Some People Just Keep Going On Their Dreams
A report from the Idaho Statesman. “The federal takeover of Fannie Mae and Freddie Mac produced hopes among Treasure Valley real estate agents Monday for lower mortgage interest rates and fewer foreclosures. But bankers were cautious. Eugenio Aleman, a Wells Fargo economist, issued an analysis saying ‘the biggest reason for this intervention is the Federal Reserve’s obsession with preventing home prices from falling. And the only way that is going to happen, according to their argument, is for mortgage interest rates to come down. And I think that this is the mistake the Federal Reserve, the U.S. Treasury, and markets are making.’”
“‘Even if mortgage interest rates decline,’ Aleman wrote, ‘which is a big if in the medium and long term, the mortgage market will remain tight just because credit standards were too loose during the last two decades and the economy is deteriorating, with the rate of unemployment increasing and now prime mortgage loans also at risk. Thus, even if the measure helps interest rate spreads, credit will remain tight for the foreseeable future.’”
“IdahoDataProviders president Charlie Nate said Monday that in the last 30 days the number of homes listed on the MLS as short sales has increased 9 percent to 1,095.”
“‘The recent takeover of Fannie Mae and Freddie Mac by the government should stabilize the housing market in the short run,’ Nate said. ‘However, if the loan standards are not relaxed by the entities (lenders), home loans for borrowers will continue to be scarce, and the housing market will continue to deteriorate.’”
“A record 304 properties were served with an initial notice of default in Ada County in August, a 171 percent increase over the same month last year. Canyon County recorded 179 notices of default, 77 percent higher than August 2007.”
“The increasing number of short sales is driving down median home prices, too. Median prices have fallen 4 percent in Ada County and 6 percent in Canyon County since the start of the year, according to the Intermountain MLS.”
“Idaho job growth sank by almost a full percentage point during the second quarter of the year, according to a government report released Tuesday. In absolute numbers, that meant that about 1,300 fewer people were working in Idaho during the second quarter, said Boise economist John Church.”
“‘Anyway you cut it, that’s a lot of people out of work,’ Church said.”
“Idaho Department of Labor spokesman Bob Fick said the state saw employment declines during six of the first eight months of 2008, including the last four months. One big reason is the normal spike in second-quarter construction jobs never materialized this year because of the housing slump.”
“‘We’re down thousands of construction jobs from a year ago,’ Fick said. ‘It’s something like 4,500 jobs.’”
The South County Spotlight from Oregon. “Boise Cascade announced this afternoon that it is permanently closing its veneer plant in St. Helens. The ongoing slide in the wood market, a direct effect of diminished demand for new housing construction, hit home at the veneer plant last February, when a swing shift was dropped and a number of full-time jobs were lost.”
“Since then, the plant has undergone several weeklong and half-week layoffs, trends that finally culminated in Wednesday’s permanent closure. Bob Smith, the human resources manager for Boise Cascade’s Western Oregon Region, pointed to a reduction in housing starts from 2 million in 2005 to roughly 900,000 in 2008.”
“‘In that period of time, that’s how dramatic it’s been in the reduction of housing starts,’ he said.”
The Estacada News from Oregon. “Despite grim reports on the state of the nation’s housing and lending markets, some industry members believe that things are not all that bad in Estacada. Yet, online market data providers show the city’s sale prices considerably lower today than at this time last year. Although numbers vary slightly from one source to the next, each illustrates a consistent and significant decline.”
“During the summer of 2007, the average sale price of an Estacada home peaked near $310,000. Since then, the average price has fallen 30 percent to $220,000.”
“Phyllis Brinkley, an East County realtor of 35 years, said the price decline is indicative of the market normalizing. ‘Prices are not falling out of the sky, but they are adjusting a little,’ she said. ‘I think we are more fortunate than some of the other areas.’”
“Brykley said price drops are caused by decreases in demand and increases in foreclosures. For Metro Portland, RMLS states that ‘activity continues to decrease compared to this same month a year ago. Pending sales decreased 22.3 percent, while closed sales were down 30.2 percent. Home sales declined 32 percent in Estacada during the same period.”
“Eagle Creek and Estacada have had two foreclosures and 11 short sales during the last nine months, said Adam Durham, a loan officer at Globill Inc. ‘Out of those 11, eight are new construction. I think it’s amazing, statistically.’”
The Yakima Herald from Washington. “Developers of The Vineyards Resort began the first phase of construction that will include the 18-hole golf course, clubhouse and pro shop, the roads and utility lines and preparing the first 230 home sites. The Vineyards will be the second destination resort in this area after the much larger Suncadia near Cle Elum, a 6,400-acre mountain development that plans 3,000 housing units.”
“The groundbreaking for The Vineyards occurred on a knoll that will be the site of a Tuscan-themed retail center. A 100-room condominium hotel is also part of the project.”
“Rich Barnes, co-managing partner for the Vineyards project, said the price of home sites will increase once the public lot sales begin. Some lots could attract prices up to $1 million, he said.”
“Barnes said while the rest of the country is struggling with a declining home market, the Northwest continues to be a bright spot. ‘The Pacific Northwest is still very exciting to everyone in the rest of the United States,’ he said. ‘Yakima has the same situation. All the dynamics that make this a quality resort community are still here.’”
The Olympian from Washington. “South Sound home sales stayed cool in August yet prices largely have remained stable, the Northwest MLS reported. On a year-over-year basis in August, sales of single-family residences and condominiums stumbled, falling nearly 31 percent to 303 units from 439 units, the data show.”
“Since January, median home prices have fallen about 5 percent compared with a year-over-year price drop of nearly 8 percent in August. Last month, median prices fell 7.81 percent to $248,000 from $269,000 in August 2007, the data show.”
“South Sound real estate professionals say it is a great time to buy. ‘I cannot stress enough what an amazing opportunity exists right now for move-up buyers,’ said J. Lennox Scott, CEO of John L. Scott Real Estate. ‘The price gap between the more-affordable price ranges and higher price ranges has narrowed, which means these buyers can afford to ‘price jump’ into a new home at a premium value.’”
‘South Sound real estate agent Bill Nieland added that mortgage interest rates remain low. ‘This is a great market,’ he said. ‘I’m more enthused today than I have been in years.’”
“Nieland also questions whether the MLS sales data truly reflects the pace of sales in South Sound. ‘Nobody can convince me that (home) sales are down,’ Nieland said.”
The Seattle Times from Washington. “The median selling price of houses in King County dipped last month to its lowest level since April 2006, according to the Northwest MLS. The broker-owned service said the median price of single-family homes sold in the county in August fell to less than $424,000, down more than $53,000 from August 2007.”
“The 11 percent decline was the first double-digit year-over-year drop for King County since the subprime-mortgage crisis turned the market on its head.”
“Real-estate brokers said the August numbers reflect more willingness on the part of more, but hardly all, sellers to ask less for their houses to increase the odds they will find buyers.”
“‘Houses that are priced right still sell in 15 or 20 days,’ said Jerry Howard, managing broker at the John L. Scott office in West Seattle. But there’s still resistance, he said, especially among owners of higher-end homes: ‘Some people just keep going on their dreams.’”
“Matt Deasy, general manager of real-estate giant Windermere’s Eastside operations, said the big year-over-year decline in median house prices shouldn’t surprise anyone. ‘Last August was probably the peak,’ he said. ‘The marketplace was very different then. That was before the lending standards changed.’”
“And now? ‘It’s supply and demand,’ Deasy said. ‘There’s still eight sellers for every buyer in a month.’”
“Closed sales of all residential properties - condos and houses - slid 38 percent, and pending sales dropped 23 percent, while the number of properties listed rose 18 percent from a year ago.”
“The story was similar in Snohomish County. Closed sales for houses and condos plunged 40 percent; pending sales slid 19 percent; and inventory rose close to 8 percent. The median selling price for houses there fell 9 percent from August 2007.”
“In West Seattle, the median selling price for single-family homes dropped 13 percent from last August’s level, from $428,500 to $374,000. That’s partly because lower-priced houses in neighborhoods such as Delridge and White Center are selling well, and higher-priced houses aren’t, Howard said.”
“They aren’t moving because the asking prices still are too high, he said.”
“‘I was out this morning to look at four houses in the $850,000 to $1 million range, all within a quarter-mile of each other, three with views,’ Howard said, ‘and if you looked at these houses with me, you’d have to say, ‘How did they price those houses?’ At least three of them are overpriced. The best thing you can do to satisfy clients today is telling them the truth.’”
“The median selling price for a house in Kent dropped more than 15 percent since August 2007, from $365,500 to $310,000. William Collins, assistant broker at Windermere’s Kent office, attributed the drop to the large number of bank-owned homes on the market as well as short-sale houses.”
“If an agent takes a client out to look at 10 houses in South King County during a weekend, he said, odds are that seven or eight of them will be ‘distressed’ properties.”
The Bellingham Herald from Washington. “In what was already a very quiet summer for local real estate, August was especially ugly for sellers.”
“Only 255 homes and condominiums sold in Whatcom County in August, down 35.9 percent compared to the same time last year, according to the Northwest MLS. In a separate report released by Lylene Johnson of The Muljat Group South Office in Fairhaven, single-family home sales in both Bellingham and Whatcom County in August were down 40 percent year over year.”
“Median prices also dropped. The median price for homes and condos sold in August was $260,500, down from $275,000 in August 2007, according to the NWMLS. The median price for homes and condos sold in July was $265,000.”
“‘When activity is down 40 percent overall, there aren’t many price points to look to for relative strength,’ Johnson said. ‘I’ve also seen prices coming down, and we’re seeing more short sales and foreclosures sales.’”
“The rest of the Puget Sound area saw similar drops in home sales and prices, according to the NWMLS. In Skagit County, home and condo sales were down 49.5 percent year over year, with the median price dropping from $280,500 to $254,935.”
The Wenatchee World from Washington. “The FHFA - Federal Housing Finance Agency - has placed both Fannie and Freddie in a conservatorship that puts the government in control to restructure and revive them.”
“Local statistics show foreclosure rates haven’t been much above normal, but home prices have soared in recent years. Loans are still available, but only to borrowers with good credit histories and a perceived ability to repay. Sandy Blakley, vice president of marketing for Richland-based Gesa Credit Union, agrees loose lending will likely not return.”
“‘I’m certain that with the painful memories of such large loan losses still fresh in everyone’s minds, the FHFA will not allow those standards to slip again,’ Blakley said.”
“Lending rates may come down a little, but none of those contacted expect a return to the free-for-all lending that landed the country in its present mortgage mess - the worst financial crisis in generations, according to some media reports.”
“‘It caused a terrible problem,’ Ken Martin, president of Cashmere Valley Bank, said of lax lending practices that awarded home loans to applicants with poor credit histories and insufficient income to repay. ‘It’s caused mass foreclosures, massive delinquencies. … At the end of the day, all it did was drive up house prices.’”
‘I’m certain that with the painful memories of such large loan losses still fresh in everyone’s minds, the FHFA will not allow those standards to slip again.’
We have a cancer of excess consumer and housing spending and debt in the United States.
We have a heart attack of asset price deflation, and collapsing consumer demand globally.
Who knows what they are going to do? Other than try to get through the election.
“But there’s still resistance, he said, especially among owners of higher-end homes: ‘Some people just keep going on their dreams.’”
Some readers may realize that denial is one of the symptoms at the onset of a heart attack. Does anyone have any idea about how long the denial phase of this housing market heart attack is going to last?
Until everyone stops trying to resuscitate a patient that is dying from natural causes.
There will come a time when everyones focus will shift from housing to something more dramatic. At that point, there will be a complete collapse, but everyone will just shrug there shoulders because of the bigger impeding disaster.
That something more dramatic will be jobs IMNSHO.
At the end of the day, no jobs = collapsing rents = collapsing home prices.
no jobs = collapsing rents = collapsing home prices
Neither my employer nor our competitors can win contracts if the employees are based in ‘high cost’ areas. We just lost a large contract to a cross town rival… who won based on the jobs being shifted to Colorado. (We didn’t know that detail…) Yes, its cheaper to build new buildings and ship the workers than keep them in a high cost state. Its a slow trend, but gaining momentum.
I’m sure other industries will be happy to stick around and pay the ever increasing CA taxes…
Got Popcorn?
Neil
Good point Neil…Higher taxes in Cali is just going to drive more companies out….
I can tell you that more than half of my company’s competitors are in Austin. Seems like there’s getting to be a serious amount of startups in Austin these days. I’m extremely tempted to check it out over there. Still signifigantly cheaper than it is in Cali.
cvca,
…and like it or not that’s exactly the catbird seat the REIC is in right now. Imagine borrowing dad’s car for your prom date and getting in a minor fender bender? You park it in the drive and vow to own up to it in the morning. That night a terrible storm blows over the tree in the driveway crushing dad’s pride and joy?
Well he’s majorly bummed… ( but thanks to an “act of God” you’re completely off the hook! )
Anyone that’s ever been in the military will tell you, If you’re going to f@ck up ( f@ck up BIG! )
Question for the Econ Professors:
FNM is at 76 cents. Buy? Why or why not?
Gracias
I do not like them in a box.
I do not like them with a fox.
I do not like them in a house.
I do not like them with a mouse.
I do not like them here or there.
I do not like them anywhere.
I do not like green eggs and ham.
I do not like them, Sam-I-am.
I can pretty much guarantee that the feds will backstop you at $0.00 on your purchase, so the bottom is most definitely in sight…
It would take an act of God to keep the common shares of doggie-mae from going to goose egg. IMHO
‘If an agent takes a client out to look at 10 houses in South King County during a weekend, he said, odds are that seven or eight of them will be ‘distressed’ properties.’
Oh dear…
Oh and Welcome to 2006 Seattle!
It was such a great year we decided to do an instant replay. You’re gonna’ love our Tribute to 2000!
The press coverage about this in the Seattle PI is still neglible. People still don’t get it in Seattle yet.
Interesting the degree to which BC lower mainland/Vancouver Island is mirroring the Washington market. There seems to be a general geographical Pacific Northwest effect going on.
Today on the Missoulian’s business page was a national map showing how much various housing markets are overvalued, according to Global Insight and National City. Missoula is on there in the “moderately overvalued—15-35%.” category. I about dropped my teeth — not b/c of the rating but b/c it was in the Missoulian. No commentary, of course. This is a stock page they buy from the AP. It’s called “Money and Markets.” It runs in many small and medium town papers.
You can go to the Global Insight home page to read the full report. You have to have it emailed to you, but it’s free. http://www.globalinsight.com/Highlight/HighlightDetail2350.htm Maybe Ben’s already posted this. I don’t know. I’ve been away for awhile.
According to the detailed report, Missoula is 20% overvalued and 26th most overvalued in the nation (of 330 metro areas). So much for the realtor mantra of “we will not suffer as much as other areas.”
Most of the areas that are more overvalued than Missoula are in the West:
Bend, OR—overvalued 47%
St. George, UT—overvalued 36%
Portland, OR — overvalued 35%
Bellingham, WA — 32%
Boise, ID—overvalued 25%
Spokane, WA—overvalued 24%
Grand Junction, CO—overvalued 23%
Seattle is just below Missoula, overvalued 19%.
These valuations are based on OFHEO data plus interest rates, household incomes, etc.
One thing I find crazy about this report is that Global Insight doesn’t predict house price declines equal to overvaluation. On p. 2 of the report, they say that markets with >35% overvaluation will suffer price declines of 10%. What’s that about? Does it make any sense to you?
Good to see y’all again.
Wow, that’s the understatement of the millennium(so far). What’s interesting though, is all the people that DON’T own property do get it.
At least everyone I’ve talked to.
I have a married couple living a couple apartments down from me and they were going to go to a real estate seminar last weekend. I told them to prepare to be pitched, and that I wouldn’t touch any real estate with my ten foot pole until at least 2010 or 2012.
I explained fundamentals, how we should be at max 3:1 price to annual income ratio, but we’re really at 6:1, and that prices probably have a long way to fall.
Don’t know if it’ll sink in though. She works as an insurance agent and is $20k in debt for a new sports car(which she was asking if I was interested in buying). I did everything I could to convince then they shouldn’t even THINK about buying RE. don’t know if it’ll do any good.
Yeah, we’re the last holdouts here - still deep in denial.
It may be just me, but there seems to more tension in the air here in Seattle suburbia lately. As if thousands of soccer moms are wondering if buying that overpriced crapbox a year or three ago on an I/O loan was such a great idea. Naahhh. RE always goes up. Besides, it’s different here in Seattle. Not to worry. Now, I need a latte’…….
“but there seems to be more tension in the air here in Seattle”
Oh and do I know it well. Like the judge asked to rule on a p0rn case, “I don’t know how to describe it, but I know it when I SEE it!”
My problem is that I typically have a tendency to view it as “rudeness” or indifference? I even tried to coin a term for it by calling it “Strategic Indifference”. You know, where people just… didn’t happen to notice you at a 4-Way Stop sign? “Oh I’m sorry ( they seem to mime ) but look! I’m already unloading my shopping cart?”
The general message is, “I’M” more stressed out than you are and anybody with half a brain can see that. So tough t!tties” Mixed in with arrogance, aloofness and whatever other negative emotion they happen to be spewing that day?
“Yeah, we’re the last holdouts here - still deep in denial.”
Sorry, but the crown of last holdout has to go to the saints along the wasatch front. The koolaide flows freely there even still.
“Eugenio Aleman, a Wells Fargo economist, issued an analysis saying ‘the biggest reason for this intervention is the Federal Reserve’s obsession with preventing home prices from falling. And the only way that is going to happen, according to their argument, is for mortgage interest rates to come down. And I think that this is the mistake the Federal Reserve, the U.S. Treasury, and markets are making.’”
How long will it take for the results of this latest natural experiment by the top thinkers at the Fed to come in? My prediction is that slightly lower interest rates will not be sufficient to offset the combined impact of falling home prices, increasing unemployment and a reversion to traditional lending standards that require households to prove they have the assets and incomes to repay their loans. However, I can see a possible way forward where the primary (but unstated) policy target is stabilizing home prices, in which I expect overbuilding at the high end to continue going forward, adding to a record glut of vacant properties.
I’d say lowering mortgage rates wouldn’t have any effect, but I underestimate the average individual ability to bury their head in the sand.
Two years ago, a drop in rates from 6.00% to 5.00% might have enticed me into the market (assuming I was willing and able, I was neither). Today, now that I am somewhat willing and able, I am not.
Why?
Risk premium. After saving all that cash for 20% down and emergencies and being able to buy a car with cash when my current one croaks, I’m in no hurry to be parted with it. The risk right now of needing to relocate due to work is much larger than it was two years ago. I consider my ability to relocate without needing to sell a house one of my greatest assets; in order to purchase a house I need to be “compensated” for that loss. Not to mention property tax rising and energy costs rising: so far, the massive increase in those prices in my area has not been reflected in rents.
For me, right now, as a renter, I’d gladly pay 10% over the equal purchase price (20% down, 30-year fixed) to rent my apartment. But I don’t, I pay significantly less than what it would take to purcase (PITI+condo fees) an equal condo. In order for me to buy here - to compensate me for the assumption of all that risk - prices would need to drop about 20-30% beyond where they stand today.
That is why I’m not in the market, despite being willing and able with 20% down and perfect credit. I’d be an idiot to part with both money and assume all that risk.
yea I agree with you why tie yourself down in a bad job market and pay MORE to buy than rent.
Aw, Bear, there you go again. You gotta lay off of that making sense stuff.
Professor,
He also noted that “credit standards were too loose for the last two decades”. Well… o.k, I’d say a good TEN years but you’re the analyst dude, why didn’t he raise any objections earlier?
Must have been busy.
b/c he’s an “economist”. Economists can only predit the *past*. If he had gone on record about the hazards of lax lending several years ago, he would have been driven out of the business. Probably would’ve been accused of being a warlock or some such…
I have seen some recent REIC propaganda in the MSM suggesting that F&F should loosen lending standards in order to respike the housing market.
Guess what got us into the pot of stew in which we are all boiling?
Wasn’t there discussion on Bits bucket this morning about how F&F were now requiring 15% down?
I don’t care how loose credit and income requirements are, if the FB is required to have skin in the game to the tune of 15% there is no way, now how, we are re-lighting this rocket.
BTW, welcome to mixed methaphor hell.
Will people borrow money at low rates and stretch themselves after watching housing prices fall. I don’t think so. I suspect the fundamentals will have to improve and we’ll have to see a couple of years of stable growth before most will stretch themselves financially again. The same goes for lenders, after watching the carnage are they going to throw caution to the wind in the next few years. I’d say no again.
Agree ME. Rates are certainly a factor, but the primary driver for the bubble in terms of psychology of the masses (the real driver for the whole thing was cheap credit sourcing from the Fed, but that’s not what we’re talking about here) was the perception that prices are going up and will continue to go up.
There is doubt now. No doubt lower rates may have an upward effect on RE sales, but hopefully that effect will be minimal and the negative psyche of the collective will continue to have a larger downward effect.
I think the opposite to a certain extent. I think alot of people saw others make a whole bunch of money for doing nothing. I think they will jump at the first chance to maybe do the same. They will say that they’ll be different and won’t screw themselves so it’s OK.
‘The Pacific Northwest is still very exciting to everyone in the rest of the United States,’ he said.
WRONG.
Death by drowning is also exciting, or so I’ve heard.
Auto-erotic asphyxiation?
Snuff films, in the vernacular.
A.K.A. Florida and California home-pawners.
BWAHAHAHAHHAHAHAHHAHHHHHHHHHHHHHHHHHHHH!!!
Yeah, I’m sure all of you want to move to Yakima. It IS a nice place, but there are MANY nice places.
MacAttack,
Could you believe there EVER was a $310,000 median price in Estacada? How does that possibly make sense? It’s a hard, long commute to anywhere and it’s every bit a “cultural center” as Molalla is! Oh but it’s good to know now that median is 220k that prices have only “adjusted” a little?
As a current Clackamas County resident, that figure shocks me. I’m happily renting right now, waiting for the fall, when I can get out of here and move to the big city!
Jim,
On the local PDX blog there was… “spirited debate” on whether or not sacred “close in” properties would go down in price, at ALL! RE Bulls seemed to be willing to defend the theory quadrant by quadrant*, “district” by district and even house by house! ( To the death mind you )
Much as we’d seen in the Bay Area. Patience!
( For non-”Helenites” the Willamette River divides Portland East and West and Burnside divides the city North and South ) *
Clackamas. Is that a real place??? That’s awesome.
There should be a holiday song called “Christmas in Clackamas”
I’ve seen a starter house - as -is, looks like it needs SOME work - in Newberg for $119K asking. It’s about 1000 SF on a lot about 4000 SF.
Down the street in Tualatin, near Haggen Supermarket, townhouses were put up in ‘99 or so; their peak asking prices were right about $300K. Today, there’s a nice end unit asking $231K, and it hasn’t sold. Others in the neigborhood are in the $220K range. I can’t say for certain, but I believe that area flooded in 1996 (but the entrances are up a couple feet, so they would escape a repeat by the skin of their teeth).
Ridiculous.
We (my wife and I) found a house in Mt. Tabor that we absolutely love, original wishing price was $480,000. It’s now down to $420,000, which we figure is still about 25% too high. House has been on the market since March.
So, we’ll keep waiting. We have enough cash for a 20% down payment, perfect credit, no debt, and more than double the median household income ’round here, so we’re set up nicely to benefit from the collapse.
MacAttack,
My oldest sister lived off of Martinazzi for years and I assure you that was the case. I also recall having to tell the damn dog that the cesspool on the side of Freddy’s was *not a swimmin’ hole! ( Doofus )
It’s actually just as low or lower on the East side of I-5 by Meridian Hosp. Early commuters know that it’s the last place where morning fog clears. Come to think of it that ‘morning’ fog was there many a’ time coming home from work too?
There should be a holiday song called “Christmas in Clackamas”
Just sing it like a happy little ditty.
Christmas in Clackamas.
We beg you St. Nicholas,
Please don’t turn your back on us.
New HumVees would tickle us.
Life here in Clackamus
is debtor spectacular;
Credit cut’s an attack on us;
not in our vernacular.
The Yakima Herald from Washington. “Developers of The Vineyards Resort began the first phase of construction that will include the 18-hole golf course, clubhouse and pro shop, the roads and utility lines and preparing the first 230 home sites. The Vineyards will be the second destination resort in this area after the much larger Suncadia near Cle Elum, a 6,400-acre mountain development that plans 3,000 housing units.”
I have a friend here in Seattle, who’s from Yakima. Whenever she tells people where’s she’s from, she kind of winces, as if to apologize for being from there. (I’ve never been, so please, no angry pro Yakima posts.) From her description, it’s hard to imagine the place supporting million dollar abodes.
Let’s start a campaign that we will buy houses in Yakima from the FB who writes the best pro-Yakima letter.
I feel an attack of ennui coming on, and cruelty towards FB’s will go a long way towards allaying that.
Ya-kima is so fat, she’s stuck in her house.
BWAHAHAHAHHAHAHAHHAHHAHHHHHHHHHHHHHHHHHHHHHH!!!
Takima is the arm pit of Seattle cue to paper pulp processing. I hated going their for soccer games when I was a kid. It is a stinky crime hole.
OK- I’ll slow down…
Yakima not Takima, and due to not cue to…
No, you’re thinking of Tacoma (the Aroma of Tacoma).
“It is a stinky crime hole.”
A co-worker’s wife was in an automobile accident there, knocked-out cold. A twenty-something latino prick stopped long enough to steal her purse containing her ID and medical insurance card. Police eventually traced her license plate for the hospital who contacted her husband.
How do we know that the person who stole her stuff was a 20-something year-old prick?
This is a Northwest thread, so here’s a repost from yesterday’s bit bucket (I got it in a bit late). This is a first-hand report of the Billings, MT home auction Ben had a story on. Go to the link for pics and a table with all properties
Kenmark auction sets new comps
OT, but here’s the number from Florida. 37,000 fewer students in the public schools (statewide) at the start of this school year compared to last year.
http://www.heraldtribune.com/article/20080911/ARTICLE/809110405/2055/NEWS&title=Schools_lose_37_000_pupils
Wow.
In a word… wow! I would love to see the stats by state. So how is Mexico doing?
Got Popcorn?
Neil
From the original post:
“Idaho Department of Labor spokesman Bob Fick said the state saw employment declines during six of the first eight months of 2008, including the last four months. One big reason is the normal spike in second-quarter construction jobs never materialized this year because of the housing slump.”
“‘We’re down thousands of construction jobs from a year ago,’ Fick said. ‘It’s something like 4,500 jobs.’”
There’s someone here in Tucson with the same name. My now-retired German accountant and I both know him, and she confided to me that she found his name to be quite amusing. Seems that the German equivalent for that naughty four-letter English word is…
…fick.
Arizona Slim,
Stop ficking around! O.K?
If only his first name were Richard.
PDT WASHINGTON, (AP) –
Nearly one-third of the country’s top executives expect to cut payrolls in the coming months as companies cope with a weakened economy dogged by housing, credit and financial problems.
Add recession layoffs to the credit crisis RE slump
About time those … ahem… CEO’s figured out the economy isn’t doing a “V” recovery. For the record: I’m friends with a few CEO’s (mostly retired). Not bad folk in general (if overpaid), but they do tend to be overly optimistic (normally a good thing, except at the start of a recession) and they do drive via the rear view mirror.
Got Popcorn?
Neil
It’s not surprising that CEO’s are so overly optimistic. Every day at the office they’re surrounded by people kissing their butts. The large salary probably help to make them optimistic as well.
This is a real problem.
Having worked with more than my share of CEO’s, they only want “good news”, and they have the “don’t tell me the problems, just show me results” attitude.
They never learn that sometimes problems are so much larger than their little world that there are NO good solutions. The best solution is the least worst one, and since that one is a “failure”, they take the most optimistic visions, and fail spectacularly rather than cutting their losses and running.
As a general rule, when you run into this situation, it’s resumé-time. Telling the truth is a waste of time, the “optimists” will run you over, and you’ll lose anyway.
“‘Even if mortgage interest rates decline,’ Aleman wrote, ‘which is a big if in the medium and long term, the mortgage market will remain tight just because credit standards were too loose during the last two decades and the economy is deteriorating, with the rate of unemployment increasing and now prime mortgage loans also at risk. Thus, even if the measure helps interest rate spreads, credit will remain tight for the foreseeable future.’”
And there you go folks. Who in their right mind will relax their NEW strict lending practices, when they got screwed up the ying yang when it was very very loose.
REs will need to devise a plan to screw people with tons of cash. Because they already screwed people that had none.
Some People Just Keep Going On Their Dreams
———————————————————-
We eat our Jung.
I was a freud of that.
To the dreams comment lad said, “We eat our Jung.” Laddy boy, your comments are a thing of beauty.
Some People Just Keep Going On Their Dreams
———————————————————-
We eat our Jung.
What an ObamaNation
We are such stuff
As dreams are made on, and our little life
Is rounded with a sleep.
Weird, I was in Wenatchee last week (flew in on a 37-seat prop plane.)
Lord knows why prices would have soared there in recent years - lower rates=bigger principals? Certainly no shortage of land, and only job growth due mainly to a new Alcoa plant being built.
Can’t say I was a big fan of the sprawl/low-density retail. The surroundings and people were very nice, though.
Wenatchee has become one of the most overpriced areas in Washington. I still don’t know why it hasn’t sank yet like Bend. Good local ski slope and access to Lake Chelan. It will fall hard.
Wenatchee, WA grew back when paddle-wheels were making their way up the Columbia river, but in modern times they are without a 4-lane freeway due to the mountains and the river. It sure is a pretty place, and cheap hydro-power electricity is a plus, but like many places the home prices climbed too far from the median wage. Long icy winters are typical of the region.
“The best thing you can do to satisfy clients today is telling them the truth.’”
holy crap…now they have to…to…tell…*gasp*…the TRUTH?!?!?!
But I can’t handle the truth !
Telling the truth to clueless people is overrated.
Have you never been to a barbecue with the interminably clueless?
“And now? ‘It’s supply and demand,’ Deasy said. ‘There’s still eight sellers for every buyer in a month.’”
Someone didn’t get the memo. There’s supposed to be all that pent up demand to buy.
OT…
Finance gurus…
I have a modest and perhaps important question that is a bit outside my reach of understanding. My family holds some Wamu Investments/IRA Sepp accounts with this beleagured group. They are in “baskets” of ailing mutual funds.
My question: Should I be concerned about the disposition of these funds due to Wamu’s perilous position?
I understand these funds are not deposits, not FDIC insured, may lose value and so forth. In non-legalese, a dice roll.
The question: If Wamu fails, what becomes of funds the bank holds for investments described above. My belief is that the investments in the underlying funds would be OK. Or is there a boogie man/gal around the corner that would jeopardize the investment?
Thoughtful response appreciated.
Thanks.
Awwww, Milkcrate, let me first pour you a cup of tea with sympathy.
Not so much because those investments are with WAMU, but because you are about to enter the world of…
…IRA Rollover Pain
Now, you may see those mutual fund company ads about how easy it is to roll your retirement funds from Company A over to them (Company B).
Well, kiddo, I’ve been there. And lemme tell ya something, reality is a lot harsher than those ads.
I tried for three months before I was able to extricate most of my retirement money from the clutches of TIAA-CREF. Former employer had the retirement plan with them, and after years of dealing with all sorts of incompetence and unhelpful customer service, former employer bailed on TIAA-CREF.
I got a letter from former employer informing me of their decision to bail. Which inspired me to get my own moola out of TIAA-CREF. It took several rounds of paperwork, all of which had to be signed by the former employer’s HR manager.
Boy, did she have the patience of Job. And she also said that many other employees had trouble getting their money out of TIAA-CREF and into other retirement funds.
So, ‘Crate, be prepared. Your rollover will take time and try your patience.
Slim
I brought some scones to go with fine pot of jasmine. Thank you for the cup.
my situation may be easier, since the accounts were set up by the family member, who owns the biz. Sounds like your odyssey was muddled by more players.
Still uneasy.
Nice cactus plantings outside.
It’s actually surprisingly simple.
Ask them for the forms. Send the replies via “registered mail” so that you can track it.
Call them a few days letter to check if they have mailed it. They will have NOT and will make all kinds of excuses.
Tell them on the phone that your “financial adviser” told you to roll it. (It doesn’t matter that you don’t have one.)
Also, tell them your lawyer will be contacting them to open a legal dispute. (It doesn’t matter if you don’t have a lawyer.)
Send them the details of the phone call “registered mail” so that you can track it.
You will receive a check within the next few days. Make sure you “roll” it over right away otherwise you will face the wrath of the IRS.
Trust me, this works! Even the most craptacular companies jump when the L-word is used.
Slim, cat..
Many thanks for the input. One thing: should I roll our marbles out of Wamu pronto, with dispatch, ASAP or fast as I can beat feet to the Post Office?
So sad to hear this BS is STILL going on. There’s actually only (1) firm that handles ACAT’s ( account transfers ) nationwide. Back in the day Merrill or whoever would simply take the client’s request and put it on the bottom of the pile.
When it finally rose to the top… they’d put it back on the bottom. I think under ERISA Law these people are playing with fire. There is such a thing as “alienation” meaning you cannot alienate people from their OWN MONEY! Mention ERISA or DOL regs. liberally in your conversations with your plan administrator. ( That usually gets ‘em hopping )
Of late w/ all the Auction Rate Securities ( wurtless ) firms have resorted back to these 1980’s tactics. They’re stalling because, well the “safe as a money market” schlock they sold you, well let’s just ‘other’ firms don’t want it on their books so they’re demanding they be liquidated prior to transfer!
You can always get a check provided you deposit within 60 days IIRC.
The whole thing is a sham but you can get your way.
Right, absolutely. The only thing I don’t care for in that particular scenario is that if you have some funds or stocks you’ve had forever and done well with, you’ll incur costs to sell the positions and then likely AGAIN as you go to repurchase the XYZ Fund or stock!
These admin’s KNOW people are aware of the damned expenses so it’s kind of a poison pill if you will. In the meantime you’ll be getting calls from Fidelity or whomever with an account retention ’specialist’ saying “Well you’ve been with us so long and we have this great working realtionship etc. etc.” ( when the truth is you’ve never even gotten a call from these people UNTIL you decided to move the account!
In some cases, they get poor grades for “Plays well with others” because they don’t even have selling agreements with one another so you wind up having to liquidate any way. It’s the dark side of the biz.
If I recall correctly from last year, I was told you have 60 days to roll it into a new account.
If you pick another mutual fund company I think they will help you in transfering it, you never get the check and don’t have to worry about paying early withdrawal penalties.
Looking for Work in All the Wrong Cities: Tokyo
http://cosmos.bcst.yahoo.com/up/player/popup/?rn=3906861&cl=9686996&ch=4226714&src=news
Four Democratic senators urged the mortgage companies Fannie Mae and Freddie Mac on Thursday to freeze foreclosures for 90 days on loans they hold.
I guess in their dream world noone would have to actually pay back their mortgage. Free houses for everyone.
“When playing Russian roulette the fact that the first shot got off safely is little comfort for the next.”
Richard Feynman
This must be a joke:
I just saw an advert for Armando Montelongo’s book “Flip and Grow Rich” appear right above the bit bucket.
Classic positioning, in the classic meaning of “bit bucket”…
Yeah, it’s “Flip Over and Don’t Mind the JT” time now.
Yeah, their media buyer needs a clue
Or perhaps they’re trying to lure visitors in…
Whee! A PNW thread! Thanks, Ben
And add this gem from today’s Olympian, here in lovely Thurston Co. WA
‘Owners see reasons for hope’.
http://tinyurl.com/3tfz2u
‘Truss Components General Manager Chad Johnson, whose Tumwater business manufactures wooden trusses for the housing industry, also expects the economy to improve after the election.
Johnson said revenues have dropped about 50 percent since 2006, a record year for home sales in Thurston County, according to Northwest Multiple Listing Service data.
He expects the housing market to hit bottom this winter, then regain some momentum in the spring.
“The market has come down as low as it’s going to go for home sales,” Johnson said.’
Hahahahaha! Oh, golly, thanks Chad. I love a good belly laugh on a lovely sunny day. Ahhhh…(wipes tears of mirth from eyes.)
Um, yeah, Chad, that’s EXACTLY BACKWARDS.
When house prices were going sky high and my salary was staying the same with a small cola I wondered if everyone got some huge pay increases. NO! Only makes sense it was a bubble just like was predicted long ago. We will see how many other first time homebuyers stay away with no downpayment assistance programs and the so called tax credit being nothing more than an interest free loan. House prices will continue to come down to match median incomes.
hell yeah
home values are way too high
Aren’t they going to increase fannie and freddie by ~6% until 2010 and then decrease their size by 10% every year afterward until they are ~30% their former size?
I think this will take 13 years
So the gse’s will be downsized ,, “their mbs” from 2010 until 2023!!!
Is this what happened to Japan?
Collapsing jobs = collapsing America = GREAT DEPRESSION!!!!
With Lehman and WaMu knock, knock knocking on heaven’s door on 9/11…
I declare the past 7 year period to be the:
Broken-Mirror-Economy
What would Jack Welsh do? har har His brand of huffing & puffing only worked in a bubble economy.
OPINION
How Paulson Would Save Fannie Mae
By PETER J. WALLISON
September 12, 2008
The most astonishing thing about Treasury Secretary Henry Paulson’s plan for Fannie Mae and Freddie Mac is that he intends to use taxpayer funds to resuscitate the companies and return them to profitability.
This after 20 years, during which Fannie and Freddie used government backing to enrich their shareholders, managements, lobbyists, former government officials and Washington insiders; after they rigged the political process with campaign contributions; and after their Congressional supporters resisted every effort at reform until the two companies were on the verge of collapse. Now a Treasury secretary in a Republican administration aims to put them back in the same business, and get the taxpayers to finance it.
It is difficult to believe, yet that is where we are headed.
“Accordingly, as it stands today, the Paulson plan is an historic missed opportunity to eliminate Fannie and Freddie as government-sponsored enterprises, the form which has put us at such risk. Nevertheless, the Housing and Economic Recovery Act of 2008, which authorized the conservatorship, also contemplated its conversion into a receivership. It is not too late to take this essential step.”
Mr. Wallison, a senior fellow at the American Enterprise Institute, was general counsel of the Treasury Department in the Reagan administration.
http://online.wsj.com/article/SB122117569863425755.html?mod=opinion_main_commentaries
REVIEW & OUTLOOK
Lehman’s Fate
September 12, 2008
Wall Street in a financial crisis has rules similar to those on the African savannah: The hyenas pick off the weakest wildebeest first. And so it has gone this week as investors and lenders stalk the venerable but sickly Lehman Brothers investment bank. The rest of the financial herd is also spooked, but we hope this is one institution the taxpayers don’t have to rescue to calm everyone down.
Can anyone comment on whether this sort of event might affect the value of Manhattan real estate? Because it was not long ago that the value of the high end pretty much everywhere was different, and Manhattan was especially special. I am thinking the high end may not be so different as it used to be?
For Lehman Employees, the Collapse Is Personal
By GERALDINE FABRIKANT and ERIC DASH
Published: September 11, 2008
In the last few days, employees of Lehman Brothers have wrung their hands as the value of their stock evaporated before their eyes. Now, many fear losing their jobs, too.
The Lehman Brothers office in Midtown Manhattan. “Everyone was always hoping we would pull through. Now, that is not really an option,” said one employee.
In scenes eerily reminiscent of the final days of Bear Stearns, the megawatt energy within Lehman Brothers has dimmed to a hum as employees focus on the fate of the firm and what it might mean to them. To make matters worse, pink slips for previously announced layoffs were being handed out this week.
“Everyone is walking around like they have just been Tasered,” said one Lehman employee, who, like many interviewed for this article, declined to be named because he was not authorized to talk publicly. “Everyone was always hoping we would pull through. Now, that is not really an option.”
The footprint of the credit bubble monster is clearly visible in Lehman’s stock chart.
American corporate profits
A turn for the worse
Sep 11th 2008 | NEW YORK
From The Economist print edition
The outlook is deteriorating even for the best-performing firms, let alone the troubled ones
Illustration by Claudio Munoz
THE second quarter of this year was the most profitable ever for Big Oil: the six largest Western oil companies reported a 40% jump in profits, to a combined $51.6 billion. Exxon Mobil, the biggest of them all, banked $11.7 billion, the highest-ever quarterly profit reported by an American firm, beating its own record. But nobody expects a repeat of such feats of capitalism in the quarter soon ending, thanks to the tumble in the oil price from its peak of $147 in July. And given all the recent talk about levying windfall taxes on them, the oil giants may think that is just as well.
However, anyone tempted to hope that falling energy costs will mean higher profits for other American firms should think again. To the extent that oil prices are falling because of slowing global growth—the likeliest explanation, despite the flap earlier this year about the role of speculators—then they are likely to be an indicator of falling profits across the board. As oil prices tripled between 2002 and 2007, aggregate corporate profits doubled. Both reflected strong global demand, points out David Rosenberg, an economist at Merrill Lynch.
He says the recent decline in energy prices is a “symptom of demand destruction” that has dire implications for overall profitability. Mr Rosenberg has just written a gloomy report identifying “four horsemen” that will do their worst to American corporate profits: thinner profit margins; paying down debt as tighter financial conditions take their toll; lower energy prices; and a combination of slowing growth outside America and a stronger dollar. He predicts 7% falls in profits for firms in the S&P 500 both this year and next.