A Colossal Housing Bust In California
The Santa Cruz Sentinel reports from California. “Tuesday was a record-breaking day for foreclosures in Santa Cruz County. Compared to this time last year, foreclosure sales are up more than 300 percent, topping 600. Tuesday’s large number of foreclosure auctions was due in part to Labor Day, and partly because there is no slowdown in the number of people with adjustable-rate mortgages falling behind on payments.”
“A small crowd gathered as Liese Varenkamp, who handles auction sales for lenders, read off addresses and asking prices for the properties, many purchased in the 2005 and 2006 boom years. Ten were sold back to the lenders after no one bid. Last year, four to five foreclosure sales took place in a typical week.”
“Another 21 sales were postponed, six because the borrowers filed for bankruptcy. In the rest, the borrowers and lenders are talking to see if there are options other than foreclosure.”
“Usually foreclosure auctions wrap up in a half hour, but Tuesday’s took nearly 90 minutes as Varenkamp waited for instructions from lenders as to asking prices for 16 properties.”
“‘I’ve never been here this long,’ she said, as the clock approached 3 p.m.”
“In Santa Cruz County, default notices to delinquent borrowers have grown steadily, topping 50 a week, according to the Santa Cruz Record. The foreclosure pipeline is even bigger in Monterey County. Varenkamp said the number of default notices filed last week reached 191, the second highest number in that county’s history.”
The Sun Post. “The abundance of dry grass and weed-filled yards of foreclosed houses are keeping code compliance officers busy, but a new state law could help them force lenders to maintain their properties.”
“‘It’s obviously a big problem,’ Lathrop Code Compliance Supervisor Lane Avilla said. ‘Last month (the number of foreclosures) was pretty high, and April was pretty high. It hasn’t slowed down. We average 15 a week.’”
“‘It doesn’t make the community look very good,’ said Shawna Snodgrass, who moved to Lathrop recently after she bought a foreclosed home. ‘Our grass was dead, but it was green before we moved in. I think the realtor did it.’”
“‘It’s terrible,’ said Phyllis Maxwell. ‘The real estate agents have too many to monitor. Fifteen houses (on Daffodil Hill) are foreclosed and we’re getting ready to go too. It makes you feel terrible.’ Maxwell added that she feels her entire neighborhood is disappearing.”
“City officials criticized TCN Properties last week for failing to uphold its promise to build parks in Mossdale Landing, despite protests from the developer that the project is unrealistic given the state of the housing market.”
“But it appears that residents will get the parks anyway, as they will soon be built by the bonding company that insured the project.”
“Assistant City Manager Cary Keaten told the council that Mossdale Landing residents have already been paying for the parks’ maintenance through the various fees associated with purchasing a home.”
“‘TCN Properties already sold all the land for the houses to KB Homes and they are in the process of building all the houses right now,’ Keaten said. ‘They’re almost done.’”
“The issue came to the council on Tuesday, Aug. 19 when building industry lobbyist John Beckman, who formerly worked as a business developer for the City of Lathrop, delivered a letter to the council on behalf of TCN.”
“‘Considering the severe downturn in the housing market and the exceptionally large number of foreclosures which have occurred in Lathrop, it would be a wise decision for the City of Lathrop to reconsider the timing of new parkland development,’ Beckman read.”
“Public Works Director Steve Salvatore said there are 10 parks slated for the Mossdale Landing area. Five parks have been accepted by the city, two have been only partially accepted because their public bathrooms remain unfinished, and the three promised by TCN remain unbuilt, he said.”
The Merced Sun Star. “The Merced County Board of Supervisors voted Tuesday to accept plans for the largest housing development ever proposed in Merced County. If it’s built as envisioned, Laguna San Luis would add 16,000 homes and 45,000 people during the next three decades to the area just west of Los Banos and south of Santa Nella.”
“Three other massive housing developments are also in the works on the county’s Westside. If all goes as developers plan, the four projects would add about 80,000 people over the next 30 years to the region just west of Los Banos, now home to a few thousand.”
“During a public hearing before the board’s vote, a handful of people spoke against the project. They questioned why the county would consider building more houses when countless homes already stand empty here and dozens of subdivisions sit half-built and basically abandoned in the wake of an unprecedented market meltdown.”
“‘For the last 20 years, and especially the last 10, our collective elected officials have brought a colossal housing bust that has made national and international headlines,’ said Bill Thompson, secretary-treasurer of the Merced County Farm Bureau. ‘Why are we planning for more people when there is no clear and present need?’”
The Tribune. “Real estate developer and broker Patrick Aurignac has bought another building in downtown San Luis Obispo for $1.125 million. And he’s developing a 16-unit condo project called Campus Point Townhomes, although that project is outside the San Luis Obispo downtown core.”
“The latest purchase is 745 Higuera St. ‘When you consider how dynamic and attractive San Luis Obispo is - its low congestion and crime, its great schools and its location - it’s a lot like ocean-front property; there’s only so much of it, and I believe the value will only continue to go up,’ Aurignac said.”
From CNN Money. “A rock-bottom price just isn’t enough for buyers these days - it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.”
“Buyers are in the driver’s seat and they know it. They’re using that leverage to pry more concessions out of desperate sellers than they ever dreamed of during the bubble.”
“‘Now it’s my turn,’ is the attitude,’” said Mike Byrd, a real estate agent in San Luis Obispo, Calif. ‘Some buyers are really putting the screws on.’”
“‘[During the boom] buyers usually accepted the property as-is, and we even occasionally offered to pay the seller’s state and county transfer taxes,’ said agent John Sullivan, who is president elect of the National Association of Exclusive Buyer’s Agents. ‘No more.’”
The Ventura County Star. “After nearly three decades in business, Ventura Volvo shut down Friday. ‘We’re closing today because the economy is so bad and we can’t sell enough cars to make a profit,’ said owner Chris Norstedt.”
“Ventura Volvo is the third local dealership to go out of business over the past few years. Ford of Santa Paula closed in March, 18 months after Ojai Ford shut down. Ventura County car and truck sales have tumbled according to Western Automotive Consultants, a Ventura firm that tracks new vehicle registrations.”
“‘It’s just the way it is,’ Norstedt said. ‘There’s a lot of people who’ve lost their homes and lost their jobs. The country’s a mess and we’re just part of it.’”
The Daily Breeze. “The continued high cost of housing hurts young workers, the middle class and businesses by forcing employees to live far from their jobs, according to a report released Tuesday by the Los Angeles Business Council.”
“Despite a building boom that created more supply, and the current foreclosure crisis that has pushed down prices, too few residents can afford to live near their places of work.”
“‘A lack of housing near job sites consistently serves as one of the major obstacles to doing business in this region, and the situation is getting worse,’ said Antonio Manning, a VP for Washington Mutual and one of the report’s authors.”
“The Westside, Santa Monica, Santa Clarita, Pasadena and San Fernando Valley all boosted home construction to keep pace with new jobs. But the report doesn’t say whether the new homes in those communities were affordable for the people working in those new jobs.”
“Fewer than 11 percent of the homes for sale during the first quarter of 2008 were affordable to families earning the median income of $53,000.”
“‘Where it gets tricky is when you talk affordable housing,’ said Mary Leslie, the council’s president.”
The Daily Breeze. “The continued high cost of housing hurts young workers, the middle class and businesses by forcing employees to live far from their jobs, according to a report released Tuesday by the Los Angeles Business Council.”
“Despite a building boom that created more supply, and the current foreclosure crisis that has pushed down prices, too few residents can afford to live near their places of work.”
Bulloney. There are all kinds of places to live for cheap, they’re called “rentals”. People with this obsession to own a house begin to remind me of monkey with fist stuck in jar because it won’t let go of the cookie. Everybody quit buying for awhile, and see how that affects price of housing. Wait, that’s what’s happening now.
But, but, we don’t want our daddies and big brothers and old girlfriends to think we’re not successful. We just can’t rent. WE JUST CAN’T. You can’t make us.
Kind of reminds me of the people who wouldn’t be caught dead attending a community college. It’s even funnier when the kids are aimless and irresponsible.
It depends where you live … and after renting for over 12 years now, I’m getting a little beaten down. I WANT to settle down somewhere. Now that I’m at a place professionally and personally and I’m ready to, I can’t afford to. And rentals in many areas, especially ones in good school districts, are expensive. Just because it’s a rental doesn’t mean it’s cheap … and if no one is coming down on price …
Everyone is coming down on price.
Depends where you’re living, catspit. Daily Breeze is a Santa Monica paper. Rentals have been brutally priced over the past 3-4 years on the westside. A place my wife and I were renting (before we left for literally greener pastures in Seattle) for $1100 in Pacific Palisades in 2004 went up to $2500 by 2007. Go on craigslist and check out westside prices. Crappy 2 bedrooms for $2000. A buddy of mine is renting a so-so place in Brentwood for $2600.
(Otherwise you’re right, rentals are awesome. My wife and I are renting a place in Seattle that’s fantastic, will leave when they drag us away.)
Lionel, are you trying to tell us there are *no* rentals in nice parts of the west side for under $2600? Sorry, but not buying it. First off, PP, Brentwood & SM are among the most expensive places you could possibly live. Why not cite Malibu beach rentals too, if you’re going to extrapolate average rental costs from the very highest priced areas?
I grew up in L.A. (just moved away this year), and despite spending far more time in the San Gabriel Valley, I knew plenty of people on the west side that paid far less and didn’t have to pack heat or dodge bullets. I myself found plenty of decent 2Bdm rentals in the Pasadena area for $1500-2000/mo.
Now, if you’re comparing rental costs in L.A. to… almost anywhere else, then you have a point –they are ridiculous. Especially when you compare average wages in L.A. to almost anywhere else (not much different). However, when you compare L.A. rental costs to the cost of buying the same property –no comparison. Rentals win out every time. At one point during the peak of the bubble (2005-2006), the difference was close to 3:1, now it’s probably closer to 2:1, and converging a bit more each month.
Strike time (when the rent vs. buy equation balances, or favors buying)?: most likely 2012-2013, when the massive option-ARM reset tsunami is done hitting CA. Until then… happily renting.
HARM, all I’m saying is that there was a drastic uptick in rents over the last few years. This is very likely because of the housing bubble, which both took rentals off the market and turned them into condos, and also made it very difficult for reasonable people to purchase property, which meant they had to rent. What was once affordable, e.g., when I met my wife in the mid-90’s, she was renting a bungalow in Santa Monica on a waitress’ salary, is now exorbitant. Even crappy houses in Santa Monica run over 3K now. I’m not talking about luxurious digs. As I’d written, the place I was renting in PP was 1200 for a pretty nice-sized 2-bedroom, but not fancy. A 1300 bump up makes it completely unaffordable (to me anyway).
Anyone who pays $3k/mo. for a crappy bungalow in SM needs to have their head examined, IMHO. And there’s always the option of “voting” with one’s feet (finding another rental or just leaving L.A., as you have done). Even so, renting is still a *relative* bargain compared to purchasing –even in pricey SCAL.
“Lehman is one of many Wall Street firms and investors enticed by visions of land riches.”
When marveling at how overvalued California housing became, never forget the role of a money flood into the CA real estate market, both from direct investment and also from Megabank Inc’s subprime securitization liquidity pump, which is broken beyond repair. Now that the tide has receded, it turns out that some of the naked swimmers flopping around on the beach are NYC-based whales.
This is one of the problems of the FIRE economy.
You can take overvalued assets, put them up as collateral, borrow more and leverage even further.
Lather, rinse and repeat.
When the cycle goes in reverse, as is happening currently, payback’s a REAL mean bee-yatch.
But the alternative is to produce useful things, pay reasonable wages, and have a happy population who can afford a decent life… and since that doesn’t help the kleptocrats, we won’t have it.
Has the Lehman picture improved much since this July 3 article pulled away the rug that was hiding their California real estate white elephant investments?
How Lehman lost its way
The venerable Wall Street firm once looked like it would escape the worst of the credit crisis. Now there’s talk of a Bear Stearns-like collapse - or a sale.
By Allan Sloan and Roddy Boyd
Last Updated: July 3, 2008: 5:02 PM EDT
NEW YORK (Fortune) — To understand what went wrong at Lehman Brothers, leave the canyons of Wall Street and head to the flatlands of Bakersfield, 120 miles northeast of Los Angeles.
That’s where you’ll find McAllister Ranch, envisioned as a 6,000-home, multibillion-dollar recreational community built around a Greg Norman-designed golf course, boating and fishing waters and a beach club. Now McAllister is three-square miles of fenced-off, almost lunar landscape punctuated by a half-finished clubhouse and a golf course gone to weeds.
So far Lehman’s bets on McAllister and other real estate plays in Southern California’s Inland Empire have cost Lehman at least $350 million.
None of Lehman’s investment bank peers have this kind of exposure to the burst real estate bubble. Then there’s the exposure all of them have: problems with collateralized loan obligations, leveraged buyouts, and mortgage-related securities. But Lehman insisted it was only minimally exposed to this kind of stuff.
Turns out, it wasn’t.
“People with this obsession to own a house begin to remind me of monkey with fist stuck in jar because it won’t let go of the cookie.”
- “It’s never easy to tell somebody this but we’re going to have to cut off your arms.”
- “They’ll grow back. Won’t they?”
You have to love Homer Simpson and FBs. I’m sure they think their arms will grow back, too.
Kittyspit,
I’ve met some of those people.
Mike
“Three other massive housing developments are also in the works on the county’s Westside. If all goes as developers plan, the four projects would add about 80,000 people over the next 30 years to the region just west of Los Banos, now home to a few thousand.”
Why?
There is nothing out there but agricultural labor. That what has been out there for many decades.
What are they going to do now? Create a tech park? Car assembly lines?
Wishful thinking.
That Mossdale Landing will be on the news soon again after it is discovered that it is futile to build in certain places. That place is far away from all employment centers.
Los Banos is literally in the middle of nowhere.
There is nothing on both sides, and it’s one crazy-drive to the nearest jobs in Silicon Valley (*)
(*) unless you’re a garlic-picker in Gilroy.
BWAHAHAHHAHAHHAHAHHHHHHHHHHHHHHH!!!
Crappy place, Los Banos.
And it stinks too.
BWAHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHH!!!
“BWAHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHH!!!”
You cut and pasted that, didn’t you?
It doesn’t ring the same when it’s not genuine.
Here are the two “cut and pasted” for your delectation:
BWAHAHAHHAHAHHAHAHHHHHHHHHHHHHHH!!!
BWAHAHAHAHHAHAHAHHHHHHHHHHHHHHHHHHH!!!
As you can plainly see, they are not the same. So there, smarty-pants.
BWAHAHAHAHAHAHAHHAHHHHHHHHHHHHHHHHHHHHHHH!!!
I sit corrected.
Based on the number of aitches (Aitch Bubble Formation) and performing aregression analysis of random distribution and overlaying it with bubble years. It is possible to create a meaningless set of probabilities that your next bubble aitch will be between 23 and 27.
God I luv bubble markets.
HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
It is a good place to pull of the road and contemplate the riverbed of the San Joaquin, once California’s second largest.
And they are talking about building another dam upstream!?
We don’t need jobs or infrastructure!
Let’s just sell houses to each other at ever-increasing prices!
Wait… what? It’s not 2005 anymore? Oh… nevermind!
Right. If you build it, they will come. Come and tear out the copper, open up a whore house, and start up a rogue pharmacy, that is.
The county is doing it for the developer fees, which they will have to give back or suspend when the developer finds out it may be a little tricky selling all those houses….
I don’t understand why anyone would complain about more development. Yes, most likely these house will be sold at a loss, but why would anyone but the developers complain. Cheap houses for everyone, why complain?
If you plan to purchase, don’t complain.
If you plan to sell, tough cookies.
If you are against growth and want a small town, move your a– to Alaska, Wyoming, … .
Well the banks might complain a bit since they’re holding a lot of underwater mortgages. Pushing them furthur underwater by building more houses and forcing down prices is going to screw the economy up even more.
“‘Now it’s my turn,’ is the attitude,’” said Mike Byrd, a real estate agent in San Luis Obispo, Calif. ‘Some buyers are really putting the screws on.’”
put the screws on someone (informal)
to use force or threats to make someone do what you want. They put the screws on him until eventually he was forced to sale.
yeah TEAM!!
Payback is a B##ch.
Yep, that pretty much sums up what I’m doing. I’ve never enjoyed uncomfortable silences like I do these days while looking at used houses.
I WISH payback was a big bitch–but some of these people are living mtg free for a YEAR while they try to short sell their house. I know some people doing just that. They are stockpiling money to pay for rent once they move.Payback is not nearly bitchy enough!
Totally agree with these assessments. Los Banos and Lathrop will be decimated, as they should be. A couple of years ago I had the misfortune to drive through Los Banos and they were building both a Lowe’s and Home Depot, all within a couple miles of each other. This for a town of 35K people. I can’t imagine 8 people wanting to live out there, let alone another 80,000. Middle of nowhere and little purpose in a peak oil world. This bubble created some of the stupidest projects known to man. This thread really revived the schadenfreude in me!
You want to know what stupid is?
Google Diablo Grande golf course.
Think about this:
Find the exact middle in the Central Valley between Fresno and Sacramento. You’ll find Patterson/Los Banos there.
Now go in several miles into the mountains there, maybe a 20-30 minute ride.
Well, someone was bright enough to figure out that a LUXURY development was a good idea there. Not just houses, but shops, luxury hotel, WINERY, etc.
Find a google map of Patterson, check it all out, and you’ll think you are in the twilight zone.
BTW, the place is in bankruptcy…
LOL re: Diablo Grande. I’ve been following that story with great interest because I knew it was a matter of time before reality hit (that it was insanely stupid, as you said). The highest bidder in the most recent round of bankruptcy proceedings offered up $26 million. The owners spent well over $150 million developing that POS. Major residential water issues there, not to mention that there won’t be enough people living there to keep it afloat. Residents are bringing in bottled water because the system has such little draw that water comes out of the tap brown and stinky! Talk about a luxury development! Stupidity doesn’t even begin to describe Diablo Grande. RIP and good riddance.
That may become an actual ghost town, as there is no reason for people to live there, and the infrastructure costs are way to high for the # of people living there.
BTW, for those who may not know, the bubble saw the # of houses in Patterson grow by 25%.
“Like millions of other dwellings across the country, home prices in this remote development tucked away in the buckskin-colored hills west of Interstate 5 have melted away by more than half, owners say. Many have seen their homes lost to foreclosure. Others who want to sell find they cannot unless they’re willing to walk away from most of their original investments.
Claudio and Kristina Ross-Ortiz know people in a typical financial bind. A home that a neighbor of theirs purchased in September 2006 for $353,000 has been on the market for a year at $149,000, with no offers.”
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/20/RECH11QS8K.DTL
“buckskin-colored hills” ( that’s generous )
But why ‘o why can’t we have a nice collapse in places rainbirds might actually prefer like.. Palm Springs? C’mon PS you can do it.
Dang Dinor.
I am trying. I am thinking PS, go down go down, hurry, faster , faster,
Well, a condo we looked at this wknd. Really felt good in, Senior cit passed on, place is immaculate, and the guy selling it, “really liked us”. so he says the owner wants xxx, but today he called and said the owner will take 30k less for 30 day closure, Owner wants to go to europe.
I said, it is premature for us, by 4mo minimum, and he said, well put something on paper and lets see.
I think I might play this one out…hehehehe
like a cat with a ball of yarn.
A friend of mine purchased a home in Deep Well for $1,179,000 3 years ago and is selling it for $679,000
Nice haircut
They can’t sell unless they’re willing to walk away from most of their original investments? A neighbor purchased a home?
Sounds like these people were playing the housing market Vegas style. Oh well. When it comes to gambling, people who win deserve to win, and people who lose deserve to lose.
The Diablo is in the Details.
Even better is the new Lowe’s and HD right across the street from each other in Kalispell, MT.
I do wonder what will happen there–the actual housing stock is OK, but prices are going to plummet. Probably a lot of illegal aliens with bitchin’ digs. Work in the fields, live in a 3K sq ft McMansion.
Artists are always on the lookout for cheap digs, but I can’t see the place being scenic enough to develop as an artist’s colony.
A quick clarification:
The V in “Big V” represents a down arrow. I never realized it could represent a V-shaped recovery, since I hadn’t heard that metaphor before logging on for the first time. I just don’t want people to think that I’m advocating a V-shaped anything, except maybe ice-cream cones, or the tops of certain Mikasa wine glasses.
V for Victory?
O i just always assumed “Vulva”
Or a related region, in close proximity…….
Perverts………:)
I’m trying to think of some male equivalent, but the only thing that’s coming to mind is vas deferens.
V for Visa - a shoppoholic?
Ya–I thought it was vagina—-
LILLL
Me too!
I was thinking cleavage. So much for that theory.
Come on back, BV, we love you and your Intelligent posts, really. Just teasing a little.
Yeah, and her picture is in here and I looked and said… gee they don’t look that big.
Maybe a side view?
me too.
Good afternoon, America. Allow me first to apologize for this interruption. I do, like many of you, appreciate the comforts of every day routine- the security of the familiar, the tranquility of repetition. I enjoy them as much as any bloke. But in the spirit of commemoration, thereby those important events of the past usually associated with someone’s death or the end of some awful bloody struggle, a celebration of a nice holiday, I thought we could mark this November the 5th, a day that is sadly no longer remembered, by taking some time out of our daily lives to sit down and have a little chat. There are of course those who do not want us to speak. I suspect even now, orders are being shouted into telephones, and men with guns will soon be on their way. Why? Because while the truncheon may be used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who will listen, the enunciation of truth. And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression. And where once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission. How did this happen? Who’s to blame? Well certainly there are those more responsible than others, and they will be held accountable, but again truth be told, if you’re looking for the guilty, you need only look into a mirror.
V
Ah, God bless Alan Moore.
Although couldn’t Big V also stand for Big Visitor? As in, one who looks human but actually wears a rubber suit over her reptilian body? And eats guinea pigs and humans? Maybe we should be cautious around the Big V.
I remember that sci fi program.
“And the truth is, there is something terribly wrong with this country, isn’t there? Cruelty and injustice, intolerance and oppression.”
Assuming “V” is discussing America, yes there is cruelty, injustice, intolerance and oppression in America. To some extent there has ALWAYS been all of the above and, to some extent, there will ALWAYS be some of each of those unpleasant aspects to LIFE….ANYWHERE.
The questions are however: Are things getting better or worse here? Are things better or worse somewhere else?
The freedom America promises INSURES that “perfection” will never be attained. It recognizes that human beings, free to pursue their own interests, will OFTEN make bad choices. Sometimes those choices will be broad, bad, ones (slavery) sometimes they will be broad, good, ones (fighting WWII).
I look in the mirror, “V” and don’t see an intolerant, cruel, unjust or oppressive person. I look around me and I occasionally see all of those things, throughout the spectrum of race, class, ethnic or gender categories but they are rare and have been witnessed only infrequently in a middle class life, covering fifty years, in three states and travel all over this country.
My family encompasses Jew and Catholic, Italian, Irish, German, Persian and African-American (at last count). My friends are equally diverse.
I’ve seen rich people blow fortunes and humble people grow rich. My experience with America is that most people, most of the time, just want to get along. Sure, there are plenty of jerks in America who seem to make their life’s work tormenting others but I’ve encountered far more who have been fabulously generous in many, very quiet, ways.
So I suggest to you that if you’re seeing someone “guilty” in your mirror you get out of your bedroom a little more often. Look to serve a few people in some fashion and maybe, just maybe, you’ll find they will appreciate what you do and will look to reciprocate.
Perfection isn’t found in any mirror I know of and if your looking for a “perfect union” in which to live, God bless you.
You’ll search for it the rest of your life…futilely.
V: The only verdict is vengeance; a vendetta, held as a votive, not in vain, for the value and veracity of such shall one day vindicate the vigilant and the virtuous.
I think the reference has been lost on poor jag.
(hint: it’s fiction)
(and only his 2nd best work)
wow, you guys are SMART!
You could always change yourself to the Big “L”.
\
That backslash looks dashing on you.
HAR!
I thought it was the roman number 5, like Lucy from Charlie Brown… “I’ll give you 5 reasons not to buy a house, one, two, POW!”
So, are you saying you are Big Downer (down arrow)? I like Big V as in v for victory, vitriol, vice….
Mercy Over-Kill?
“The Merced County Board of Supervisors voted Tuesday to accept plans for the largest housing development ever proposed in Merced County. If it’s built as envisioned, Laguna San Luis would add 16,000 homes and 45,000 people during the next three decades to the area just west of Los Banos and south of Santa Nella.”
RE: “After nearly three decades in business, Ventura Volvo shut down Friday. ‘We’re closing today because the economy is so bad and we can’t sell enough cars to make a profit,’ said owner Chris Norstedt.”
On the way to the doc this AM, I was dumbfounded when I saw that the Auburn, ME John Deere tractor and mower dealership which has been around for decades GONE!
The place always had a great inventory.
Small tractors-large tractors-loaders-trade-in’s-you name it. But now-not a green Deere to be seen anywhere!
Man, when the farmer’s can’t get their tractor’s fixed or traded, we’re all in deep doo-doo.
It’s all gettin’ too spooky!
In many cases these are responsible business people who can see the writing on the wall and want to exit the game while still solvent. Shrugging Atlas, Atli, Atlases?
hd,
Just another example of how ‘the boom’ is dragging down a lot of unintended victims with it. AFAIK the ‘heavies’ have had decent corp. earnings so perhaps this more a sign locally? Either way, I hate to see it.
Volvo has been in trouble for years and I believe there were only a few dealers left on the West Coast anyway. We only have Fisher Volvo in the Port. OR area remaining.
If it was only Volvo.
But looking at sales results expect to see quite a few closings of:
Chrysler
Ford
GM (Buick? At least GMC sells to business… oh wait…)
With the 27% drop… I wonder if the weakest Toyota dealerships will fold?
Let’s face it, during the bubble the following were way oversold:
Mercedes
BMW (But they seem to be adapting quickly…)
Lexus (But due to the quality…)
Infinity
HummerGot Popcorn?
Neil
I think I read in the LA times that 85% of the BMW’s in So Cal were leased.
“AFAIK the ‘heavies’ have had decent corp. earnings so perhaps this more a sign locally?”
If that’s the case I’m surprised that the corps can’t extend a little help in terms of zero dollar inventory (hold inventory without paying up front).
Jon Deeres going out of beeswax was predicted by someone on this blog around 2006, I believe. It was neil, or palmie maybe.
Must have been palmie. I missed that one. There is a reason Buffet is richer than I.
Got Popcorn?
Neil
Excellent…I can’t wait for some people I know to really eat dirt.
“A rock-bottom price just isn’t enough for buyers these days - it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.”,
That’s because prices are not rock bottom yet.
Payback is a biatch…I remember going to open houses where the places were lost in filth. And they expected bids on the move.
Now they can kiss my a%%.
All the “fixes” these whiney little biatch homeowners are complaining about should be STANDARD fixes when selling a home. Tough that the have to fix them…serves them right.
Brilliant minds……(see my comment above)
You comments about people showing trashed-out houses made me laugh……reminded me of one we were taken to check out back in 1999.
Walked up to front door, door was splintered around the deadbolt, had been pushed back approximately into place, and 12×12 brass plates bolted on both sides of the door to reinforce it
(Drug raid?)
Upstairs was empty…..hadn’t been remodeled or carpet changed since new (1978-79).
But downstairs……..
Bare concrete walls tastefully decorated with naked women paintings on black velvet. Bookshelves stocked with VHS pornos,….. and, in the middle of the room, completing the ambiance……
A gynecologist’s exam table.
We decided to take a pass.
About 4 months ago I moved into a place that I swear
Jame Gumb must have lived.
Baaaaaaaa
“should be STANDARD fixes when selling a home”
Amen to that. Or… they aren’t ready to sell? We’d truly gone ’round the bend when sellers were that confident they weren’t even doing basic maint. to make the place livable while ‘they’ were there.
I can understand when it’s being sold by a young couple w/ kids and long commutes and very little money but when empty-nester’s do it, it’s just another way of saying, kiss my @$$.
That’s because prices are not rock bottom yet.
That’s the key point. Everything will sell… for a price. If repairs are needed, buyers typically expect the cost of repairs and a discount for the repair hassle. Oh… sellers forgot about that discount (which can be huge). Bwaaaahaaaahaaa!
We’re about to enter the 18 months of great price declines.
Got Popcorn?
Neil
I once attended an open house for a 3/2 in a cute neighborhood, over 50 years old, where the owners decided to do some painting DURING THE OPEN HOUSE. They acted like they were being oh-so generous, since many other folk weren’t bothering to do anything at all to get the place sold. I was offended by it, but didn’t want to say anything because I wanted to save up for my punch line, which was, in those days, to ask the realtor the last time a comp was sold. This was right after the crash started, and almost everyone was still in denial.
I will never forget seeing the woman’s red cocktail dress hanging from the closet door, on display, as if to say “You, too, could have sex on our italian-tile kitchen counter. You, too, could hob knob with the man who owns the $3 million house next door, and maybe, if you’re coy enough, convince him to leave his wife for you, and then you could finally tell that louse of a husband what you really think of him.” and then, as if to go on, “You too, can hang your fat-ass size 16 up on the closet and imagine for a moment that you were anything less than an aging, dim-witted loser with a short husband who MAKES YOU PAINT THE HOUSE”. Those were the days, ha.
My wife and I went to an open house on Ohau, Hawaii this past Saturday, 1350 square feet at 690K. Everything was orgional down to the lime green kitchen countertops, cracked foundation, termite eaten walls, roof seperating from cinder block walls, plastic flowers in the yard, garage floor turned to rubble, you get the idea a POS. The house was advertised as a “Fixer Upper” and to be sold “AS IS” and ready to “Builds equity as the new owner adds improvements”.
We mentioned to the couple that we were debt free with our single biggest bill being auto insurance every 6 months on our paid for autos. The couple hung thier heads and sighed and said they were going the other way and were considering a 2nd mortage to cover ongoing living costs and to buy another condo.
As we left my wife burst out in laughter while wadding up the house flyer and said she only thought the stories about insane homeowners in CA were just stories. She said she would now start reading HBB with a new understanding of how nuts people have become.
Trying again:
I once attended an open house for a 3/2 in a cute neighborhood, over 50 years old, where the owners decided to do some painting DURING THE OPEN HOUSE. They acted like they were being oh-so generous, since many other folk weren’t bothering to do anything at all to get the place sold. I was offended by it, but didn’t want to say anything because I wanted to save up for my punch line, which was, in those days, to ask the realtor the last time a comp was sold. This was right after the crash started, and almost everyone was still in denial.
I will never forget seeing the woman’s red cocktail dress hanging from the closet door, on display, as if to say “You, too, could have sex on our italian-tile kitchen counter. You, too, could hob knob with the man who owns the $3 million house next door, and maybe, if you’re coy enough, convince him to leave his wife for you, and then you could finally tell that louse of a husband what you really think of him.” and then, as if to go on, “You too, can hang your fat-ass size 16 up on the closet and imagine for a moment that you were anything less than an aging, dim-witted loser with a short husband who MAKES YOU PAINT THE HOUSE”. Those were the days, ha.
“The continued high cost of housing hurts young workers, the middle class and businesses by forcing employees to live far from their jobs, according to a report released Tuesday by the Los Angeles Business Council.”
“Despite a building boom that created more supply, and the current foreclosure crisis that has pushed down prices, too few residents can afford to live near their places of work.”
=========================================
Recipe for disaster:
Add a mixture of people living far away from their tenuous ten dollar an hour jobs, and in lieu of them being tossed into a cauldron with the heat being slowly increased like so many frogs, do it instead vis a vis the price of gasoline…
Serves 300 Million
Palmdale 93552 hit a milestone today. (or a millstone, depending on your viewpoint)
Median wishing price for the zip at the top was $335K. As of today it’s $235K. For the math 99 crowd that is 100 grand difference. Woohoo!!
Only another 100 grand, give or take, left to go…
Commute from Lancaster/Palmdale 85 mi one way on the 14 or the 6 @ $4 per gal plus oil ,tires/maintenance. PRICELESS. Thankyou Sierra Club and the Demoncrats who won’t let us drill!! hehehehehehehe
“The country’s a mess and we’re just part of it”
I can’t speak to the woes at Ventura Volvo but this could be what happens when you make a car more durable than most of us are used to? If you buy a Volvo with 200k miles on it, you’re pretty much assured of another 100k trouble free miles.
Volvo people… buy Volvos. It’s really been more of a lack of marketing support and Ford. I just regret the sales mgr. had to drag the whole country into it?
Volvo: Boxy but bankrupt.
p.s.
Ford taking over Volvo was like AMF taking over Harley Davidson in the early 70’s…
square pegs into bottomless round holes
Thank you Arthur! No seriously I commuted with their ‘thunderous’ 2.0 Litre ( in-line 4-cyl. ) for 10 years. Round trip of almost 70 miles. Most of that, gas was under $2 a gal. but I never put in more than $20 for the week. ( Try that now huh? )
“Vixen” is the most dependable car we’ve ever owned. Boxy isn’t a fashion statement, but 300,000 and still going strong. Minimal repairs, but pricey. Yeah, we like our Volvo. We also own a (paid off)Vette. Something about v’s going on. Kinda like the drug companies, with their z’s and x’s.
When some asks my husband what his favorite car is, he always replies, “one that’s paid off.”
some=someone (long day, sorry).
Los Banos is the worst place I’ve ever had the displeasure of driving through. However, they did just build a junior college so maybe the housing is needed for that over the next decade? I got nothin’ No one should live in Los Banos except the farmers.
Ever been to Baker, CA?
It’s on the freeway between LA and Vegas, next to a dry lake, south of Death Valley, and home of the “world’s largest thermometer.” Go for the dust, go for the tire-melting heat, go to see the broken down cars that couldn’t make it up the 14 mile grade just east of town.
It ain’t called BAKER for nothing.
Isn’t there a GOOD Basque restaurant in Los Banos ? Anyone?
IndyMac is back at it, offering 4.15% for 7 month cd’s, in the L.A. Times.
@ the top of the advert it simply stated:
“committed.”
The left off the precursory, “should be”.
As in, those who take them up on this offer should be committed?
More like the people running the bank into the ground should be committed.
If you had a gravy train that earned you millions each year would you not be looking to make sure it remained a going concern.
Then again I’m a “superior spirit”, as are many on this blog.
committed. my sentence
AARRGH!
Below is what should have been in the block quote above, but wasn’t, because I oviously did it wrong, because I’m stoopid:
“It would have been an insight that only a superior spirit could have had at the time.”
Angelo Mozillo, 8/24/07, when asked why his company didn’t tighten lending standards sooner.
It’s IndyMac Federal Bank.
We, you and everyone else is paying me 4.15 for 7 months.
How can a bank be more safe than one supported by a dollar bill printing press?
I have some of my money there.
“‘Now it’s my turn,’ is the attitude,’” said Mike Byrd, a real estate agent in San Luis Obispo, Calif. ‘Some buyers are really putting the screws on.’”
——————————-
Just wait. You’ve seen nothing yet as far as putting the screws on goes…
“Just wait. You’ve seen nothing yet as far as putting the screws on goes…”
Got that right! SLO is a beautiful place, but the spread between median income and the median priced home is still 10x or more. It’s going to crash hard when the retired boomers discover that Wall Street has fleeced them.
I’m speaking of the entire state of California, of course. Anyone who doesn’t think we aren’t going to see another drop in price of at least 10% over the 12 months is either delusional or just plain dense.
Looking on the bright side (when it’s all over with….)?
Up until about two years ago, I know of a lot of people saying they had job offers in California, with big pay raises, but couldn’t afford to move there because of the housing prices. (people used to MIdwest prices, and believing California prices were nuts).
Have pay rates in Cali been affected yet?
If pay scales stay approximately the same in California after all of this, and housing prices drop somewhere close to what they are in the rest of the country, you could see a lot of people from flyover land relocating out there.
Good news for California. Bad news for the rest of the country?
Or will the availability of affordable housing, and companies being able to hire people at payscales closer to Midwest pay rates, drive down Cali pay scales?
I experienced the reverse, I got a pay raise to leave Sacramento, CA to Phoenix, AZ back in 2004. I was offered a couple jobs later for less than what I was making in Phoenix which I never could understand. Why would someone accept a lower standard of living if they don’t have family or some logical reason to do so. I see lower prices in CA.
Dude, you just don’t understand the “sunshine premium” here. Or the “schools, malls and hospitals packed with illegals” premium. Or the “paying high taxes cuz it’s, like, all good” premium. The streets here are paved with gold, there’s a movie star in every pot, and a swimming pool in every garage.”
CA = Paradise. Everywhere else = Flyover country. You either get it or you don’t.
I think there will not be any great influx of people. Cali is starting to go through a massive change. Neighborhoods that were getting better are falling prey to gangs and graffiti. Crime will skyrocket as the entitled masses get even more desperate. Those up and coming neighborhoods will becoe even more dangerous. Residents will become accustomed to seeing giant gang tattoos emblazoned on the local pedestrians. Gunfire will lull you and yours to sleep at night.
There’s “reverse gentrification” for you. Personally, I prefer the familiar, steady purr of a silenced Uzi 9mm, but I’m old school.
yup, that’s how it is here, and the 70-degree ocean water and 76-degree air temp and beautiful women bodies don’t help a bit. Stay away! DUCK!!
To me, I see happy people moving from rentals into houses as prices decrease. On here I believe they’re referred to as “knife catchers”, no?
When the same house will cost you 20% less in one year, then yes, I’d call that catching a falling knife.
To someone with no money in the game it’s just a roll of the dice. Unfortunately, this throw will come up snake eyes.
“Gunfire will lull you and yours to sleep at night.”
+1
Ben made a comment that I wrote back to but never was noticed and I’d like to put it up here again because it’s so pertinent:
He said:
That’s right Mr NAR. Some people have been ruined financially, some even commit suicide. And all this time the NAR has pretended this was some public relations game, when in fact now millions of families are “hurt.” You don’t deserve to be lecturing anyone about how lending should be loosened, or anything else for that matter. Go crawl under a rock with the other NAR economists.
Ben…
Why on earth are you feeling sorry for these families? In my humble opinion, I think most of these “families” knew exactly what they were doing. They knew they were trying to get away with murder…they knew they were trying to flip and run.
I have not a single ounce of remorse for most of these families you speak of. Scr&w em.
If I can take the time to sit down and read a contract that will bind me to a 1/2 million dollar pile of debt, so should have the rest of these losers.
If I could sit down and do some simple math and figure out my mortgage will double in 5 years, so should have these other losers.
As far a I’m concerned, I hope things just get worse so responsible, honest people like me and many readers here I’m sure will have a chance to finally buy a piece of property for what it was intended….to my life in.
Yes and no to what you say. Many families and indivuduals got burned by these lying sacks of $hit.
A realtor, a mortgage broker.. they are paid to do a job by you, and in your best interest. Why?? Because we and our families are busy doing our job that we are paid to do. By paying these lying lowlife piece of $hit con artist we are trusting them to do their FU(KING JOB, not ripe us off. They deserve to rot in hell for the misery they have caused so many families that PAID them to do a job for them.
But yes, they should have read the forms before signing. They also should have hired a lawyer considering what lying scum the NAR is.
Hummm, have to hire a lawyer to keep the NAR from ripping you off…come to think of it, what FU(KING GOOD are you piece of shit NAR trolls good for if we also have to hire lawyers to make sure you do your dam job.
If that wasn’t enough, they outdid themselves by borrowing against the values of the dumps to purchase more sh*t. (Winners all around. We’ll never have to pay the HELOC back because the house values from here out will increase even more.)
Exactly! and the banks who loaned them the money should be given their young daughters (and sons, if said bankers happen to be homosexuals, not that there’s anything wrong with that), as the mortgagees were solely to blame for Wall Streets blatant attempt to cash in on just about all that’s left, “the American Dream”, by giving wads of money to anybody able to sign their name.
I knew it would happen eventually . My nephew just called me wanting money because he has been out of work for a couple of months . I haven’t talked to this kid in 5 years and he has two kids now . I wonder how many people that are not having financial problems are getting hit up now by people that are having problems because of the economy that is in recession ? My nephew doesn’t even have a problem with a mortgage because he rents ,but it hard getting a job right now ,(he works in the building trade ).The nephew was almost crying with desperation and stress . I’m going to send him some money ,but I hope he can get a job soon . Anyway ,the desperation is hitting a lot of people now.
Cars for Houses? Yep, going on here in Cleveland
http://cleveland.craigslist.org/reo/819495682.html
“My nephew just called me wanting money because he has been out of work for a couple of months .”
Has he canceled his cellular and satellite services yet?
No ,he still has a phone . I think he needs his phone for job hunting .I don’t get the feeling that he has a lot of fancy things in life because he
doesn’t even have a computer .This is a person who never got a break in life because his mother and father died when he was about 16 .He was on his own from about 18 on and hes just a worker in the building
industry . His wife doesn’t seem to be of much help ,but she is trying to take care of small children . But, here is a guy who is just trying to get food on the table for his kids .
http://www.nysun.com/business/unthinkable-happens-manhattan-apartment-prices/84900/
“A rock-bottom price just isn’t enough for buyers these days - it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.”
By 2012 I expect to be in a position to demand that the seller drink a cup of my urine!
>> ““A rock-bottom price just isn’t enough for buyers these days - it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.””
And we want you to announce it in a note on nice stationary that you did it.