The Housing Gods Must Be Crazy In California
The San Francisco Chronicle reports from California. “Despite plummeting values across the nation, 62 percent of homeowners believe their property’s worth has actually climbed or stayed the same during the past year, according to a survey commissioned by Zillow. In reality, the market price on 77 percent of properties has dropped and only about 24 percent have risen or held firm, the company estimates.”
“Malcolm Kaufman, a Realtor with McGuire Real Estate who focuses on San Francisco, said local sellers are generally more informed and realistic about the condition of the market.”
“That said, he sometimes finds it difficult to convince clients to list their homes at slightly below the going rate, which he believes is the best tactic for generating multiple offers in an environment where people are looking for bargains.”
“‘It’s human nature (to say) ‘My home’s worth a million dollars, I want to get a million,’ he said.”
“According to S&P/Case-Shiller…prices fell 22.9 percent in the San Francisco metropolitan area, defined as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, making it the sixth worst-performing region in the country.”
“Each of the Bay Area’s nine counties saw double-digit median price declines in June, compared with a year earlier, according to DataQuick.”
The Plumas County News. “‘I don’t think there’s a recession in the real estate market, I think there’s a depression,’ John Hodgson, Feather Ridge Estates, told Portola’s City Council at its July 23 meeting.”
“In requesting an extension of the development agreement with Portola for an additional year, Hodgson cited the ‘challenging, even dismal, real estate market we’ve seen in the last year or two, probably more.’”
“Saying ‘there is no market right now,’ Hodgson predicted, ‘It’ll come back, but we’re not sure when …We think there’s one or two more years in this recession.’”
The Union. “Alison Lehman is seeing firsthand the impact of Nevada County’s escalating unemployment rate, which is nearly 50 percent higher than a year ago.”
“Lehman also knows how competitive the job market is in Nevada County. Her department recently advertised for a temporary position that paid a base salary of $36,245. They received 95 applications. In the past, the department would get 10 to 15 applications for such a job, Lehman said.”
“As the director of the county’s Department of Social Services, Lehman has watched a growing number of the newly unemployed file into her office in the past nine months to apply for food stamps and other help.”
“‘What’s stood out to me is that there are more employable individuals who are now looking for assistance,’ she said Tuesday.”
The Manteca Bulletin. “The housing gods must be crazy. Now - in some cases- it is substantially cheaper to buy a home in Manteca than to rent an apartment. Nine homes closed escrow in Manteca last month that cost less per month to buy than renting a two bedroom, two bathroom apartment at Laurel Glenn on Button Avenue that is commanding $925.”
“Realtor Tom Wilson noted that the current Manteca housing markets driven by foreclosures is shaping up more and more as ‘an opportunity of a lifetime’ for first-time buyers as well as investors. Wilson noted, ‘He who hesitates is going to lose out.”
“‘First-time home buyers who are taking baby steps like their mom and dad did are doing quite well in the market,’ Wilson said. ‘I imagine those who bought baby McMansions a few years ago as their first home are wishing they hadn’t.’”
The Californian. “The Marina City Council was poised to breathe new life in the stalled The Dunes at Monterey Bay redevelopment project on Tuesday, with a $106 million reimbursement to the developer. The council meeting went late into the night without a final vote.”
“‘The reality is the project would be dead without additional redevelopment funds,’ said Douglas Yount, director of the Marina Strategic Development Center.”
“Marina Community Partners - developer of The Dunes project - originally expected a 22 percent return on its investment with the original agreement in 2005, Mayor Gary Wilmot told the council. But with the downturn in the housing market the developer expects only a 0.15 percent return on investment - even with nearly $106 million from the redevelopment tax increments.”
“‘This is an extremely risky project,’ Wilmot said. His comment was loudly echoed by the developer who attended the meeting.”
The Compton Bulletin. “Two years after an exclusive negotiation agreement (ENA) was inked, city lawmakers last month finally moved forward with a plan to build 100 single-family homes on the former Alondra landfill site despite the real estate bust.”
“The move did not come without some hesitation on the dais. Councilman Isadore Hall, a real estate executive, said he’s worried the city ‘could lose in the end’ in that there’s no telling when the real estate market will bottom out and begin its slow recovery.”
“The land was appraised in January at roughly $8.5 million. But the value of that land could continue to decrease to a point where the city’s return would be less, Hall said.”
“In 2006, the ambitious project was expected to boost property tax coffers by $70 million annually. Advanced, which will build a gated community of homes on 5,000-square-foot lots along with a pocket park, then planned to price the homes from $600,000 to $700,000.”
“But those prices likely wouldn’t cut it in today’s market, and they might be too far out of reach for too many in the future.”
“And the availability of mortgages has shrunk dramatically, according to DataQuick President John Walsh. Even qualified borrowers are being turned away left and right by lenders.”
“‘The mortgage market turbulence is putting quite a bit of activity on hold,’ he said. ‘Even some very well-qualified households aren’t getting mortgages these days, although this could all change fast if liquidity comes back.’”
The Union Tribune. “A San Diego real estate investment firm has purchased a group of troubled residential development loans for less than 40 cents on the dollar. Ayres Advisors bought 16 loans and one foreclosure property with a face value of $122 million from Central Pacific Bank of Hawaii. The loans were backed by residential land, some condo projects and nearly completed homes, mostly in California.”
“Central Pacific Bank said in a press release that it sold the portfolio for $44.2 million - or about 36 cents on the dollar.”
“In San Diego, Pathfinder Partners, a private equity fund, has purchased loans for distressed condo projects in Florida and hopes to invest $300 million to $400 million in similar deals nationwide over the next 12 months.”
“But until recently, banks have been slow to sell distressed loans at prices low enough to justify the risk, said Lorne Polger, managing director of Pathfinder Partners. That’s starting to change, he said.”
“‘I can tell you what we’ve seen in the last 60 days is a significant sea change in the way many banks are thinking about these things,’ Polger said. ‘We’re seeing pricing much more reflective of the true market value of the asset than we saw six months or 12 months ago.’”
“Banking regulators are pressuring institutions - particularly those overly exposed to residential land development and construction loans - to get realistic about the prospects of payback, said Keith Horne, president of Ayres Advisors. So ‘the smartest banks’ have begun selling troubled loans at steep discounts to help clean up their books.”
The Wall Street Journal. “Burl East is looking for a good deal on a foreclosed house. Make that a good deal on 1,500 foreclosed houses. Mr. East, a managing principal of Silver Portal Capital LLC, a small real-estate investment bank, is raising $150 million to purchase foreclosed houses in and around the firm’s hometown of San Diego.”
“He is scouring lender portfolios and real-estate listing services for houses that he can rent out and then resell in five years. That is when he bets that the local housing market will have recovered.”
“‘It’s like the infantry,’ says Mr. East, who plans to buy his first house later this month. ‘We’ve made a list, and we are going house to house.’”
“Mr. East’s staff includes five sales agents and a former division president at Olson Co., a Southern California home builder. They are targeting properties that were priced at less than $600,000 at the peak of the housing boom and have fallen in value by about 50%. That puts them well below ‘replacement cost,’ or what it would cost to construct an equivalent house.”
“Their strategy takes them away from the shiny new condominium towers in downtown San Diego and into the more-modest suburb of Chula Vista and other nearby California cities where lax lending and big price swings have led to high foreclosure rates.”
“Over the next 12 months, Mr. East plans to purchase as many as 1,500 homes in San Diego and nearby Orange and Los Angeles counties. They plan to rent them to teachers, police officers and health-care providers earning around the median household income in San Diego of $68,000.”
“He is banking that most of his profit will come from price appreciation when he resells the houses starting around 2013. He is betting that houses in coastal Southern California will recover much of their value because the area is a desirable place to live and has a solid employment base anchored by the biotechnology industry and the military.”
“Of course, there is a risk that Mr. East could be striking too early. Ramsey Su, an investor who bought up foreclosed houses in San Diego in the 1980s, says foreclosures have yet to peak and home prices are likely to keep falling, so he is waiting to start buying again.”
The Bakersfield Californian. “State regulators laced scathing descriptions of former Crisp & Cole Real Estate principals into closing arguments Tuesday of a weeklong license hearing.”
“David Crisp ‘lied to the lenders’ on loan applications, said Michael B. Rich, attorney for the California Department of Real Estate, and showed a ‘low moral compass’ by paying staffers in a scam to put properties in their name in order to later funnel sales profits to the company.”
“Carl Cole, meanwhile, was an ‘abject failure’ as supervising broker of Crisp & Cole and its former mortgage brokerage, Tower Lending, Rich said, adding Cole ‘enabled his sales licensee partner’ - Crisp - ‘to run amok.’”
“The state wants real estate licenses of Cole, 61, and Crisp, 28, revoked.”
“Crisp, Cole & Associates, the corporation behind Crisp & Cole Real Estate named in the state complaint, took in more than $488,000 in commissions from the 13 properties referred to in the complaint, Rich said during his closing rebuttal.”
“Tower Lending earned about $120,000 for originating loans on most of the properties named.”
“The state’s 25-page complaint was filed against Crisp & Cole in September, two days before FBI and IRS agents raided 13 Bakersfield locations to seize documents and other evidence related to Crisp & Cole operations. No charges have been filed in the federal case.”
California is crazy. Gods have given up on the people there.
from a movie I saw once :
“god is going to sit this one out!”
the punisher
Looks like these so called Housing Gods turned out to be CLOWNS in a statewide Circus
We don’t call this the land of fruits and nuts without reason.
I haven’t heard that term “land of fruits and nuts” since my Army days.
Does that mean of bunch of them will be moving out of state? That’d be AWESOME!
There’s a lady at work who believes that the recent problems in CA are actually our punishment from God for allowing gay marriage. She’s moving out of state to get away from it. She also doesn’t understand how dinosaurs could have lived during a time when humans weren’t around, since man was the first living thing created. I’m not so sure that it’s a bad thing for CA to be losing some of its current residents.
Damnit, she’s not headed north, is she?
That is scarey. Religious fundamentalists should at least know the bible a little bit. She doesn’t know that the Genesis story has the critters made before people?
I’m not about to argue with her, she’s going to TX.
Phew!!
Oh man. That’s what I was afraid of. She will find plenty of like-minded people here - but we really don’t need more…
“The housing gods must be crazy. Now - in some cases- it is substantially cheaper to buy a home in Manteca than to rent an apartment.”
No, the housing god’s aren’t crazy. It should be cheaper to buy than rent because when you rent, you can easily leave.
The housing bust will not end until it is substantially cheaper to buy than rent in almost all areas.
Keep the popcorn popping,
Red Baron
Not to mention that now the housing stock is being absorbed by real users rather than speculators, supply will increase, and probably reduce rents. Expect rents to decline!
I’m starting to think that it might be time to buy in places like Manteca and Los Banos. I mean, 60-70% off? That’s a lot. I know, I know, you have to look at incomes, gas prices, etc. I haven’t really done an analysis in those areas because I don’t want to live there or have any business there, but for some people it might be a good idea to look into it.
OK, I just took a gander. The median income in Los Banos is $53k. However, I’m thinking most of the people earning $50-$150k are actually commuting to Silicon Valley. A lot of those people will be leaving and not coming back. Hence, I think the future median income will be maybe $30-$40k. That should support a median house price of $90-$120k. Right now, it’s about $200k. Hence, even if the median income doesn’t go down, houses are still overpriced by about 20-25%.
Sounds like the area I live in. Median income from 2000 census adjusted for inflation is 43k . Median sale price in this areas is still 199k. Median asking price 260k. Price per square foot median is 124 psf.
Median income from 2000 census was 37k but median asking price for a home was 77,800. This area still has a long way to go.
So, you are assuming:
1. Most of the people making $50-$150k in Los Banos commute to Silicon Valley; and
2. A lot of these people are going to now leave Los Banos; therefore
3. Median incomes in Los Banos will be dropping by 20-40%?
And what are you basing #1 and #2 on?
How about this for a different logic chain:
1. People who live in places like Manteca to commute to places with higher wages do not do so in order to rent unless they really want to live in Manteca; therefore
2. People with local jobs in and around Manteca (or who love Manteca) can now buy a home and pay less than their rent; thus
3. With the pervasive belief that eventually one wants to buy a home to live in, people with local jobs in Manteca will move from being renters to owners–clearing the inventory of unsold homes, and potentially softening rents in the near-term.
I think you’re looking past the facts (that prices are in the process of hitting bottom in places like Manteca and Los Banos) because you don’t want to believe it, and making up reasons why they will keep falling.
I’m not going to jump up and down to say that we are now at bottom overall and next month will be better, but the worst hit places have had such massive price adjustments that they may be very close to hitting bottom (if they’re not already bouncing along the bottom).
Los Banos is horrible. You should go there some time just to gawk. The roads there are also in terrible shape, and account for much of the local experience.
Stockton is in that area too, and there are reports of multiple bids on foreclosed properties driving prices higher than the ask. The foreclosure capital of the world may just be getting cheap enough to clear inventory.
Is this the end of the beginning (the price crash) for the down cycle in Stockton/Manteca? Are we entering the “inventory clearing” stage?
“Is this the end of the beginning (the price crash) for the down cycle in Stockton/Manteca? Are we entering the “inventory clearing” stage?”
I doubt it. No freaking jobs, bay area transplants hating the high dollar commute–and don’t forget we’re going to have a whole new wave of Alt-A and Prime resets coming along.
DOC
Construction jobs are toast…agreed. I think though that the job story is better in Stockton than people realize.
Toyota just opened 2 parts plants in Stockton. US Gypsum is building a massive drywall factory there to serve the West Coast (1 billion square feet per annum capacity). These are big companies choosing Stockton for manufacturing…why? Port, airport, intermodal yard for rail, and the 99 and 5 for trucking.
Just met a guy at a greentech startup who chose (of all places) Stockton for their manufacturing plant–good access to labor and logistics infrastructure.
Catellus is building ~5MM square feet of industrial near the airport in Stockton over the next many, many years that will bring lots of jobs.
Yes, it’s pretty damn bad out there…but it’s not all bad.
In the same way there is a risk of being too optimistic when things are high and going higher, there is also a risk of being too pessimistic when things are down and going lower.
“Despite plummeting values across the nation, 62 percent of homeowners believe their property’s worth has actually climbed or stayed the same during the past year, according to a survey commissioned by Zillow. In reality, the market price on 77 percent of properties has dropped and only about 24 percent have risen or held firm, the company estimates.”
The fire sales won’t begin until denial gives way to desperation.
And denial is not a river in Egypt.
It’s a faith-based ownership society.
No surprises here.
They haven’t reached anger and bargaining.
Surprising that we have not even gotten out of the first stage yet here. Wait for the teasers to reset on all of the ALT-A and Option ARM Primes this year. That may wake em up.
“‘I can tell you what we’ve seen in the last 60 days is a significant sea change in the way many banks are thinking about these things,’ Polger said. ‘We’re seeing pricing much more reflective of the true market value of the asset than we saw six months or 12 months ago.’”
True market value… 36 cents on the dollar… hummmmm…
If the banks start capitulating, you will have houses and condos for sale at fair value just because of the volume of foreclosures.
That’s what’s “different this time.” The correction may not take seven years to happen.
A serious recession would just accelerate the profits, but forcing more people to “sell at market.”
“Of course, there is a risk that Mr. East could be striking too early. Ramsey Su, an investor who bought up foreclosed houses in San Diego in the 1980s, says foreclosures have yet to peak and home prices are likely to keep falling, so he is waiting to start buying again.”
Sounds like Mr. Su may have some important insights to the risks of snapping up foreclosure properties early in a correction which Mr. East may be lacking.
A former securities analyst, Mr. East has devised models to forecast house prices and foreclosures in San Diego, but selecting the houses can be more art than science. For example, he says, the houses must be located within a five-minute drive of a Starbucks coffee outlet. “That is a sign of being near civilization,” he says. “We are not looking at tract houses built in the middle of nowhere.”
heh.. starbucks.. Well, lacking insight or not, Mr. East is gambling with OPM, not his own. He knows there are lots of high net worth GFs with money burning holes in their pockets, and people like East will offer them what they want (high risk, high returns). They might lose but East can’t lose.
East may win big by starting his venture at this point, before everyone and his dog starts reciting the mantra: “Real estate is the worst possible investment.”
yeah.. makes ya wonder how long that window of opportunity will be open… a few more months? .. but seeing how the craziness in other markets shows substantial resistance to the RE market decline, maybe Mid ‘09?
“He is scouring lender portfolios and real-estate listing services for houses that he can rent out and then resell in five years. That is when he bets that the local housing market will have recovered.”
That 5 years time frame is a Goldilocks number.. not too long and not too short. Almost everyone (except us) thinks the RE market will recover in 5 years or so. I have to give the guy credit for being a good salesman.
Any idjet can see that there are Starbucks everywhere, even on the outskirts of patch-work housing developments in the middle of nowhere. The cafe will sell to people who want to stop by on the way to work and to housewives who want to meet up with other housewives and bring their kids.
speaking of starbucks, on my most recent drive down to FL earlier in the year I had to take US 19 to bypass the smoke & fire on I-75/I-10 georgia border.
hadnt been down that way in a long time, but I remembered it was very desolate, unspoiled, rural, rustic, & whatever else you want to describe the condition of way the hell off the beaten path.
anyway, about 200 miles down, in the middle of nowhere, getting some gas at at small oldstyle c-store, with the old-time dial gas pumps (wow), sure enough, next to the pickled pigs feet and eggs on the counter was a FREAKIN STARBUCKS MINI-COOLER with bottles of coffee !!
oh man, I was both laughing & relieved because, while still a starbucks store virgin I DO like to buy 2 bottles of the stuff on the road to keep me awake.
(joked with the clerk about how he should open up a starbucks store if they franchise. you could see the light bulb go on in his head as we spoke.)
shout out to PALMY, you old he-coon!!
Well, assuming they don’t close them?
You gotta love Mr. East’s business plan. Buy 1500 houses, rent them out for five years and then sell them for a profit. This from a former securities analyist with 4 sales agents and a regional builders’ manager on the staff. Can anybody change a faucet washer? Try to maintain 1500 rental houses for 5 years well enough sell for more than they now cost. East really needs a good ol’ slum lord on his staff.
Why is Mr. East allowed to take away 1500 American Dreams ? Without him,
1500 renters will have a chance to buy their American Dreams at a lower
price. Corporation should not be allowed to buy homes.
COMPTON – Two years after an exclusive negotiation agreement (ENA) was inked, city lawmakers last month finally moved forward with a plan to build 100 single-family homes on the former Alondra landfill site despite the real estate bust.
Homes…in Compton…built on a landfill…prices ranging from six hundred to seven hundred thousand.
There are no words.
Welcome to California….everyone wants to live here….even if it is on top of an old landfill…..
The city will probably offer teaser-rate option-ARM financing to potential buyers…..
Welcome to Compton:
Where not only your house’s value, but also it’s foundation, has the potential to drop drastically.
Next will be the suits for methane gas seeping through the foundation, big pay-outs, followed by bulldozing.
Never underestimate the stupidity of the masses and their lenders.
What are you guys talking about?
A house with free natural gas!
I should be a Realtor!
Mike
Welcome to Compton…
Where the price of living is going up
While the chance of living is going down
-thanks Robin Harris
Which brings up something I’ve been wondering about “urban condos”.
What responsibility do the owners/builders have for lead and asbestos contamination?
Or, even better, groundwater pollution? A lot of these are in former industrial areas. If the EPA finds groundwater pollution, they go after all the current property owners, unless they can prove the contamination was there before they bought the building. Do any of these developers even check? Or do they (as I suspect) let the sleeping dog lie?
It would be a pain to see your HOA fees go to $10 gazillion/month due to this.
A company I used to work for (rumor has it) avoided this issue on a long-term (20 year) lease on a facility, by bringing in a crew to drill core samples……Rumor Control had it that they found about a foot of jet fuel sitting on top of the ground water.
Yikes. I used to know a guy who was an environmental geologist. He would go out and do inspections for this type of thing. At least, I think it was this type of thing. Add that to the list of inspections to include as a contingency on any offer.
First of all, the EPA isn’t going to find anything. What ends up happening is a potential buyer finds a problem and the consultant the buyer hires reports any issues to a government agency.
Second of all, any smart buyer is going to do their due diligence. Any buyer of a building is going to hire an arch/engineering firm to do a physical condition assessment, a probable maxmium loss for earthquake (on the West Coast), a environmental site assessment Phase I, and if the Phase I finds anything, they’ll drill core samples in a Phase II and remediate the situation. Additionally, finding asbestos or lead isn’t necessarily a bad thing. It’s only bad if you’ve got exposed asbestos or lead.
“according to survey commissioned by Zillow”
This … from the company who gave birth to perpetually optimistic zestimates. Rich.
You got that right. Zillow has my house worth $262k - I just signed a contract to sell it for $220k - 7k worth of concessions for a real price of $213k. Maybe we could have gotten more, but I doubt much.
Of course the tax assessor and everyone else who leaches off of real estate will claim the $220k sales “price” as the true “value”. What a bunch of creeps.
Even so, I’ve beat renting over the last 7 years. When your 15 year loan payments are comparable to rent it’s hard to lose.
Now, for the perfect foreclosure to come on the market……
OK, I had no choice (insurance and accounting reasons) made a bid on a house last night in SoCal. The house was originally listed at a little over 1 mil. The price has been steadily dropping to about 780k. We offered 620k cash deal. Listen, the response was like out of a Disney movie. The prospective seller wrote us a two page letter explaining why they think their house is worth at least the asking price (but would take about 700k). They mentioned crap like the other homes listed are not as nice. It was actually funny to receive this response. I have to explain to the idiot realtor why housing is still going down in socal. They both (seller and realtor) have no clue of reality. It is almost funny. We just walked away and told the realtor that either get the deal done, or we go onto another deal without him.
“Houses haven;t dropped on our street:…LOL
p smith,
Good for you. Not familiar with your area but any time a SELLER is writing a 2 page novella about why they desrve more than market rates it’s worth posting. Remember it wasn’t that long ago BUYERS were writing letters as to why you should accept their offer and how they’d be a nicer addition to the neighborhood and feed the squirrels etc.
Sounds like you understand that 1 mil. was never real anyway.
P Smith: Could you please post this letter on site or give us an email address to request it? I could really use some laughs right now.
Quote, “We just walked away and told the realtor that either get the deal done, or we go onto another deal without him.” Awsome, a man of my cloth. I assume that the realtor is your realtor (buyer agent).
If you did get that deal, it would’ve destroyed the comps within the neighborhood. You could’ve single handedly brought down millions of dollars of lost equity. with that deal. 1 Mil to $600K
OMG, p smith, did your house burn down? Can’t you reason with the insurance company? Is it OK to just make offers on houses, or do you actually have to buy one?
“……..there are a more employable individuals wh are now looking for assistance…..”
This statement brings up a question……..what percentage of the US population is essentially unemployable, due to drug or alcohol addiction, dropping out of school, disabilities of various types, other reasons and/or just being basically worthless?
Don’t beat me up for the “worthless” blast……….anyone who has ever worked in a group of more than five people knows exactly what I’m talking about…….:)
Anyone hazard to guess a percentage?
“essentially unemployable” - My take is 25% are permanently under-employable. Through lack of education, poor lifestyles and dead-from-the-neck-up parents, they will always find a living just out of their grasp.
Oh… about… are they loanowners? If so then about 70%. For the last decade or so the only reason to even HAVE a job was that it was a means to RE loan! Your job was just a day gig until bi-annual flipping/equity skimming could be turned into a full time flipping gig.
I swear, before I went independent it’s all anybody talked about at lunch! How they were going to pick up this, that or the other thing at Home Depot and couldn’t wait to get started on that koi pond project. All you could think was, Gee, I just wish they had ‘that’ much enthusiasm about their DAY job!?
““essentially unemployable” - My take is 25% are permanently under-employable. Through lack of education, poor lifestyles and dead-from-the-neck-up parents, they will always find a living just out of their grasp.”
Hah!!
Just looking at the bell curve for intelligence WITHOUT factoring in drug use, alcoholism and disability is freaking scary.
Outsourcing unskilled labor jobs is the nail in the coffin. 25% is wishful thinking IMO.
Just think how sexy it’s gonna be when these hoards are hungry and homeless.
DOC
A few years ago SBC had trouble hiring telephone installers because only 8% of applicants could pass both the written test and the drug test.
Several years ago, I met (now U.S. Representative) Gabrielle Giffords at a networking breakfast. At the time, she owned a local tire store chain. She said that the company had major problems finding people who knew how to read well enough to comprehend and complete the employment application.
25% wouldn’t surprise me…….
I’m hearing the same from all sorts of different directions….
you would think at some point that employers would be willing to pay a premium for literate people that were able to pass a security check/credit check/drug test. But it isn’t happening around here.
It looks like employers have decided they are only offering “$ X” for a specific job, and they will leave the position unfilled until they find someone that can pass the screening and will work for that amount.
Gulfstream-fixer,
I was talking to an old friend that is a recruiter for the Nat’l Guard. He said it’s been hard to meet quotas because so many of the people he’s worked hard to get back in ( even in a reserve capacity ) have drug convictions in their past! A SERIOUS percentage too!
Oh and I guess tattoo’s are an issue too? I guess it’s o.k to have them where a uniform can hide them but not one that says “F” The World on your neck or forehead? I can see how the military would be funny about that.
So. We made a drug user President, what’s the difference………………:-)
Yeah, it was a real shame about Clinton.
finding white collar cipherin skills in a blue collar work-with-yer-hands type of guy means that he took some english classes to sit next to some good lookin babe in high school.
aqius,
I was banned from the Vo-Tech wing of my HS. In fact it was explained to my parents that if I ever had children they would be banned as well.
Ahem, I spent the better part of HS having to fill my sched. and much of it in Modern Novels, Humanities etc. and I want to assure you there were no “hot babes” in ‘those’ classes. That’ll teach you to pull pranks in shop class!
dinOR
‘ children banned as well . . . ‘
you got me rolling off the damn couch in a fit of laughter on that one!
And what wage were they offering? For, say, $7.50 an hour–not enough to rent a studio apartment in California, you get a warm body. If an employer wants someone who is literate, can cipher, shows up reasonably on time most of the time, can make competent decisions and can perform the duties in the job description, you need to pay more than that. Oh, and you might get someone who doesn’t quit after two months too.
PeoninChief …..I was thinking the same thing you said .I’m sick of companies wanting everything but not being willing to pay .
That’s been my complaint for the last 5 years. I’ve said it before. All those companies that moved out of town (mexico, china, india) didn’t want to pay living wages to Americans, save a buck right? Now who is going to buy their products? Americans can’t afford a new car, a house, appliances, or any high dollar item, so these companies are going belly-up. Too effin bad. Greed will get you in the end.
Genuinely unemployable? I’ll be nice and guess at a very low number.. like 3% or less.
It really depends on how much work you’d want to invest in the prospective employee. Anyone who really wants (or needs) to work is employable.. can be trained or retrained, and coaxed into or out of the best and worst of habits. As long as they show up for work on time and without fail, they have potential, imo.
Strange thing…
I worked with mentally handicaped people.
They loved to work and it gave them great satisfaction to be able to contribute something.
What the heck is going on out there?
Some of the highway rest stops in Calif (maybe all of them) are maintained by the mentally handicapped. They take great pride in their work and care for the rest stops as if they owned them.
Disclaimer: I’m not discussing the folks who are genuinely physically or mentally handicapped through no fault of their own.
I’m referring to the physically or mentally handicapped who got there due to their own decisions, or because of their parent’s decisions.
because of their parent’s decisions which is no fault of anyone but the parents!
Let me start the list:
-Drugs of all types…..not just the use of, but there are a lot of people that would rather sell drugs than make less money doing honest work.
-Alcohol……most of these people seem to be working in the home construction industry.
-Parents that don’t care or don’t know better, and school systems that support the academic and sports “stars”, while throwing the majority of the average kids under the bus.
-A general ‘laziness/lack of motivation” in our society.
-A general sense that “Work is for suckers” or “I’m much too smart, or talented, or creative to actually WORK….”
-A certain percentage of the population that, no matter how “Normal” they outwardly appear, just don’t “get it”.
You all know them…….the people that everyone covers for, because they screw up every project they get their hands on………sorta like our current President.
-Disability and welfare programs that are too easy to “game”, due to the lack of supervision or oversight.
Thus, you have our current story of the disabled Body-Building champion
There’s a huge social security disability scam! Back in my more liberal days, I used to volunteer for organizations that provided direct services to the poor.
I discovered that in this great nation of ours, any woman can go down to the Social Security office, say “Boo hoo! I’m depressed!” and get a disability check, housing assistance, and free happy pills, oxycontin, and Xanax. And they sell the Oxycontin and Xanax to make even more money.
I don’t disagree, but it would be nice if those who can take responsibility for themselves, would do so.:)
But on the other hand…..,
I, for one, am getting a little tired of corporations/businesspeople complain about the lack of educated/skilled workers, while at the same time doing everything in their power to avoid paying taxes and/or denying any responsibility to help support the school systems they are complaining about.
Or for lobbying for more H1B visa and no penalties for hiring illegals, because they are cheaper to hire and easier to intimidate than US workers.
Exactly.
Big V
Get the unions out of schools and you have my support.
Yes, but if you compare our school system with any other country, we are getting ripped off by the teachers and their unions. My child is in the 6th grade and I help her with her homework. There are many 6th grade math problems that I have found that the teacher does not know how to solve (but thinks she does) and is teaching the wrong answers and methods. I have an engineering degree from college, and I am very strong in math, so I know when the teachers are wrong.
Americans who stand up for the American teachers are idiots. I went through the American schools and did not know until college how important it is to have good teachers. I was shocked when I finally was able to compare good teachers (college) with bad teachers (grade school). I have a very low opinion of the American grade school teachers.
The schools in CA are not nearly as good as they used to be. The quality of education has been declining right along with the quantity of $$ available to schools.
I don’t know whether or not you live in CA, but if you’re disappointed with the education available from public schools, then you might consider supporting a tax structure that could support a better school system. It doesn’t really make sense to me when people say “The school system is substandard; therefore, we should provide less funding for it, or give the money to unregulated private schools using vouchers instead.”
I am an education researcher, in my spare time and have published a few articles. But I also have access and frequently talk with people who are much more knowledgeable than I. The issue is not as simple as more money = more success. There are some complicating factors that I highlight:
* One of the largest draws of funds has been special education over the last 20 years. Federal law is giving unfunded mandates to give ever increasing attention to all sorts of handicaps. This increases the education budget of schools and districts, but has really decreased the amount per pupil that normal kids get.
* When you actually look as per pupil expenditure for the regular ed. kids, there IS a clear relationship between more money and more success.
* When you look at student success and per pupil expenditures in the aggregate, the relationship appears flat because special ed students are often not tested, yet so much of the money goes to support them.
* Also, there are so many damn restrictions on how the money can be spent that it’s pointless just to throw more money at the problem. My wife is a school psychologist and is so frustrated that she can’t buy materials for the kids for counseling, but that there’s $60,000 in the budget for new desks. Come on legislators, give some more flexibility to the principals.
pos,
There are some good teachers and some bad teachers, just like in any field. But, it never ceases to amaze me that most people recognize you get what you pay for, unless, of course, it comes time to pay to learn. Now, we could pay with money, or we could pay with respect, or we could pay with some combination. What we give teachers, instead, is low pay (compared to equally-trained people) and disrespect. I mean, some BA student with a C- average can come out of college and get the same salary as 15 year veteran of teaching. And, don’t say anything about “summer vacation;” teachers, unlike that college grad, take work home every day of the 9 month school year, meaning they get paid 9 months for 12 months work.
Given these working conditions no wonder you, with an engineering degree (congrats! by the way) probably never considered teaching. You are not alone–few accomplished people think about going into teaching and making it a career. And therein lies the problem–only a few dedicated people will put up with the low pay and disrespect and they get worn down by a system that puts good teachers in straitjackets, tars all teachers with the same brush, and leads uninformed people to wail about over-paid teachers when most of the money is gobbled up by irrelevant administrators.
These are big problems, and their solution will be costly. But, we could start with giving a bit more respect to teachers. That wouldn’t cost us anything, and might actually save us something–like, say, our collective kids’ future.
IAT
“And therein lies the problem–only a few dedicated people will put up with the low pay and disrespect and they get worn down by a system that puts good teachers in straitjackets, tars all teachers with the same brush, and leads uninformed people to wail about over-paid teachers when most of the money is gobbled up by irrelevant administrators.”
My girlfriend is a Spec, Ed instructor and let me tell you straight-up–some of the s**t she puts up with from Admin, Parents, psycho kids (no-restraining allowed–except under extreme circumstances) is unbelievable.
I theorize all these folks bitching about Teachers would cry like little girls if they had spend one week in her class .
DOC
Dr. Strangelove,
My SIL is also a Spec Ed Instructor. She loves her job. She also has to put up with a lot of s**t. I agree with your observation about the whiners that complain about teachers. Walk, no teach a day in her shoes.
Depends upon your options…
Had a diabetic cousin in her mid-fifties who was laid off, sympathetic doctors & a lawyer got her disability.
Couldn’t find a gig as good as what she lost, so disability was as financialy good as what was out there.
I’m sympathetic to all who genuinely need disability and a big believer in a safety net.
But in her case she wasn’t any unhealthier six months after she got laid off than she was for years previously.
This route seems to have become some sort of a “stealth early retierment plan” that skews unemployment stats.
There are other factors, though. For instance, a diabetic needs a job that offers health insurance and allows regular breaks. In today’s job world, they would rather hire someone from a 3rd-world country than offer those perks to a US citizen. In some cases, a sick/disabled employee may not be able to replace his/her job with one that will allow continued survival.
Agreed. In the last year, I’ve done volunteer work for an organization with more than one ex-con on the payroll. While I was doing that work, I worked with a fellow who’s mentally retarded and he only has time to volunteer on weekends. Reason: He has a fulltime job during the week.
Bakersfried,
“…No charges have been filed in the federal case.”
Operative word: Yet.
Crispy & Cole…were rich
The State attorney…is Rich
The defendants are poor…but the testimony… is rich!
People are in denial here in California. To amuse myself on the cheap while I am saving money for a down payment, I look at the MLS. There are many many many houses in the San Francisco Bay Area purchased for an inflated price during the bubble that are now on the market for MORE than the original price! You can also buy flips that flopped (no floors, no walls, no plumbing, no electricity, etc.) in the $300,000 range (I am not kidding). Houses sit on the MLS for a year or longer with absolutely no price reduction. It’s amazing to me that people can be so completely and utterly stupid. Or, in keeping with the humor on this blog, sheeple can be so udderly stupid…
“In 2006, the ambitious project was expected to boost property tax coffers by $70 million annually.”
What is the end game here, really? I never understand tax abatements and other incentives to continually lure a larger volume of tax payers and thus, tax payments.
I can understand a moderate amount of development to spur a healthy, stable living environment for a given population but why all this attempt to lure more people?
Portland is going through this right now. Why not quit trying to lure people who only seem to add more stress to the already inadequate infrastructure we have?
Or am I just a commie?
Sleepless, if that’s being a commie, then I’m wrapped in a red flag. It never, ever made sense to me to destroy an area’s livability just to pull in a few more tax bucks. It really is the same as the RE shell game, where nobody wants to make slow and steady permanant improvements, but wants the quick flash and cash.
“It really is the same as the RE shell game, where nobody wants to make slow and steady permanant improvements, but wants the quick flash and cash.”
I think that’s exactly it. Political posturing and greed is all I can really figure. Again, what’s the end game? Where does it stop?
No, that’s just the nature of stupid humans. The rest of us will be taking over from here, thank you.
Wah!!!! Wah!!!! I wanna my million!!!
*stomps feet and takes all my toys home*
I went to my brother’s house in Fremont yesterday, and saw one of his neighbors just listed a sloppy house for sale at $849k: (47433 Towhee Street, Fremont CA 94539). This same house was sold for $455k in 2000. I really don’t know if the owner or the listing realtor or both are still on cocaine….
That’s just their mortgage balance. There is a similar situation down the street from me in Newark. Listed at $880k, Zestimate is $680k, realistically the house would probably go for about $580k. No one has come to look at the house except for a couple guys who looked like they were either from the bank or some fraud unit.
“‘It’s like the infantry,’ says Mr. East, who plans to buy his first house later this month. ‘We’ve made a list, and we are going house to house.’”
what “infantry” is that, exactly? the US Army conducting an urban sweep in Iraq?
the Gestapo doing the same?
pretty piss-poor choice of metaphors. but then again these type-A overagressive a-holes think everything in life is combat.
kill or be killed!
take no prisoners!
house-to-house search for the bad guys!
maybe it’s just me but I don’t think a chilling statement like that is good for real estate business!
now I ain’t some granola eatin tree hugger but jeezuz h christ take it DOWN a notch, pal.
Anyone remember Kellen Winslow Jr (then a tight end for Miami U) going on his tirade about being a warrior?
Kinda reminds me of that. Some blowhard-tough-guy-wannabe. Why’s everyone gotta be a tough guy?
I have a copy being faxed to me today (the letter was read to us in over the phone). Although, it is probably not too ethical for me to publish the letter. One person asked if it was my realtor that I told either get it done, or take a hike! Yep.
You know how realtors write “entertaining offers from 1.1 to 1.5 million”….I am thinking of telling them we are submitting offers from 620 to 700k. 620 cash and 700k if your client can carry 100% at 5% fixed for 30 years. That oughta keep them thinking.
“entertaining offers from 1.1 to 1.5 million”….
I love that term “entertaining offers”. Makes me think of a bunch of showgirls dancing in front of some RE contracts. Or, the offers themselves are “entertaining”. I guess you gave them an “entertaining offer”, they should have taken it. You’ll hear back from them and then you should give them another, lower, “entertaining offer”.
Zing!!!! Oh man that hurts….
“You know how realtors write “entertaining offers from 1.1 to 1.5 million”
The solution…tell the Realtors that you have $XXX (cash + loan), and you are “entertaining” houses with YYY bedrooms, or ZZZ square feet, in AAA neighborhood. If anyone wants to buy your money with his/her house, bring them on by…but also tell them that, in regards to your money, you “aren’t going to just give it away”.
Solid gold!
In the past I’ve found it amusing to use the seller’s agent as a duel agent to make a low ball offer. When they’re looking at getting both sides of the commission, they can be a lot more movtivated in persuading the seller to come down.
Really, really fun to watch that bait dangling in front of a hungry real estate agent.
if you work with the sellers agent you can argue that they can lower the price 3% since they dont have to share the comission with the buyers agent and can rebate it to the seller. In practice they will keep the 3% (they are realtors) but work harder to convince the seller this is a good deal.
“‘The mortgage market turbulence is putting quite a bit of activity on hold,’ he said. ‘Even some very well-qualified households aren’t getting mortgages these days, although this could all change fast if liquidity comes back.’”
Yes, we all need liquidity. Maybe the problem is that lenders want well-qualified households to show their liquidity and put 20% down. Those covered bonds trumpeted in the news lately require 80% LTV at least. I envision a Wild West showdown, with the two liquidity duelers counting their paces, turning around and shooting their liquidity. Unfortunately no one has liquidity that can go far enough to make a difference. The well has run dry and everyone is praying for rain.
I remember giggling on here couple years ago when buyers were writing the letters, this is first i have heard of seller doing so—a true turning point in this whole debacle i’m thinking. And actually even more ludicrous. Personal dignity is right out the window when it comes to $$ isn’t it?
Would be fun to add some contingencies to your offer wouldn’t it? Like have the guy personally take care of all the yard work for 10 years, have the wife bring you one dozen (12) fresh-baked chocolate chip cookies each week with at least one ounce of real chocolate chips per cookie… etc.
“Would be fun to add some contingencies to your offer wouldn’t it?”
This would be mine: “You must eat the squirrels”.
Yeah:
I was hoping they could leave the boat, but they already sold it. Hey Palmetto, my wife called a half an hour ago and told me we are getting another letter from them. That is so funny that you guessed it. I think we will lower the offer that we will “entertain”.
The San Francisco Chronicle reports from California. “Despite plummeting values across the nation, 62 percent of homeowners believe their property’s worth has actually climbed or stayed the same during the past year, according to a survey commissioned by Zillow. In reality, the market price on 77 percent of properties has dropped and only about 24 percent have risen or held firm, the company estimates.”
I experienced this last week in Florida. People living in small developments where there were at least 50 homes exactly like theirs for sale within a few blocks each way would say things like “I’m not worried! I’m not underwater. The houses selling cheap are foreclosures.”
As if “foreclosure sales” are paid for with a different type or dollar than a non-foreclosure sale.
In reality, even if you priced your home 10% less than the most recent bank sale, if there are 50 homes identical to yours in your gated community, it could take a long time to find a buyer!
And savvy buyers are figuring out that a HOA/CC&R community where at least 25% of homes aren’t contributing to their dues is a huge risk. Florida has HOAs everywhere, even for single-family-detached-home communities. The HOA is responsible for street maintenance, swale upkeep, etc, as well as any common areas. If there’s a problem with a street or drainage after a hurricane, and not everyone is paying the HOA dues, you’ll get stuck with a bigger bill. or go with unmaintained streets.
Anyone who thinks their home hasn’t lost value last year–especially if their house is in a sliphshod bubble development with an HOA–is crazy. If there are ANY unsold houses near you that have been for sale for more than a couple of months, your house is worth a LOT less than you fantasize.
Even qualified borrowers are being turned away left and right by lenders.”
I’m seeing this kind of language more often - I guess they really weren’t “qualified”.
LOL.
“Qualified buyers being turned away” is the new “House listed below market value!” or “Instant equity!”
Very astute observation!
Qualified buyers, by definition, can get mortgages!
We can add this to the other tautology unearthed in the HBB:
Houses sell at market value, and never below market value. (Though with the guv’ment “affordability programs” and handouts, you can argue that they sold above market value.)
Regarding all of the the qualified buyer talk (etc.), I would like to add that there is some truth with many being turned down. The problem is systemic with the credit crunch accelerating. The banks are in horrible shape (much worse than cnbc lets you believe) and are trying to build their liquidity. They are not loaning out a heckuva lot. In fact, Chase cut off all jumbos yesterday. I could go to them and offer my package with 20% down and they will decline the deal. I would qualify based on normal factors, but they still will decline it.
It is only going to get worse as fre and fnm crash. This is a serioius problem. If you have a heloc, you will be getting a letter soon tht cuts it in half or cuts it off completely.
At anyrate, have a great night.
For those of you unfamiliar with real estate in Los Angeles, here’s a listing that I’m sure would have gone for $500,000 2 or 3 years ago.
http://guests.themls.com/profile_page.cfm?mls=08-298603&tab=search
LOL. I don’t get the fence right in front of the wall, unless the house was built after the fence. In any case, it looks like a prison. I don’t even want it if the bank gives it away for free.
Here in LA people who bought recently still think they’re sitting on goldmines. One acquaintance who grossly overpayed for a condo in ‘06 told me she’s going to remodel her kitchen and bathroom to “increase the value” of her unit before she sells it. I can think of a dozen better places to put her money.
““Realtor Tom Wilson noted that the current Manteca housing markets driven by foreclosures is shaping up more and more as ‘an opportunity of a lifetime’ for first-time buyers as well as investors.
Wilson noted, ‘He who hesitates is going to lose out.”
Wilson again…”‘I imagine those who bought baby McMansions a few years ago as their first home are wishing they hadn’t.’”
Hey Tom, how many of YOUR “few years ago” clients that you sold houses bought your “he who hesitates” line and are now upside down and pissed???
DOC
Living in Manteca is, by definition, losing out!
“‘It’s like the infantry,’ says Mr. East, who plans to buy his first house later this month. ‘We’ve made a list, and we are going house to house.’”
What’s going to happen in 5 years is his investors will have lost their shirts on these properties that will have devalued again by half. The investors will have trouble paying their own bills. Their own house loans will be in default. It’s just going to be a mess.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aWA2CsXnpEac&refer=home
Mexico’s Poor Forgo Goods as Income From U.S. Drops
“Aug. 6 (Bloomberg) — In the Mexican town of Tarimbaro, construction has stopped on new homes, so sales at a hardware store are half last year’s total. A butcher who slaughtered a head of cattle a day now slays two a week. And Rocio Rangel feeds her son and daughter bread and coffee for dinner.
Rural Mexican towns are suffering as money transfers from relatives working north of the border dry up, the result of a weak U.S. economy. Remittances equaled 2.7 percent of gross domestic product last year and are Mexico’s second-biggest source of dollar flows after oil exports. ”
I imagine as Mexican dayworkers give up and return home, that will only exacerbate the vacant housing issues.
Cry me a river.
Hopefully this downturn will force the Mexicans to finally develop some economic institutions that distribute and produce things of value other than drugs. The Mexican drug lords should support local initiatives to create a strong legitimate job base domestically, as that will increase their consumer base in areas in which their product can be distributed freely without the (token) intervention of US authorities.
“The Plumas County News. “‘I don’t think there’s a recession in the real estate market, I think there’s a depression…”
Yet, 16 properties for sale 1.2 million to 3.2 million around Lake Almanor, and for all 16 properties ZILLOW estimate and previously sold for information has been removed.
There are 574 matching results FOR SALE on Zillow around Lake Almanor, and the total population is about 5000. Nearest city Redding 100 miles away.
Too bad such housing craziness, beautiful area with really nice folks up there.
Hey, can’t find ZILLOW “sold for” info for any house in California. Has it been removed?
I used to feel sorry and bad about the many horrowing stories on this blog about people that have lost everything.
Now, after reading many of the stories, I have come to the conclusion that they were either GREEDY, got duped by a Real Estate Agent (who are really used car salesmen that would let you sleep with their spouse to make a sale) or are truely too stupid to own a house.
I lived through and survived the 19% interest rates of the late 70’s and early 80’s, and if the people who bought aub prime or alt-a are stupid enough to believe that their purchase would keep rising to infinity, then they are too stupid too pity or bail out.
Let the market crash, then sanity will prevail. If you are 1 of the imbeciles that are over your head, seek serious financial consulting assistance and go out and take a course in Finance 101. RENT, because you are too stupid to be a home owner.
I think you have it the other way around….you have to be stupid to be a homeowner…not a renter.