is Prudential Real Estate, which claims that sellers who offer their homes in a general price range attract a broader group of prospective buyers. “It’s like fishing with a net compared with a single hook,” says Carlton Lund, a Prudential broker in the San Diego suburb of Carlsbad.”
Yeah, what a fantastic idea Carlton. I’m sure there’s tons of people caught in your “net” that are offering $525,000. How does that thought process go? “Let me see, I could offer them $475,000 for that house, but I don’t feel like paying them that amount. I think $525,000 is a much better deal.”
A price range is actually a very good idea in a falling market. If you range it from say 499K to 525K, it gets picked up by someone looking to spend upto 500K. Obviously if the 499K offer is 100% financing with an IO mortgage, the seller is not likely to accept. It does give the seller more options than most realtors are aware of.
“It does give the seller more options than most realtors are aware of.”
Enlighten me how so??
“Obviously if the 499K offer is 100% financing with an IO mortgage, the seller is not likely to accept.”
If he wants to sell in this market he better pull his head out his behind and accept it.
Most buyers are looking to be in a price range lets pick 500K - If you (as a seller realize the prices are going down and the 600 K you would have gotten 9 months ago has vaporized, there are 10 houses on your block for sale and you must sell) list at 525K the potential buying pool are those individuals who are willing to spend up to 525K+. If you range list 499K to 525K - you will still get the 525K lookers from the MLS as well as the buyers up to 500K. If there are then 2 offers one cash at 499K and the other at 525K 100% financing which is better for the seller? That is the biggest advantage for the selller - it expands the pool of potential buyers and still allows room to reject a 100% financing offer. Why would anyone wish to tie up equity in a dropping market. Cash is king. And I have seen more financing deals fall thru in falling markets let alone 100% financing deals. All it takes to kill a finance deal of any sort is a newer comp prior to close - regardless of the CTC - National City Mortgage Corp lowered the loan amount before funding a deal last week AT THE CLOSING TABLE - new docs needed to be drawn and a 1 hour close turned into a marathon. And while waiting to finalize the sale - the buyer is at no risk! However if the buyer is willing to pay the full range price in this example 525K then I would accept the inherent risk in the 100% financing clause. Selling houses is not like the stock market were even in the worst times in the last 19 years you could liquidate in a day. I wonder how many specuvestors thought about selling.
“I wonder how many specuvestors thought about selling.”
Not many why would you when as one poster put it the market corrected all errors. Now thats not the case and very few had foresight. Another thing about that example is when you put it in the MLS unless it has changed. You only have one choice 495K or 525k most people put the range pricing in the comments and like I said before it’s mostly ignored.
I’m still interested to hear how this give sellers more options than the realtor is not aware of.
I disagree I don’t think range pricing works especially in a down market and your. When Prudential started this it was largely ignored. And people just automatically went for the lower price. In your example if your in a hurry and you have 10 competing properties in the same price range forget the gimmicks get 5% less then the 10 and let it fly. This is the mistake people make in down markets when you are competing against people in forclosure going through a divorce or an unemotional R.E.O. manager who’s going to bite at first and the best whether it’s 5 or 10 percent below list. Range pricing is not your friend.
Wow that came out screwy let me try again sorry for the double post.
“I wonder how many specuvestors thought about selling.”
Not many why would you when as one poster put it the market corrected all errors. Now thats not the case and very few had foresight.
I disagree I don’t think range pricing works especially in a down market and your. When Prudential started this it was largely ignored. And people just automatically went for the lower price. In your example if your in a hurry and you have 10 competing properties in the same price range forget the gimmicks get 5% less then the 10 and let it fly. This is the mistake people make in down markets when you are competing against people in forclosure going through a divorce or an unemotional R.E.O. manager who’s going to bite at first and the best whether it’s 5 or 10 percent below list. Range pricing is not your friend.
Another thing about that example is when you put it in the MLS unless it has changed. You only have one choice 495K or 525k most people put the range pricing in the comments and like I said before it’s mostly ignored.
I’m still interested to hear how this give sellers more options than the realtor is not aware of.
TRich,
I’m with you. Price Range Marketing is Bull$h!t. Just say what you want for the f’ing house. The market itself will determine what your offers will be.
“yeah- I think I will offer the higher end of the range… in a market that is tanking”. where do these people come from???
Probably just a way of persuading the seller to lower his asking price to something closer to the market. “No, you’re not lowering your asking price to $475,000, you’re asking for a RANGE from $475,000-$525,000. With 6 month of inventory out there, would ANYBODY offer the higher bid?
Heard a stat at a RE conference a while back (a year or two) that at least 40% of condo buyers in SD were speculators. How did they do the study? They looked at lists of buyers for the various units in various projects in downtown SD, and when they saw a name twice (on different, or in the same complex), they counted those units as going to investors, not residents.
So, the 40% only included those people who bought AT LEAST two units, didn’t include the investor who only bought one. We’ve been waiting for SD condo market to tumble for the past year or two. Looks like “someday” is now.
I have access to title sites to look at comparables and it gives great info besides value, like how many of the loans have a 80/20 loans or 100% financing. Aerospace industry caused the crash in the early 90s, Its going to be the exotic toxication loans that will bring this one down. Whn you can qualify 100% financing with 500s FICO scores, theres a major problem.
When nearly 100% of first time buyers need to go I/O to get into a home, you are in trouble. When these people decide the I/O is too risky, and that there is no rush to buy (because inventory is up and appreciation has stopped/reversed), the house of cards falls down.
Those who are trying to “move up” can’t get the “equity” out of their home because the first timers decide to rent for anther 6-months, year, or two, purchases all become contingent on the sale of the old house. The whole thing slows/stops.
Add in the fact that lots of people bought more house than they needed, you have an underground supply of rooms for newly divorced husbands who lost $$$$ on RE investments and for those singles who want to rent for a while longer. Rents won’t spike like people expect, continuing to make renting a nice option.
It’ll take years to unwind.
My apologies, I’m think I’m going wear this one out eventually, so I have to put on a special twist.
I say: “Downtown San Diego condos for everyone and their favorite double buyin’ specuvestor!”
>eventually
This is the best housing bubble post I read all day. That owner got cocky and will now get burned. And it’s crap like this that makes you wanna see realtors become extinct like the milkman or blacksmith.
“all the people in my office are less than 4 months old, ”
Now I know why those loan officers are making all those idiot loans.
And don’t these guys sound just like the day traders, circa 1999-2001?
sf jack…Day traders take the their own hit.
These mortgage jackels prey on the ignorant and uniformed and ruin lives in the process.
There are none lower.
Actually it seems like a good portion of the spec-u-vesting has come from the RE industry — newbie brokers / agents themselves. If you’re dumb enough to jump into this career now… you are dumb enough to drink the kool-aid.
well said, feepness.
hd -
I meant more the naive “jumping into a career” late thing, more than anything else.
Sign of the times (a “market top”).
The difference is that they dont even know there idiot loans, so there innocent when talking on the phone. I’ve been steering all my deals to fixed rates, but borrowers dont qualify and to stupid to understand why the payments are higher than before.
Yea I’ve had that problem too. Most folks want to get into a fix rate problem is now because of their bad judgement before the fixed rates are higher than the voodoo loan they are in. It’s going to get really really nasty for a lot of folks
I love this, F*&^%^ all those people that didnt do there loan with me. Was giving a repeat borrower of mine a 5.5 40/30 year fixed, taking him out of his 6.5% I/O loan, got all the way up to signing and walked on me. My first walk out in 3 years, really pissed me off because I was proud of being up front with the fees & process & my record with my fellow LOs. He told me to call him in a couple of months, thinking I was going to offer him a better rate for a fix. I told him, after Dec. 05, you’ll wish you’ve done this loan with me now. Called him up, let him know the new deal, 1/2% higher, than before, he stated I’ll wait, they’ll come down again and I said yeah they will come down, your house value that is, hahahahahahahahaha, even better, hes a PIG (LAPD), they make good money, but not on his 500,000 95%LTV loan in todays market. Get ready to roast you F*&^%^ PIG
95% LTV on 500k on a cops salary and he turned down 5.5 fixed. Yeah he’ll be calling soon. Cops tend to overspend way beyond their means I don’t why that is. Then when stuff is not going their way they try to intimidate you. Funny stuff, Had one tell me one time Yea, all you guys are crooks why don’t you just fix my paperwork like everyone else’s I can send you lots of business. Yea no thank you Tweedle Dum. Take your business elsewhere
Well, I’ll say it. That was the most pathetic post I have ever heard. What kind of a-hole calls a police officer a pig?
pv tom: I’ll say it, and I’m a straight and narrow guy with zero offenses. It is hard to deny that many people in law enforcement are egotistical and thrive on power. That is not to say all are pigs. Heck, I even thought about going into law enforcement after my military service was completed, but felt that there are too many requirements I could not morally carry out. i.e. I feel the war on drugs is not only unnecessary, but a pathetic failure overall. From the description, this FB police officer earned his moniker of pig. He obviously has little to zero financial knowledge/sense and believes his home is a goldmine. Let him squirm and squeal.
Bruce doesn’t like pigs either, especially thugs like LAPD. They are usually stupid as bricks and would be prone to stupid financial mistakes.
If I could get a nickel for every time I hear: “I have an interest-only rate that is about to adjust. I want to refinance to a fixed rate, principle and interest lan,pull out $20K and get a lower payment.”
By all means, people, hate loan officers but do so only if you’ve witnessed to torrant of bullshit that trickles out from the mouths of many mathematically challenged homeowners.
Amen to that
OT, but good ole Robert Aldana guru of Santa Cruz-San Jose gave his radio show pep talk bouyed up by CA’s CAR past pres. Robert Bailey.What I learned today is that interest rates couldn’t be better, come in preapproved as a buyer (for some that only takes minutes)(he won’t even take an offer to the seller unless you are preapproved), IO mortgages are getting a bad rap, this is not a buyers nor sellers market but a BALANCED market, he is still getting multiple offers on his listings…….my head is spinning and I can’t remember the rest or maybe I just don’t want to!
I’ve mentioned this before, but this is the same drive time radio market where the guy on the ad for his lending company says:
“We think getting a home loan shouldn’t be any harder than ordering a pizza. We have people get approved from their car… we specialize in bad credit. And we’re nice people, too.”
what kind of pizza?
it’s not easy finding a good thin crust extra crispy pepperoni here in LA
Let me know when you find one. I am not joking.
it’s not easy finding a good thin crust extra crispy pepperoni here in LA
That’s because there’s no such thing. Try the frozen food aisle. (just pullin’ your chain, cereal
)
Hey Cereal,
You eat pizza??? I thought you only ate breakfast food…
A roller coaster is also balanced right before descent.
I received an email from my re agent in Los Gatos today. He said that there is lots of inventory to choose from but rates are going up so I better hurry. I don’t even answer any more - I just hit the delete key.
Lunar;…I go away shaking my head every time I preview a house in LG…Recently sold a house on Lucky Rd and another off Camino…People are desperate to get into those school districts and are willing to pay dearly to get it…
desperate = dumb
If they are so eager to put their children into a good school district, they can rent in the same district and save the extra money for college. But no, they need to fit in with the herd and strap themselves with a massive loan. I feel sorry for their kids.
Glad to be a DINK.
I’m sure as hell glad that someone got the last laugh on one of these assholes.
I had been e-mailing back and forth with a mortgage broker on MySpace, and I told him that I thought that the conditions out there were deplorable, and I also told him that I felt badly for all of the idiots who got suckered into a negative amoritzaion, interest only, ARM style loan who were going to run screaming to mama by the time all was said and done.
So what does the asshole do?
He sends me an e-mail back touting the virtures of a negative amortization style Interest Only loan as the best way to go so that I could get into “more house” for lower payments, and he even went so far as to break it down into how many thousands of dollars I could save over five years.
Some people have their head shoved so far up their asses that I’m sure it isn’t deliberate malice, but simply the lack of oxygen to their damn brains. I was so disgusted to get his reply, although why I expected any better from a mortgage broker at this point is beyond me…
I’m with ya. So are millions of others. Fox news could say the earth is flat and you’ll have shitloads of people believing it. It’s the new paradigm. War is Peace. Debt is saving. Saving is bad.
Marketing has turned into outright lying.
Well stated Lingus….
Oh yes, I just remembered more…SC-SJ is sooooo wonderful there is an influx of people coming into the area monthly and not moving out like elsewhere in the state, he’s sooooo glad this rain has stopped so he could spend some time outside, and the big daddy lie…spring season is just starting so start looking now.
Ah yes, and next week I go back to Bakersfield for three days to visit relatives and I get to see what’s happening down that way.
Watch out for the sign spinners. They are everywhere! Go visit a few of the open houses in 7 oaks and Brighton Estates. These are the most desperate of all the agents.
Everyone, just keep your eye on the T-Bill, things will unravel soon…..like someone said, after July u will see whats up
sfjack….yeah, but he wasn’t there today because he was at the baseball game….business must be knocking down his door…
non-occupying homeowners who bought in the recent past are probably losing money each month
There’s no “probably” about it!
With totally out of wack valuations relevant to historical Gross Rent Multipliers, single-family home investor’s are losing money by the second!!!!!!
this article made my day. The only thing I would have done differently is that I would have used a bit more colorful language than, “get lost” to that seller and realtor. Oh, that and not have made the original 699K offer in 11/05. On second thought, perhaps I would have told the agent that I would put in a full-priced offer when he called me back and then back out at the last minute. Actually, never mind. Not even I’m THAT mean.
“But Roberts’ anger turned into laughter last week, when the same Realtor he finally fired last December called to say that the previous deal with the other buyer had fallen apart and the house is now back on the market, for $50,000 less than he offered to pay last fall.”
He should start at one or two hundred thousand below list price and tell the seller to call when he is ready to sell.
Wanted to post this for Desi Dude.
Indian Real Estate: Where the Action Is
Sanjay Somaney
Apr 13, 2006 10:11 am
The official stats say there is need for 25 million homes in India but that amount is understated by a factor of 3.
There is so much focus on Indian equities but there is another silent but hugely profitable opportunity in India: Real Estate. Let’s start with a background of real estate in India.
In the 80s Indians always looked at real estate as the place to invest money, since prices were always escalating and supply was relatively scarce especially in areas that were considered “desirable” to live in. Think Manhattan in New York, San Francisco in California, et al.
The real estate “bubble” in India reached a crescendo in 1999 when the British, who were forced by the terms of their long foregone Colonialist era treaty with the Chinese, to cede control of Hong Kong. A million Indians living in Hong Kong decided to hedge their bets, given the uncertainty of coming under Chinese control, by buying property in India at absolutely absurd levels. I remember getting an offer back in 1999 for one of many apartments my family owns overlooking the Indian Ocean for a price 2x what it was worth just a few months prior to the offer. So naturally, when that demand from HK abated, as the Indians living in the Far East came to the realization that nothing really changed, prices started easing lower.
So what is driving the real estate market in India higher now? 9/11 has led to many Indians the world over; worried about persecution due to being brown-skinned, buying second homes back home in India. In addition you have the growing affluence of 300 million Indians who can now buy first homes or second homes as investments. Finally, you have foreign money coming in as well. The following will illustrate my point:
Just today, CALPER’s announced that they will invest between $100 million and $400 million in building homes in India. Think about how ridiculous that is. The largest US pension fund committing money to real estate in a country that a lot of people associate with cows and elephants on the road.
CALPERS manages about $190 billion in total assets and are now committing a fraction of that money to Indian real estate. Remember, these are the same guys that were late but not too late in coming in to Indian equity markets.
CALPERS is putting about 8-10% of its $180 billion cash hoard into Asian real estate. The pension fund giant has committed a maximum of $400 million to developing housing in Indian cities like Mumbai, Bangalore, Delhi and Bangalore. Hear it from me, those markets are played out.
Once these big boys get in, the game is close to being over. Here’s where the action is which CALPER’s has no clue about: it’s the cities of Pune, Chennai and Hyderabad.
That is where we are going. I have sold the two houses I owned in Whitefield, Bangalore and am putting that money in Pune, India which is a two hour drive from Bombay and will soon be considered a suburb of Bombay.
The official stats say there is need for 25 million homes in India but that amount is understated by a factor of 3.
So, in summation, either we do it together or I do it on my own. It matters not. There’s more to India than just equities.
Bangalore is really a nice place. I’d live there myself if I could.
I’m trying to link another blurb from a hedge fund guy who said he had dinner this week with a partner in a VC firm. The VC firm pitched to a large pension fund but the fund declined to invest saying that VC is too risky. Instead, they are investing in residential real estate.
Does anyone remember Fidelity (I think it was?) taking a filing size position in HLTH back in late 1999 or early 2000 at $76/share? I do. And I also remember seeing them puke it back out a couple of years later for something in the order of a 90-95% loss.
txchick,
do you know of the new expose book Hedgehogs? I ordered it on Amazon and eagerly await it’s arrival.
Brad, another good hedge fund expose is “Ugly Americans”, if you haven’t read it.
actually Calpers is pretty damn smart. They have been unloading their U.S. real estate holdings in droves at the top of the market. Japan’s real estate market is at rock bottom. Are you saying they are stupid for harvesting winners from a bubble market and reallocating to a market that could be poised to take off?
Tbizzle is right on.
Ben blogged about them offloading US RE about a year ago now for the newcomers.
Here ya go. Sounds nice!
http://chennai.craigslist.org/rfs/144229323.html
The real estate price escalation and speculation in Indias Metro is probably even more than those in Coastal USA.
Interest rate is higher than usa, 8+%. Theprice in many places has doubled in 6 months!
The consumers there hardly have any avenue for getting their concerns addressed. Stock market has been going up crazy. It is a new ball game….sound too risky for me IMHO.
No, the writer is saying they are stupid for buying into a market that is tapped out and not the ones that have appreciation ahead. That’s not knowing your market.
Txchick,
That sounds like a nice place on CL. Wish they had pictures.
BTW, I’ve heard that India has its own RE bubble, but I still think it’s a better bet than U.S. real estate. I don’t think the Indian consummer is as indebted as we are. There is more room for growth there as well.
I do agree CALPERS needs to be sure they understand the market there. I have to think they have locals/natives who are advising them on their investments. CP does have a good reputation, and I’m guessing they want to have a certain percentage of their portfolio in RE. I would also be in Asian RE if I were them.
Anyone know of any REITS for India. Got to imagine as long term plays, it could be interesting.
Simmsays…
http://www.AmericanInventorSpot.com
AmericanInventorSpot.com
Crisp&Cole, I remember when you could buy in 7 Oaks for $500,000 and Hagen Oaks for $300,000. Those houses here would be in the $3,000,000 range and were better built.
Thats $1 million plus territory now. Soon to be $500k and $300k again.
Crisp&Cole..I plan to do some eating like breakfast at Donna Kays, peanut butter pie at Happy Jacks, a black and white at Dewars, a chocolate taco at Mexicali, plus a Mexicali special (drink) if I have someone to drive afterwards, chicken enchlada mole at La Costa (21st).
You must have been a local. I know this town is a shit hole, but I does have a few good qualities.
You must have been a local to know these spots!
The Red Pepper is better than the Mexicali since Marci is no longer shaking the margaritas.
I have a question. If baby boomers who own second vacation homes before retiring decide to move to said vacation home permanently after retiring what does that do to the supply of homes for sale in the future? Do they just rent out their old home and leave them to their children or do they try to monetize them?
When Medicaid busts, they’ll be sellin’ the second home, for pennies on the dollar, and turnin’ their main house over to the State, after their liquid assets are wiped out to cover their nursing home expenses.
Bond Rates:
“Joachim Fels, an economist at Morgan Stanley, said the conundrum had been caused by the easy money policies in Japan and Europe, creating a flood of global liquidity that continued to overrun the US credit markets long after the Fed began raising rates.
He said synchronised tightening across the world was now leading to bond sell-offs everywhere, with “nasty implications” for risky assets. “I think it is time to hunker down,” he said. The bank is predicting a 7.9pc fall in European stock markets over the next six months.
JP Morgan Chase is forecasting a 13pc fall in Amer-ica’s S&P 500 stock index, and 12pc fall in the FTSE 100. “Our big concern is the combination of rising bond yields, sustained high energy prices and weakness in US housing,” said Abhijit Chakrabortti, the global equity chief”
Salinasron;….He said synchronised tightening across the world was now leading to bond sell-offs everywhere, with “nasty implications” for risky assets.
It was one hell of a party wasn’t it ?? Now, the hangover…
Crispy&Cole, Yep, I lived there from 1971 to 2004 when I moved up here. I have lots of friends there. My BIL farms cotton and pistachios in Buttonwillow.I still go down there to have my cars worked on at Miller’s and still buy my tires (and breaks) at Clerou’s. Whenever I’m in town I buy my meatloaf mix from Greenfrog Mkt, and if I get a chance I run across toward Inyokern to buy some brew from Indian Wells brewery…Mojave Red, Lobotomy Bach, and Orange Blossom (?) …if you’ve never tried them check them out on the net….
We have friends who want us to get involved with them (financially) with fixer uppers in Glendale, Ca. They tell us it’s almost foolproof.
I have to do everthing in my power not to tell them I think they are foolishly gambling.
Does anyone know about Glendale, Ca? Is it truly different as they say?
Only as “different” as the other medium-nice areas of LA. Glendale has a lot of SFHs interspersed with apartment buildings. It seems to be one of the going vertical due to housing demand and lack of space. Also, Glendale, like Burbank, has high-rises in its (small) downtown area. Glendale is within striking distance of Burbank, Downtown LA, and Pasadena.
Ya rolls yer dice, and you moves yer mice…but don’t get caught! My inclination would be to ‘just say no to flipping’ in LA…
(One last point, Glendale is only a hop, skip, and a jump from the Eagle Rock Tommy’s Burgers…THE most important consideration, in my opinion…)
That should be “It seems to be one of the AREAS going vertical”…
Yea if your not buying them 30 to 40 cents on the dollar stay away and wait a bit. The levels of mortgage fraud that goes on over there is below no other. Patience will be your greatest virtue over there. When the resets come and your buying them from the bank it’s going to feel like stealing.
Given that San Diego rents are so low in comparison to home prices, non-occupying homeowners who bought in the recent past are probably losing money each month. The only plausible reason for owners to subject themselves to such repeated losses seems to be an expectation that future appreciation in either home prices or rents will make up the shortfall. These people are, without a doubt, speculating
True, and this makes as much financial sense as buying a one hundred dollar bill for $150 on the hope that some other idiot will buy it from you next week for $200.
speculators fleeing? A typical craiglist item (ft lauderdale,fl)
$585000 - MUST SELL TODAY! Price drop from $800,000 to $585,000/Best Offer
NEW CONSTRUCTION!!!!
Motivated seller moving out of state on short notice. Seekeing best offer OR A GOOD RENTER! Must sell TODAY!! Best value for the money: Save $215,000.
*** Call 954-567-3477 (owner)
Address: Villa Medici is located on 1033 N.E. 17 Way, Ft Lauderdale, FL 33304
Property Information:
=====================
Luxurious 3 Bedrooms, 3 ½ Bathrooms, 2 car garage, 3,217 sq.ft (approx 2,200 sq.ft of a/c space), this 4 story town home with oversize rooftop terrace and spa hookups, great room, breakfast nook, granite counter tops, stainless steel appliances, hurricane impact glass, concrete block construction, Mediterranean style roof, and much more!
It looks like quite a few of the properties are for sale… and it’s not even completed yet…. uh oh!!!
Haha, that listing is making the buyer think they’re saving 215k.
They should have reduced it from 1,585,000 to 585,000 and the buyer could save a cool mil, and have a million in instant equity
At $585 still WAAAAAAAAAAAAAAY overpriced.
That FL flopper is surely one MFB. Perhaps Bubbles the Clown could speak to him. Rainman18 - got a comment for that CL FB.
Bubbles the Clown will be in tommorow (he’s passed out) but Bubblefucius had this to say.
Bubblefucius say:
Condo flipping like kick in scrotum. Both painfull and you left holding bag.
Rainman…. you’re pretty good at being bubblefucius
Bubblefucius say:
To ‘read about’ a compliment is only surpassed by the melody of one spoken.
It’s morning…If bubbles could please wake up, clear the flem, spray some tinactin on the itching spots and begin our dialog. we would be most appreciative
anyone buying with a low down and either an arm or i/o loan the last 3 years is speculating.i have been trying to move people into fixed loans since i got into loan brokerage…telling people “it’s a 40 year low!!! get it while you can!” 70% of the loans in my county were exotics last year….in my experience people who ask for pain get it…this will be the worst crah since la in 1889,and once it starts moving it will go fast…i’m getting a few calls now from people who changed their minds about their arms…their values have dropped 5-10%….and rates have gone up (surprise) some get quite upset because i can’t get them the payments they want.too bad,take a xanax,have a martini or five,just put your bk on your visa,nothing to stress about
Comment by Sammy Schadenfreude
2006-04-13 16:37:09
Personally, I would’ve strung them both along for a few weeks while the price dropped even further. Revenge is a dish best served cold….
Even better if he put in a 2nd offer of $500,000 and told his agent to go make the deal to earn her commission.