Buyers Will Get To Have A Say In California
The LA Daily News reports from California. “San Fernando Valley homeowners saw property values plunge 35 percent - a quarter-million dollars on a median-price home. The median price of a previously owned house tumbled from $650,000 in August 2007 to $420,000 last month, said a new report from the San Fernando Economic Research Center at California State University, Northridge.”
“The median price in August matched levels last seen in January 2004.”
“‘It’s stunning. That’s a huge amount,’ said Daniel Blake, the center’s director. ‘Next month we’ll be back at 2003 prices.’”
“During August, foreclosures soared 219 percent as 923 families lost their homes. And Blake said foreclosures in the third quarter - to be reported in late October - will likely break the record of 2,084 homes seized during the April-through-June period.”
The Claremont Courier. “According to real estate data on Trulia, the median price of homes sold in Claremont between June and August of 2008 was $520,000, down from around $600,000 during the same period in 2007, a drop of 13.3 percent.”
“Yahoo! Real Estate shows that there are 102 foreclosures in Claremont. But Geoff Hamill, a senior real estate agent with Prudential Wheeler Steffen, believes there could be many more approaching the point of foreclosure that are not yet listed.”
“While market conditions are scaring off many potential homebuyers, some housing experts think that now is the time to buy. Local mortgage banker Tim Harrison believes that fear is stopping people from entering the market despite clear incentives and an excess of housing options.”
“‘They see that their friend has just lost $100,000 on their home, and they think the same will happen to them,’ Mr. Harrison said.”
The Press Telegram. “How much would you pay for a luxury home whose amenities include stainless steel gourmet kitchens and master suites with walk-in closets? Buyers on Oct. 19 will get to have a say on the market prices of 25 houses on about 3.5 acres at Studebaker Road and Del Amo Boulevard in the city’s last ‘new construction community,’ named Lakewood Estates at Gordon Ranch.”
“And they’re expected to go fast, in a transaction estimated to last about 31/2 minutes, said Ken Stevens, who will be conducting the auction. ‘There’s not going to be an opportunity like this,’ he said. ‘This is a one-time opportunity in Lakewood.’”
“Construction for Lakewood Estates began in early 2007 and wrapped up in the first quarter of this year. The city was chosen as a project site because of its schools and its proximity to downtown Los Angeles and the beach, said Tony Weeda, a partner of Lakewood Estates LLC. Weeda declined to disclose how much money was invested in the project.”
“But at the time of the project’s completion, the real estate market and consumer confidence had been bitten hard by the credit crunch. Sales fell through, Stevens said.”
“‘We just feel that with the current conditions in the housing market, strategically this is the first course of action to take at the time,’ Weeda said. ‘This gives the buyer the comfort of knowing that they are taking part in establishing the price.’”
“Of the 25 houses up for auction, six are 2,267-square-foot homes with three bedrooms and 11/2 bathrooms. Asking prices for these homes were originally listed at $776,080, but the minimum bids will begin at $445,000.”
“The remaining 19 are four-bedroom, three-bathroom homes whose dimensions range from 2,513 to 2,580 square feet. The minimum bid for homes whose initial asking prices reached $829,530: $495,000.”
The Orange County Register. “Hard times have hit Aliso Meadows hard. The Laguna Hills condo complex had at least 23 foreclosures in the past six months, resulting in months of unpaid homeowner association dues.”
“Now, Aliso Meadows is so short on cash that it has deferred roof and termite repairs, can’t fix rotten wood siding and must wait to fix potholes ‘big enough for your families to make Jacuzzi’s of,’ association officials said.”
“Aliso Meadows is one of many HOAs in Orange County and around the state that are having trouble coming up with the money they need for maintenance and services because of rising foreclosures.”
“At the Cinnamon Tree condos in Placentia, more than 30 foreclosures and mortgage defaults have aggravated the complex’s existing financial troubles and disputes.”
“Foreclosures, and HOA delinquencies, mushroomed after prices there fell from around $300,000 a unit to as low as $150,000, helping to push the board into raising fees and levying a $1,000 special assessment, property owners there said.”
“At Threewoods, a Fullerton community of $1 million homes, owners abandoned one unit under the threat of foreclosure, leaving the association to water and mow its lawn during the months it sat vacant. The association also was forced to act after a 100-pound beehive was discovered inside the home.”
“Karen Conlon, president of the California Association of Community Managers, noted that her own association in Laguna Hills discovered 14 squatters had taken up residence in one of four foreclosed units.”
“Homeowners facing foreclosure often stop paying dues for a year or more before losing their home, so the unpaid dues mount up.”
“‘When some homeowners aren’t paying their fair share, it puts a burden on the other homeowners,’ said Conlon. ‘It’s going to take us a long time to recover. I think it’s going to take a good two to five years to fully financially recover from all the things happening in the community.’”
The Mercury News. “Measured by new building permits, single-family housing construction fell by 60 percent in the East Bay during August compared with the totals for the same month the year before, the California Building Industry Association reported.
“‘This is the worst since the Great Depression,’ said Michael Ghielmetti, president of Pleasanton-based Signature Properties, and an officer of the Home Building Association of Northern California.”
“The downturn in the East Bay activity was steeper than California, which suffered a statewide decline of 58 percent in new-home building during the 12 months that ended in August. San Joaquin County single-family building fell by 65 percent. The San Mateo-San Francisco-Marin region slumped by 31 percent.”
“‘My dad has been in this business for 42 years and he has never seen it this bad,’ Ghielmetti said. ‘The Hoffmans of the world have been building homes since the 1940s, and they say they haven’t seen anything like this.’”
“The nose-dive in new-home building was more severe than anticipated by a statewide group.”
“‘We have been taken aback by the dramatic cutback in single-family home production in California,’ said Alan Nevin, chief economist with the California Building Industry Association.”
“The largest decline during the 12 months that ended in August occurred in the Yuba County-Sutter County area, which was hammered by a 93 percent drop in single-family home construction.”
“‘Most metropolitan areas have seen their single-family permit activity decline by half in the past year, with little indication of improvement in the last third of the year,’ Nevin said.”
The Sacramento Bee. “For most of 2008, it has seemed that California’s home building industry could hardly scale back its expectations further. But it did just that on Wednesday.”
“The Construction Industry Research Board has downsized estimated home starts in California this year to 70,000. A month ago, it estimated construction would begin on 75,000 homes this year. The board now predicts California builders will start only 74,000 residences in 2009.”
“Housing permits peaked at 212,960 in 2004 before the real estate market began a decline. Builders say this will be their least productive year since the state began keeping records in 1954.”
“‘In essence, the industry has come to a standstill, with minimal indication of improvement during the balance of the year,’ said Alan Nevin, chief economist for the California Building Industry Association, in a statement.’
“Early this year, Nevin predicted builders would take out permits for 128,400 single-family homes, apartments and condominiums in 2008. Acknowledging that he was being more optimistic than most economic thinkers, Nevin predicted a slight rebound during the second half of 2008 and a ‘modest recovery.’”
“The numbers show that builders in Yuba and Sutter counties started only eight homes in August, down almost 94 percent from the same month last year. The tally was down 62 percent from July.”
From News 10. “If you knew you could stop making house payments and remain in your home for up to a year or even longer, would you continue paying the mortgage? A southern California company is selling a system that helps distressed homeowners take advantage of foreclosure laws.”
“Real estate professionals who were directed to the Web site by News10 were unimpressed. ‘I’ll tell you (how to do it) right now for free,’ said Alexis McGee of a Web site aimed at foreclosure investors. ‘If you don’t pay your mortgage the bank’s going to take awhile before they foreclose,’ she said.”
“McGee and others said there are other less destructive ways to leave your home that won’t so seriously impact your ability to buy another home in the future.”
“‘(Foreclosure) is the kiss of death for most lenders today, especially in the tightening market we’re in,’ said mortgage broker Pat Mackin. ‘You’re consigning yourself to be a renter for a period of up to seven years.’”
The San Francisco Chronicle. “The Federal Deposit Insurance Corp. seized IndyMac in July, and Chairwoman Sheila Bair immediately halted foreclosures on its home loans. Of the 742,000 mortgages that IndyMac owned or serviced, more than 60,000 are 60 days or more in arrears.”
“‘We can freeze the interest rate cap for the life of the loan at the Freddie Mac survey rate (about 6.5 percent),’ said Michael Krimminger, special adviser for policy to Bair. The rate can go as low as 3 percent initially.”
“‘If we have to, we can put in a 40-year amortization,’ Krimminger said. ‘Say you were two years into a 30-year mortgage, we’d essentially add on another 10 years, so it would be 38 years.’”
“The final option would be to calculate payments based on a reduced principal. For example, the borrower might owe $400,000 but the payments could be calculated based on principal of $250,000. However, the deferred $150,000 would still be due when the home is sold or the loan matures.”
“Doesn’t that mean borrowers would have to come up with large amounts of money if they want to sell within a few years?”
“‘In many cases, forbearance is not really the best option,’ Krimminger said. ‘It’s not an investment decision for the borrowers. If they want to keep their home, we can do a lot to make their mortgage affordable. If their mortgage is heavily underwater and they don’t want to stay there for that reason, that’s their decision.’”
“‘Our obligation is to maximize the value of the assets of a failed bank,’ Krimminger said. ‘All the options to modify a loan are checked against … what we would recoup in a foreclosure. If (a loan modification) doesn’t give more money than a foreclosure, then we have to look at a foreclosure as being the best option.’”
“If the borrower has owned the house for long enough that it contains significant equity, IndyMac might be ‘obligated on behalf of investors and insurance’ to foreclose for better returns, he said.”
“And some borrowers simply cannot afford payments, even at lower rates. ‘That is troubling, but is (true) in a not-insignificant number of cases,’ Krimminger said. ‘We want to make sure if we do a modification, it’s one that the borrower can afford to repay.’”
“IndyMac FSB will work to verify borrowers’ incomes as part of the loan modification process. Krimminger said IndyMac made a lot of loans that were low-doc or no-doc, meaning it did not verify borrowers’ incomes.”
“‘Let’s face it,’ he said. ‘IndyMac failed for a reason.’”
From CNN Money. “When Sarah Lavely gets angry, she likes to break things. Not all the time, but on days when everything seems to be going wrong, she has been known to throw some plates against a wall. Fortunately, she has an easy outlet: Lavely is the founder of a San Diego shop where customers pay to smash tableware like dinner plates, wine glasses, intricately lined sashimi plates, brightly colored vases and goblets.”
“Since the shop opened business has been steadily increasing, with each night, on average, busier than the last. Despite consumers’ tendency to be budget conscious in a down economy, Lavely is getting calls from groups of people who want to come to her shop from as far away as Los Angeles.”
“Economic uncertainty might actually be driving business, as customers smash their way through the frustrations of high gas prices, a slumping housing market and rising unemployment.”
“‘We leave Sharpies in the break rooms and people will write on a plate before they throw it. I don’t read what they write, but when those customers are finished you can see they feel pretty emotional,’ Lavely says. ‘But that’s why they came, to throw their frustrations against a wall and walk out the door feeling good.’”
‘‘In essence, the industry has come to a standstill, with minimal indication of improvement during the balance of the year,’ said Alan Nevin, chief economist for the California Building Industry Association, in a statement.’
Well, Mr Nevin your industry needs to come to a standstill. This guy still insists California needs 200k houses every year. But as Chris Thornberg said a long time ago, there is a shortage of housing in California - in low priced apartments.
No need for new houses. Greenspan and his gang just blew up Wall st. The damage is greater than 9/11 by far.
It only took W seven short years to finish the job.
Nobody expects the W Sucquisition!
About borrowing money for the 700 B bailout.. ahem..
_____________
China banks told to halt lending to US banks-SCMP
Wed Sep 24, 2008 9:52pm EDT
BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.
http://www.reuters.com/article/wtMostRead/idUSPEK16693720080925
If you had been reading my posts at the forum, you’d know the housing bust has gone global, with every major and most sub markets now seeing double digit declines. Lender and developer defaults are sure to follow, and the market for US treasuries could go into the dumpster.
Yes.. that is the problem that no congress creep wants to acknowledge. The housing bubble has affected (directly or indirectly)every country with indoor plumbing.
I always felt it was very disingenuous of politicians, investment advisers, bankers etc to keep on denying the obvious. The sad part of this debacle is they have now malinvested and almost destroyed the retirement plans of almost every person in the western world (maybe even japan and korea). Even government pensions are effectively toast. Neither deflation or inflation can make the retirement plans of most people whole again (yes even deflation- most people have very small/nonexistent savings.
The system cannot function in it’s current state. Humpty dumpty cannot be put back together.
If we only had spent all of this ‘greenspan’ liquidity in building coal, gas and nuclear power plants or improving our infrastructure..
What do you think of the assertion, “Pass my bailout measure fast, before I tell the world that the global financial collapse that began under my oversight was your fault.”
Kerikeri, New Zealand: median SFR price down 25% in last 6 months.
When I moved here a year ago, I was told that would never happen. Because “It’s different here. New Zealand real estate only goes up. All the boomers want to retire here. All the foreigners want to invest here”
LOL!
Yeah, well, what does NZ really have?
Pretty pictures? That don’t pay the bills.
That place is gonna get banged so hard it’s gonna be like a bad p*rn movie.
Or a good one?
Oh, sheesh. A store where people pay money to break things.
And to think that I got up at 5 a.m. this morn so I could go out and do yardwork before the heat set in. My yardwork, which included setting up a guerilla garden on the city-owned, vacant lot next door, cost me nothing.
In my imagination, I beat up several selfish, inconsiderate neighbors (and their robo-barking dogs) with my caliche bar and shovel. Dang, that felt good. And that guerilla garden looks very nice, if I may say so myself.
All these plate smashers sound like they need to sit down and start thinking about their lives. What they’re doing wrong vs. right. But they can’t because they’re stupid, so they just smash plates. Maybe that’s why our economy is crashing. It’s because we have too many people like that on the payroll.
Well Big V,
I would rather have them smashing up plates than taking a six shooter and shooting someone.
“which included setting up a guerilla garden on the city-owned, vacant lot next door”
Good for you! Get some use out of the un-used and undeveloped land AND save some money and get exercise as well. Although there are some out there that would see the undveleoped land as a major sin!
Stars End
Well, bop me over the head with a caliche bar. It’s guerrilla garden. One of those R-rolling words.
“Oh, sheesh. A store where people pay money to break things.”
Why oh why would anyone pay to do such a thing? I just tell Marge to get me another beer - and something usually gets broken for free!
As I pondered the stupidity, it occurred to me that in tribal cultures where there’s a village Commons, folks would be burning effigies and pounding drums to deal with their frustration. In our “modern” society, everything has a consumption aspect, so it’s only “normal” that folks would resort to what they know, heading to a store, buying the means to express anger in a communal fashion. As MasterCard would say, Priceless.
Glad to hear of your morning ritual.
How often do you tend your garden?
What are you growing?
I made a sign to take to the (useless, I know) protest in Fremont. It’s from 5-6:30 PM at 39439 Paseo Padre Parkway, 94538. My sign says “No More Crack”.
They will just use the money to buy more crack.
There’s a protest in downtown Tucson, but ACORN is one of the organizers. And you’ve already read my rant on ACORN.
So, I’ll go attend that reception on the other side of town instead.
alinsky commies
who’s your daddy ?
Protests forming all around the nation.
One site to find your local protest:
http://www.tickerforum.org/cgi-ticker/akcs-www?forum=FedUp
I know there are 3 in San Diego tonight, one in El Cajon, one in Solano Beach (in front of representative’s offices), and one downtown. There is another website with easier to use to find your local protest.
We can say no to this! 73% of the citizens do not want the bailout.
Link?
here is the link to the organizing site you can punch in your zip and see where the protests are going to be in your area:
http://truemajority.wiredforchange.com/event/distributedEventCalendar.jsp
Protest the tax money giveaway to Wall Street Stand with your neighbors and say NO Bush Bailout! Mission Valley 5pm Email me or call me …
Meet on grassy area in front of WaMu. We may switch it up later.
Get there from the 8 freeway.
Protest at Bilbray’s office Stand with your neighbors and say NO Bush Bailout of Wall Street! Protest at the Solana Beach …
Sep 25 17:00
Protest the tax money giveaway to Wall Street Stand with your neighbors and say NO Bush Bailout! A few of us will be holding our signs on the …
Go 3 blocks east on W. Chase from El Cajon Blvd. to Nidrah.
Go 14 blocks west on W. Chase from Magnolia to Nidrah.
An HBB reader and fund manager sent me this from Marketwatch:
‘Sen. Dodd, If you vote for this plan, I will not vote for you and I will aggressively work to help your opponent get elected. This is a critical issue. The public-opinion polls are overwhelmingly against these plans. The media and Congress keep saying people do not understand the issues. I clearly understand the issues. I understand them better than you do, and I also understand your clear conflicts of interest.
Regards,
Paul Jaber Jr.
Manager, Perpetual Value Fund’
Very nice!
I just got back from the protest. There were only 4 of us, mainly because there was no time to organize. Almost everyone was on our side. We were so popular, that some people were getting annoyed by all the honking. One guy said “F_ck You”, but I think he was just doing that for fun. I think one of the main reasons why this was presented as an “emergency” was to prevent people from organizing. As it turns out, you don’t have to organize when everyone is already with you.
NPR’s MarketPlace had a caller put it perfectly. This is the third time this administration has whipped up pure panic to rush through their agenda without the public getting a chance to think anything through. Right after 9/11 they rush through the Patriot Act and shred the Constitution, then they get everyone up in a panic over the “WMD’s in Iraq” to start a war there, and here we go again, PANIC PANIC PANIC, to get this bailout passed.
THIS COUNTRY IS A BUNCH OF LEMMINGS.
“‘They see that their friend has just lost $100,000 on their home, and they think the same will happen to them,’ Mr. Harrison said.”
….because it will.
I’m seeing 1,000 sq ft homes in not so bad neighborhoods in Stockton (central valley) listed at 64k. A guy could offer 50k, put down 10k, and the entire monthly nut (including property tax) would be less than $300/mo. Nice little investment eh? Any thoughts?
Just make sure to hang around the hood for a few days. Stockton is pretty bad.
I know, I grew up there and went to a high school with several known gangs and a 50% drop-out rate. That’s why I no longer live there. But I can find a decent renter willing to pay $800/mo easy for a small house. That particular hood is not so bad (relatively speaking).
IE Fencesitter:
If it’s a bad neighborhood in a city with a declining economy, you should be careful. It could be difficult to find a renter with a stable job that pays enough to afford $800 rent.
IE Fencesitter,
I know. I keep looking. It is tempting, that’s actually less than I paid for my first house in Oregon over 20 years ago. Is Stockton ideal? Is Modesto prestigious? Does it f@cking rain 10 months out of the year there?
SOLD!
(OT)
Anybody remeber the sitcom from the 80’s with Danny Ganz? The impressionist guy in Vegas? Open House, I think it was called? They showed realtors for what they were way back then!
O-p-e-n hou…se, change that For Sale sign to SOLD!
No, Stockton is a low-income, crime-infested low-life city, but if you find the right renters it could work. Modesto is marginally better. Even if it were vacant for some time, I wouldn’t sweat a $280 monthly payment, and the $300-$400 profit during the months it IS rented would more than make up for it. Ten years down the road I would owe 30k and it would probably be worth 100k at least.
IE,
We actually have a friend of the family that’s retired Navy that would occupy the home much of the year and then bag @$$ for Vegas when we’d be heading down.
Or he could hang out for all we care. I’ve always felt like I owed the guy and I know he would have everything that moves greased and everything that didn’t painted!
We came VERY close to *not having a summer at all in Oregon and it’s getting to be a real drag. Our kids don’t really recognize it b/c when you’re just married, having their first child and first home, everything is just so… groovy! ( Yeah, wait until 15 tax filing seasons come and go and the “thrill” of being able to paint your living room “any color you like” wears off… )
Yeah, you’ll be just like me. In hybernation 9 months out of the year waiting, waiting patiently for a summer that may or may not happen. Then you start hatin’ life. Can the occasional drive-by shooting in Stockton be all that bad?
We came VERY close to *not having a summer at all in Oregon and it’s getting to be a real drag.
I turned down a job in Oregon because of that. I was up there in August and it was a nice break from Phoenix heat but no. I’ll take the nice winters.
“We came VERY close to *not having a summer at all in Oregon and it’s getting to be a real drag.
I turned down a job in Oregon because of that. I was up there in August and it was a nice break from Phoenix heat but no. I’ll take the nice winters.”
Read ‘ya loud-n-clear up here in Washington.
In Portland, a popular joke among outdoor sports types:
Q: what do they call the day after it stops raining?
A: Monday
Of note “Open House” 1989 - 1990 was the TV debut of Ellen DeGeneres as a horny heterosexual receptionist.
New Zealand Renter,
Now ‘that’s’ what I call acting!
( Not that there’s anything wrong… with that! )
I just thought it was funny that a show dating back to the late 80’s turned out to be a fair depiction of realtors nigh on 20 years later?
Here is the Open House intro:
http://www.youtube.com/watch?v=omxihQlWeAI
post eaten?
another try, here is the Open House theme:
http://www.youtube.com/watch?v=omxihQlWeAI
If you can get a “Section 8″ comittment it may be worth looking at…Just keep in mind the potential maintenance costs…
“And they’re expected to go fast, in a transaction estimated to last about 31/2 minutes, said Ken Stevens, who will be conducting the auction.”
At a stated “minimum bid” of $445,000, I would have thought that three and a half minutes was stretching things for the lots to be passed in.
..Well the builder had better act fast. Tract far from finished. Nothing as been done for months. Work stopped. No stucco, yards, road not finished. Chain fence still up.
Last monday saw a few trucks in there. With 3 weeks to a 3 1/2 minute auction. Better work fast.
IMO 400k for a crowded up house 1000′ from 605FWY
is a joke.
I must add the following info on this (un)development. Half the homes were exposed to weather for 8 months b/c they didn’t have any walls, just the shell. Walls are up, but they remain unfinished. Only about 8 are move in ready. This presitous development is behind a gas station that is on a main road, and just next to major power lines the parallel another road. Lastly, the 605 free way is about 500 meters away. Lakewood is a very nice blue collar town. At best, $300K for these ill-conceived debacles.
Next up, the Americana in Glendale!
“‘(Foreclosure) is the kiss of death for most lenders today, especially in the tightening market we’re in,’ said mortgage broker Pat Mackin. ‘You’re consigning yourself to be a renter for a period of up to seven years.’”
OH!! The unmitigated HORROR! Having to rent! What will the Jones say? Yeesh, give me a break. We sold our condo in 11/05 are now renting and I COULDN’T BE HAPPIER!!
No irritating and useless HOA, no horrible neighbors AND a better neighborhood! It’s a win-win!
Why are people so terrified of (*gasp*) renting??
/rant off
Stars End
Because many rentals come equipped with elephant neighbors in the apartment above yours.
All around me people have been spending hundreds upon hundreds of thousands of dollars to live in condos that had been mere apartments for the majority of their existence.
Maybe the “privilege” of getting to pay property tax makes the floors squeak less?
I could never understand the condo market? You are buying a small apt (usually) with all the maintenance and taxes a landlord would be stuck with. I’d rather own a 2+1 small house, if that’s all I could afford. You would have to be a moron to buy a condo.
That said, as an ex-McMansion owner, a few times over (even a “luxury” one), that’s h*ll too. You still feel like a tenant with the HOA as the dictator. Forget about individuality, privacy (2 story jungle), and nice neighbors.
Condos should have remained a niche market. I’ve lived in one for ten years now - it suits my lifestyle - but never would I argue against the SFH still be the top choice for most people. When condos crossed the ~$150k line though - that’s when they lost direction since they only make sense when they’re really, really cheap relative to a SFH.
edgewaterjohn
Sorry, didn’t mean to offend anyone. Yeah, I agree about the $150K line. Some of the townhomes going up in Thousand Oaks, Ca. (north of Los Angeles County) are starting in the $500K-$600K range. Some of the condos are in the $250K-$300K for cracker jack places. I would say, rent you idiots. There is no shame in renting. Those aren’t reasonable prices, they’re insanely over priced.
You can rent an SFH if you want to. There are tons of them available.
We’re renting a SFH and our monthly cost is substantially less than the payments would be to own it. Have you seen the property taxes around here?! Yikes.
Property taxes are a small percentage of the value of the house. The only trouble is the “value”. That’s one huge number!
That’s what white noise generators are for!
And believe me, I KNOW all about Elephant Neighbors. We had a rather chunky middle aged lady above us who would PACE THE FLOORS (including several passes every minute or so over a floorboard so squeaky it was almost comic) between the hours of 11 PM and 3 AM EVERY NIGHT. And no, she wasn’t on drugs. Maybe she should have been? 
The white noise generator solved the problem…..
Stars End
Sleeping blissfully……
I have to call BS on this. In California in the early-mid 90’s I heard the same thing, you know what happened? People that had foreclosures on their records got loans after 2-3 years. They paid about a 50-75 basis point premium on the base interest rate.
The reason was that the lenders needed the business, and so many people had foreclosures on their record that they swallowed their “rules” and made the loans.
I am seeing the opposite reaction lately. I’m renting a home for about 60% of the cost of buyig it, my landlord does all the repairs, and I have the freedom to walk away whenever I feel like it. My friends,on the other hand, stare at me with a mixed lok of envy on the one hand and nausea on the other, as they pay double what I pay for mortgages on homes that are mostly upside down.
and I have the freedom to walk ??
But you also have the risk of a notice to leave or exposure to escalating rents…Don’t get me wrong, I see nthing wrong with renting, I am a landlord myself so I am glad you guys are out there its just (for some) the comfort (sense of security) that they get from home ownership particularly if they have children…
Comfort??
We’re talkig SoCal here where half the population is spending 50% plus of their income to stay on top of mortgages for houses with no equity, and falling. My landlord has 3 homes, all upside down. Thought he would be a RE mogul by now. Yes, freedom to walk. If they want the house back, no problem, there are a hundred more empty ones to choose from in my area.
And that’s what feels so empty and hollow about this whole, incredible, unnecessary drill. A home is only ‘worth’ 100-150-200k if an occupant is getting shelter out of it.
If we’re all so anxious and upset about the ’scale’ of the Bail-Out Pahlooza, we might as well take every freakin’ vacant, empty, abandoned home and burn it to the ground as we speak*. Does that take some of the uncertainty out of the equation for you Mr. Paulsen?
Just sitting on neg. c/f time bombs, hoping things will ‘pick up’ is nothing short of delusional. I’m willing to bet that with rare exception every specuvestment that’s empty now will continue to do so until it no longer functions as shelter. Certainly not the kind you’d want to live in?
*Ben Jones nor ‘most’ of the poster advocate burning down vacant homes no matter HOW deserving!
I dont think we will have much of a choice soon….most left to the elements weather and crime, wont be livable or saleable much longer.
What would you pay for a house in Hot sticky bug infested Floriddah which is probably seriously moldy from water leaks No AC and boarded up for a year?
——————–
*Ben Jones nor ‘most’ of the poster advocate burning down vacant homes no matter HOW deserving!
How do you get any comfort from knowing that your mortgage bill is higher than your monthly take-home pay, or that it will cost you twice as much money to pay off your house than it would have to rent an equivalent one for the rest of your life? You could have used that $$ for your kids’ education.
If your landlord kicks you out, you can easily find another rental.
same here - renting is not great for above mentioned reasons but a lot better than 50%.
–
So far it seems like until the prices are down 35-40% from the peak the sales don’t pick up. That is when foreclosures become a big part of the sales and further price declines. Soon San Jose area will be in that category. The primary driver in the area are prices of the local tech stocks and I expect them to be down 50% from recent highs within the next 6-9 months.
The question we will have next year is: Which areas are not down 50% from the peak?
Jas
I agree, Jas. San Jose, CA is way over-priced. However, there are so many nice old tree-lined neighborhoods there with Prop-13 boomers sitting pretty; no reason to move. On the other hand, look at the roads there; very poor condition with multiple patch repairs, no resurfacing. Trash lined freeways. Lots of fake jobs that pay well, and good weather keep it alive. Just too crowded for me!
“…which was hammered by a 93 percent drop in single-family home construction.”
93% only rates “hammered”? For 27% that might do, but for 93% they should have at least used “obliterated”.
‘The Hoffmans of the world have been building homes since the 1940s, and they say they haven’t seen anything like this.’”
Of course they have never seen anything like this, there has never been anything like this before. The “Hoffmans” of the world are going to see a whole lot more of what they have never seen before.
My maternal grandpappy was a small time house builder in the late 1940s. A scant ten years earlier, however, he was an lone carpenter lugging his toolbox on the streetcar to job sites - completely unsure if there was even work at the other end of the ride.
That war changed alot of fortunes. (sorry FDR/New Deal fans)
“‘They see that their friend has just lost $100,000 on their home, and they think the same will happen to them,’ Mr. Harrison said.”
It will, Mr Harrison, it will.
It’s happened already, if your friend lives in your neighborhood.
“‘(Foreclosure) is the kiss of death for most lenders today, especially in the tightening market we’re in,’ said mortgage broker Pat Mackin. ‘You’re consigning yourself to be a renter for a period of up to seven years.’”
I wonder if this fellow is related to Phil?
Yea, Yea, Pat they are doomed be to outcast renters, when they could be lucky home debtors.
“While market conditions are scaring off many potential homebuyers, some housing experts think that now is the time to buy.
Why does the media cause these people “experts”
they make a living on selling you this garbage, and they are also an expert on when is the best time for them to make a commission…which of course is “always”
Some “experts” think the earth is flat, or this is how it might be expressed if the modern media were doing a story about the surface of the earth. The media should be more concerned about accuracy than balance. Giving equal weight to credible and non-credible sources is a great disservice.
“after a 100-pound beehive was discovered…”
( On Sarah Palin’s head! )
*snarf*
Shelby is blocking the deal. It may not be going down. WOW.
Shelby is my hero!
BTW, I wrote a “Just say NO!” e-mail to my Congressman, Raul Grijalva. And, per his website, he is against the bailout. Which means that Raul and I finally agree on something. Better call the paper — that’s news.
BO is my senator. I would copy and paste his form response here except:
1. I don’t want to waste Ben’s time
2. I don’t want to be responsible for any strokes/heart attacks
Yeah, it’s that bad - but I wanted to have my say.
We have tons of banked owned homes here in Riverside, Ca. that have yet to be listed. What are the banks waiting for? I was told that the banks may sell these homes in a package to a 3rd party.
Our agent and lender keep telling us this is the bottom, but with so many homes out there still, I find that hard to believe.
they are waiting for the taxpayer to buy them next week. gravy train is coming!
“they are waiting for the taxpayer to buy them next week.”
+1
More evidence that the BO is BS (from cnn):
The littlest guys are still lending
While the credit crisis has shaken Wall Street to its core, the thousands of community banks that make up the lion’s share of the nation’s banking system remain, to a large extent, quite secure.
“Our lending window continues to remain open,” said Jonathan Fox, the chairman and CEO of The Fowler State Bank, a Colorado-based bank an hour’s drive from Pueblo with about $56 million in assets.
Fox admitted that, since the credit crunch began, his bank has taken a harder look at the value of a piece of real estate involved in a loan as well as a customer’s income.
But he said that his bank, which traces its roots back to 1899, can continue to lend freely because they didn’t get caught up in the subprime mortgage market.
Fowler is not unique in this regard either.
Karla Wilbur, a senior vice-president at Passumpsic Savings Bank in St. Johnsbury, Vermont, said that an existing customer with a good credit standing and steady income who applies for a home equity loan could very well qualify for it.
She said the 11-branch bank, which serves towns along the Vermont-New Hampshire border, has ratcheted back on some of its non-core loan business — such as buying loans from car dealerships or doing joint commercial loan deals with other banks.
But she added that the bank’s consumer lending business hasn’t been affected all that much following the panic that spread through the credit markets last week.
“It pretty much looks like it did a month ago or two months ago,” said Wilbur. “Things haven’t changed a lot.”
“It pretty much looks like it did a month ago or two months ago,” said Wilbur. “Things haven’t changed a lot.”
Unfortunately, that is the way it is in northwest California still. Just today, I saw a house that sold in October 2007 for $375K and it is back on the market for $429K. Even now, people up here feel entitled to make a profit holding a POS during the largest national home price drop in history. But, as the REALTORS say, it is different here. My guess is that some retiree from SoCal will buy the house at nearly full asking price, as is the case with almost all home sales here…still.
Even now, people up here feel entitled to make a profit holding a POS during the largest national home price drop in history.
I don’t think they feel so entitled any more, but they are trapped by their loans. Yesterday I dropped into an open house in Westwood that sold a little over a year ago for just under 1.1million (a 2 bedroom home, mind you). It is now remodeled (nicely) and back on the market for I think 1.275 or so. The realtor looks desperate, and I’m sure the owner is desperate too. Still wishing for that knife catcher to walk by….
Below link is to a home I could get accustomed to living in and its located in my favorite zip 90274.
90274 is that large hill just south of LAX between Long Beach and Redondo Beach sticking out there towards Catalina Island.
http://tinyurl.com/4vh6ye
Would I be insulting seller if I offered just under 2 million for it?
$19 MM? California Dreamin’. Maybe a rich Russian will buy it hahahhahahahahahahahahhahahahahha!!
Having lived for a few years in Venice, with fond memories, I find the posted crib to be totally sweet. Who wouldn’t?
However, given that I believe in reality in pricing and debt, what do the posters here think such a home would actually be worth? Certainly it is expensive, but I really have no idea whatsoever.
It’s hard to say without looking into that market in more detail, but I would venture $7-10 MM. I base this on the value of Michael Jackson’s CA mansion, which was valued at $5 MM somewhere around 2000. I remember about that time, all the big stars had $5 MM mansions, not just Michael Jackson. I recall that value being bandied about in relation to one of Madonna’s houses too.
If you want to stop the bailout go to Marketwatch.com and search for open letter to Dodd or click this link:
http://www.marketwatch.com/news/story/letters-editor-bailout-un-american/story.aspx?guid=%7B7CEB61F6%2DE939%2D4D46%2D961C%2D4EBC2AB5965A%7D&dist=msr_2
Then email marketwatch and tell them to make the letter front page tomorrow am. If you don’t think writing congress will help at least you can help with this. They will read it.
WaMu partially acquired by JPM. Details scant…
Wonder how this will affect the west coast mortgage market…
How can the govt justify taking people’s assets by force? On a Thursday night for cryin’ out loud. They are supposed to wait until Friday night.
They already do - ever hear of eminent domain? Seize property, all for the *Greater Socialist Good*. Look into the NYTimes’ support and use of eminent domain if you want an example.
The government can justify it by pointing a gun in your face.
All put in place and enforced by lawyers, ‘natch.
No, they can’t justify it that way, Eudemon. Personally, I do not own a gun, but I am pretty confident in my basic abilities, and I would get one in a heartbeat if I thought that my government were about to justify ANYTHING by pointing a gun in my face. It’s kind of hard to bully people when they’re mad and have bullets and stuff. I’m not saying that any of us should think about using violence over this particular matter, but I just don’t like it when people give up their own power by saying that the government can point a gun in our face.
I agree completely.
Maybe a week ago, someone here mentioned buying pitchforks. I rather like that idea…for the 1800s-era symbolism alone, and hopefully a whole lot more. Too bad 10 million people don’t buy pitchforks and surround Capitol Hill.
Anybody got 100,000 lbs. of tea to dump in the Atlantic, Pacific, Gulf of Mexico and the Great Lakes? I, for one, am tired of being raped.
It’s time to get back to basics and tell the Feds and States that this is OUR country, not theirs. Enough is enough. Enforce the ample regulations on the books - strip away those no longer apply, let the citizenry suffer, then recover, and be done with it.
Stop perpetuating the madness.
I’d be happy to march on Washington, pitchfork in hand!
If I could afford the gas to get there….
Sigh…
Sharp sticks and torches for all!
Bankrupt - the part of WaMU that wasn’t acquired by JP Morgan is now bankrupt.
Stock fell 78% in after hours trading, and will be de-listed from the NYSE at their current levels.
If the US ever recovers, JPMorgan will be #1. The company has been uncontested at making acquisitions in the past few years, their name could be JPMorgan Chase Bear Stearns Washington Mutual.
I figured it out. Tomorrow is pay-day.
JP Morgan just bought out good assets of WAMU ( being deposits and branches ). FDIC involved ,but no bank run necessary in this government brokered deal .
BAIL OUT DEAL has reached a snag . Opposition is saying that Paulson Plan is flawed and they need to work out a better plan . Looks like they are going back to the chopping block .
Go back to the chopping block and call us after the election.
Who is the opposition? Barney Frank? Chris Dodd? Gotta be the Dems, since this is a Republican proposal. Right?
NO, the opposition is capitalists. It sounds unreal, but this is a dispute between Socialists (who are calling themselves Republicans) and everybody else. It’s like Jews fighting to save Jesus. That’s what made them Christians.
It would be a beautiful political coup if the Dems led them to believe they were in agreement, then waited until after the election to follow through. That is what I would do if I were a Democratic Congressman. I wonder if they thought of this, or if they are quaking in their boots over the latest WH scare tactic?
That would be beautiful indeed…
You folks have GOT to be kidding me! It’s the Republicans who are opposing this. Don’t blame our “compassionate” conservative president’s party for this steaming pail of BS. It’s just the fascist sitting in the Oval office and a few moderates who are going along with Barney “Gay prostitute roommate” Frank’s proposal.
I hate both parties, but at least this time some Republicans are finally rebelling against the government rape.
Actually the Republicans are opposing it ,at least in its current form .
More accurately, the fiscal conservatives.
This has impressed me as well. First voices of reason that I’ve heard from the Republicans in a long time, and it makes me yearn for the way things used to be. I grew up in farming IL and conservative people were straight there - none of this nastiness and big money focus of the last few decades.
Along those lines, I looked for a protest from the poster above based on my hometown zip code, and it appears as if the Land of Lincoln is dead outside of Chicago (and maybe other bigger cities which I didn’t check). A real shame, an abdication of the duty of citizens. The population of central IL is completely zombified.
Greetings from scenic Detroit,
I just heard WaMu got sold to another bank. Awesome!!! One more fraud-based institution biting the dust! You know what happens when a company merges—it purges (employees, that is)!! So, looks like there will be a few more mortgage processors having a “blue Christmas”—I love capitalism, when it’s allowed to work!! I hope they all rot in hell, along with their rotten paper.
WAMU had a good banking operation actually so I’m happy that all those branches are going to operate .Looks like shareholders are going to eat it with this buy out by JB Morgan .Wasn’t the stock really low anyway
lately ? No bank runs necessary …and that is a good thing. Equity and debt holders will be wiped out apparently . I’m just getting snapshots of what I’m hearing on the news and not all details are in .
I joined Home Savings of America years ago after getting frustrated with BofA nickeling and diming me on everything. Then WAMU bought Home Savings of America and kept the fees low. I’m still at WAMU. I like the service they provide and the easy access to ATMs. Just a couple of weeks ago they noticed right away of a possible fraud on my checking account. They immediately canceled my ATM card and sent me a new one with a pin number. I’m glad to hear they are being bought out.
I was with Security Pacific when it was bought buy BofA. I hated BofA so I moved to American Savings which was bought by WAMU. Now I am apparently with JP Morgan since they bought WAMU.
Wait what bank am I with, I lost track.
Well i guess if I just walk into any bank and hand them a note they should just understand my problem and give me money. Don’t mind that gun in my hand, I heard bank robbery is actually legal now.
I think Las Vegas’s draw from So. Cal. qualifies my local observations of Atlantic City as on topic: Any glee the industry here took from LV’s troubles has really quieted with the end of summer. Commencement of construction on the $2B Pinnacle Casino has been delayed indefinitely; the $2B Revel might be half-way built and is scrambling for funds to finish; I think 2,400 emplyees have been laid off since Labor Day throughout all casinos (more than the usual end-of-season hit); despite massive publicity campaign and fawning press coverage Borgata’s new Water Club has disappointed and is quickly losing its appeal to hipsters. Last but not least, The Tropicana had its license revoked last year, was taken over in the spring by a state-appointed conservator who rejected a $900M bid for the casino. Latest offer at which the conservator is seriously looking? $700,000.
There are a score of developments that have sprung up on the mainland behind AC to house casino employees and their families. They really aren’t needed. A real blood bath is coming in ‘09.
As for me, I’ll go to one or two casino shows over the winter, drink a few beers, flush a few toilets. I’d do more if I had a HELOC; but Idon’t, so I won’t.
“‘My dad has been in this business for 42 years and he has never seen it this bad,’ Ghielmetti said. ‘The Hoffmans of the world have been building homes since the 1940s, and they say they haven’t seen anything like this.’”
“The nose-dive in new-home building was more severe than anticipated by a statewide group.”
Well Mr. Ghielmetti did you dad ever see in his 42 years of business the frenzied building that went on between 2000 and 2007? Amazing your dad couldn’t grasp that future sales were being cannibalized! Greed, greed, greed.
salinasron,
Allow me to be more blunt: Who gives a sh*t if it’s the worst his dad has seen in 42 years?
if people want RE -why not just buy a REIT on a dip?
total return should be as good w/o the calls at 3am etc….
From Jimbo in Atlantic City: Whoops! Latest offer for Tropicana is $700M, not $700,00. Need ‘nother beer.
Bailout plan is stalled, and the market is up. Maybe the financial system will not instantaneously collapse if the bailout measure is not passed by tomorrow after all?
http://www.marketwatch.com/
The local news interviewed a local banker, and the banker said they had no problems with lending to credit worthy people.
Of course they will gladly peddle more debt. But like any pusher, they know the “clean” kids have more milk money to spend. Pushers hate full blown addicts.
That’s what I posted above. This whole thing is a ruse, JUST LIKE IRAQ.
Ahh, Disaster Capitalism? Naomi Klein, anyone?
look at the JPM presentation.. Page 17
They think a severe recession will cause prices to drop by 58% from their peak in California and 64% in Florida
Sorry posting from my iPhone - sorry no link because iphone has no good cut and paste app.
That’s all? Optimists.
They are really sticking their necks out there. What’s another 23 pct drop in CA prices (14/60*100) when they are already off by 40 pct?
What? They got that from us. Copy-cats.
I still feel that might be optimistic especially in coastal Florida and the inland empire.. More like 80%.. If they can find buyers
This is too funny. The freaking Realtor will always say it is time to buy. Those news reporters are just so stupid and included “some housing experts think that now is the time to buy….” on every article regarding housing price from 2005 to now. What a joke!
Just FYI for those CA people with large down payments ready to go…Fidelity California Muni money market funds FCFXX e.g., are now yielding over 5% because they are variable rate demand notes (VRDN based on LIBOR, which has skyrocketed). That’s a tax-free yield. Who knows how long it’ll last.
My bank, WaMu, went bust. I should have shorted the stock a while back. Double Drat!
Shorting is for outlaws.
I’m predicting “Black Friday” on the market. Biggest 1 day loss in history, it will shut down early to do damage control. Short everything.
I bought some May (IIRC, right in that time frame) put options myself, but they expired worthless. When I expected plunges, based on reality, I instead saw advances.
“And they’re expected to go fast, in a transaction estimated to last about 31/2 minutes, said Ken Stevens, who will be conducting the auction. ‘There’s not going to be an opportunity like this,’ he said. ‘This is a one-time opportunity in Lakewood.’”
“Of the 25 houses up for auction, six are 2,267-square-foot homes with three bedrooms and 11/2 bathrooms. Asking prices for these homes were originally listed at $776,080, but the minimum bids will begin at $445,000.”
“The remaining 19 are four-bedroom, three-bathroom homes whose dimensions range from 2,513 to 2,580 square feet. The minimum bid for homes whose initial asking prices reached $829,530: $495,000.”
Really FUNNY. I live two blocks away from these place. I will pay $380K for those large units, no more than that.
This is not good for bernanke or paulson.. when your underling compares derivatives to nasty STDs… and says your treatment is not gonna work..
Full speech at
http://www.dallasfed.org/news/speeches/fisher/2008/fs080925.cfm______________
Fed’s Fisher Says Rescue Would Increase Fiscal Burden (Update1)
By Vivien Lou Chen
Sept. 25 (Bloomberg) — Dallas Federal Reserve Bank President Richard Fisher said the U.S. Treasury’s proposed $700 billion rescue of financial institutions would be “a critical first step” toward calming markets even while adding to the U.S. government’s fiscal burden.
The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions “is an incremental addition to the federal government ledger,” Fisher said today in a speech in New York. Existing federal obligations in Medicare and Social Security mean “we are deeply submerged in a vast fiscal chasm,” he said.
Fisher made the comments as the central bank expands its role in the biggest government intrusion into markets since the New Deal, with Fed Chairman Ben S. Bernanke trying to persuade Congress to approve Paulson’s bailout plan.
and at nakedcapitalism
—
The Bloomberg story missed some of the juiciest bits of the speech:
There is no nice way to say this, so I will be blunt: Our credit markets had contracted a hideous STD—a securitization transmitted disease—for which lowering the funds rate to negative real levels seemed to me to be not only an ineffective treatment, but a palliative and maybe even a stimulus that would only encourage further mischief.
I was and I remain skeptical that lowering the fed funds rate is the most effective antidote for such a pathology, given that, in my book, rates held too low, too long during the previous Fed regime were an accomplice to that reckless behavior. A fed funds rate of around 3 1/2 percent—that was the level at which I began to stray from “the pen”—did not appear to me to be the principal problem, particularly with commodities prices soaring and incipient inflation coming to our shores from demand-pull pressures and rising labor costs in the countries that we use to source the inputs needed to run our manufacturing base and stock the shelves of our retail stores..
I bought my townhouse in southern california for 168,000 in 2001.
The same model townhouse is now listed for ….151,000.
They sold new in 1991 for about 140,000 and in 1998 for 135,000.(They didn’t finish the complex until 1998 because noone was buying)
1991 was about the end of the last bubble I think.
Adam Corolla, on his morning radio show, mentioned the financial crisis; he also suggested people check out some online mint (can’t remember the name), e.g. that moving into coins/PMs was a good way to protect your money (more implied than stated explicitly, but still). I can’t remember the name of the mint (anyone catch it?), but I thought that was pretty interesting.
With this kind of psychology become prime-time and more pervasive, things will likely only become more volatile.
Doh. Posted to wrong thread. Will re-post on today’s bits bucket.