Lenders Are Cutting Their Losses In California
The Palo Alto Daily News reports from California. “In a dubious distinction amid the nationwide foreclosure meltdown, East Palo Alto has the highest number of properties in default and in bank ownership per capita than any other city in San Mateo County, according to a report. Three other cities in the county - Daly City, South San Francisco and Redwood City - also have high foreclosure rates.”
“East Palo Alto council member and real estate agent David Woods said that in the most extreme cases this year, some homes lost almost 60 percent of their value before foreclosure.”
“He said a small, two-bedroom house on the 2300 block of Oakwood Drive was appraised at around $600,000 just 18 months ago. In February, Woods said it went to auction for $189,000 and didn’t sell.”
“On the 1100 block of Sage Street, a home that was appraised 18 months ago at about $635,000 went to auction a few months ago and also didn’t sell. The lender is now selling it on the market for $289,000, Woods said.”
“‘These are the ones that are sticking in my head, because they’re so extreme,’ Woods said. ‘These lenders are just cutting their losses.’”
The Novato Advance. “After a precipitous decline spurred by the highest foreclosure rates in Marin, there are signs that the value of Novato’s real estate may be nearing stabilization. ‘What’s happened is that there were a lot of short sales. There are so many real-estate-owned properties, it’s a buyer’s market,’ said Patti Cohn of Frank Howard Allen.”
“‘The median price of a home in June 2007 was $497,000,’ said Cohn. ‘In June 2008 it was $319,000. This might be a bottom.’”
“Stringent mortgage requirements are a potential brake against the volume of activity needed to raise the price of housing, said Bill Stewart, co-owner of Provident Real Estate in Novato. ‘It’s very difficult right now, all the loans seem to be challenging, and the basic problem is there’s no money out there,’ he said.”
“That means homeowners looking to sell are either stuck waiting out the market, or faced with taking a huge cut in the return on their property. ‘It’s very difficult,’ said Stewart. ‘We pass on numerous listing opportunities because we won’t tell sellers only what they want to hear.’”
“‘A lot of real estate sales and short sales are coming to fruition,’ said Denise Athas of Athas and Associates. ‘They’re getting a lot of offers because they’re priced really well, and that’s bidding up some prices in those price ranges. Right now we’re getting through the inventory of foreclosure and short sale properties, and once we burn through that, we’ll see slow appreciation every year.’”
The Marin Independent Journal. “Another 14 Marin County homes were foreclosed in the past month as they were taken over by banks, a Northern California real estate data firm reported. Ten properties in Novato and four in San Rafael were the latest Marin foreclosures, said Susan Gorham of Lodi-based California Resource.”
“‘A lot of these properties are going back to the lender because a lot were sold at the top of the market,’ she said. Properties ‘might be worth less than the unpaid debt.’”
“Marin posted 284 notices of default, the first step in foreclosure proceedings, during the second quarter this year, up 140 percent from 118 default notices during the period last year. Statewide, default notices doubled.”
From ABC 7. “With the housing market suffering, one business is booming, self-storage. In some communities, just finding a storage unit is nearly impossible.”
“Chuck Jeffries spends his days locking up and checking the facilities as manager of Branham Self Storage in San Jose. He doesn’t have to go out in search of business, it’s coming to him. The facility is nearly full and he attributes the spike in occupancy to the drop in the housing market.”
“‘They have to move out and they’re losing their places and they have to put their stuff somewhere, somewhere fast,’ said Jeffries.”
The Merced Sun Star. “A record number of property owners in the city of Merced were slapped with financial penalties for failing to maintain their property last year — another example of the toll foreclosures and vacant houses are taking in Merced.”
“The city handed out warnings to clean up overgrown yards and other nuisances at 3,758 lots last year. That’s nearly double the number warned in 2006, according to a recently released city report.”
“The list of properties where the city hired contractors to clean hazards reads like a catalog of factors contributing to blight in Merced. Foreclosures, out-of-town owners and developers who’ve abandoned subdivisions all make appearances.”
“One cul-de-sac in southeast Merced, Polaris Drive, is home to three blighted properties that were cleaned up by city-hired contractors. One of the houses now appears occupied, with a clipped green yard. Two others — both brand-new, like the rest of the block — stand empty.”
“One looks as if it could use another round of nuisance abatement. The city says the owner lives in the Contra Costa County town of Danville. The city billed them $427 to clean up the property. The owner never paid. Now there’s a lien on the property.”
“On Wednesday, Tommy Gutierrez was outside the house next door performing some pest control work. He said in the three years he’s been working on Polaris Drive, he’s never seen any signs of life at 2659, the property the city liened.”
“‘It’s too bad,’ he said. ‘It’s a beautiful place. It could be a nice starter home for somebody.’”
The Fresno Bee. “Sales of existing homes climbed in Fresno and Clovis in July for the sixth consecutive month. But analysts were quick to note the market is still fragile because more than half of the sales were bank-owned properties and that sales typically increase in spring and summer anyway.”
“At least 518 existing single-family houses were sold in Fresno and Clovis in July, but about 51% were bank-owned, said Don Scordino, president of the Fresno Association of Realtors.”
“Andrew LePage, an analyst for DataQuick, said increasing sales is a positive trend, but that a strong recovery won’t occur until the foreclosures begin to fade, and the inventory of unsold homes shrinks.”
“‘The sales bottom is the first bottom you’ll see, and then there will be a price bottom. We don’t see that,’ he said.”
The Bakersfield Californian. “A snapshot of Bakersfield’s home sales in July shows a jump in volume fueled by bank-owned properties and declining prices, according to a report from local appraiser Gary Crabtree.”
“July’s 484 sales sagged slightly from June’s 546, but were up more than 52 percent from the previous year’s tally of 317 sales. Distressed sales - foreclosed homes and short sales - accounted for almost 70 percent of July’s sales. A year ago, distressed sales accounted for 14 percent of the market.”
“Median price, at $190,000, marked a return to July 2004 level. In dollars, Bakersfield’s average home declined $10,000 from June’s value and $101,000 from July 2007 figures.”
“Foreclosures in the Bakersfield area have cost lenders more than $200 million since September, Crabtree estimates.”
The Daily Pilot. “Newport Beach-based MKA Capital Group Advisors LLC has been running a Ponzi scheme on its investors, according to a Newport Beach couple suing the company.”
“According to the lawsuit, filed in Orange County Superior Court July 28, MKA Capital Group, a real estate investment-management firm worth between $400 million and $500 million, has been using new investors’ money to cover losses suffered by the group’s ‘Opportunity Fund’ investors. The Opportunity Fund is a fund created to make loans to real estate developers in hopes of turning a profit.”
“When Newport Beach couple John and Cynthia Gates invested $3 million into the Opportunity Fund in July 2007 they say they were promised a 12% annual profit on that investment and that there was virtually no risk of losing money, their attorney Gary Steinberg said. Instead, for whatever reason, their money was used to cover losses earlier investors had suffered, the lawsuit claims.”
“‘No one in their right mind would make such a guarantee,’ said Dan White, general counsel for MKA Capital Group.”
The Los Angeles Wave. “There is no shortage of gloom in the Southern California housing market, as one key indicator recently saw home values in Los Angeles fall 24.5 percent from a year ago. But those spiraling fortunes are helping Barrington Malcolm build a dynasty.”
“Malcolm runs Dynasty Dynamics, Inc., a multimillion dollar, privately owned property company that keeps a low profile, but has been a major player in the high-stakes California real estate market for more than 20 years.”
“Malcolm is quickly becoming the California banker’s best friend, acquiring properties at significant discounts and remodeling them for sale at a profit.”
“For instance, in June, Malcolm bought a house in Leimert Park for $249,000, and within four weeks the remodeled property was listed for $439,000. Right now his company is in negotiations to buy four properties at the Cove Condominiums in Marina Del Rey; the high-rise luxury apartments, which people were snapping up for a $1 million-plus, are now going for half that.”
“‘You see recession,’ said Malcolm, ‘I see opportunity.’”
The New York Times. “The first season of ‘Million Dollar Listing,’ a reality series on Bravo that follows real estate agents in Hollywood and Malibu, Calif., was broadcast two years ago, and already feels like material from a time capsule.”
“The show captured a giddy period in which a cash-strapped seller could list a shabby 1960s contemporary in the Hollywood Hills for close to $1.3 million, get an offer above asking price, and still debate whether to make the deal.”
“The current housing market, of course, is much gloomier, especially in Los Angeles. Considering how emotionally fraught the subject of residential real estate has become, most fans of ‘Million Dollar Listing’ probably figured the show, which was off the air last year, had gone the way of the subprime loan.”
“But this week a second season made its debut, and the channel has bravely stuck with the name and the format instead of steering the show in a more topical direction, like ‘Million Dollar Foreclosure.’”
“Still, one wonders how a series that owed its popularity in large part to the go-go real estate market, and the national housing obsession that that market created, will be affected by the mortgage crisis.”
“‘Obviously, the market is different today,’ said Andy Cohen, the senior VP for programming and production at Bravo. ‘But the cost of real estate in Malibu is still ridiculous. It’s like, O.K., this house isn’t selling for $17 million, it’s been reduced to $14 million.’”
“Beverly Hills or not, market realities are evident in the first episode. One seller, an interior designer looking to unload his renovated condo, wants to party like it’s 2005, and Chad Rogers must persuade him to be realistic about the asking price.”
“The seller pouts, then pulls the listing. According to the lone holdover from Season 1, Madison Hildebrand, unrealistic sellers are common these days, as are price reductions and slow turnarounds on high-end homes, even in Malibu. ‘Now the average time is eight months,’ he said with a sigh the other day.”
“Randy Barbato, the show’s executive producer, acknowledged, the move to the city’s wealthiest enclaves does reflect the way property lust has evolved. Back when nearly anyone could get a loan, he said, ‘it used to be that you could almost touch the shingles’ on houses shown on programs like his. Now, the attraction is more about fantasy. ‘Some properties should be there to long for, and not to have,’ he added.”
“He said a small, two-bedroom house on the 2300 block of Oakwood Drive was appraised at around $600,000 just 18 months ago. In February, Woods said it went to auction for $189,000 and didn’t sell.”
A house can’t sell for $189,000 in Palo Alto?? I’m curious what’s going on in that area? Is it still suffering from the tech bubble burst? I thought Palo Alto was still kind of a hot area –esp since it’s fairly close to SF.
‘I thought Palo Alto was still kind of a hot area’
That’s what the trolls always said, too. another one bites the dust!
It’s East Palo Alto.
Kinda iffy neighborhood. That place had no business having $600K houses.
In 1992, East Palo Alto had the highest per-capita murder rate in the country! (Google it!)
If you paid me $1M/year to do so, I still wouldn’t live there.
It’s “East Palo Alto” , it’s a crime and gang infested shithole much like “east” San Jose.
Yeah, and in LA they used to say, ‘it’s just Long Beach, Palmdale and Lancaster. They never had any business being at $600k.’
I think you’re reading too much into his comment, Ben.
There is some truth is saying East Palo Alto is really nasty and only during a bubble can you have had $600K houses there. They had no business doing that.
Same with saying that the bust is moving outside in (most marginal nabes first.)
This is just denial in action. Nobody here seems to be claiming that regular ol’ Shallow Alto will not collapse.
My point is that in every single market, it was foreclosures that pulled down the market, not resales. And every single market saw defaults creep up amid denial from the ‘experts’ until suddenly it’s a ‘crisis.’ In 2006, when the defaults took off in CA, posters here would say, ‘but it’s coming from such a low base. It’s only the crappy areas.’ Well of course the marginal areas are going to tank first, that’s only logical. And look at California now; the foreclosure capital of the world!
It’s really simple; was there a housing bubble in Marin and Palo Alto? Can people afford the reset payments, is it cheaper to rent? If there was a bubble there, then these foreclosures are inevitable and so are the price declines. IMO what we are seeing is the same old story; these people were speculating, that goes away and they walk. Like it was said, this isn’t rocket science, it’s much more important.
Hey Ben:
I just got chided by a coworker for using logic again. He’s the second person who has recently said that to me. I’m like “God forbid that we should use logic”. I mean, we were discussing a scientific matter, so data and logic are correct, right?
Oh well, as long as you are using logic, then the people of Marin and Palo Alto will not listen.
FPSS,
Agree with you about East Palo Alto. As far back as I can remember late 60’s EPA has been iffy. I went into shock when I saw homes starting to sell for 300K a few years ago in EPA.
And in al these market here in the BayArea all the Real Whores keep saying their “local” area is different and ech month it creeps closer and closer to their area even here on the San Mateo coast….
http://www.hmbreview.com/articles/2008/08/07/news/doc489a18a66b838148601682.txt
Iffy doesn’t even begin to tell the story. East Palo Alto is scary. Around the edges it is just beginning to become more or less livable, but the things that happen there and the quality of life … YUCK! Palo Alto will fall as well, but even with the half off correction it will still be expensive and East Palo Alto will still be an insane dump festering with the worst dregs of poverty that humanity has to offer. The freeway and the river mark a vast divide, a kind of land use chasm that has few parallels.
Mole Man you aren’t overstating the neighborhood in East Paly that’s for sure. Remember back in the 80’s when it was the murder capitol? You had to remember which way to turn when you got off of 101 at University (left, go left). Scary Sh!t. You could not GIVE me a house in this neighborhood I don’t care how close to IKEA it is.
BTW: I don’t think ANY area is immune from a housing collapse.
Basically there are going to be two types of neighborhoods:
#1 Prices drop 50%, but at some price there still are buyers for the homes and the neighborhood remains a viable place to live
#2 It becomes a dangerous place full of boarded up houses.
Palo Alto will be type #1, EPA will be #2
a kind of land use chasm that has few parallels
I respectfully disagree, there were and are parallels everywhere. I can think of areas in Sydney, Australia where a few years back you could walk from 5-Star hotels/offices/retail to out-and-out slums in 2 minutes. The same was and to some extent still is true with the transition from the “City” to the East End in London, England.
I would suspect most if not all big cities have sharply demarcated areas, often from historical reasons like the requirement to have cheap and nasty accomodation for manual workers within walking distance of the docks etc.
As you say, sometimes it’s as sudden as crossing a street . . .
They are talking about houses in EAST Palo Alto - separate city from Palo Alto (separated by the 101) - at one stage in the past they didn’t even have a police department the area was so bad.
For everyone that isn’t familiar with the area, the difference between East Palo Alto and Palo Alto is like the difference between the elevation of Mt. Everest and Death Valley. The financial divide on either side of the hwy 101 divide is like nothing you’ve ever seen.
Picture this.
Steve Young has a home on one side.
Section 8 checks are delivered to the other.
No sh*t, I’m not joking.
Mike
Okay, East Palo Alto (EPA) and Palo Alto is separated by HWY 101. Just go over the the HWY and you enter the Killing Fields. I’m exagerating but at one point in time, EPA was the murder capital of the United States. Yep, 1 out 500 people in EPA was murdered. Mind boggling.
They cleaned it up by using military technology but the damage is done. Noone in their right mind will walk in EPA at night let alone by day. $600K in EPA. Must have been alot of fraud going on or stupid out of town investers. Houses should be around $100K or less.
In 2005/2006 the SF Cron had a number of articles on the ‘gentrification’ of EPA. Talked on and on about the spillover by ‘new urban pioneers’ buying up homes in tough areas.
What’s the old saying? Pioneers catch all the arrows?
SSSSSSSiioottt. Bulleye.
Did they at one point tried to rename EPA to Ravenswood? It may have helped but Bay Area locals know better.
They tried to rename it “East Nairobi”.
You have to see it to believe it.
Mike
That’s been one of my harping points for years. All this “gentrification” will be reversed in the crash. I saw a documentary on the phenomenon about 5 years ago or so. It’s almost never permanent. It can only really take hold if a new industry comes to town that sustains higher incomes.
What was the name of the documentary? Any recollections?
No, I don’t remember.
Bzzt. Like you’ve never been to the Castro. Gentrification is real, and the hangover is beyond terrible.
Big V was it “Flag Wars” on PBS?
Back in 1994, I took a two-week summer course at Stanford. One night, I went out to dinner with some of my classmates. And, oops, our trusty driver made a wrong turn.
We found ourselves in East Palo Alto, and trust me, we beat it the heck on out of there.
Re: E. Palo Alto housing previously priced at $600K. What an absolute joke. A perfect example of how idiotic bankers are, and how they hooked up with idiotic, crooked appraisers. Geez, an entire block of housing in E. Palo Alto might be worth $600K, but not one unit!
And is anyone else as sick of Realtards as I am? Does ANYONE actually believe these douchebags when they spout garbage like this?
“‘The median price of a home in June 2007 was $497,000,’ said Cohn. ‘In June 2008 it was $319,000. This might be a bottom.’”
and…
“Right now we’re getting through the inventory of foreclosure and short sale properties, and once we burn through that, we’ll see slow appreciation every year.’”
We may want to recall that prices in Palo Altos and Menlo Park across 101 from East PA .. prices were 350-400K
but now they too skyrocketed to $1.5-2M.
And that is way beyond the salary range of many who work in the region. The media covers way too much on EPA housing issue and skips the most obvious question… do even PA or MP make sense?
They did build a Four Seasons there - off 101……..:-)
Yep, Even the huge law firm Wilson, Sonsini is right next to it. I believe they tried to fight for a Palo Alto Address but failed. If you look it up, they are in EPA. LOL!
Wilson Sonsini is on Page Mill Road near El Camino Real. It’s not in EPA - it’s about three miles from it. Sun Micro was going in near the Dumbarton Bridge in EPA, last I looked.
Right. FP is not too far off, though. There are a number of major national law firms in the University Circle complex, by the Four Seasons. That’s about 500 yards from the killing fields on the other side of 101.
West side of 101: Four Seasons patrons drinking $500 bottles of wine at Quattro and smoking $40 cigars.
400 yards to the east, on the other side of 101: Jack in the Box patrons drinking Night Train and smoking crystal meth.
Part of EPA is also on the other side of 101. Not too far from the Shallow Alto Univ Avenue enclave.
I used to live in epa (2003) - crackheads on bikes everywhere…
News from the “good” Palo Alto:
Average type house (nothing to write to mommy about) costs $3M. It would rent for $6k, which would justify a $1M price, but I guess the Google kids have degrees in something other than finance.
The rest of the population in Palo Alto (including yours truly) lives like a college kid. No way I would every buy here - its just NOT THAT GREAT, and the people suck.
> and the people suck.
Most people there are “nice” but about twice day you’d run into somebody that you’d want to eviscerate for their rudeness.
That truly hasn’t happened to me once since I’ve moved back to the midwest last year.
I lived in PA as a tiny tot when my dad was a grad student.
A modest little (under 1000sqft) tract house was $20k back then. Same house is now over $1m.
Some very, very nice neighborhoods if you’ve got big $, but a hostile and desperate place to struggle to live if your household is pulling less than $200k.
EAST Palo Alto is NOT Palo Alto. A freeway separates them… they are different worlds, in different counties. One was the Murder Capital of the World some time ago, and probably isn’t much better now. The other? Well, I was priced out of there 35 years ago. It APPEARS to be holding steady.
This is EAST Palo Alto! It’s like another world!
I stay away from both … PA has inflated egos
I dont live in California but I go there alot for business and have always liked it. Never considered moving there since housing was so outrageous. But you never know if it keeps tumbling……….
Only other problem is that the state government is screwed. I bet all Californians just love paying for all those hefty state pensions and mandated expenditures for illegal aliens.
The mandated expenditures for illegal aliens helps keep them here and they are the only people we can get to work for minimum wage, I think. If it weren’t for them, maybe prices for everything would be even more ridiculous than they already are (prices for food, etc). How can anyone possibly survive on $7 and hour in SoCal?!?
I’d be willing to see what life would be like without them.
I guess we’ll never know.
What do you think about going after the people who *employ* these illegals? That, to me, always seemed like it would be a good thing to do.
Count me in.
Going after the employers of illegals is supposed to be the latest thing in Arizona. I used the phrase “supposed to” because there’s a ballot initiative that seeks to water down the new law.
Needless to say, the Stop Illegal Hiring initiative isn’t getting a lot of love from those of us who aren’t among its well-heeled business backers.
consumers could vote with their dollars and not spend so much on products produced by the companies that encourage illegal immigration. Wine industry anyone? They are a very guilty party. Tax deductions up the wazoo, not contributing to the cost of the infrastructure, schools, medical, emergency services of the cities and counties where their illegal workforce live and work… and yet people clamor over each other to out wine snob each other and brag about outspending each other for a bottle of stuff they will piss out. seems like an ok place to start making a statement.
boycott?
You can’t attack a whole freakin industry. How many people get hurt? Everyone in the industry.. all the way down to the guy who sweeps the floor in the local liquor store.
just do a thing about hiring illegals.. those responsible pay and the rest of the industry is left untouched.
Are you illegal? Did you get hired? Report it and you get a $10,000 bounty and a ticket home..
Athena:
I’ve always wanted to find a vintner that didn’t use illegals. I wonder if there’s a way to identify one, other than going out there during the summer and asking to see everyone’s green card. There should be a group out there who goes and checks on different companies and then publishes their findings on a web site. Do you know if anything like that exists?
athena,
So good to see you! Right, one way around that is to wait until those snooty labels are piled up on the floor in cases at “The Gorcery Outlet” for about a third of what they were at Costco or wherever. Buy wine that you had to sell at loss? No probalo. Great to bring to parties too!
I don’t know of any that don’t use illegal immigrants. There must be some small little wineries that rely on friends, family and legal workers, but this area has boomed with everyone trying to be the next big fad winery, make a gazillion dollars and sit back and count their gold. My grandfather used to be a winemaker and he was the last that did not use illegal workers. He was an immigrant himself and he saw it as a sign of disrespect to use illegal labor. He believed an honest business will request the work authorizations for the workers they need if they cannot find them otherwise. Legal workers exist, and if they don’t and an industry will fail if they don’t have the workers, then they can take the legal steps to request and secure work authorizations for the workforce they need. The Silicon Valley tech employers do this endlessly.
I think people who make second careers out of proclaiming their taste bud excellence and sniffing out oaky, berry, and skunky flavors in wine, ought to sniff out the stink coming from the industry that pisses on the workers who break their backs to provide them their swill of choice.
If they need them, they should be made to make an honest accounting of the labor force they need and request legal work authorizations.
Hi Dinor!!! Great to see you too! Have missed your Sageness!
I agree- and you know what? sometimes that two buck chuck is better than the fancy schmancy stuff anyway. Personally, I prefer wine to cook with. It is never something I crave as a beverage, but it makes for tasty food.
However, true and fun story… was working a school charity event with my brother in law… and working the wine booth, and pouring glasses of wine people were grabbing and guzzling down. Had snotty organizer run over like a frazzled hen yelling… “No!!! don’t serve the $2 buck chuck! that is for the sangria! Use THIS…” and she pulled up some really snotty wine from a really snotty resident.
well… in true horned fashion… my BIL and I swapped them back and laughed our a$$es off watching and listening to people proclaiming all sorts of wonderful about the “cheap stuff” in their glasses.
Big V… that website sounds like a great idea. It would be some sort of job in itself to do the research on the employment practices of the wineries… but I bet there is a way to get the information if someone were sleuthy enough.
athena,
Well thank you ( but I don’t know about that “sageness”? )
If you walk into nearly any grocer these days you will find that just about anybody who is anybody has their own wine label. I think someone here compared it to “vanity publishing”. Besides I should think by the time a person reaches their 30’s they probably have a good idea what they do and don’t like. What’s with all the experimentation? Pick one and stick with it.
I’ll bet a lot of people remember their dad drank the same beer/wine brand his whole life? All out of sorts if they ran dry.
Well, I happen to be a senior assistant winemaker at a winery in Washington. We do not hire any illegals, although we do use a lot of Mexican labor. How about stopping with making these accusations without data? All our employees are legal for work in the US and we make sure that they are. We pay far above legal minimum wage, treat our people well, and have a good relationship with them. Why don’t you try working agriculture in the hot sun for a while? Might hake you a better person.
Let’s see if we’re gonna get nit picky on the illegal thing, how about restaurants, fast food, hotels, gardeners, “nannies”, building maintenance and well all of the lower level jobs that employers can exploit…..after all they wouldn’t be working if no one hired them.
We were driving Gilroy last weekend and looked over at some agriculture fields. I just saw a bunch of crop pickers pulling veggies. I’m sure they are illegals but that sh&t is hard work. Noone in their right mind will submit themselves to that type of work conditions other than the Illegals. It was scorching too.
Jentzen is interviewing for a host of jobs outside of real estate to try to continue making his mortgage payments. But so far, he continues to be turned down as overqualified.
LMAO. This takes the cake for the funniest quote of this housing bubble so far, what in the world type of job would a Realtor be overqualified for? He’s getting turned down because he’s unqualified, but he’s too egotistical to realize it.
To put this in perspective,
from a July 1908 issue of the Traverse City, Michigan newspaper,
“– A group of Alma college students will arrive in the city next week and at once go to work picking cherries on the Peninsula, a number of the growers having made arrangements for their services. With the assistance of the college boys, the lack of help will not be felt so much as usual this year.”
It was common around Portland, OR in the 60s that many junior high and high schoolers picked berries in the summer to earn money.
It was common in the Santa Clara Valley too. My brothers worked out at the McCarthy ranch picking cucumbers one summer. Picked cherries, prunes & pears in town (Santa Clara) and I cut ‘cots in south valley & Hollister. Waaaaay fun work.
Yup. When I was in HS a friend and I rode our bicycles to a local orchard in Los Altos Hills to slice apricots. We were being paid by the bucketful. After a couple we figured out we were making 15 cents/hour, so we got back on our bicycles and rode home. We never bothered to collect our pay.
Funny, I’ve just finished reading ‘Grapes of Wrath’ and they weren’t illegals who picked then!
Anyway, most of them do have documentation — they have seasonal paperwork.
Many have forged documentation. A friend just started working in the payroll dept. of a local household name winery …and they just recently had some auditors that came in and reviewed all the paperwork on file for all accounted for documented workers and more than 50% of the worker’s SS#’s on their documentation were fake/falsified, didn’t belong to them.
I think more things like this should make the news and be followed by consumer backlash.
Grapes of Wrath….wow, read that as a kid, left such an impression on me. What an ending….way to go Steinbeck!
‘they are the only people we can get to work for minimum wage’
Sorry Rintoul, but that’s really BS. Paying anyone minimum wage so the educated elite (and the uneducated delite) can buy $4 hot candy bars is a marvelous business model. As for slamming those that hire illegals, count me totally in. Nothing like paying for the true costs of labor to wake a population up to the absurdity of their lifestyles.
What’s a hot candy bar?
If it weren’t for the illegal immigrants, then high school kids and people of low intelligence would actually be able to work. Hence, there would be more $$ to go around, and we would all be better off. The reasoning you use is the same that was used in the old South before abolition. Wouldn’t you know it, their economy flourished once the slaves turned into consumers.
Methinks that the western states’ agricultural economy will have to go through the same automation that the southern states’ cotton economy did.
You’re right.
Almond farmers use all kind of machines to harvest, including
one that shakes the tree with what is essentially a big rubber band Big blowers move the nuts to trucks, though choking dust can be a concern.
The industry is working on a citrus tree shaker. But prototypes have ripped branches and trees by their roots, and chemicals that make fruit plop off easier are environmentally unfriendly.
And what percentage of illegally earned dollars ended up south of the border?
All of that would stay here, as you indirectly pointed out…
Not immediately. There were decades which were difficult for everyone. A lot of blues sings of this. From slavery (ownership of labor) it went to ownership of tools and land. None of the two classes (former slaves, former plantation owners) did well with this - until at least 1900?
The former slaves needed seed to plant the leased land. Lacking transportation, they got it from the former landowners store, that wrote up everything they needed during the year, and they had not dollars but cents left after the harvest was done and the year’s bills paid.
We haven’t paid out the pensions yet. Give us time and we’ll see the light.
Actually, most people I run into across California, if they even know about how much firefighters and police are making, feel that they deserve it since “their lives are at risk.” Well, so is the beat cop or firefighter in Topeka, too, but he makes only 1/5 the salary and entitlements that they do in almost any comparable population city in California.
And, in California, it would be political suicide to suggest raising property taxes to fund the budget, since many people own lots of property here and make little or no money. So, they’ve done just what I expected them to do: go straight for an income tax increase. Besides that, house prices in Eureka have only fallen from a peak of $340,000 in 2006 to the current $308,000…which is the probably the “best” performing market in the state given many areas are down 30-50%. People here are still buying and feel like they are getting a great deal. Losers.
My brothers would kill me, both firemen, it is obsene what they make. But the sick thing is their retirement package, 80 percent of salary plus benefits for life, somewhere around 120k because they take the total of the highest years and they work a lot of O.T
“For instance, in June, Malcolm bought a house in Leimert Park for $249,000, and within four weeks the remodeled property was listed for $439,000.”
The days of 50% price increases for a coat of paint and minor repairs is long over.
Notice it did NOT say SOLD for $439,000.
Malcolm needs a straw buyer to pocket 200K in 4 weeks.
But now, no bank will loan that amount of appreciation in 4 weeks.
The market price was $249K 4 weeks ago, that’s how Malcolm got his.
“On the 1100 block of Sage Street, a home that was appraised 18 months ago at about $635,000 went to auction a few months ago and also didn’t sell. The lender is now selling it on the market for $289,000, Woods said.”
“‘These are the ones that are sticking in my head, because they’re so extreme,’ Woods said. ‘These lenders are just cutting their losses.’”
What SHOULD be sticking out in his head is that those properties did not sell despite the reduced price. That should tell him that lenders are not just cutting their losses. They are trying to find the correct market price right now. There is a difference.
I like the example Merrill set.
$635K * .22 = $139,700
Tell ya what, call it $140K and get Johnny some new shoes with that extra $300.
Actually, I think Merrill sold for 5.5 cents on the dollar because they financed 75% of the sale.
laonlooker,
Oh, well that ‘does’ make sense! At some point they have to know where their portfolio value is at, even if they don’t advertise it publicly. May well be true.
“Stringent mortgage requirements are a potential brake against the volume of activity needed to raise the price of housing, said Bill Stewart, co-owner of Provident Real Estate in Novato. ‘It’s very difficult right now, all the loans seem to be challenging, and the basic problem is there’s no money out there,’ he said.”
———————–
“there’s no money out there”…
Recently got a bit of personal experience with this - a line of credit that I haven’t used for a couple of years, and even then only used rarely and to a low “utilization ratio” has had the APR raised by about 4%. This at a time when the Fed rate is holding at 2%, and “good” borrowers are few and far between.
A few months ago I mentioned that this account was my “canary in the coal mine” in terms of how tight credit is getting. I’ve got an 820+ FICO - I can only imagine how the spigot is completely turned off for the 650 crowd these days.
Found a local house that sold for $1.1 mil in March - half way through the “renovation” it’s back on the market for about $600k. I might be interested at $300k. Not sure if it’s REO at this point.
There’s money out there somewhere. Stuff is still selling quickly in Fort Collins CO if it’s priced well.
I have a contract on my house with the buyer putting only 5% down - I’m a bit concerned since the broker is known to be one of the shadier ones. Supposedly all his last 6 deals have made it to closing, we’ll see if mine is lucky #7.
Yep, it’s that price that really cinches it. Funny how the unrealtoRs like to just blame it all on those mean, stingy banks.
FHA with 5% down is going to fly. (However do not be surprised if the buyers ask you to contribute to closing costs - mostly to the mortgage broker and RE agent.)
“For instance, in June, Malcolm bought a house in Leimert Park for $249,000, and within four weeks the remodeled property was listed for $439,000.”
There’s a wee difference between “listed” and “sold’ which the writer of the article might have wanted to look into.
Leimert Park for those of you outside of Los Angeles.
Demographics
Per the United States Census of 2000, for which Leimert Park was roughly contiguous with tract #2343, the district had a population of 4,262. Racial and ethnic representation was as follows: 1.7% white, 91.7% black or African-American, 0.3% Native American, 1.2% Asian or Pacific Islander, 1.4% some other race, and 3.6% of two or more races. 3.5% of respondents of all races were of Hispanic or Latino ethnicity. Median household income was $31,443, median family income was $46,709, and per capita income was $25,253; 16.1% of individuals and 15.9% of families were below the federal poverty line.
“‘The median price of a home in June 2007 was $497,000,’ said Cohn. ‘In June 2008 it was $319,000. This might be a bottom.’”
****************************************
*BZzzzt*!! Wrong answer! Thanks for playing!
Yes, yes,yes. His name says it all. And what he said under his breath - ‘This might be a bottom (for this month).
Why oh why do these serial bottom callers suggest that every leg down towards affordable pricing signals a bottom must be at hand?
Oh I’ve gotten used to the daily bottom calls, they don’t even phase me any more. What bugs me is people that couldn’t see a bubble coming are going to tell me when the market will return to… “modest appreciation”. Wha..?
None of these serial bottom callers seem eager to address the recent C.A.R. sales report that showed the YOY Californian median used home sales price down by 36 percent, nor the historical fact that Californian home prices fell for roughly six years running from 1990 through 1996. I guess history and data don’t matter to those engaged in porcine beautification efforts.
Bottom callers are the taxpayer’s friends.
As is the NAR.
“What bugs me is people that couldn’t see a bubble coming are going to tell me when the market will return to… “modest appreciation”.”
Good one, DinOR. I’m going to plagiarize that for the next time I’m confronted with friends at a cookout who are trying to convince me the worst is over when one year ago it was, “Everything will be just fine. This is Portland.”
sleepless,
Right, you couldn’t feel the ground a’ shakin’ as a SIX engine freight train was barreling down the tracks, hear that diesel hummin’ nor hear the crossing bell but… now you’re going to proclaim “It’s right on schedule!”
I don’t think so.
we should have a blog that tally up the quotes and talking heads making the daily bottom calls.
In Sonoma the bottom is nowhere close. The area of town that has a large immigrant population as renters and bubble time home owners has started to get hammered and a few places have returned to at least 2003 prices. That side of town is still over valued. They are still asking double what they should be. Prices TRIPLED here over an 8 year period of time. There is still quite a ways to go. The east side is starting to get hit with Alt-A and prime resets- and the rooster crowing for the snobby prestwood district peeps that HELOC’d themselves silly banking on the debt is wealth mantra.
the rental list grows daily and the “rare” east side listings are popping up like fungus. funny, how they all proclaim… “rare, east side opportunity.”
I don’t expect anyone on the east side to swallow the reality pill until the foreclosures on the much lauded special side of town start making the local paper with old time residents lamenting the blight of whole east side neighborhoods.
When that happens, it will be possibly a good time to think about buying.
i used to work with a guy who loved to say, “bottom pickers get smelly fingers.” I’ve never been able to forget that line, though Lord knows, I’ve tried.
With a median of $319k, there will be plenty of knifecatchers for Novato if they can secure the financing. But its a false bottom because the long-term problem is that it costs so damn much to commute from Novato to SF, between gas, the bridge toll, and parking. Double that for Sonoma County.
In terms of climate and aesthetics, there’s not much difference between Novato and the Central Valley. In my opinion, only Southern Marin is really desirable. When you start seeing median of less than $200k for Corte Madera or $250k for Mill Valley, that’s when there will be some good bargains.
Median for Novato should be around $175k, IMHO.
“After a precipitous decline spurred by the highest foreclosure rates in Marin, there are signs that the value of Novato’s real estate may be nearing stabilization. ‘What’s happened is that there were a lot of short sales. There are so many real-estate-owned properties, it’s a buyer’s market,’ said Patti Cohn of Frank Howard Allen.”
“‘The median price of a home in June 2007 was $497,000,’ said Cohn. ‘In June 2008 it was $319,000. This might be a bottom.’”
Patti WISHES it were a bottom so she can collect some fat commissions on overpriced houses again. These Realtors (TM) are a total joke.
I track the Novato housing market regularly, and it is anything but stabilizing. Prices are being slashed left and right, and the price cuts picked up steam in the past two weeks. Most of the places on the market have been cut multiple times. There are high-end condos in Novato that are going down $500+ PER DAY in price.
The median household income in Novato is no more than $60,000 per year. When the median priced home in Novato is $200,000–not $319,000 as it was in June–then it might be time to troll Novato for deals. All the knife-catchers who think they are getting great deals now in Novato are going to find out the hard way what great deals really are in the next few years.
Keep the popcorn popping,
Red Baron
“The city billed them $427 to clean up the property. The owner never paid. Now there’s a lien on the property.”
Cities are in a bind. Adding a lien to the property just makes it worth LESS. If they place enough liens on the place THEY are the proud new owners. Just ask Detroit how that game ends.
The road is being paved with good intentions…
climber,
…nuff said. Point taken.
How else can a city handle a property like this? The liens give them a way to get the attention of the property owner.
If the city ends up owning the property, the city can resell it to some one who maintains it.
Detroit is in trouble because there are fewer jobs. People follow jobs. If there are no jobs, even free housing will not attract many people.
Yep, there are a few people on this blog looking into tax liens as a potential opportunity coming out of this…
At $7/hr that’s more than 60 hours of work. Doubtful they did that much. Overpriced labor to cut weeds and grass to say the least.
“Right now we’re getting through the inventory of foreclosure and short sale properties, and once we burn through that, we’ll see slow appreciation every year.’”
Once we burn through that?? Hmmm….and how long will that take?? What about the tidal wave of AltA and Prime resets? What about new home sales? And non-distressed properties? How long will it take to burn through that tsunami of inventory?
Of course the reporter didn’t ask, but I can only “guess” that with higher rates and tighter lending standards, it will take a long, long time to “burn through that.”
“This might be a bottom.”
But then again, maybe not…
This has been discussed on the HBB before with few answers, this was from Saturday, Aug. 02, 2008
Living in limbo: Tenants feeling the mortgage mess
By LESLIE ALBRECHT
Merced Sun Star
“…When she and her three teenage daughters want to bathe and wash their long hair, she fills up four pots and two roasting pans with water and heats them on the stove.
Sounds like the kind of problem she should complain to her landlord about. But Menina doesn’t enjoy a typical landlord-tenant situation. The apartment building she lives in is in foreclosure.
Now a bank owns it, and it’s hired a real estate company to sell the building. They want her out so they can sell it. Menina says she’ll leave when she can — legally, she’s entitled to stay for at least another month. …
Quick facts on tenants and foreclosure
Landlords have no legal obligation to inform their tenants that the property is in foreclosure.
Tenants can find out what’s going on with their landlord’s property by visiting the Merced County Recorder’s Office at 2222 M St., (209) 385-7627. That’s where notices about late mortgage payments and foreclosure auctions are filed. Some information is available online at http://www.recorder.merced.ca.us.
After the foreclosure is complete, it’s illegal for landlords to collect rent on the property. State law says tenants must be given 60 days’ notice before eviction proceedings start.
After the foreclosure is complete, it’s normal for the bank or new owner to send someone — usually a real estate agent — to talk to tenants.
If a tenant thinks his rights have been violated, he should contact a lawyer who specializes in landlord-tenant issues. In Merced, low-income residents can contact Central California Legal Services at (209) 723-5466 or http://www.centralcallegal.org. ”
http://www.mercedsunstar.com/167/story/376595.html
There are some interesting comments after the article
Surprisingly nobody made the obvious comment.
Welcome to the First World™! We hope you like it here.
Apologies if this has already been posted:
From American Baker:
“Freddie and Foreclosures
Among the policy changes Freddie Mac announced last week to encourage servicers to avoid repossessing homes was one allowing servicers to take more time to process foreclosure actions in the District of Columbia and 20 states.
In those places, where foreclosures can be completed relatively quickly, the government-sponsored enterprise said that beginning this month it would let servicers take as many as 300 days between the due date of the last payment and the foreclosure sale.
Freddie said it made the change “to provide borrowers additional time to work with their servicers to explore alternatives to foreclosure.”
The states where the new policy applies are Alabama, Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, Rhode Island, Tennessee, Texas, Virginia, West Virginia, and Wyoming. In other states the foreclosure process normally takes more than 300 days, Freddie said.
The GSE also said that this year it would no longer pay incentive fees to servicers that complete foreclosures quickly.”
They are delaying walk aways. I wish they would just admit defeat already and move on.
10 months rent free? Damn…
And yet, when they’re finally kicked out onto the street, a good portion of these idiots will still not have anything saved up for a security deposit on rental.
It is just plain wrong. But I am OK with it; let the foreclosed folk live ten months rent free and we will keep paying rent through the nose at rates that still reflect bubble pricing, knowing that with Californian home prices declining at a 36 pct YOY rate, we will save several years worth of rent by waiting a little longer to dip our toes into the purchase market.
“Among the policy changes Freddie Mac announced last week to encourage servicers to avoid repossessing homes was one allowing servicers to take more time to process foreclosure actions in the District of Columbia and 20 states.”
Every stupid move designed to keep FB’s in “their homes” will only make new mortgages that much more difficult to qualify for… and the RE market still tanks, if no one other than Bill Gates can qualify for a home loan.
Oakland is now also well below six figures. The bottom may not be as far off as was originally suspected, but the timing depends more on how close to core bubble areas a property was.
http://sfbay.craigslist.org/eby/reb/787598970.html
7333 Weld St., Oakland, CA
2BR/1BA Single Family House
offered at $75,000
Year Built 1923
Sq Footage 924
Bedrooms 2
Bathrooms 1 full, 0 partial
Floors 1
Parking 2 Uncovered spaces
Lot Size 3,800 sqft
HOA/Maint $0 per month
They would have to pay me to live in that ghetto.
“When Newport Beach couple John and Cynthia Gates invested $3 million into the Opportunity Fund in July 2007 they say they were promised a 12% annual profit on that investment and that there was virtually no risk of losing money, their attorney Gary Steinberg said. Instead, for whatever reason, their money was used to cover losses earlier investors had suffered, the lawsuit claims.”
Must be a typo, as anyone STUPID enough to be investing in real estate in July 2007 (not July 2005, but July 2007) could not have accumulated $3M, or at least could have never legitimately earned it.
There is financial firm offering 5 % CDs and a 9% return a minimum $20,000 investment in Ventura County. Red flag?
“‘You see recession,’ said Malcolm, ‘I see opportunity.’”
I see scumbag who again is ruining opportunities for hard working people who really want a home to live in.
“‘You see recession,’ said Malcolm, ‘I see opportunity.’”
I see sc**mbag who again is ruining opportunities for hardworking people who really want a home to live in.