The Things That Are Beating Down Prices In California
The Press Democrat reports from California. “Sonoma County’s summer home sales surge continued in July as buyers snapped up discounted properties shed by lenders and financially strapped homeowners. The countywide median price fell to $399,000 in July, down 30.6 from a year ago. Prices were last under $400,000 in March 2003. ‘People are out looking for bargains. I think you’re going to see continued softening of prices into next year,’ said Leslie Appleton-Young, chief economist for the California Association of Realtors.”
The Sacramento Bee. “Sacramento-area home sales surged past last year’s levels for a fourth straight month in July as 4,126 buyers embraced falling prices and deals on foreclosed homes. It’s not surprising, experts said Monday. Prices have fallen steeply, 30 percent or more in the past year.”
“Median sales prices of existing and new homes combined in Sacramento County…have now fallen 45.7 percent from their August 2005 highs.”
“Banks in July continued their reign as the capital region’s top sellers. Their foreclosed properties accounted for 70 percent of closings in Sacramento County alone, according to the Sacramento Association of Realtors. ‘Banks have been extremely aggressive in their pricing,’ said Bob Bronswick, president of Coldwell Banker Residential Brokerage’s Sacramento-Tahoe region.”
The San Francisco Chronicle. “Bay Area home prices plunged to a 53-month low in July as a brisk business in foreclosed properties depressed prices and buoyed sales volume. The median price for both new and resale homes and condos stood at $470,000, down 29.3 percent from a year ago, according to MDA DataQuick. The last time the median was lower was in March 2005, when it was $469,500. For resale homes, the median was $485,000, a 34.3 percent drop from last July.”
“A full 33 percent of all resale homes were foreclosed properties. In July 2007, just 4.2 percent of existing home sales were foreclosed properties. ‘So much of today’s market is driven by distress,’ said John Walsh, MDA DataQuick president. ‘Unless interpreted in that context, the stats give a rather distorted view of the overall market. We know one-third of the Bay Area’s resales in July were homes fresh off foreclosure. Who knows how many more involved a desperate seller and a lender who accepted a short sale?’”
Bay Area Newsgroup. “As the mortgage meltdown forces more homes into foreclosure in the Bay Area, some of these properties are being picked up by investors who are putting them back into the rental market.”
“The upshot of this activity is that more single-family houses are starting to show up as rentals in parts of the East Bay - such as Antioch - and in San Joaquin County. In addition, some condo for-sale properties in downtown Oakland - such as the Broadway Grand - are being rented out as apartments because developers are having a hard time finding buyers in today’s tough housing market.”
“Joy Diricco, a Realtor in the Antioch office of Prudential California Realty, has 20 listings for various short-sale properties in Antioch and Brentwood. Such sales help people who are having problems paying their mortgage avoid going into foreclosure.”
“Diricco attempts to find rental houses for her short-sale clients to move into after their properties are sold.”
“‘I’ve been very lucky getting my clients into rentals. It has not been easy,’ she said. ‘All of these short-sellers - when they sell - they have been displaced from their homes. Now they need a place to live, so they have increased that renters market.’”
The Ventura County Star. “The median price paid for a Southern California home was $348,000 last month, down 2 percent from $355,000 in June and 36 percent from $505,000 a year ago. Foreclosed properties accounted for 43.6 percent of the existing homes sold in the six-county region last month.”
“Though…Mark Schniepp, executive director of the California Economic Forecast Project in Goleta…does not believe prices will drop much more, he predicts more year-over-year price declines for as long as foreclosures continue to rise.”
“‘Much of the declines we’re seeing right now is influenced heavily by distressed sales,’ he said. ‘Those are the things that are beating down prices.’”
“About 36 percent of the county’s existing homes and condominiums sold in July had been foreclosed on at some point in the past year, compared to 7.7 percent a year ago.”
The San Gabriel Valley Tribune. “July’s median price for a Southland home was $348,000, down 2 percent from $355,000 in June and down 31.1 percent from $505,000 for July 2007. Broken out separately, Los Angeles County home sales fell 3.2 percent in July compared with a year ago, while prices dropped 26.9 percent.”
“The county’s median price last month was $400,000, down from $547,500 during the same period a year earlier.”
“Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, said foreclosure properties make up about 30 percent of the buying and selling activity at her realty office.”
“‘That includes short sales,’ she said. ‘With short sales, you have about a 70 percent chance of the deal going through. The banks are so overwhelmed right now. They don’t have enough people to handle this.’”
“Many foreclosed properties are in need of work, but for those willing to take on the challenge, the savings can be substantial, according to Rodriguez. ‘One home sold for $100,000 to $150,000 less than what we’re selling them for now,’ she said. ‘In some cases you can get 25 to 30 percent off in pricing.’”
The LA Daily News. “Buyers in July committed to an average mortgage payment of $1,632, compared with $1,671 the previous month, and $2,447 a year earlier. Adjusted for inflation, the current payment is at its lowest level in five years. The payment is also 24.2 percent lower than spring of 1989, the peak of the prior real estate cycle.”
“Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said the residential real estate market remains cause for concern. ‘I think you have a ways to go before you can say things are starting to turn. We just don’t know how much trash is out there in the market,’ he said.”
The Union Tribune. “More San Diego County homes were sold last month than at any time in more than a year, MDA DataQuick reported yesterday. The overall median price was $364,000, down $6,000 from June and off $125,000 from July 2007. The 25.6 percent year-over-year decline was the highest for any month in the 20 years of DataQuick record-keeping.”
“Experts…pointed to the record 40.8 percent of the sales involving homes foreclosed in the previous 12 months and the fact that new foreclosures are outnumbering the sales of foreclosed properties. July’s 1,259 foreclosure sales compared to June’s 1,838 foreclosures.”
“Peter Dennehy, senior VP of Sullivan Group Real Estate Advisors of San Diego, said, ‘The percentage of foreclosures and the mix of housing needs to be quite a bit smaller,’ closer to the traditional level of 1 percent to 3 percent of sales.”
“Prices will stop falling, he said, when foreclosures stop increasing, existing home sales are strong and the unsold inventory gets far below its current level of 19,058.”
“While agents report overbidding on some foreclosure properties, Christopher Thornberg, a principal at Beacon Economics in Los Angeles, said that interest is coming from ‘vulture funds’ with millions of dollars to spend on distress sales.”
“‘That process is not in any way, shape or form an indication of a return to stability, a healthier housing market,’ he said.”
The Press Enterprise. “While the number of resale homes sold rose almost 50 percent in Riverside County and 25 percent in San Bernardino County, median prices in both counties dropped 35 percent from a year ago.”
“While foreclosure sales accounted for 43.6 percent of all of July’s Southland sales, DataQuick analyst John Karevoll said they were an even more dominant factor in the Inland region. They accounted for 64.2 percent of sales in Riverside County and 58 percent in San Bernardino County, and that trend could continue for several months.”
“Karevoll said the Inland communities where foreclosures play the biggest role in sales are those with large amounts of housing stock less than 5 years old. They include such cities as Perris, San Jacinto, Rialto and Fontana.”
“Downward pricing pressures on the resale side are prompting builders to continue offering discounts of as much as 30 percent as they seek to sell off recently completed homes, said Steve Johnson, a director with Riverside real estate consulting firm MetroStudy.”
“‘The entire market has softened in respect to pricing. There are some real bargains out there, obviously,’ he said Monday.”
The San Bernardino County Sun. “The nation’s vicious real-estate meltdown that keeps chewing up and spitting out banks has a new victim: Wescom Credit Union. The not-for-profit Pasadena-based financial entity is closing 11 of its 55 branches in Southern California because of $40 million in losses over the last four quarters.”
“Wescom, a $3.7 billion entity, never made loans to subprime borrowers, according to Jane Wood, executive vice president. Instead, many customers can’t pay off Wescom credit card and auto loan balances because of their financially troubling subprime mortgages serviced by other institutions, she said.”
“So how did customers qualify for risky subprime loans from other financial companies and stringent credit union loans at the same time?”
“‘We made good loans to good members who (passed) the criteria at the time,’ Wood said.”
“‘Credit unions didn’t relax lending standards, but that didn’t stop an individual from getting a car loan (from a credit union) and then getting a low-documentation loan from another source down the road,’ said Daniel Penrod, industry analyst for Rancho Cucamonga-based California Credit Union League.”
The Bakersfield Californian. “Construction at two neighborhoods in northeast Bakersfield’s City in the Hills development has been halted by one of the builders there, K. Hovnanian Homes, a company official said.”
“Some homeowners in Lantana’s Edge are upset. ‘This is what we look at … a barren landscape on a daily basis,’ said Bob Jones, motioning toward the dry dirt.”
“Jones and his wife, Donna Wyatt, moved from New York in December after buying their house online. ‘We were psyched,’ he said, about parks, bike paths and other promised features.”
“Katie Rogers said dust from the empty lots blows in her family’s house ‘all the time.’”
“Corina Hilton, meanwhile, said on top of everything else, her home took more than a year to get built - she bought it almost two years ago, paying much more than units now go for - and has had numerous problems since she moved in at the end of last year.”
“‘I got screwed,’ Hilton said.”
“The median price paid for a Southern California home was $348,000 last month, down 2 percent from $355,000 in June and 36 percent from $505,000 a year ago.”
36% in one year? That’s scary. I was listening to CNN’s “mortagge meltdown” the other day, and some economist was predicting another 20% drop before equilibrium is reached, then stagnation fo rseveral years. Wow.
Stagnation is possible after most of the resets have occured and we are not continuing to lose jobs at an above normal pace. Until that happens, banks will have to dump properties in default by selling below the ever decreasing current market rate. Also inflation is becoming a real problem. Thus, interest rates will need to rise at a time of tighter lending standards.
“rates will need to rise” …if the Fed has any gumption. See today’s WSJ
I agreee that to combat inflation interest needs to be raised substantially. I am not sure if raising rates would have the desired effect, since deflation = more defaults and more bank failures. what IS needed is large scale wage inflation. AKA protectionist policy. Short that, figure on a nice out of the way place to grow your own and weather out the coming economic collapse.
“what IS needed is large scale wage inflation.”
Globalizing wages is a higher priority for the PTB than supporting high house prices. History may very well prove that what we’re seeing today is nothing more than a delaying action as the banks struggle to extricate themselves from this mess.
IMHO, once the major playas are free and clear, J6P gets thrown under the bus - houses and all.
Demographic shift will take care of that. There are only a few well trained young pros ready to take over as the boomers step aside. For skills in demand wage inflation is going to be fierce, but that isn’t going to happen seriously until at least 2010.
I think young people will actually earn and expect less. Relative to the past it might be higher but for the over all it should be lower numbers. Particularly for the public sector.
Don’t think the demographic storm really picks up until 2014 or so.
I don’t know if I can accept the “demographic storm” argument.
Time will tell I suppose, but excepting the world wars (temporarily) - when has America ever run short of workers? During the 1990s they said the internet’s demand for specialized workers would go unmet - yet how did that end?
As soon as a field’s wages start to soar it will attract workers who will get the training…somehow. Plus, there’s the wildcard of immigration - remember Greenspan thinks we ought to attract skilled immigrants to buy all these houses.
Mortgage rates are already rising even *without* any increases from the Fed. Possibly b/c inflation is on the march (as measured by the less politically manipulated PPI), lenders are insolvent & cannot so easily securitize and sell crap (to anyone but Uncle Sam), plus investors are finally catching on that MBS/CDO doesn’t mean “risk free”.
Article in WSJ: The rise in rates may force overt govt intervention with fannie, freddie sooner rather than later
Deflating Mortgage Rates
http://tinyurl.com/6cdfy7
(As if it would make a difference.)
I think inflation will moderate soon, since other currencies are starting to feel inflationary pressures too right now, and today’s inflation is a relative measure. That may just be wishful thinking on my part, but it makes sense to me.
Unfortunately, inflation is not rising prices….what is inflating is the money supply, increasing the amount of money in the system ultimately increases prices, we unfortunately measure inflation from the increase in prices. Much of our “inflation” is sitting in China’s hands, until they get tired of keeping all their eggs in one basket, those dollars are coming home and that’s when you will really see inflation.
I think we are seeing deflation; but as Canary said we will feel the prior inflation when China/Japan/Saud unload the inflation we already made.
Kind of funny that by the most everyday visible measures it will seem inflationary.
I thought that the most insightful comment in the WSJ article was:
“In the past year, producer prices have increased 9.2%, while consumer prices are up 5.6%. Yet, because there are so many measures of inflation it is possible to focus on some, for instance consumer prices excluding food and energy (aka, “core” CPI), which remain benign. This allows many to say there is no inflation.
But oil and food are absorbing a large part of excess Fed liquidity. When consumers spend more on energy, they have less to spend in other arenas. This reduces demand for other goods, keeping prices lower than they would be otherwise. This helps explain the divergence between overall and core measures of inflation.”
Housing excepted, of course. The bubble rules all, fundamentals mean nothing. This principle would apply to rents, though.
That is about right for my neck of the woods too - East bay (not Antioch) - a few units that sold for $395 at the top are sitting empty and listed around $250. That’s 38%, and it’s a fairly nice neighborhood with good people.
“Though…Mark Schniepp, executive director of the California Economic Forecast Project in Goleta…does not believe prices will drop much more, he predicts more year-over-year price declines for as long as foreclosures continue to rise.”
Which they could do for another two years. So, prices won’t drop much more, but they will continue to drop for 2 years..hmm.
“Though…Mark…does not believe prices will drop…he predicts more…price declines…”
I’m confused. Mark does NOT believe prices will drop, but he PREDICTS more price drops. So…he doesn’t believe it will, but predicts it will.
…doesn’t believe…but predicts…
Hmmm…seems so…contradictory…
That’s because you’re not a sophisticated economist like him. The sooner you uneducated, unintelligent sheople learn to stop asking questions and just follow the bright leaders amongst you, the sooner we can get this socio-enviro-economic show on the road. K?
You’re too late…I swallowed the red pill that Morpheus gave me.
Well, if only you had listened to the French philosophers like Baudrillard, you could debate whether this is a “simulacrum” of reality, or a “simulation” of reality, or whether this is “reality”, or this is reality?
BWAHAHAHAHAHHAHAHAHAHHHHHHHHHHHHHHHH!!!
At the risk of defending the oblivious, I think he’s saying that prices will continue to drop as long as the foreclosure mess continues… but he doesn’t think they will drop by much.
Having a post-modern Derrida moment, are you, love?
I talk like that when I’m drunk
“‘I got screwed,’ Hilton said.”
Faster Pussycat, can I get a “BWAHAHAHAHAHAHA!!!!”?
Sigh. I’m only human.
What can I say? I’m a sucker for an audience.
BWAHAHAHHAHAHAHHAHAHHHHHHHHHHHHHHHHHHH!!!
Not only did she buy in Bakersfield, she bought in *northeast* Bakersfield. Hope she doesn’t get valley fever from all that blowing dust.
If you want to talk about dropping your pants and yelling “come and get it!”, buying anywhere in Bakersfield over the last few years fits the bill. This Betty was begging for it!
Are Cali’s to be the new Oakies with their Dust bowls and depression.
I should write a book about it and called it the “Wrath of the Grapes”.
Hmm with name like Hilton you would think there would be smarts in the RE area.
” I got screwed,” Hilton said
She is pretty gullible to fall for a glossy pitch on a website in buying a home in a development that is defaulting all over the place.
It’s not bad in New Jersey. Yes there are foreclosures, yes there’s some pressure in the market, but several observations come to me:
1. Foreclosure here is below the national statistics
2. Home prices are still steady
3. Unemployment is still better than national
4. Apparently, there’s still a lot of people with disposable income to flaunt: luxuries like groceries at Whole Foods, eating at expensive restaurants, car traffic volume and # of SUVs are still pretty high from what I can tell.
Disclosure: I *DO NOT* own a home in NJ (or anywhere), nor housing stocks, nor am I in the housing field, so I have not vested interest in lying. I’m just stating what I see.
Anyone else in this area making the same observation?
Go look at the latest link in the Builders On The Ropes thread at the HBB Forum.
http://njrereport.com/
Hit that and start scrolling… It’s not all pork loin and cannoli in NJ…
Apparently, there’s still a lot of people with disposable income to flaunt: luxuries like groceries at Whole Foods, eating at expensive restaurants, car traffic volume and # of SUVs are still pretty high from what I can tell.
Visa.com
Not Missing It,
LOL! Probably, probably.
This was actually a CA thread but… you have to be encouraged by the lower payments people are jumping into and the substantial boost in their spendable income. This is the path toward healing. Who needs an annual/semi-annual cash-out oiled up re-fi spending orgy when you get to spend at least some of your check on a bi-weekly basis?!
Starve the REIC!
In the big northern cities one finds a heck of a lot of gov’t and union jobs. I would never say that this makes such areas immune - but it might buy them some time in terms of maintaining boom levels of conspicuous consumer consumption.
This sets up kind of a trap because by the time that crowd feels the pinch the rest of the country will have already felt the big hurt - and some might have already started to move forward again. Meanwhile the gov’t/union crowd will get a lesson on just how thin their slice of the worker’s paradise really is.
“Apparently, there’s still a lot of people with disposable income to flaunt: luxuries like groceries at Whole Foods, eating at expensive restaurants, car traffic volume and # of SUVs are still pretty high from what I can tell.”
Nope, just bought a house I could afford and paid it off, which leaves lots of room for buying our groceries at Whole Foods. No VISA card required. I realize that most people here would like to believe that the entire country is up to their eyeballs in debt, but that is not the case. And if things get a little tight around here, I can cut back on the organic foods to balance the budget. But the house is mine…ALL MINE!
Re: nothingburger_in_nj
I’m seeing about a 10% drop compared to the peak on the kinds of properties I would consider (next level above starter home). I think you have a lot more negotiating power on starter homes since these are the people who really over-extended themselves.
Those with less debt are trying to ride out the storm.
However, given the mess in the NJ (huge fiscal problems, out of control taxes, loss of high paying jobs) plus the departure of older affluent baby-boomers to warmer climates over the next 10 years, I expect prices to remain weak here long after the rest of the US recovers. Given my dicey job situation, I’m not buying anything here for at least 1-2 more years, if ever.
It’s not hard to believe that house prices in Jersey are holding up better than in Calif. I don’t think NJ was the primary locus of nutty lending. That doesn’t mean I’m about to invest in NJ RE.
NJ has long term problems, that go well beyond the price of housing.
http://www.nypost.com/seven/08192008/postopinion/opedcolumnists/jersey__a_lesson_in_failure_for_ny_125076.htm?page=0
I have seen price declines where I live, I have also seen many condos being turned into rentals. I think it is only a matter of time before many of the developers who built a lot of these condo towers have to cave, my guess is that many of them are renting out units at a loss, hoping against hope that the market will come back.
I think we are trailing some of the other markets when it comes to foreclosures, but don’t expect that trend to hold. Employment in this state is shrinking, while taxes are going up. When you combine these factors with the massive pension obligations that this state has you have a recipe for a long term decline.
You could say the same for the entire Rust Belt, Frank. There remain major unresolved structural problems in the north’s economy (pensions, migration, high labor costs, ancient infrastructure, etc.).
I’m puzzled why it seems a lot of folks seem to think the Sun Belt will founder as a result of this bust, and at the same time think the Rust Belt will take the lead in the eventual recovery.
I think you can make a comparison of NJ to a state like Michigan. While Michigan’s problems are much more severe currently, NJ may have a similar future.
Michigan is tied into the auto-industry that is in long term decline and NJ is big on pharmaceuticals, I don’t think they quite compare, even if I believe health care spending is bubblish in this country. NJ’s problem is its fiscal deficit and inability to live within its means (not unlike many other states, but more messed up except maybe Kalifornia).
At least people from North Jersey have New York City and Port Newark/Port Elizabeth, and all the ancillary industries required to support the many functions of NYC and the vital import/export trade that goes thru the ports. Even with the decaying infrastructure, there’s an underlying current of real economy, the movement of valuable goods and raw materials, in that area. Since that decaying infrastructure is going to need repairing, there’s gonna be a lot of work available.
It’s just not going to be high-pay/commission Wall St., real estate and “information economy” jobs. A lot of people currently doing more cushy things will wind up getting their hands dirty instead.
That goes for everywhere in the US, actually. Probably do us some good.
The trend is going in the other direction. Even with high transportation prices hands dirty jobs get outsourced or given to robots. The only future is with the creative economy where not only products, but also the needs they serve get created. Mickey Mouse gets a trim, but stays profitable during downturns.
I live in Princeton Junction area of NJ and I would say prices have declined 10-15% of where I am. In my hood of 350 SFH I have seen only one foreclosure, even though between 5-8 are on sale currently. So yeah, compared to CA/FL we are in decent shape, relatively speaking. NJ prices didn’t triple since 2000, but still went beyond traditional valuation measures and will likely fall some more and then stagnates for years to come.
I keep seeing the same 35 story concrete skeleton I saw 6 months ago on the northern edge of Pavonia/Newport with no fenestration save for the two or three modules spanning at most a few yards across affixed about fifty feet up.
Very similar scenario in the Philly region. It didn’t go up nearly as much as places like Fla and Cali, but it’s still down about 15% from the peak. Nonetheless, there’s not a lot of backlog or foreclosures. If your a builder in this market I pity you, but I’m also not seeing 45 for sale signs on one street.
“Adjusted for inflation, the current payment is at its lowest level in five years. The payment is also 24.2 percent lower than spring of 1989, the peak of the prior real estate cycle.”
Wait. What?? Is that a mis-print? Oh Billy!….Billy, Billy, Billy….
What were interest rates in 1989?
(I wouldn’t know. I was 19 and well, you know what 19 year olds with newly found freedom are up to…)
Mortgage rates were over 10% in 1989.
We bought our first San Diego house in 1987. We got a 9% loan and were THRILLED. That seemed like a deal compared to, say, 1981. I remember my parents telling me that the loan on their first San Diego house (1958) was 6%. I was flabbergasted. Never thought we’d see those rates again.
sleepless,
Here’s what’s even better. The avg. person committed to a monthly payment of $1,632 vice $2,447 just a year earlier! I have to say this is good news. That’s another $815 a month these people have to spend in the “Non-REIC Economy”!
I hate to say this but I’d rather see people spending money on drugs than over-priced POS housing! Right now it happens to be gas fumes but hey, Rome wasn’t built in a day. This is an important step in breaking the House=Debt=Wealth mindset in avg. Americans. Now it’s Housing Crash=Lower Payments=More Disposable Income! Not a bad thing to be hooked on?
“‘I got screwed,’ Hilton said.”
My oh my. Another Hilton getting screwed on a regular basis. Video @ 11.
I saw the vid, and it showed Hilton signing the contract in the dark, while being shot with a night cam.
Leslie Appleton-Young:
Feb 07 “The worst is over”
Jan 08 “I think we are just about, if not already at, the bottom”
Jan 08 “It’s not going to get much lower than that”
Aug 08 “I think you’re going to see continued softening of prices into next year”
Where in the timeline was the, “Prices will go down in Marin over my dead, ugly, Botox injected body” comment?
Prices in Marin are collapsing, and not just at the low end in Novato and San Rafael.
Here is a place in Sausalito that has dropped from $2.7 million to $2.2 million in 3 months:
http://www.redfin.com/CA/Sausalito/675-Sausalito-Blvd-94965/home/626505
A woman who does credit counseling in Marin was quoted in the Marin Independent Journal last week that foreclosures in Marin will triple by the end of the year. The Marin market will be a bloodbath by this winter as the option ARM start recasting in size.
Keep the popcorn popping,
Red Baron
The glass windows in the living room have mismatched polarization. How does this happen?
My best guess about what she’ll be saying six months from now is, that she’ll be “admitting” prices probably have another year of decline in front of them. Then, six months after that, she’ll be saying that prices may remain soft for an additional year and a half. (But she’ll also be saying Buy Now ‘Cause You Can’t Time The Bottom.) Yawwwwwn.
She is a practitioner of the fine art of mantology.
The study of mants?
A form of fortune telling that is obsolete due to inaccuracies.
Mantology \Man*tol”o*gy\, n. [Gr. ? prophet + -logy.]
The act or art of divination. [R.]
http://onlinedictionary.datasegment.com/word/mantology
Aug 2015 “House prices are going to go down forever”
Aug 2016 “House prices might go up a little, but not after inflation is factored in”
Aug 2020 “Houses may be a good inflation hedge after all”
Aug 2022 “Houses beat stocks”
Aug 2025 “You have to live somewhere”
Aug 2027 “House prices always go up”
…after years of ignoring his accountant James decides to pad his nest egg with a housing investment….
I expect to be a forgetfull old man at that point and end up with an Modulated Payment Variable Return Mortgage Affordability Product.
Ben Jones Jr will probably blog about me.
You’ll know that you are in California this year when you see the Condors and Turkey Buzzards circling RE offices and houses in search of carrion
Views from the top floor penthouse in downtown San Diego could give one vertigo….
425 Beech St #1705
San Diego, Ca 92101
MLS# 080050210
Price: $1,040,000
Beds/Baths: 3 / 4
Square Feet: 2,460 sf
But, we have a problem…
Sales History
Date Price Held Return Annual
12/23/2004 $2,100,000 n/a - -
I don’t think this one is a short sale either. More money getting removed from the system.
Ugh. What are the condo fees like on that beast?
If you have to ask, you can’t afford it.
Is this one of those condos that is situated directly adjacent to a nightclub that bills itself as the “loudest, latest club in downtown Sandy D”? I think I’ll pass, thanks.
“Katie Rogers said dust from the empty lots blows in her family’s house ‘all the time.’”
Suddenly Katie heard her cell phone ring, “The Gambler” music started to play. She knew her brother Kenny was trying to rub it in once again…
Just wait til New York Kate and her brood land a rolling case of Valley Fever from all that dust. Nothing like snot, joint pain and burning eyes to say ‘Welcome to the Central Valley’!.
From New York…to…Bakersfried…talk about a “death spiral”
People like them are beginning to dilute the dust bowl progeny.
I can only wonder what they think of the Bakersfried penny-saver flyer…the one in Spanish.
This is precisely the sort of situation that California wildflowers are great for. It is too bad we have nearly wiped them out.
So with the volume of sales moving up pretty dramatically over the last year, we can see that the market is beginning to clear. Prices will probably be stable for a shorter period of time than people think, moving up again next year. People buying now are going to be sitting pretty in 5 years or so.
Not likely with Alt-A and Option Arms resetting in 2009. Additional pain is on its way.
Someone get this poor person a Credit Suisse reset chart, please?
http://2.bp.blogspot.com/_kQmcDGJ6WuI/SKK_-yziY0I/AAAAAAAAAK0/6CmRnPRdi_g/s1600-h/0604_arm_reset.jpg
The business week chart, from Credit Suisse data. Resets peak in late 2009.
There isn’t going to be a snap-back, because the banks won’t be making stupid loans again any time soon.
Easy needs to reread the article. He/she missed the part about how there were more foreclosures that went back to the bank than those sold by the banks.
Just press the EASY button and home price appreciation shoots to the moon! Are you mentally challenged or realtor remnants from a bygone age?
Well, they will have to look as pretty as possible as they sit on the corner waiting for a generous fella to stop and offer them a ride.
Oh wow. Would you like to buy our current residence. You’ll be sitting pretty 5 years from now. Oh yessss, my precious.
Thanks for the hot tip Mr. Greenspan!
easy is just practicing his talking points for his interview to become the next NRA doublespeaker.
He has a good chance at it they go through more talking heads than a 1980’s goth record shop.
He is correct that they will be sitting pretty in 5 years, because the government will have be busy bailing him out in 4 years so he can reward the next administration with his vote.
ROTFLMAO
January 24, 1930
“Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.”
New York Herald Tribune.
June 29, 1930
“The worst is over without a doubt.” James J. Davis, Secretary of Labor.
November 1930
“I see no reason why 1931 should not be an extremely good year.” Alfred P. Sloan, Jr., General Motors Co.
Where will they be sitting pretty? In the front seat of their car? Or the back seat of their sons car? It certainly won’t be in an easy chair! But if they are sitting in the car seat, where will they sleep? Where will they sleep?
“History doesn’t repeat itself, but it does rhyme.”
Mark Twain
Oh brother. Are you for real?
“Jones and his wife, Donna Wyatt, moved from New York in December after buying their house online. ‘We were psyched,’
Buying a house online….They must be avid Ebay buyers. You buy it at Ebay and when you receive it, your disappointed. The product is not what you expected.
I think the worst .dot com online retailer was Furniture.com. Who the hell buys heavy furniture online. Shipping costs and returns just killed it. LOL!
The article doesn’t say - but I wonder if an agent somewhere still managed to get a commission from that online transaction?
“Prices will stop falling … when foreclosures stop increasing, existing home sales are strong and the unsold inventory gets far below its current level of 19,058.
— Peter Dennehy, senior VP
When people can afford what they bought, buy what they can afford, and sell to the middle - prices will be at equilibrium.
The mental currency required for placement at the senile VP level has devalued to pennies on the dollar.
“While agents report overbidding on some foreclosure properties, Christopher Thornberg, a principal at Beacon Economics in Los Angeles, said that interest is coming from ‘vulture funds’ with millions of dollars to spend on distress sales.”
(waxing allegorical)
One day a vulture came across a newly dead mouse. He could not believe his luck. He hated to kill things, but loved it when the meat of his dinner was still warm, and the blood not yet coagulated.
He gobbled it down with great satisfaction, thinking himself the luckiest vulture alive. His satisfaction, alas, was not long lasting. As he wafted along over the highway below a sudden, intense, relentless pain stabbed his gullet. He felt as if he were on fire!
He flopped down on the roadway writhing in pain and through to haze of agony came the realization that he had eaten a poisoned mouse, but not just any poisoned mouse, he had consumed a mouse that had such avarice as to consume a dose of cyanide fit to kill not only itself but anything else that dared consume it’s remains.
Then he got ran over by a tractor-trailer, a triple hauler.
The end
That is mean. Please tell me that no vultures or mice were actually harmed in this allegory. They were just ACTING, right?
Only in my mind’s eye.
It’s time for the HBB Writers’ Showdown!
Oly, you have some serious competition here. Better start hittin’ that keyboard…
Cute, cute, cute. Oops, I think I’m getting a little regurg from that mouse I ate for dinner.
And the pharisees (your local realtard) asked; who sinned, the mouse, or the vulture, that this great evil should come upon them?
Why are vulture funds allowed to steal the American Dream from renters and first time buyers?
So which one was Kayser Soze?
NR
OT I know, but have you guys seen the shape of WAMU’s CD yield-curve recently?
It’s got an interesting bubble in the 8-13 month area. Can you say liquidity squeeze? It varies in how dramatic it is across product types, but it shows up across all their CD-types.
Traditional CD: http://www.wamu.com/personal/certificate_deposit/traditional_cd/default.asp
Online CD: http://www.wamu.com/personal/certificate_deposit/online_cd/default.asp
Now, who exactly would want to get paid LESS for a 2 or 3-year CD than for an 8-13 month CD??
Jon
More evidence they’re desperately trying to raise cash.
I have a checking account with them - I’m keeping as little as possible in it, just in case.
Heck, I was tempted to open a CD with them, with those rates on an 8-month maturity…
Until I remembered that I _want_ them to crash and burn big: I’m still short their stock.
I’ve gone to holding over 150K aggregate with Wamu to just over 10K currently.
I found this:
US Bank ‘to fail within months’.
Doesn’t really say what bank it is, though.
I found this:
Doesn’t really say what bank though.
Found this:
Doesn’t really say which bank though. Either he knows something, or he doesn’t really know, like saying that “prices will go back up…in time.”
In a “humped” yield curve, it means the buyer of the long-term CD expects the interest rate will likely decline in 8-13 months so if he bought a 8-13 months CD and time to renew the rate would be lower than the 2-3 years rate he is locking in now. Humped yield curve doesn’t happen often though and signals “less than usual” economic situation. Enough said.
Apologies for the multiple posts. It wasn’t showing up initially. I thought my posts weren’t getting through.
The countywide median price fell to $399,000 in July, down 30.6 from a year ago. Prices were last under $400,000 in March 2003. ‘People are out looking for bargains. I think you’re going to see continued softening of prices into next year,’ said Leslie Appleton-Young, chief economist for the California Association of Realtors.”
Prices are going to continue softening, just like they did from a year ago when the countywide median was $575,000 up until now, when it is $399,000.
If a median price decline of $176,000 (an average loss in home equity of $482 per day) is a ’softening’, I am wondering what LAY would qualify as a crash?
Stop saying crash, jas. The FDIC might hear you and send Ben a lawsuit threat.
This is what happens when FBs start to actually believe their inflated salaries as shown on their falsified loan docs.
$482 a day is chicken feed!
$482/day = over $60/hour thrown away on owning, before even considering interest, taxes, insurance, HOA, Mello Roos, maintenance costs, etc, etc, etc.
How many San Diego home owners earn upwards of $60/hour?
For that matter, interest payments on a $500,000 loan balance at 6 percent (assuming 15 percent tax deductibility) amount to around
(1-0.15)*(6/100)*500,000 = $25,500 — more than our annual rent paid out on interest alone before considering a $150,000 home equity loss. Why would anyone want to hang on to their home under these kind of extraordinary market conditions?
Are you trying to be rational again?!?
What’s wrong with you?
“Why would anyone want to hang on to their home under these kind of extraordinary market conditions?”
That’s because they still have their jobs, and are confident that a recovery will arrive before the pink slips.
Marin County median price, per Dataquick:
June 2007, $961k
July 2008, $770k
770/961 = .80, i.e., a 20% decline.
LAY is on record saying that such a drop would not happen in her lifetime, but it only took 13 months!
“Experts…pointed to the record 40.8 percent of the sales involving homes foreclosed in the previous 12 months and the fact that new foreclosures are outnumbering the sales of foreclosed properties… Peter Dennehy, senior VP of Sullivan Group Real Estate Advisors of San Diego, said, ‘The percentage of foreclosures and the mix of housing needs to be quite a bit smaller,’ closer to the traditional level of 1 percent to 3 percent of sales.”
AVALANCHE!!!!!!!!!! LOOK OUT BELOW!!!!!!!!!!!!
Greeting from Long Beach, CA
Here is a neighborhood comp killer
315 E. Hullett Street
Sold 06/14/06 $455,000
REO Sale 08/18/08 $180,000
Nice Haircut!
If that’s Long Beach, shouldn’t that be a comp killa?
I’m getting a funny feeling that foreclousers are seldom counted as inventory but are always counted as sales.
New York metro area now rated number one least affordable housing. Only 11% of households can afford the median priced house. Prices have been sticky on the way down here. But notices of default are way up. The problem is in New York the foreclosure process can take over a year. Were late to the party, but we’ll get there. Late 2008 through 2009 should see some significant declines here.
http://biz.yahoo.com/cnnm/080819/081908_most_affordable_housing.html
“‘That includes short sales,’ she said. ‘With short sales, you have about a 70 percent chance of the deal going through. The banks are so overwhelmed right now. They don’t have enough people to handle this.’”
I have a very hard time believing a success rate of 70 percent for short sales. Given how overwhelmed the lenders are (sometimes several weeks just to get an initial response) and the complexity of the loans, I wouldn’t be shocked if the success rate were only 7 percent or some number well under 50 percent. From the information related to short sales from articles from all over the country posted on this blog, the current “success rate” must still be fairly low.
“July’s median price for a Southland home was $348,000, down 2 percent from $355,000 in June and down 31.1 percent from $505,000 for July 2007. Broken out separately, Los Angeles County home sales fell 3.2 percent in July compared with a year ago, while prices dropped 26.9 percent.”
==========================================
The city of angles is a good example, in the danger of taking out HELOCS on their castles…
For homeowners in L.A. to have shared in the booty that was the housing bubble, they needed to do one of 2 things.
Plan A:
Sell their house for moon money and relocate out of town, or state, to cheaper digs, buy a house for cash and still have plenty of dough in the bank from the bargain.
or:
Plan B:
HELOC as the value of your house goes up, and go back to the well often.
Tons more people did Plan B, than did Plan A…
Bummer they didn’t read the fine print on Plan B.
Got Popcorn?
Neil
Sonoma County’s summer home sales surge continued in July as buyers snapped up discounted properties shed by lenders and financially strapped homeowners.
So all the scum and parasites moved up to Sonoma…nice.