Every Month The Deals Get Better In California
The North County Times reports from California. “Real estate agents across North County reported strong activity throughout the summer. But slow sales in more affluent neighborhoods suggest that the flurry of activity was affecting only a sliver of the market: low-priced foreclosures. And the increased sales were concentrated among bank-owned homes, as lenders continued to seize homes at a rapid pace.”
“Cities with high rate of foreclosures such as Escondido, Vista and Oceanside posted the largest jumps in sales, with several areas seeing sales triple from the same month a year ago. On the other hand, higher-end communities with few foreclosures such as Carlsbad and Encinitas experienced losses in sales.”
“The median price last month tumbled 7 percent in just one month, to $457,500, according to the monthly HomeDex report released by the North San Diego County Association of Realtors. condo market sales increased while the median price dropped 5 percent in one month.”
“‘Now people are getting the idea that we are getting close to the bottom,’ said Dennis Smith, a real estate agent in Carlsbad. ‘If we could get the banks to lighten the reins a little bit, we might have a recovery.’”
The Tribune. “Las Lomas, a large housing subdivision started in 2003 in south Atascadero, has come to a stop and is in financial trouble. Only 60 or so of the 279 projected homes have been built and occupied, and part of the 100-acre-plus tract is in foreclosure.”
“Currently 21 lots on Via Cielo, Azor Lane and Monte Verde are scheduled for public auction next month. About half of the to-be-auctioned lots have newly-built, high-end, 3,000-square-foot homes that were on the market-but did not sell - for between $800,000 to $1 million. The rest are vacant.”
“Trimark Pacific Homes of Westlake Village near Los Angeles, has stopped building because it ‘owes the bank more than the houses are worth,’ said Kirk Chittick, Trimark Pacific’s VP of sales and marketing.”
“As recently as 2006, the company was building 500 to 600 homes a year, primarily in Southern California. This year, Trimark Pacific’s building activity has slowed to about 60 homes, Chittick said.”
“‘We had great plans to grow in Central California, and bought La Terraza (its portion of Las Lomas) from Hertel with that in mind,’ he said. ‘We even were looking to buy more property in Santa Maria and Atascadero, but as the market continued to degrade, it didn’t make economic sense, and we elected not to move forward.’”
“Part of the tract is owned by developer Ronald W. Hertel. The pending foreclosure of Hertel’s portion of Las Lomas comes as his firm retreats from real estate business in this county and elsewhere.”
“Within the past several months, it has shut down its office in Avila Village, disabled its Web site and even put its headquarters building in Ventura up for sale.”
“Also, its still-current contractor’s license appears to be in peril. Adding to its woes are other North County properties worth millions of dollars that are in default to lenders such as Transamerica Financial Life Insurance Co., Pasadena- based Indymac Bank, a thrift that failed in July, and San Luis Obispo’s Coast National Bank, according to documents filed in the county Clerk-Recorder’s Office.”
The Santa Cruz Sentinel. “After waiting nearly two decades for something new to rise on the empty dirt lot next to LuLu Carpenter’s on Pacific Avenue, city residents will have to wait a little longer.”
“A hard economy is taking its toll on developers, and the condominiums that were scheduled to break ground in October on that lot have been postponed, said Rossana Bruni, chief financial officer of Brooks Properties, the firm in charge of the property.”
“‘We are just in this morass with everybody else in the development business,’ Bruni said.”
“For Bruni, the signals she’s waiting for include steady housing prices and lenders who are not as wary of handing out money to housing developments after watching condo prices fall over recent years.”
“‘It’s not because Brooks Properties aren’t strong enough or Santa Cruz isn’t a strong enough market, but the lenders aren’t strong,’ she said.”
The Mercury News. “Nearly five times as many homeowners in Santa Clara County lost their properties to foreclosure last month than in July 2007. Even many county residents not threatened by foreclosure saw their home values plummet in the second quarter, according to a report released Tuesday.”
“Mortgage lenders and servicing companies foreclosed on 646 Santa Clara County homeowners last month, according to ForeclosureRadar, a Discovery Bay company that tracks foreclosures statewide. Together, those homeowners held a total of $364 million worth of mortgage loans.”
“Statewide, there were 28,795 foreclosures last month, with combined mortgage loan balances of $12.55 billion, a record for one month. Since January 2007, lenders have foreclosed on $100 billion in loans, said Sean O’Toole, ForeclosureRadar’s president.”
“With home values in most Silicon Valley neighborhoods dropping, it’s harder for homeowners who find themselves unable to pay their loans to sell their homes for enough money to pay off their loans and avoid foreclosure. It’s likely that about 90 percent of properties in default will end up sold on courthouse steps, up from 50 percent in a typical year, O’Toole said.”
“‘The number of notices of trustee sales we’re having as a percentage of defaults is unprecedented,’ O’Toole said.”
“In the San Jose region, 38 percent of homeowners who purchased their property in 2005 owe more than what the properties are now worth; 46 percent of those who bought their homes in 2006 have negative equity and about 32 percent of those who acquired real estate last year are under water, according to Zillow.”
The Recordnet. “Sales of existing homes - mostly foreclosures - in San Joaquin County continued to rise in July for the sixth consecutive month. the median selling price countywide continued to drop, from $220,000 in June to $215,000 last month.”
“That continuous slippage back to selling prices not seen since spring 2002 is driving sales, real estate brokers said.”
“‘The demand continues to grow, because the prices continue to come down,’ said Tom Guiliano, VP of sales and marketing at Cornerstone Real Estate Group in Stockton. ‘Every month the deals get better.’”
“RealtyTrac has reported that banks repossessed 5,878 single-family houses in San Joaquin County in the first six months of this year. That’s an average of 980 per month. That average is also about 50 fewer than the closed sales last month.”
“Still, the overall number of houses on the market basically stayed flat at fewer than 4,600 countywide.”
The Modesto Bee. “A record-breaking 3,000 homes were lost to foreclosure during July in the Northern San Joaquin Valley, pushing the 12-month foreclosure total to more than 20,000 homes. Mortgage defaults on those properties cost lenders about $1.1 billion in July, according to ForeclosureRadar.”
“Stanislaus County had one of the biggest jumps in foreclosures: 1,053 properties with outstanding loans of more than $440 million went to auction on the courthouse steps during July.”
“Only 39 of those Stanislaus homes attracted bids. Lenders got stuck with the remaining 1,014 of them, which they must try to resell. More than 7,000 homes have been foreclosed on in the county during the past year.”
“Statewide, 28,795 properties with a combined loan balance of $12.55 billion were foreclosed on during July.”
“‘We’re going to see even more foreclosures this month,’ predicted Sean O’Toole, founder of ForeclosureRadar. ‘The lenders still just have their heads in the sand.’”
“Many parts of Stanislaus, Merced and San Joaquin counties have had median home sales prices plummet 50 percent or more since the housing boom peaked in 2005.”
“So, many homeowners are trapped and some simply give up. ‘We keep hearing about people who can afford to pay their mortgage, but who walk away instead,’ said Brad German, a spokesman for Freddie Mac.”
“Even though being foreclosed on will damage someone’s credit for seven years, German said, some homeowners don’t seem to care. ‘A mortgage is a legal contract,’ German stressed. ‘It’s not an option you can walk away from based on whether a home appreciates in value.’”
“German said there are persistent stories about people who let one home be foreclosed on right after they purchase a second home.”
“‘It is very concerning and it’s fraud,’ said German, noting that some buyers misrepresent their intentions and their creditworthiness. ‘When people voluntarily leave their homes, they add more houses to the inventory. It also causes tighter lending standards, which makes mortgages harder to get.’”
“Teresa Kinney, a member of the staff of Rep. Dennis Cardoza, D-Merced…has helped organize seven foreclosure workshops the past six months.At one June event in Modesto, Kinney said more than 35 homeowners had their loans modified by Countrywide Home Loans. She knows that’s not many, considering how many people have lost their houses to foreclosure.”
“‘We’re not going to be able to save everyone because, frankly, there are people out there who lied (on their mortgage applications),’ Kinney said. ‘They have to deal with the consequences of that.’”
The Fresno Bee. “A new threat is emerging that could keep the tidal wave of foreclosures continuing into 2011, experts say. More interest-only and so-called option adjustable-rate mortgages handed out during the real-estate boom are starting to go bad as home values continue to fall. These loans also are called alternative-documentation loans, or Alt-A.”
“The loans were popular in the central San Joaquin Valley as housing prices soared during the real-estate boom. ‘I got caught with my pants down on quite a few,’ said Richard Barnes, owner of Resource Lenders of Fresno, who issued those types of loans.”
“During the most recent quarter, foreclosures made up 43.2% of all sales in Fresno County, up from 6.3% five years ago, according to Zillow. The median home price of $204,000 is off 22% from last year, according to Zillow.com, and about 80% of all homeowners who bought in 2006 are under water.”
“Last quarter, there were 120,000 more foreclosures than modifications in California, the Center for Responsible Lending said.”
The Daily Press. “The most recent numbers in the High Desert Real Estate market show…sales in July were up 16 percent from June and up 132 percent since July of last year, according to statistics from the MLS compiled by Larry Trombley of Century 21 Rose Realty.”
“In July, 80 percent of the homes sold were bank-owned, showing that the local market is still saturated with a large number of foreclosures. ‘I think the real estate market will bottom out when we get through these foreclosures,’ said Gary Stater of Gary Stater Realty in Apple Valley. ‘It’s a difficult question. They just keep coming.’”
“The numbers show that the home prices were down 42 percent from July of last year. Prices will probably stop dropping by the end of the year, said Caroll Yule of Shear Realty. ‘I just can’t imagine them going much lower.’”
“‘People are excited because they can actually go out and become homeowners and have an investment down the line,’ said John Hess of Shear Realty. ‘People can actually afford to purchase a home now.’”
From Reuters. “Thanks to plummeting prices and a slew of foreclosures in the county, east of Los Angeles, 31-year-old photographer Elizabeth Luma can see her dream of owning a home in Southern California come true. She is scouting for a $200,000 home for her five-member family.”
“‘The range of homes is low enough, so we can pay for it right now,’ said Luma, who rents an apartment in Los Angeles and plans to close the deal on a Riverside house within the next month. ‘Right now is the time for first-time buyers like us who couldn’t afford it earlier to take advantage of the low prices.’”
“Prices in June were down 31 percent from a year earlier year in Riverside, which is ranked second in the country for foreclosure rates behind Stockton in Northern California.”
“Tera Wunderlich, a 27-year-old hairdresser who has been planning to buy a house for years, is going to make the most of those numbers. ‘My budget is roughly $200,000 and I know there are bank-owned properties to look at,’ Wunderlich said.”
“Rows of once-luxurious properties that now lie foreclosed are bringing down home prices in entire neighborhoods in the county. Foreclosed homes accounted for more than 62 percent of homes sold in June.”
“But in the short term, Luma thinks the time is ripe and the price is right for the dream house she has been waiting for. ‘It must have a backyard for my kids, and definitely a big kitchen with an island in the middle,’ Luma said. ‘I can’t wait to get out of this condo.’”
The Merced Sun Star. “The world’s leading business newspaper has pegged Merced as one of America’s foreclosure capitals, casting the city’s housing woes onto an international stage. The London-based Financial Times story quotes local officials and real estate professionals who place much of the blame for Merced’s troubles on out-of-town speculators who snapped up houses during the 2005 boom.”
“‘There should be a special place in hell for those people,’ James Marshall, Merced city manager, says of the speculators. ‘I’ve heard about renters who were making their payments on time and then all of a sudden they would get a knock at the door.’”
“Merced Councilwoman Michele Gabriault-Acosta, a residential Realtor, hadn’t read the Financial Times piece, but…likened reports of Merced’s housing bust to coverage of the downturn Detroit experienced in the 1980s during the collapse of the American auto industry. ‘You start to second-guess whether it’s somewhere you really want to move to and bring your family to,’ she said.”
“This isn’t the first time Merced’s real estate ups and downs have garnered attention from an international media outlet. In July 2005, The Wall Street Journal listed Merced as the least affordable housing market in the country.”
“Back then, one local mortgage lender sounded a prescient note. Commenting on the Wall Street Journal story, Ed Walters of GMAC Mortgage said Merced’s boom had been fueled in large part by subprime loans with adjustable interest rates.”
“He wondered, ‘What’s going to happen two years from now when their rates are adjusted?’ Everyone in Merced knows the answer to that question now.”
“…..condo market sales increased while the median price dropped 5 percent in one month.”
Five percent in ONE month! Hmmm, no further comment in the article. If my math is correct, this would project to 60% in a year. I think that’s almost more than half. Not to worry, the elusive “bottom” is around somewhere,
I have been corrected on this before myself. It’s 5% of an ever decreasing number per month, thus the annualized rate is less. PB knows the formula (e.g., a drop of 10% per month would not equate to an annualized loss of 120%).
((1-.05)^12)-1) = -46%
C’mon, folks, this isn’t rocket science.
If the price drops 5% in a month, next month the price will be (1-0.05) = 0.95 x original price.
If the price drops 5% for two months, it will be 0.95 * 0.95 = 0.9025 x original price = (1 - 0.9025)% drop = 9.75% drop.
If it drops 5% each month for a year, you get a 1 - 0.95^12 = 46% drop.
Kind of like manual calculations of compound interest. Remember when they taught us that in high school?
“C’mon, folks, this isn’t rocket science.”
Just for fun, how about asking the question of how many more months of 7% monthly declines would be necessary to reduce prices to 90 percent below their current levels?
((1-0.07)^x-1)*100 = -90
(0.93)^x = 0.1
x log(0.93) = log(0.1)
x = log(0.1)/log(0.93) = 32 months = 2 years, 8 months
Check:
(((1 - 0.07)^32) - 1) * 100 = -90.1948475
If current rates of decline continue on average over the next 32 months, then April 2011 should be a good time to buy.
Prof. Bear,
Surely you know about the law of diminishing returns?
Calvin
Indeed. Returns to holding on to real estate in a falling knife market are ever diminishing.
Increasing sales though will tend to slow that decrease, provided such increasing sales results in lessened inventory.
To add–if someone on the upside said, prices are going up by 5% per month, therefore after a year, they will be up 1.05^12, or 79.5%, we would (and did) say they were crazy–it’s an unsustainable trend upward that had to stop.
Same with 5% per month decreases. It is an unsustainable trend downward that (with a growing population) will stop. The evidence that it will eventually stop is rooted in the fact that sales are increasing. (the same way that sales slowing down was the precursor to the crash)
Yes, it will eventually stop. However, prices will go lower than anyone imagined possible. They will not stop declining when they hit their true value because conditions will be hard scrabble.
And what would 8% mortgage rates do to this boneheaded market? “Good night, Gracie.”
I’m just trying to be a bit of a voice of reason, the same way we were all trying to be a voice of reason when prices kept rising.
Will we overshoot on the downside? Of course, you can’t help but to overshoot because of market psychology. There will be some great deals to be had. I argue that in some markets (yes, sigh, real estate is local, as we are seeing in how some places are vastly more effected than others), those great deals are being had right this instant. In other markets, we have a ways to go.
Such overshooting won’t last (and in higher population growth areas, it won’t last very long). It can’t last. At the “lows” that people are predicting on this board, NO NEW HOUSES WILL BE BUILT, yet population will continue to grow and inventory will diminish. That is an unsustainable state.
Take a look at a graph showing housing starts in the U.S. For single family home starts, when adjusted for population, we are currently building at the lowest rate since the mid-60’s (I didn’t look farther back). And at the peak in 2005/2006, we were at the highest peak as well, but only ~5%-7% higher than the peak in the late 70’s. The falloff in starts has been faster this time around.
Every time there was a housing crash in starts there was a rebound back to more “normal” levels within a year or two, max. “Normal”, based on an average going back ~45 years, is about 2x the current rate of home starts.
What this means to me is that at least some markets are in the overshooting mode right now in prices, and prices will be back to a point where builders can justify new construction by 2010.
Or is the housing cycle “different this time”? Again, words we all ridiculed in 2005/2006 when prices were rocketing up.
“yet population will continue to grow”
- Illegal immigration will probably slow due to lack of economic opportunity and a backlash against illegal immigration as the population has to blame somebody.
- Middle-class families will have fewer children as times tighten or did we forget how the tough times of the 1970s killed the concept of big families?
- If welfare benefits are cut due to massive governmental budget problems then we will see lower-class families having fewer children.
- More extended families will live together as the necessity to pool resources increases.
In a worst case scenario I wouldn’t be betting on a booming population to increase housing demand.
Now THIS is a perfect reason to own a McMansion, 8 people for 5 bedrooms, not 3 people!!!
—————————–
- More extended families will live together as the necessity to pool resources increases.
http://en.wikipedia.org/wiki/Demographics_of_the_United_States
“The U.S. population is predicted to increase by one third by the year 2050.”
Source, US Census
There has been a lot of slow economic times in the graph shown with population growth…the curve still looks pretty damn smooth, all else equal. It’s hard for me to imagine anything other than continued population growth given the last 200 years of history and demographic projections.
Eventually, with replacement birth rates, the population will stabilize, but we won’t hit that point for a while.
There will be people that need to double-up in homes (and rent out rooms to make ends meet, etc.), but with home prices crashing back to earth, this is going to be less necessary, and since it is less desirable, it won’t happen by choice.
“If welfare benefits are cut due to massive governmental budget problems then we will see lower-class families having fewer children.”
Need to think this one over again with a couple of 20-oz dark beers; focus on “lower-class.”
Take a ride on the subway with me. It’s not too difficult to figure out. Or wait, do you just not want to be politically incorrect and use terms like “lower-class”? I could have called them worthless pieces of human refuse. A little less politically correct but probably closer to the truth.
Yes, it will eventually bottom. But how many people would have realized that in some markets, like Cleveland and Detroit, that housing values would actually be negative? That is, you can’t even give them away.
NYCityBoy;….
I agree with your Comment on the potential impact of higher rates…I believe as soon as the financials have some legs underneath them the Fed is going to defend the dollar big time and that will crush inflation that we all know is way beyond the stated number…Also, regarding your comment on family formation with illegal’s, yes many will no longer come and some will go home but those babies that have been born here are not going anywhere…I read a opinion by a demographer in the San Francisco Chronicle a few days ago that said a staggering 46% of the pre-kindergarten children in the state of California are Latino…If that number is anywhere close to the truth, think about the future political and financial impact on the state…
“It must have a backyard for my kids, and definitely a big kitchen with an island in the middle.”
___________________________
I hope she and her family make full use of those attributes, if they are able to find them. But the number of people who pay good money for backyards and kitchens like that, and then stay inside all day and eat cereal for dinner, is one of our great national ironies.
I know a lady who has a house with a back yard and a pool, but she won’t let her kids go outside because then they would get dirty.
My mother used to have a friend who wouldn’t let anyone use her downstairs bathroom because then she would have to clean it. Then again, she was pretty much nuts.
I would have pissed in her kitchen sink and then seen if she would let me use that downstairs basement.
NYCityBoy,
You have the most unique way of solving problems. I love your solutions.
A bit off topic, but you brought back a memory from the college years. I was at a party at Marsha and Clyde’s, one of the few married couples we knew in college. Marsha and Clyde tended to get a little extreme. I walked into the kitchen and there was Marsha, drunk as a lord, pissing in the kitchen sink.
I would not have wanted to see what she left in the lettuce crisper.
Why is the shmear for this bagel brown? Umm good!
You know it. All they really need is Costco MREs and a big microwave. Otherwise, it’s just a fluffer kitchen.
I need need three things to cook and cook well. One burner with a gas flame, large frying pan on top, A crock pot and a rice cooker. Isabel.
The two greatest things about math. It involves numbers.
“‘Now people are getting the idea that we are getting close to the bottom,’ said Dennis Smith, a real estate agent in Carlsbad. ‘If we could get the banks to lighten the reins a little bit, we might have a recovery.’”
From one of the comments on that story:
“What boggles my mind is how many buyers are wandering about without a realtor, when it costs a buyer nothing to have someone represent their interests.”
The costs of using the wrong agent can be immense. With agents like Smith that have no understanding of the market and no concern for the financial well-being of potential clients, is it any wonder that potential buyers might not want nor need such services?
But real estate commissions “always” comes first!
That statement was made right after this statement “The median price last month tumbled 7 percent in just one month, to $457,500.” Seems to meet the rate of a decline is increasing. Doesn’t this mean we are not anywhere close to a bottom?
7% a month. That is just mindboggling. Over $1,100 per day on an average 500k Cali McShack. Of course median sales price decline may not equate to actual loss because of changes in what is selling but still.
I don’t know Greg. In a foreclosure, you are going to be dealing with a UHS no matter what, except it will be one that works for the lender. If you get a buyers rep, the lender pays for it (split commission) and there are some out there that know the real situation. Remember Jim Klinge and Bob Casagrand in Carlsbad?
BTW, it was great to meet you. I think your HB tale and Mannys were the two most interesting experiences I heard out there.
Ben,
As I’ve said also at other times, I’m not anti-agent. A good buyers or sellers agent can be worth their weight in gold, maybe even at current prices. In the current market, a good buyers agent could be very helpful in navigating around some potentially bad situations. I want those good agents around now and in the future. As for the others, the sooner they’re gone the better.
The average real estate agent probably weighs, what, about 150 pounds? That includes the silicon fun bags. Gold has just dropped to about $800 per ounce or $12,800 per pound. That means that a good real estate agent would be worth about $1,920,000.00. Good lord!
Maybe you should check the spot price on pewter. That might be a bit more realistic.
Nah, gravel…
NYCityBoy,
Mr. Rogers is having a special on tonight…”Fun with silicon”. Be sure to check it out on your local “Adults only” PBS station.
Giggity-giggity.
“That means that a good real estate agent would be worth about $1,920,000.00. Good lord!”
Maybe over the course of a very long career if they’re really good? Maybe in Mozillo dollars instead?
150 pounds times 12 troy ounces per pound times $800 per troy ounce is $1,440,000.
SDGreg
I wondered whether, if someone was in business for themselves, what benefit would be derived from having a real estate license. You can obviously buy and sell without one. Someone told me you could get better comps from MLS if you were a member of the licensed fraternity. I dunno about that. I scan RealtyTrac and a couple other services and am awash with more data than I can process.
But I digress. Agree with your point that faulty/flawed/made-up advice from sales people can cost a pile in the long run.
As others have noted, seems that half the population of Calif. has a real estate license.
The realton.com sites and the like show very little of what is really happening on the MLS services. I checked the MLS against realtor.com and mountains of listings are not on r.com.
The problem of buyers without agents is this.
We just listed a REO at 94k 4 days ago, by the 2nd day we have 5 offers from other offices at 99k. The bank will counter them by friday, i will open it sat-sun and hopefully pull a buyer at 105k and it will be gone by Monday. One week from hitting the MLS its gone. This is almost rental ready (needs clean up and stove) with huge lot on court across from a park, it is an easy $1,100 per month rent! With 20%(21k) down it would net $400/mo or 23% ROI (not counting vacancy or upkeep)!
23%! I don’t disagree that the bottom has not yet been reached, but where else can you invest for this kind of safe return with the upside during the next bubble?
Without an agent that can get you in first and close the deal you will not be a purchaser of these deals. As prices fall further those without agents will just watch these deals fall in front of them and allways be a day late and a dollar short.
I have allways argued that a good agent is worth every penny that the buyer doesn’t pay and buyer loyalty is key. Find a good agent (like me!) and promise him a closed sale if he will work for you. This site being full of agent haters telling people they are better off without one is wrong headed advice.
The banks are demanding that their REO be in the MLS within 24 hours after faxing the broker the listing agreement. Then they are pounded with multiple offers and locked up within a week. There are literally hundreds and hundreds of buyers chasing tens and tens of REO coming up.
Full disclosure, I am talking of the lowest priced listings. There are thousands of $200k plus REO listed in the soon to be ghetto newer subdivisions around Stockton. They are flooded with $230k REO that had notes for $450-500k on them and there are more every day that are just sitting.
The stuff priced below $130ish in decent areas and shape are gone days after coming up.
Current buyers are not looking through housing bubble shaded lenses. They don’t see (or care) that the home sold for $350k 3 years ago. They simply see that they can purchase something for $800/month that would cost them between $900-1100 to rent.
It is these buyers dealing with on the ground facts regarding sound housing decisions that will turn the market. On the way up we housing bloggers blaimed the media and on the way down the REIC is blaming the media =) LMAO it’s not the media. The media reports what happened, not what is happening.
My point to those thinking of investing is that it’s not going to be us bloggers getting off the fence that will move the market. It is moving now, (ahahah still moving down, but moving). Credit markets are not going to seize up (the Fed has allready made this clear). If you plan on any financing at all be aware that the banks are not going to let you do multiple deals a year. Even if your golden you will prolly be lucky to have banks lend to you once per year. With the kind of returns availalbe the concentration should not be wasted on looking for the bottom, but looking for the right purchase. Then doing the same thing next year, and the next, and the next till you have 5 rentals. Close to the top of the next bubble you sell 2 pay off the other 3 and retire!
The bottom is an academic endeavor and will only be know in hindsight. RE goes up VERY VERY fast and goes down slowley over longer periods. By the time we are all sure that bottom was in the market will be moving and quickly jump to market then into the next bubble.
Rich,
Near as I can figure the only “wrong headed thinking” involves realtors that think they should have access to inside information to act on that would be illegal most anywhere else.
Please, please understand, the BB’s have always been as much about reforming the very scenarios you’re advocating we “take advantage of”. It was never just about sky high prices. The whole industry needs to be overhauled.
Yep, According to theory ,the real estate listing broker is suppose to obtain the highest and best price for their client . To just give insiders a crack at a foreclosure is not getting the highest and best price the market will bear .
But , if lenders/sellers think that the real estate people work on their behalf ,than they don’t know them . The sales people are all out for themselves ,and they just look to where the least line of resistance is . In others words ,the real estate sales people screw whoever the dummy is ,be it the seller or the buyer .
Whenever I want information to get to a seller ,all I need to
do is tell the sales agent to not repeat certain information ,and sure enough it gets right to the person it should not of .
Of course I want the information to get to the seller . In
fact ,the less the agent knows about you the better off you are . I’m sorry but I know the way agents talk with each other ,I know the way they think ,and the way many of them have acted in the last 10 years is criminal . Please don’t take offense if your a honest agent .The RE agents are still out there doing their damage .
The only reason RE agents couldn’t screw people really bad before this last decade is because they knew the lender wouldn’t approve the loan . With the lenders being such screwballs lately ,the RE agents went hog wild . To bad .
DinOR,
“reforming the very scenarios you’re advocating we “take advantage of”.
Sorry for the reality check, but it is what we do. Like me or not, until you get up everyday preview homes for an hour or two, have sold hundreds of homes, dealt with all imaginable (and unimaginable) RE and rental problems and know the local bullshit agent/brokerage politics you will never know as much about RE as me. It is so funny when some tard meets me and tells me to give him a call when I find a “really great buy”. Why on earth would an agent call a buyer that is telling that to every other agent they meet and has never even written a contract with him and give him a “really great buy”. They may just hose him and lie to him about a “really great buy”, but he will not get the real deal until he shows some loyalty. To the best of my ability the “really great buy” will either go to me or one of my loyal buyers that I have dealt with for years.
Believe me, I have seen the most corrupt, illegal, immoral and unethical shit in my life become common operating procedure during this bubble. The fact remains that the vast majority of RE is and always will be sold by agents (at least in our life time). When your talking about bank REO ALL of it will pass through the RE brokers. Your railing against agents is understandable and IMO prolly just, but won’t help you make the best RE deal you can. I don’t know you, will never meet you, won’t make any money off you and care not if I change your mind. But I have been on this blog for years and to the best of my ability have the people on this blogs, best interest at heart. I was on this site years before the top telling everyone of the coming collapse and that if were thinking of buying they were crazy. I took two years off or RE to do accounting work because the corruption and fleecing of the public got so bad.
If you never intended to profit from “take advantage of” this bubbles collapse why on earth would you put any thought or time into this blog. It is the stock shukamagivers that tell you that you can’t time the market! TIMING IS EVERYTHING. My intention is not to call the bottom (hell I called the top the end of 02’ and sold 2 rentals and my PR), but point out that there are good buys out there now. Will there be better buys in the future? HELL YES, but that doesn’t mean that there not here now.
Someone commented about rents coming down. Won’t happen in any significant way where near hear (maybe 50-100 bucks). Now in LV and AZ where they thew up entire towns without economies there will be much more trouble. We are seeing rentals here tightening up a lot due to all the people getting tossed from their homes (all the mock buyers that were leasing from the CDO buyers). I swear, when I drive around here the number of vacant homes here not listed surpasses those for sale. When all those hit the market rents may back up 10% or so, but what I see is the apartments are still very expensive compared to the SFH, If SFH rents pull back 50-100 bucks there will be a flood of apartment dwellers moving into rental SFH.
As far as “reforming” anything =) Vote change, Vote Obama!!!
As much you may dislike the wind, railing against it will do no good! Better to rig up a sail and have the wind drive your ship!
Hah Wizard,
You must be to young to have seen the 89′ bubble collapse. Prices went down 50% in a little over 2 years and then fell more over the next 5 years. Bubbles are all the rage in a fiat system, allways have been allways will be. As long as there is someone willing to lend money to suckers there will be something for the suckers to buy.
Gosh Rich, thanks for the “reality” check. Didn’t it even happen to dawn on you that the very behavior you’re advocating now is what got us into this mess to begin with? Yes, we realize NAR is a powerful lobby and up until now they’ve had their way. Seeing as how their practices have brought the global financial system to it’s knees, reform ( like it or *not* ) IS coming. Have you listened to Hank lately?
If not having an intimate knowledge of “how to work a pocket listing” or brow beat an appraiser means I’ll never know as much about real estate as you, then Thank Heavens! I live in a highly regulated world where your every transaction is scrutinized. Soon you will too.
But I suppose it’s like you say, live it up while you can!
Hi Rich:
Where are you seeing houses selling for positive ROI? I haven’t seen anything like that. I’m talking actual sales price, not understated asking price that gets bid up.
“Credit markets are not going to seize up (the Fed has allready made this clear).”
Bwahahaha. The all-powerful Private Reserve Bank is looking a lot like Barney Fife right about now. They have a lot of ego but not a lot of ammunition. The Privy is losing control of this thing and they know it. There have been $500 billion in write-downs. Make this same statement when we hit $2 trillion. What will they be doing then to ensure that the credit markets don’t freeze up? The Wizard is a cross-dressing dwarf, infected with syphilis and the residents of Oz are starting to figure it out.
I thought dwarfs were unisex. They dress how they dress, gender doesn’t come into play. But syphilis, yes, those horny bastards have what’s coming to them.
“RE goes up VERY VERY fast and goes down slowley over longer periods. ”
That is complete BS. RE averages 1.4% over inflation for the last 100+ yrs.
Bubble markets go up very fast and RE is always slower in a down market, but what miracle is going to allow RE to rise? Are banks going to allow stated loans, NINJA loans and other liar loans? Are enough RE lending banks even solvent?
Bubble markets do not recover fast. NASDAQ is still off 50% from its high in 2000. The S&P500 is unchanged for the last 10 years. Railroad stocks did not recover from the ’70s bubble until 2005.
Now for further proof: the CME RE index (tradable for the San Diego market)
AUG08 175.40B —- UNCH 175.40
NOV11 158.00A —- UNCH 158.00
For a brief explanation. You can sell a futures contract for 175.40 (B = bid) expiring in August of 2008 and buy (A =Asking) a November 2011 housing contract for 158. 00
You would be better off buying a Nov 2011 futures than a house at current prices. That is 3yrs 3mos without a mortgage payment and able to participate in any upward move.
The Futures market is saying houses in San Diego will be lower in 3 YEARS THAN TODAY!
Before buying anything do your homework. Buying a piece of RE because it “Goes up VERY VERY fast” is shoddy homework.
Rich,
Please email your contact info. to my email.
I live in Lodi, and am looking for an Agent to work with when I decide to do some serious looking and pull the trigger and buy.
Thanks!
John
superq@softcom.net
Why would you choose Rich as your broker when he just stated that any really good deals would be going to him or his friends? I guess he is saving the not so good deals for his other clients.
“This is almost rental ready (needs clean up and stove) with huge lot on court across from a park, it is an easy $1,100 per month rent! With 20%(21k) down it would net $400/mo or 23% ROI (not counting vacancy or upkeep)!”
I think what a lot of people forget is that the ROI will be ever decreasing going forward since the rents will also be dropping as all these properties start pushing inventory levels up. You can’t compare a future “assumed” static rent price as houses continue to pile up. Supply and demand doesn’t just affect buyers, but also renters. You show me the $1100 rent after all those pigs work their way through the snake. That ROI won’t look so good at that point. And as a landlord, you’ll still be holding an asset that’s worth far less than it used to be. No thanks.
Rob
Stockton,
The bottom is now selling fast. Cash flow is easy, but it is hard for investors to get financed. The banks preffer FHA home owners over 20% down investors for their REO. They are collectively so pissed at the flippers walking that they don’t want to get stuck holding any investors paper. It’s like the banks colluded to preffer loans they can flip to Fannie or Freddie even over an investor that might net them more. Bottom line seems to be that the lenders (not the mort. brokers) have their panties all in bunch at the “investors” and their mort. brokers.
The courts have decided over and over again that real estate agents cannot be held liable for a buyer’s damages resulting directly from really bad advice. An RE attorney, on the other hand, has fiduciary duty. Depending on the price of the house you’re buying, the attorney (who is paid, what, $200/hour?) is almost certain to cost you less than the agent. Which would you pick?
Big V,
Right, I think there was just another case in San Marcos, CA and all the agent had to say was “at the time my client purchased the home that WAS a good price”. Case closed.
We’ve all been hearing about HF’s stepping in to buy SFH’s which sounds really scary. The only positive I can think of is this will be (1) asset class they’re going into that’s ‘already’ fried. But before we can say “How much worse can they make it?” Imagine it’s 3 or 5 or 10 years down the road and HF’s own 20 or 30 or 75% of CA SFH’s!? But that doesn’t concern people like Rich because they get to make a commission today based off of HF support that may or may not exist in reality.
Plus you’ve got a heck of a lot more firepower in your hands if necessary.
I had a lawyer gunning for me when I bought my first house. The major advantage is they know exactly what to look for in all those piles of paper that show up AND know where the potential bombs are hidden in all that stuff at closing. My lawyer caught some stuff, too. (small enough piddlely-junk that we didn’t hassle over it, but we could have.)
LMAO,
Ridiculous!!!! Do you really think someone is going to sell their hose to a lawyer toting cowboy!!! Maybe in the states that use RE attorneys rather than escrow companies, but that shit would not fly here in CA. At the right price they can sell to someone else that isn’t bent on suing them! I wouldn’t sell anything to anyone that used a lawyer as their buffer that is obviously begging to get sued.
““‘It is very concerning and it’s fraud,’ said German, noting that some buyers misrepresent their intentions and their creditworthiness. ‘When people voluntarily leave their homes, they add more houses to the inventory. It also causes tighter lending standards, which makes mortgages harder to get.’”
If there had been proper lending standards in place people wouldn’t have been able to misrepresent their creditworthiness. And if mortgages had been (properly) harder to get we wouldn’t have record amounts of REO inventory.
This guy is bitching about people ditching mortgage contracts. He ignores the systemic breakdown of common sense and underwriting quality that allowed the crisis to happen in the first place. What’s scary about this is he works for Freddie Mac.
The current reality is such a bitch! All the computers and all the fancy risk programs - the substance on which German cut his real estate teeth - have failed in the face of human self-interest.
When confronted with impossible prices requiring massive undocumented incomes, they lied (imagine that!) for the chance at unearned riches. Now when the cookie jar is closed they bolt for the door.
“What’s scary about this is he works for Freddie Mac.”
Boy, does that ever sum up this mess. I wonder if Franklin Raines still believes he earned his pay?
turnoutthelights,
See my post below and why your’s is better! LOL!
Great minds….
Thank you, DinOR. There are many minds to like here, and your is one of my favorites.
Trolling Zillow, I saw tons and tons of houses for sale in CA where the monthly payment would be $24,000 per month. I don’t need a risk model to tell me that’s not right.
“Even though being foreclosed on will damage someone’s credit for seven years, German said, some homeowners don’t seem to care. ‘A mortgage is a legal contract,’ German stressed. ‘It’s not an option you can walk away from based on whether a home appreciates in value.’”
I read this with much amusement. If it was in the bank’s interest and not the homeowner’s to walk away from these contracts, what do you think would be happening?
Yes they are contracts, and the terms are clear. The homeowners are accepting those terms.
Why is it fraud to buy another home at current low market price and let the bank keep the peak’s price one? The people are just exercising their right. The lenders have their own Bernanke put, Freddie has Paulson put the size of a bazooka.
Well, good luck to Luma, the L.A. photog hoping to buy in Riverside. Didn’t say what kind of photog she is, but if she’s freelance she is facing a horrible commute once she moves to the IE.
A little summer HBB related reading:
http://overlawyered.com/2008/08/the-rielle-hunter-scandal-where-did-andrew-young-get-his-money/
“‘Now people are getting the idea that we are getting close to the bottom,’ said Dennis Smith, a real estate agent in Carlsbad. ‘If we could get the banks to lighten the reins a little bit, we might have a recovery.’”
Typical horseshat talk from a 6%’er that knows diddily squat…
Why doesn’t dennis put up his own money to loan out? Oh right, he doesn’t have any. It always comes down to OPM. I bet dennis is buying financials too at the moment.
Sitting on cash and quietly and plotting my Revenge.
Flips out another peanut to watch the squirrel and hungry RE agents FIGHT over it
When will Watt come out with his ‘08-’09 prognosis. Yun and LAY can’t be far behind ! I’d even take Lareah or Pam Anderson for some uplifting news. hehehehehehe
“‘There should be a special place in hell for those people,’ James Marshall, Merced city manager, says of the speculators.
Ah, Jimmy…they own a house in Merced, Ca. Given the current outright destruction of Merced property values, they HAVE their special place in hell.
The summer Central Valley heat is just a reminder of that fact.
I recently had my little run-in with our local city manager and this is WAY over stepping his bounds. Was he wringing his hands when all that SDC loot was crossing his palm?
“Run in”? Tell us more, dinor!
Since McCain will be chasing Bin Laden into the depths of hell, maybe the speculators can meet up with them in a few months.
A little more palatable than Oh’drama chasing the ghost of Carl Marx
Someone needs to bone up on their Chicago School economics.
Any relation to Karl?
How big is the disaster in the upper Central Valley?
Lenders ended up over 96% of foreclosures this month…
“Only 39 of those Stanislaus homes attracted bids. Lenders got stuck with the remaining 1,014 of them, which they must try to resell. More than 7,000 homes have been foreclosed on in the county during the past year.”
“Lenders ended up over 96% of foreclosures this month”
But, but … that just means more “pent up demand”.
Every foreclosure is destroying buyer demand. Unoccupied supply continues to rise while demand continues to decline with destroyed credit, even as prices decline. These defaulters won’t be back in the market for at least seven years. The banks aren’t going to be selling any of that collecting inventory back to those defaulters.
Forget the demand at the bubble peak. When the bubble bottom sets in there will likely be at least 20% fewer buyers representing real capable demand. This is where the future “overshoot” on the downside will enter. So expect the “ownership society” to go from around 70% to under 50%.
(Long time reader, first time poster. Great blog.)
“Forget the demand at the bubble peak. When the bubble bottom sets in there will likely be at least 20% fewer buyers representing real capable demand. This is where the future “overshoot” on the downside will enter. So expect the “ownership society” to go from around 70% to under 50%.”
Good first post. While the percentage of people that “owned” houses was increasing, the percentage of equity was decreasing. Hardly the definition of a real “ownership society”, more the Orwellian one.
More interesting numbers to examine in the next few years might not be the percentage of houses that are “owner” occupied (though it should go down), but the percentage of equity in those houses and the total amount of equity in those houses.
“It’s not an option you can walk away from based on whether a home appreciates in value” ( Brad German, Freddie Mac )
Oh but we here at HBB beg to differ Mr. German. That’s EXACTLY how these loans were structured! Either the property value would increase during the teaser period or it wouldn’t. If it did you could re-fi, take cash out and go double or nothing or simply sell and pocket the difference. The third possibility was they’d be underwater and get ta’ steppin’ and that’s precisely what they’re doing. Oh and btw BG ( not everyone has cushy Gov. jobs that pay whether or not you do your job )
Precisely, D! These FBs didn’t own houses; they owned call options on houses.
“they owned call options on houses.”
Actually they owned put options on houses, and many FBs are puttin’ the put on many a bank and mailin’ in the keys right about now. Put option to sell to the bank for what I owe on the loan with no recourse (in non-recourse states). HA! Take that CountryFried! Indymuck!
Got diversified assets?
“‘Now people are getting the idea that we are getting close to the bottom,’ said Dennis Smith, a real estate agent in Carlsbad. ‘If we could get the banks to lighten the reins a little bit, we might have a recovery.’”
Did he mean to say tighten the reins a little bit?
Prices will probably stop dropping by the end of the year, said Caroll Yule of Shear Realty. ‘I just can’t imagine them going much lower.’”
You won’t have to use your imagination in the next few years–prices in many areas of California will be down 50% to 75% from their peak. Only when the cost of renting is more expensive than the cost of buying will housing prices bottom out.
Keep the popcorn popping,
Red Baron
HAHA Red,
We are well past a %50 drop here in Stockton and falling fast. We are telling the bank that if they jerk a buyer around we will have to relist their POS for $10-15k less to even compete with the other banks. I am talking a $10-15k drop on a $120 list in 45 days! The stuff that was up for $120k 90 days ago is now in the high $90’s.
The only question is when will large sums of smart mony move on these properties simply for the cash flows, ignoring and equity issues at all. I am talking about large dollar funds that ignore financing and just buy for cash. Those are the kind of buyers that put the floor on prices in the 90’s. Those purchasers started showing up and just paying cash ($30-50k) that was costing $50-70k financed. Most of it was not flipped, but held in rental porfolios.
At what ROI does this money flood in? 12%, 14%, ???? With bonds costing investors money when faced with inflation the move into real estate rentals will become obvious. Once they look at excluding any appreciation forecast it is will be clear that RE is the best investment. And to top it off the RE will be a hedge against the inflation that is killing them on bonds. How much money is sitting in bonds?!? It is sure enough that when only a small portion is moved to RE the frell fall will stop in it’s tracks.
I know see common deals that if bought for cash would easily yield %10 after all holding cost and I am talking real world holding cost, not those envisioned by stupid flippers that never landlorded.
hahah, typos galore!!!
Obviously think faster than I type.
Hey Ben,
How bout auto spell checking!!
That’s great Rich I’m getting on a plane as we speak. I’ve always wanted to sleep in the same bed with Hedge Funds. Right, they’ll save the day. Great…
Rich,
Do you live in the Escalon area?
Rich, do you buy bridges also?
A positive return on investment is needed with a reward/risk ratio of more than 10. Current calculations show on current positive cash flow properties, a negative Reward! The reasons 1) rents change 2) property values are going down 3) there is a reasonable chance for a severe recession 4) The job market is collapsing 5) the market is illiquid and 6) it may take another decade to get out of a bad position.
Buy it with your money. There are safer and more profitable opportunities available. I would rather start buying on the way up, than try to pick a bottom.
He who picks bottoms ends up with stinky fingers.
What about 7) Section 8 renters f—ing the house up so badly that it has to be torn down?
That makes this great “investment” a little worrisome for me. Say what you will but I have never heard of a bank CD calling to have a toilet fixed at 2 in the morning or a Treasury bond burning down a house.
What makes you think the Hedge funds have the cash sitting around. I suspect most are playing the great game of mark to fantasy for there current assets. If they tried to sell now they would have to take some serious losses. Any free cash they do have is probably going into very liquid assets so it can move fast to keep getting a return. And this is any return not 10%.
Smart hedge funds are probably selling off questionable assets as fast as they can and getting into said liquid markets. I think one reason the stock market has not tanked is that for smart players its a reasonable place to put cash thats liquid and still giving a decent return.
Finally anyone setting on serious piles of cash is probably lurking waiting to buy bankrupt companies or commercial real estate that cash flows.
All and all putting money into managing scattered rental housing for a 10% return in todays market just does not make a lot of sense. I’d be surprised to see any hedge funds get involved. At some point of course wealthy local investment groups may swoop in and buy up a bunch of housing but I suspect this won’t happen until housing is closer in price to the value of the land.
So this time around I think it will be more like people buying up homes and slum lording them till they have to be torn down then selling the cleared land for and additional profit. Probably as farmland.
Didn’t say anything about hedge funds. Spoke of bond holders.
No spell chk it is more fun to poke fun at..!
But seriously ( sound like Henny Youngman?) when if ever will the prices in the Palm Desert/Palm Springs/La Quinta area going to go down? It isn’t different here, but the prices aren’t going down except for the areas like Desert Hot Springs- in the windy zone and just 2 hrs inside the parolees zone, and also Indio/Coachella losing value, but so far, when oh when will these other towns start losing ground?
Otherwise the “rental” investment situations will not appear here.
Hey Desert: It looks like the prices are stuck and nothing but bottom of the barrel repos are selling. There are tons and tons of houses and condos in the $550K to over $1Million range. Who do they think are going to buy those monstrosities? Co-worker just got her SCE bill for an average (2000 sq ft) house and it was $688 for one MONTH! Another co-worker spent some heavy dough a few years ago to make entire house, including pool, solar and they pay $400/YEAR. In 2000 you could still get a nice 3/2 w/pool for under $200 K in Palm Desert. Rents are at least down. We’re paying $1650/mo for 3/3 2K sq ft in gated place with all the amenities. We were paying that much for smaller house with no amenities and no gates prior.
Thanks Aretheycrazy, that is what I am seeing, no movement on prices, at all.
Still way over 500k-1mill+ and guess they owners are waiting till this next selling peak winter season.
Maybe then we will see changes, post elections.
When neighbors returned for weekend and turned on their AC, suddenly my place got cooler.Imagine that.
Wh nds spll chck, whn u cn rd ths w/o prpr spllng?
Who exactly is going to rent all these homes in Stockton and other places in California? Where are all the decent-paying jobs for these prospective renters?
Rents in my neck of the Bay Area are already dropping, and I predict rents are going to fall further over the next few years as the already huge “shadow” rental market gets bigger.
Keep the popcorn popping,
Red Baron
I love that. “I am completely convinced of my point of view, which is based soley on my imagination.” Most people think that way. That’s why it’s important for people like us to control them and use them for our own gain. Sympathy is for the birds.
My ex-boss must be really, really happy that he and his wife managed to sell their house in Santa Barbara just after the peak at $850K….
Maybe if real estate crashes enough in California, it can go back to being reasonable and they can get rid of the specuvestors. Most of my friends have lived there for years and have watched this whole roller coaster with absolute bemusement.
Yule-tide greetings from Sheep Thrills Realty…
“The numbers show that the home prices were down 42 percent from July of last year. Prices will probably stop dropping by the end of the year, said Caroll Yule of Shear Realty. ‘I just can’t imagine them going much lower.’”
Great catch! I missed that one.
“You can shear a sheep forever, you can skin it only once.”
Looks like they skinned to many customers.
“Either the property value would increase during the teaser period or it wouldn’t. If it did you could re-fi, take cash out and go double or nothing or simply sell and pocket the difference. The third possibility was they’d be underwater and get ta’ steppin’ and that’s precisely what they’re doing.”
haha exactly right
cactus,
We’ll never know but I’m sure the idea of a Neg/Am loan as being in the form of an “option” was collectively created here at some point. Did Mr. German get it from us? Again we’ll never know. Oh btw Bradster the correct terminology is Option Contract but whatever.
“…likened reports of Merced’s housing bust to coverage of the downturn Detroit experienced in the 1980s during the collapse of the American auto industry. ‘You start to second-guess whether it’s somewhere you really want to move to and bring your family to,’ she said.”
Even in my wildest dreams, I don’t think houses in Merced will go for a buck. But I wouldn’t wish to live in Merced or Detroit.
Hey Blano, where are you?
Merced was such a sleepy hollow 20 years ago…
Merced was such a sleepy hollow 20 years ago…
Until it was woken up by meth and specuvestors.
–
‘Every month the deals get better.’
That must be some kind of signal to the potential buyers and invesuckers, no?
Jas
From a CNNMoney news release:
In Stockton, Calif., 2006 buyers now owe a median of nearly $171,000 more than their homes are worth. In Salinas, Calif., 2006 buyers now have median negative equity of $161,000, and in Merced, the figure is nearly $160,000.
the door swings wide in both directions
cereal,
Just unreal. Hate to say it but at this rate these people will owe more neg. eq. than most of us owe altogether. At least as community they will finally have something in common.
cereal:
I’m still waiting for someone to tick you off, just so you can say “eat me”. Couldn’t you try to pick a fight with a troll or something? The waiting is getting to be too much.
“I got caught with my pants down on quite a few,’ said Richard Barnes, owner of Resource Lenders of Fresno, who issued those types of loans.”
What is that expression? Fool me once, shame on you, fool me twice, thrice, etc. etc., and people could (correctly) get the impression I enjoy getting caught with my pants down.
by educating one’s self and making informed decisions you can skip even the “fool me once” part.
–
A more important question to poder is:
What % of homes bought in 2008, including foreclosures, would be under water a year from now?
Jas
Interesting you bring this up since I’m not buying until I see a significant decline in the foreclosure rates for the previous year.
I actually think we will see a lot of 08’s going under in 09.
–
CA still among the most expensive…
PPSF For Metro Areas As Per Radar Logic:
$88 Cleveland, OH
$91 Detroit, MI
$96 St. Louis, MO
$97 Atlanta, GA
$98 Charlotte, NC
$100 Columbus, OH
$114 Tampa, FL
$115 Jacksonville, FL
$117 Phoenix, AZ
$122 Las Vegas, NV
$125 Milwaukee, WI
$138 Denver, CO
$143 Minneapolis, MN
$151 Philadelphia, PA
$155 Sacramento, CA
$156 Miami, FL
$185 Chicago, IL
$201 Washington, DC
$221 Seattle, WA
$222 Boston, MA
$232 25 MSA Composite
$238 San Diego, CA
$284 New York, NY
$295 Los Angeles, CA
$346 San Fran, CA
$406 San Jose, CA
We have a long ways to go, folks.
Jas
Well. This is great news but since the banking and bond collapse will take out those of us that work for a living…. ah hell.
I’m just hopeful that my gold/cash holdings are enough to carry the family through the tough times ahead.
“He wondered, ‘What’s going to happen two years from now when their rates are adjusted?’ Everyone in Merced knows the answer to that question now.”
Let me rephrase that. Everyone in (insert city name here) knows the answer to that question now.
Greenspan’s idea now for selling more houses is to let more immigrants into the country. Would somebody PLEASE put him in a straight jacket before he does even more harm!
–
We got to keep in mind whose interests Greenspan thinks about — not the ordinary working class folk.
Jas
He’s not shy about picking bottoms too!
Brownfinger.
He’s the chairman, the chairman with the stinkiest touch
A bottompicker’s touch
Such a bubble blower
Beckons you to enter his world of spin
But don’t go in
Muddled words he will pour in your ear, but
his lies can’t disguise what
you fear
For a drowning owner knows when he’s kissed him
it’s the kiss of debt, from Mr.
Brownfinger
Future buyer beware of this bubble blower
His term’s never over.
Muddled words he will paw in your ear, but
his lies can’t disguise what
you fear. For a drowning owner knows when he’s
kissed him, it’s the kiss of
debt, from Mr. Brownfinger. Future buyer,
beware of this bubble blower.
His mind’s kind of soft.
He loves only froth.
Only froth.
He loves froth.
He loves only froth.
Only froth.
He loves froth.
Sorry Shirley!
Greenspan is public enemy #1, not Bin Laden.
Looks how he crippled the US, to the tune of trillion.
OT -
I have been doing property inspection of foreclosed homes in Southern California (OC,RIV,LA,and SB) counties. I do cursory inspections to make sure the properties do not get vandalized and such. What I have noticed, especially in the Inland Empire counties, is that many solid middle class neighborhood (post 1990’s constructions) are starting to have more of the urban effect. I wondered if the new slums of the future are these neighborhood? I have tried to keep a mental tracking of the general feel to the neighborhoods to see which ways they are heading. Also more high end properties such as gated golf courses McMansions are going back to the banks. On one particular locations I counted 5 foreclosed McMansions ( more than 4000 sq ft) within a 1 block radius. It is very scary out there.
Was just there a few weeks a go. I was in a neighborhood full of McMansions over 3000sqft and only 3 years old or less. Geez, it looked like there were 1 out of 4 houses empty(foreclosed). The concrete fences already had graffiti. The weirdest thing is that the older neighborhoods nearby felt safer!
The remaining homeowners in these McMansions are very sketchy. I mean, they were the type I see at the barrio man! It was scary. Also they have the obligatory SUVs, boats, ATVs etc. No kidding.
I left there shaking my head. The shopping malls near the 15 are nice though.
Even many county residents not threatened by foreclosure saw their home values plummet in the second quarter, according to a report released Tuesday.
Why should these people care? They did buy their homes with the intention to live in them, right? RIGHT?