They Took The Punch Bowl Away In California
A report from the California UHS. “Home sales increased 56.7 percent in August in California compared with the same period a year ago, while the median price of an existing home fell 40.5 percent, C.A.R. reported. ‘Although the month-to-month decline in the median price was the smallest in a year, it’s still premature to say that the median price has begun to stabilize,’ said C.A.R Chief Economist Leslie Appleton-Young.”
“‘While sales appear to have turned the corner, the median will experience additional downward pressure as we move into the off-peak season in the coming months, and will continue to face pressure from distressed sales,’ she said. ‘Sales are just one of the variables that must fall into place before we see real improvement in the market.’”
The LA Times. “As California’s biggest builder of new homes posted its seventh straight quarterly loss Friday, Westwood-based KB Home said it was trying to boost sales by building small, lower-priced houses instead of the larger ones that had sustained the company during the housing boom.”
“KB Chief Executive Jeffrey Mezger said that foreclosed houses being sold at fire-sale prices were continuing to pull home prices down.”
“Mezger said KB Home had begun a new strategy in the Inland Empire and a few other areas across the nation in which it planned to expand its developments. The company has been selling smaller houses at lower prices in areas such as Beaumont in Riverside County.”
“Mezger said the company had to shift to smaller, cheaper houses to compete with foreclosed houses flooding markets such as the Inland Empire. ‘The challenge is how do you get your pricing down on new product so you can make money at these lower levels,’ Mezger said.”
“The company last year shifted from building 3,400-square-foot homes selling for $450,000 to 2,400-square-foot homes selling for $300,000. ‘That worked for a time, but the market continued to move away from us,’ Mezger said.”
“Now, KB Home is building three-bedroom, 1,230-square-foot homes selling for $200,000 in the Inland Empire, Mezger said.”
The Valley News. “The financial crisis that has staggered Wall Street and mired the nation’s housing and credit industries also grips southwest Riverside County, local business and government leaders agreed at a regional summit last week.”
“Unsold homes, plummeting property values, vacant office and commercial suites and sagging employment have taken a deep toll and it will likely take two to three years for the area to rebound, speakers and panelists predicted at an annual Interstate 215 forum that attracted about 1,000 participants in Temecula.”
“‘I don’t have to tell you these are painful times in many sectors of our economy,’ said County Supervisor Jeff Stone, whose district takes in much of the Temecula, Murrieta, French Valley and Wine County areas. ‘We are facing the worst housing crisis since the Great Depression.’”
“At one point in his remarks, Stone likened current conditions to an ‘economic Armageddon.’ In a sharp turnaround from previous South Corridor Economic Development Summits, Stone and a range of other speakers winced as they reported on regional growth and business outlooks.”
“They said the local housing market is so flooded with foreclosures that a Temecula builder has stopped pitching its model homes to prospective buyers.”
“‘It is chaotic,’ said Fred Grimes, CEO of a pair of commercial real estate sales and leasing companies. ‘Lenders are being very, very cautious.’”
The Santa Cruz Sentinel. “Customers of Washington Mutual voiced relief Friday, the day after their bank collapsed and was sold to JPMorgan Chase. Michael Gerami, a WaMu customer and owner of National Security Industries, predicts the economic turmoil will get much worse.”
“Here’s why: American real estate is valued at $22 trillion, and the Mortgage Bankers Association says more than 9 percent of U.S. mortgages are delinquent or in foreclosure. Do the math: almost $2.2 trillion in bad loans. But banks show only $400 billion in loans. Gerami’s question: Where’s the rest?”
“With the federal government indicating more than 100 banks in trouble, he figures the prudent thing is to move money out of the American economy. ‘I’m extremely scared,’ he said.”
The Associated Press. “Experts say that the government’s enormous plan to relieve Wall Street banks of their bad investments has a decent chance of stabilizing home prices, at least in theory. ‘The root cause of the problem is that we don’t have any home buyers,’ said Edward Leamer, an economist at the University of California, Los Angeles. ‘They’re going to sit on the sidelines - by and large - until they get a better deal.’”
“Paul Castor, a corporate attorney, is reluctant to buy a home for his family in San Diego at current prices. He has a down payment of more than 20 percent and has made two offers in recent weeks, but the sellers’ asking prices ‘were unrealistic and I wasn’t going to budge.’”
“If nobody accepts his offer, Castor is more than willing to keep renting and hope home prices fall further.”
The Voice of San Diego. “More than one-third of the houses listed on the market in San Diego County this year have been short sales, but they count for a much smaller percent of the homes that actually sell.”
“‘The general discouragement you get from the banks leaves a lot of sellers just letting the properties go into foreclosure,’ said real estate agent Dan Cassidy, who focuses on urban listings in North Park, Hillcrest and downtown. ‘That leaves people to see foreclosure and nonpayment as the best possible option.’”
“‘A desperate would-be short seller could list a house for 30 percent below the comparable properties,’ wrote economist Ryan Ratcliff, ‘but the combination of red tape, overwhelmed and understaffed loss mitigation departments at the lenders, and misconceptions about what’s needed to get the sale approved means the house doesn’t sell any faster.’”
“‘I’m telling my clients, ‘If you want to buy a short sale, plan on four to five months,’ said real estate agent John Kline, who focuses on short sales in North County.”
“In some cases, banks are asking sellers to prove their financial hardship with tax returns and to promise to pay back the difference even after they’ve left the house. And there’s always the chance that while a real estate agent is negotiating a short sale with the bank, another branch of the bank is working to repossess it, sending it to auction and selling it out from under that agent.”
“Real estate attorney Mike Spilger counsels real estate agents, buyers and sellers that the short sale route is not simple, and may be worse than just letting the house go to foreclosure. There’s some circular logic inherent to becoming approved for a short sale, he said, especially because a seller must already be behind on mortgage payments for the request to receive a response.”
“‘They don’t believe you’re having trouble until you’re two or three months behind, but once you’re two to three months behind, your credit’s already shot,’ he said.”
“To realistically forecast the bottom of the housing market, Ratcliff argues, you have to acknowledge that ’short sales have temporarily hijacked the market mechanism.’”
“What’s coming next in the region’s housing market will depend more on how short sales and bank-owned houses are dealt with by lenders than on the region’s median price reaching any sort of ‘magic’ level that would convince buyers to snap up all of the homes on the market.”
The Union Tribune. “After years of outpacing the rest of the country in economic growth, San Diego County had fallen nearly to the national average even before the local real estate industry went into free fall.”
“‘Normally, as long as the rest of the economy is strong, the housing market follows along, but now it’s been the opposite,’ said economist Kelly Cunningham of the San Diego Institute for Policy Research. ‘The housing market has dragged our economy into a recession.’”
“‘Right now, it’s not as much fun as having a housing boom, but they took the punch bowl away from us,’ said Ross Starr, an economist at the University of California San Diego. ‘We should recognize that California’s centers of research have been centers of growth for decades, and San Diego participates actively in those. If all you had was real estate, life would be harder but you’ve got real estate and brains.’”
The American Statesman. “Jake and Cynthia Stewart are the type of people Austinites are supposed to love to hate. They’re not from here; they just live here - in a half-million-dollar house in Travis Heights that the 33-year-olds bought with their fancy Golden State money.”
“As housing prices in Austin continue to rise, as traffic grows more pervasive, and as retail and nightlife stray from the Keep Austin Weird vibe, much of the blame is directed toward the influx of Californians who supposedly are buying up all the real estate and, by default, negatively transforming the culture.”
“‘Any town or community with gravity or appeal usually has a scapegoat, and California is maybe the scapegoat in this case,’ Jake Stewart says.”
“Condemning Californians isn’t just an undertone of our collective conversation. American-Statesman humor columnist John Kelso has written about it, and the same sentiment has played out from the bathroom wall at Mohawk on Red River Street that reads ‘I hate this part of California’ to the billboard for an East Austin residential community that reads ‘Live east before the Californians do.’”
“A footnote reads: ‘Californians, please substitute New Yorkers.’”
“David McDonough ups the ante on the theory of rising prices. McDonough and his fiancée own a house a couple of blocks east of the Stewarts, close to the heart of South Congress Avenue. They moved to Austin about a year and a half ago from Los Angeles, where they’d lived for five years.”
“‘People complain about us pushing up the housing costs,’ he says. ‘I didn’t purposely overpay for a house. The price is what it is.’”
“No matter how well the Stewarts conform, they are still a bull’s-eye for some prospective home buyers for whom the market is getting out of reach because of the echelon of buyers like the Stewarts who can afford higher-priced homes. Jake doesn’t know if that’s fair.”
“‘When you’re moving from California,’ he says, ‘you’re not making California income. You’re having to adapt. I think Californians may just be willing to take a bigger hunk out of their pot for houses.’”
Shouldn’t we properly be pilloried as Scapesheeple?
====================================================
“‘Any town or community with gravity or appeal usually has a scapegoat, and California is maybe the scapegoat in this case,’ Jake Stewart says.”
If they live in Austin, they’re not Californians.
“Experts say that the government’s enormous plan to relieve Wall Street banks of their bad investments has a decent chance of stabilizing home prices, at least in theory. ‘The root cause of the problem is that we don’t have any home buyers,’ said Edward Leamer, an economist at the University of California, Los Angeles. ‘They’re going to sit on the sidelines - by and large - until they get a better deal.’”
Note to Mr. Leamer: There aren’t any home buyers because most people can’t afford these prices with conventional lending standards. And those who can aren’t stupid enough to flush their 20% down the toilet and pay a premium over renting for a declining asset.
And how does the gov’t bailout “stabilize” prices at levels most buyers can’t afford?
If CA prices were successfully stabilized at 40 pct off the peak level, wouldn’t that imply a “larger than expected” bailout tab?
Lisa - Wow! You aren’t by chance running for public office, are you? If so, you’ve my vote. Me thinks you capable of summing things up and clearing out smoke pretty d@mn efficiently. Nice post.
Are you from Missouri?
I agree. Well said, Lisa.
It’s funny, I was scared yesterday morning, thinking that financial Armageddon was upon us. Now I’m fine. I’m rooting for Boehner (though I prefer to call him the Boner.)
“it’s still premature to say that the median price has begun to stabilize,’ said C.A.R Chief Economist Leslie Appleton-Young.”
must-not-say-prices-are-dropping-like-a-rock
Also must not point out that prices are falling AT THE FASTEST RATE IN HISTORY.
Yet… “Its different here” is a common refrain. Or…
FB’s pushing renters to buy (No thank you…)
From what I can tell, jumbo mortgages are drying up. Do you think J6P is going to accept another bail out for the rich? I don’t think so.
Layoffs are happening in SoCal and a few more are on the way. This could be close to the point of a self feeding cycle. (We see this at the *start* of every recession. Yes, I think we’re in a recession… oh boy is it going to get interesting.)
Case-Shiller is getting more and more interesting.
Got Popcorn?
Neil
Almost must point out that I thought Leslie AY was deceased.
She said big price declines would never come to Marin County in her lifetime.
See my poem, posted yesterday. Something about an eternal footman.
I should clarify, it’s not my poem as in “I wrote it”; I just posted it. Don’t want to get accused of anything.
Aw man, what good is the internet if I can’t make baseless, inflammatory statements about people I don’t know behind the cover of anonymity.
But, thanks for clarifying.
Also must not point out HOUSES ARE STILL NOT AFFORDABLE!!
LOOKIE HEEAR….All the new jobs created!!!!
MORTGAGE/LOAN MODIFICATION OFFICERS NEEDED (NASSAU COUNTY)
Reply to:
Date: 2008-09-27, 6:55PM EDT
Mortgage loan modification officers needed. Business is booming modifying all those subprime loans that borrowers took out over the past years. Earn money while helping people in need. Great opportunity working with bright and professional people. Family atmosphere.
Hiring Organization: A SECOND CHANCE
* Location: NASSAU COUNTY
* Compensation: COMMISSION
But do note that it is not premature to say that LAY is an idiot.
“‘We are facing the worst housing crisis since the Great Depression.’”
Wonder when folks will realize that the GD is no longer the benchmark?
Does anyone feel that LAY and the CAR clowns need to be investigated by the State and Feds for criminal negligence ? they drove this nation to brink of economic collapse.
‘They’re not from here; they just live here - in a half-million-dollar house in Travis Heights that the 33-year-olds bought with their fancy Golden State money.’
It’s a well established point, but one worth repeating. Even though the article doesn’t run the numbers, I’d guess that these folk could be renting for much less. This leads me to think they are speculating, which is part of the housing bubble. It really is a disease among the west coasters, and I suppose it will be hard to rub out.
Oh, I don’t think it will be that hard to rub out, Ben… I think my friend Mr Market will do a fine job of showing them the end result of speculating in housing. Give them a couple more years, and they’ll get it. The worm turns, the psychology slowly shifts, pretty soon the desire to speculate in housing will be hard to unearth.
Bernake & Paulson
Two guys that are deathly afraid of Mr. Market.
Government parasites hate the market. Now that its turned against them, the receding tide is affecting their ability to sustain their caste. Here in N Ohio, the Cuyahoga (Cleveland and most surrounding suburbs) county auditor has announced that he will not re appraise homes to their lower market value. He will just mail out the old value for all properties. Homeowners will have to use the lengthy appeals process to “justify” any reduction in value for any tax relief. Im surprised that these locusts didnt learn it from someone in another state. Maybe it is going on, just unannounced?
Time to recall the County Auditor.
Body found in front of “Christmas Story House” in Cleveland.
Ben, the accuracy of your point can be found in the guy’s statement, “I think Californians may just be willing to take a bigger hunk out of their pot for houses.”
They are only willing to commit that level of money because they have been conditioned to implicitly believe housing is a performing asset, as opposed to a place to live.
If they weren’t speculating, they would look at it as a depreciating asset, and would thus want to spend as little as possible.
Like a sane person would.
I wonder why Californians are being blamed and no one has slammed the Texas sellers or the local realtors.
imo, they’re doing the same thing greedy sellers and realtors did in Cali: they took note of the job market, drove up the cost of housing by asking ridiculous prices in order to capitalize off of American employment, which in turn, encouraged manufacturers to go offshore. Sick.
btw, Californians: Texans are the worst drivers as far as speeding; they are inelegant as far as maneuvering too. Anyone who mastered the 55 , 91, 101, 5 or 405 would be able to outdo them. I see the TX drivers passing through (usually at 85mph) NM on their way to AZ/NV/CA or returning to TX. The NM State Police patrol the 10 E & W specifically looking for Texas plates.
~Misstrial
Misstrial,
Texans are the worst drivers period and the worst of Texas drivers live in San Antonio. Insurance rates there reflect how truly bad they are. The concept of merging is absolutely foreign to a Texan. Texas also has the most uninsured drivers in the nation.
At least those California drivers don’t have any distractions when they drive….oh wait:
ASSOCIATED PRESS
6:23 p.m. September 27, 2008
SACRAMENTO – It’s still legal for Hollywood celebrities – and the rest of Californians – to drive with animals nestled in their laps.
Gov. Arnold Schwarzenegger is vetoing a bill to fine motorists $35 for sharing the driver’s seat with lapdogs or other animals.
True, very true…about San Antonio…an attorney friend came from there and has stated the identical info to me.
btw, Texas is also home to El Paso and Brownsville - *the* major gateways for illegals to enter the US. As it is now, Texans are still fighting the border fence - unbelievable.Texans have *nothing* ~Nothing~ to complain about Californians.
~Misstrial
It may bug you, but I think they should open that area up thru NM to a speed of “As fast as you can go”. And same for the run from Chicago to St. Louis.
Come to think of it, the 40 from Fort Smith Arkansas all the way to the 15 intersection in California should be as fast as you can go with only one speed zone being thru Flagstaff.
How I see the drivers in other states,
Chicago, I am sorry…I did not know that stop signs are considered optional in your state. Stop with the horn when I forget and actually stop at a stop sign. Also, why do you all drive over the center dividers?
Missiouri, Get the fu(ck out of the fast lane when you are doing less than the flow of traffic.
Arkansas, You people are fricking nuts. Amazing how rude they are being a midwest state.
Texas, I enjoy the speeding, makes me look like I am going slow, but please, when you change lanes in front of me, for gods sake please check you mirror and make sure you are not going to take off my front bumper when you merge into my lane
New Mexico, Drinking and driving is illegal, but if you insist on doing it please pick a dam lane.
Arizona, not bad actually.
Clownifornia, I don’t care how many times you people change lanes, you are not going to get there any faster. But it is funny watching you try.
“It may bug you, but I think they should open that area up thru NM to a speed of “As fast as you can go”.”
I disagree due to the large number of semi tractor-trailers that haul through southern NM. There would be more overturned trucks and crashes with cars, especially when the dust storms cause visibility problems east of Stein and between Las Cruces and Deming on the 10 fwy. Generally, drivers in this part of the country do not have the skill of freeway-trained and tested Cali drivers - not boasting but its a fact.
The speed limit is already 75 mph on much of the 10 through NM. Cali drivers are usually going 70mph because that speed is the max for most freeways in CA. (I live in 2 states.)
~Misstrial
btw, “Clownifornia, Kalifornia, Californication” are all so over, done with and worn-out. If you are going to engage in using slurs, please try to come up with something creatively new and fresh!
Just so you know!
~Misstrial
Clownifornia, I don’t care how many times you people change lanes, you are not going to get there any faster. But it is funny watching you try.
Have you ever driven the 134/101 from Glendale to Ventura?
You have to change lanes a dozen times just to keep from being merged off the freeway.
Californians ? not natives but migrants from east coast who drove these prices higher. Our prices in CA were pretty sane after for 10 years.
hear, hear!!
what about all the new yorker trusties who bought up all the shacks in echo park for 800,000? the texans got some good people from here who couldn’t afford it in LA anymore… quit whining… austin has been overrun for years… it’s a compliment that the californians (who were from somewhere else, anyway) thought that austin was a good and cheaper place to be.
its all sad really.
cecil - went to school in austin still renting in echo park.
Maybe OT, but the more things change, as they say…in college in Detroit in the early 1980’s, everyone was leaving for Texas, especially Houston, because Detroit had NO jobs. By 1985, Boston was the place to go, so I did. (I also remember Austin in 1987 - I was dating a woman from Texas - when it was full of see-through office buildings. Felt like a ghost town compared to Boston). I had the pleasure of working with plenty of former Texans/Austinians there…nice people, every one, and real assets to Boston (we all rode the subway, so I cannot speak to driving habits). Alas, they were forced by the late’80’s/early ’90’s bust to leave Boston to go to…Seattle, the next boom town. (I hope some of them made it back to Austin, as most of them really missed the place. And I hope it still has its’ “soul”?) So now it’s a boom town like Boston was from 1995-2006? Boston had lost a lot of its’ “soul” (and all of its’ big banks) by the time I left in 2000 for Cleveland (my more fortunate Boston friends moved to NC, a much better choice job-wise) which hasn’t been a boomtown since before the last Depression (but it’s my wife’s hometown…family is a wonderful thing). Sure is an affordable area, has a good quality of life, and Clevelanders are a friendly lot. (The foreclosure situation is bad, but only recently has the Wall Street debacle hit us hard, since things never really ever got that good here to begin with!) Growth is verrrrry sloooow…and, provided I can stay employed, that’s fine with me, as we fear no “invasion” from anywhere because we have no “cachet”…uhh, that is, until the rest of the country is either under water (literally) or goes dry in a drought.
So, y’all cash out of Austin by selling to those Californians while the boom lasts and come on up to Cleveland NOW while it’s still cheap! And the drivers here are actually pretty decent…people wave you over so you can merge onto the freeway! Midwestern hospitality here in Little Chicago…hey, at least come up to Cedar Point next Summer….
Got Water?
Marquis Dee
Get back to them after they’ve been paying 3.5% property tax for a few years (”What? You don’t have Prop 13 here?”) and realize Texas real estate doesn’t go up much more than the inflation rate, if at all — gobs of buildable land in every direction.
That is, if they don’t get fed up with the sneering hostility toward Californians in the meantime.
Bradford & Bingley, Britain’s biggest buy-to-let mortgage lender, will disappear from the high street under plans by the Government to either nationalise or carve up the bank.
The Government is in urgent talks with several big high street banks in the hope of agreeing a last-ditch deal to sell the bank, which got into trouble after levels of bad debt jumped.
If that does not happen, there will be an announcement by Monday that the Government is taking the former building society into public ownership.
Whatever the outcome, the Government has accepted it will have to take B&B’s “toxic” mortgages - those where levels of non-payments are highest - onto its own books.
It would back the toxic mortgages into Northern Rock, which was nationalised in February.
“The Government is going to create a ‘toxic bank’”, a banking source said.
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3092838/Financial-crisis-Bradford-and-Bingley-on-brink-of-carve-up-or-public-ownership.html
For some strange reason the demise of the B&B reminds me of a nursery rhyme
Half a pound of tuppenny rice,
Half a pound of treacle,
Mix it up and make it nice,
Pop goes the weasel!
Up and down the city road,
In and out the Eagle,
That’s the way the money goes,
Pop goes the weasel!
I think quite a lot of people will be popping their weasel before this is over.
Wierdly enough, a ‘weasel’ was actually slang for an amount of money - something like 5 old shillings, IIRC. A weekly wage in southeast London, back in the day.
Hence, buying the weekly shopping and then going down the pub (’the Eagle’ in the rhyme, at the top of City Rd in the Elephant and Castle - its still there…amazingly). Pop, all gone.
Couldn’t be more apt today…..
“Here’s why: American real estate is valued at $22 trillion, and the Mortgage Bankers Association says more than 9 percent of U.S. mortgages are delinquent or in foreclosure. Do the math: almost $2.2 trillion in bad loans. But banks show only $400 billion in loans. Gerami’s question: Where’s the rest?”
Ok! Then my math was wrong when I calculated this last time. Bush’s “Deadbeat Specuvestor Tax Relief Act of 2007″ which eliminated income tax on forgiven mortgage debt, meant that he signed the biggest middle-class tax cut in the history of the World!
$770,000,000,000 worth of taxes that Harry Houseflipper and Sally Specuvestor owed the US Treasury were forgiven.
Why don’t the Republicans point out that Bush was responsible for the biggest tax cut in History?
That would mean the Republican Party would have to accept responsibilty for their own actions. No one has clean hands in this. That includes us the voters.
True Conservatism means acepting responsibility and consequences for one’s own actions. Today’s neocon- hijacked, Wall Street-beholden, K-Street bribed “Republicans” couldn’t be further from that ideal.
Are you telling me that the foregiven taxes come out to be the same amount as the Bush bailout? That fits rather neatly, really.
What really blows me away is that the Banks want another bail-out
and now I’m adding up 2 trillion that has been committed if the 700 billion gets passed. The premise of the plan is that if the taxpayers take all the bad non-performing loans (some of which are already
vacant),off the books of the banks/lenders/investment firms ,than all of a sudden money will be freed up and the housing market with rise . Than of course the taxpayers will be paid back when this market goes back to this lofty 2005 peak . Accordingly the plan makes it possible for Americans to invest in America . The crisis has nothing to do with the fact that Americans cant afford prior purchases of real estate ,and prices will crash and stay down accordingly and foreclosures will rise ,but the whole crisis is that banks need money to lend to greater fools that will drive the prices back up again .
First ,borrowers don’t pay peak prices for distressed real estate ,so any toxic waste loans that are sold have to be at a discount . Holding costs ,delayed liability of property taxes ,damage to these homes ,long time with homes sitting vacant non-performing or having squatters ,does not give potential of selling at a profit .
Further if the market declines more ,it makes it more difficult
to sell this junk at anything but even lower prices . If you look at the liability ,than maybe minus 20 cents should be paid for the junk loans because you haven’t figured in price to sell and costs to administer the program .Further, the option adjustable -loans have built up neg. amortizing costs raising the balance
neg. interest owing to up to 25 % beyond high peak prices .
But the government wants the public to believe that we the people will make a profit with this Paulson Plan ,and its just a matter of
credit not being available . Also the government would like you to think that after the lenders have made the biggest mistake of their life giving high leverage easy money credit ,they are going to turn around and do it again with easy flowing credit again .
And this Paulson Plan is going to work ?
Yes…but. I’m being a little facetious here. Bush signed this because it can make him look like he’s “helping” homeowners….and he knows damn well the government would never get that money anyway from these deadbeats.
“Home sales increased 56.7 percent in August in California compared with the same period a year ago, while the median price of an existing home fell 40.5 percent, C.A.R. reported. ‘Although the month-to-month decline in the median price was the smallest in a year, it’s still premature to say that the median price has begun to stabilize,’ said C.A.R Chief Economist Leslie Appleton-Young.”
Sounds like that 40 pct off discount is getting baked into the comps. Does the $700 bn in estimated bailout costs reflect a 40 pct drop in CA used home sale prices?
The value at the banks is still at the higher value. Thats why Paulson wanted the $ with no questions asked. The true value puts all bank officers, regulators in violation of many laws. If the truth would be known, they should be fired atleast, and perhaps put in jail.
How is “true value” defined? Is it the same as market value? And how can one even know the market value if banks refuse to take the Buffett approach and sell a few of whatever kind of toxic debt they are holding in order to test the water? It is kind of like pricing houses when there are no comps.
The true value puts all bank officers, regulators in violation of many laws.
Is this just your opinion, or can you corroborate on what laws have been violated? Can’t banks pretty much define ‘true value’ as they please, or is there an objective way to do so?
AND WHY DOESN’T ANYONE IN CONGRESS CARE IF, AS YOU SUGGEST, LAWS HAVE BEEN BROKEN ON A MASSIVE SCALE???
I think you may be overreaching in your assertion, but I am going to stay open minded on this…
True value will be what someone is willing to pay. There is much discussion about mark to market vs mark to maturity.
Mark to market=banks broke
Mark to maturity=Paulsonese for trust me, give me the money
When a mtg is packaged it masks its value and I can add a huge vig. If I show you a 7% note due in 30yrs against a rental property it is easy to evaluate its merit on conventional criteria. The great thing about CMO’s from a salesman perspective is that I can tell you it is AAA rated, pays 7%. Few investors asked for much more info. Including banks, ins co, pension funds etc
PB …I guess the government has the power to do anything it wants if they perceive that its in the best interest of the banks,
I mean people .Of course a lot of laws are being violated in this BAIL OUT . I could go on and on with laws I think are being violated ,but the lawmakers are evoking emergency powers .
I’m sure that some lawyers will file a class action lawsuit on behalf of the losers and say that their rights were violated against the Constitution ,or standing law ,but I don’t see any Emergency Motions to the highest Courts .
You could go into the fact that the lawmakers are making new laws that are a broad PARDON on the violators of the law in the housing mess . The true liable parties escape Justice and the myth of there is a lot of blame to go around is the end game .
You could say that the very parties that are being bailed out ,the parties that created 30 to one leveraged security instruments that were backed by real estate ,was the unregulated Wall Street . Obstruction of true Justice ,yep .
You can’t say that bailing out borrowers that lied on their
loans so they could make a undeserved profit by fraud is
justice either .The damage is so big from what was done ,
that its to big to bring to Justice .I don’t believe that it is to big to bring to Justice ,but I think the lawmakers don’t want
the normal legal remedy on this one IMHO .
Don’t forget that last August 2007 is when the subprime credit crap hit the fan. Sales in southern Calif. (at least in Orange County) fell through the floor during a time period of the year when they generally increased. so yes, this year’s sales are up in Orange County compared to last year’s anemic sales total in August and September.
40.5%
FORTY POINT FIVE PERCENT!!!
Is that a typo?
Seriously, that is some major, major hurting. Way worse than any other bubble area in the country, including Florida which is only down half of that - 20% - year-over-year. Especially given California’s sky-high prices and large housing volume - that is a huge amount of equity wiped out in one year.
All The Gold…
In Califooooornia
Is in a bank in the middle of Beverly Hills
In Somebody Else’s name.
So If you’re dreamin’
About Califooooornia
It don’t matter at all if you’ve played before
California’s a brand new game.
Tryin’ to be a hero
Windin’ up a Zero
Can scar a man forever,
Right Down to your soul.
Livin’ on the spotlight
Can kill a man outright…
Cause everything that glitters,
Is Not Gold…
Yeah, like that song.
CA Single family detached used home median sale prices
August 2007 $588,670
August 2008 $350,140
Approximate median drop in value = $588,670 - $350,140 = $238,530
Number of existing single family detached homes in CA = 7,815,035
(conservative estimate from CA DOF as of April 2000; does not reflect building boom between 2000 and 2005)
Conservative 1-year drop in CA SFR home equity =
$238,530*7,815,035 = $1,864,120,298,550 ($1.86 trillion), lots more than $700,000,000,000 = $700 bn, and this is only counting CA SFRs.
Ahem…
I would love to see the calculations which underpin this assertion…
Bush: Bailout Plan Would Cost Less Than $700B
President Says U.S. Taxpayers Would Recoup Most, If Not All, Of Their Money
By Dan Eggen
Washington Post Staff Writer
Saturday, September 27, 2008; 4:14 PM
President Bush said today that his administration’s proposed financial rescue package would actually cost less than its estimated pricetag of $700 billion because taxpayers would eventually recoup most, if not all, of their money.
In his weekly radio address, Bush said the mortgage assets at the heart of the plan are cheap now but are likely to rise after the government buys them.
“Many of these assets still have significant underlying value, because the vast majority of people will eventually pay off their mortgages,” Bush said. “In other words, many of the assets the government would buy are likely to go up in price over time. This means that the government will be able to recoup much, if not all, of the original expenditure.”
PB, but not all those houses were bought at bubble prizes. A lot of that equity was just on paper.
But CA equity didn’t grow during the bubble!
It was MEWed out.
That has put a huge fraction of the state underwater. Everyone? No. But the market is determined at the fringes.
Got Popcorn?
Neil
–
““KB Chief Executive Jeffrey Mezger said that foreclosed houses being sold at fire-sale prices were continuing to pull home prices down.”
I am anything but an expert at building costs, but I see lot of listings and sales that are below the cost of land and building. Therefore, HBs can’t make a profit despite the scale. Anyway, that is my view as of now — you can’t make money in most markets by building new homes. I am waiting for the next Census report for occupancy and vacancies, but my forecast is that the demand has gone negative in places like CA where the economy and employment have taken a big hit.
Jas
Jas
Agreed, and I am skeptical of the builders’ estimates of their costs. KB Home sells 3,000 sq ft McMansions in Texas for $150k — and still makes a profit. Land costs more here, but still…I am pretty sure the HB’s can still reduce their prices a lot more.
“Jake and Cynthia Stewart are the type of people Austinites are supposed to love to hate. They’re not from here; they just live here — in a half-million-dollar house in Travis Heights that the 33-year-olds bought with their fancy Golden State money…. Yes, the Stewarts are from California, the motherland of the ostensibly highfalutin inhabitants whom Austinites are programmed to loathe for their imperialistic infatuation with our utopia.”
You sickening Stewarts with your fancy Scottish name and your fancy California cuisine and your fancy ball-sacks of fancy money. You think you can just waltz in here with your echinachea tacos and your hair plugs and your yoga mats and your green this and your green that and plunk down however much for a fancy Travis Heights house just so you can look sneer down your cocaine-encrusted noses at the “pissants” around here. You supercilious, stuck-up, spoiled Golden Staters make me want to vomit. Oh, and the news article says you’re both from Ojai. Well la-de-f%cking-da. Please allow me to get on my knees and kiss your Krishnamurti-loving two-hundred-dollar-Birkenstock feet. You ersatz Eurotrash sissies. Always looking for your next utopia. Turn your Prius around and go home. You make me sick.
Luv,
Jen
Jen,
I love the sound and smell of anger in the afternoon. You go luv
but
they get their kicks above the waistline . .
sunshine.
Ojai ? I don’t know of any jobs in Ojai except farming and retail? Always wondered how it became so expensive there ? I guess people like Larry Hagman can afford it easy enough .
Cali yes once people buy a house there they almost never go back to renting because for years Cali RE could make you money and protect you against rent Inflation. Another state it maybe different though and buying the biggest house in Texas maybe a trap?
Some people in CA did sell and rent proving not everyone there was drinking the Koolaid
“Jake and Cynthia Stewart are the type of people Austinites are supposed to love to hate.”
Jen — you go grrrl!
Im banned right?
“I think Californians may just be willing to take a bigger hunk out of their pot for houses.”
So skimping on pot purchases to pay for a house? or is it selling more pot to pay the mortgage? Maybe they can open a candle store?
Did the Californians buy the house from a Texan. Perhaps the Texan who used to own it? Did the builder buy the land from a Texan? Was a Texan RE agent involved. I have to say that Texans are rather fond of blaming their world on everyone else.
Texans gave the world Bush.
There’s no amount of damage any Californian can ever do that will ever come close to that. But we keep trying!
Did the Californians buy the house from a Texan? Perhaps the Texan who used to own it? Did the builder buy the land from a Texan? Was a Texan RE agent involved? I have to say that Texans are rather fond of blaming their world on everyone else.
I’m surprised that Texans haven’t come up with a bumper sticker like
Don’t Californicate Texas
or something to that effect like Oregononians and Washingtontonians did during the 80s and 90s
Dear ws:
With an idiot like former TX Governor Bush in the Oval Office, I really don’t think Texans have ANYTHING to say to anyone about “fornication.”
~Misstrial
If I were living in the land of Schwarzenegger, I wouldn’t have much to say about Bush to tell you the truth.
How’s Gray Davis these days? Has his personal power grid passed Gore’s carbon footprint test?
Dear Eudemon:
The process to recall Schwartzie has begun. He is extremely unpopular due to the feeling among voters that he passed himself off as one thing and was actually another.
You are truly misinformed about California and its politics.
btw, I have supported and worked to open up drilling in the Channel and off Malibu for 20 years.
~Misstrial
LOL - Thanks Jen!
Well, as long as we’re generalizing…
I hate when Texans drive out to CAAAAlifooooooornia every summer in their RV’s. You can keep your Winnebago warrior in the lone star state instead of driving here at 40mph in the far left lane(left signal on) with Bush/Cheney 04 stickers on it and parking diagnally accross 12 parking spots, blaring kid rock, and tossing bud light cans all over the beach while eating a bucket of KFC. Stay home, we dont like you either.
Don’t you worry Jen. They are welcome to come back here to California anytime.
btw, could you Texas drivers pay attention to the speed laws here in New Mexico??? I mean really, you people are known among the locals here for being the rudest, worst drivers in a state that is not only fugly, but the state that produced Bush.
And, should you or any other of the Cali bashers on this HBB need any specialized medical care, surgery, or custom medications, please keep your @ss out of CA. We don’t need any more traffic holdups on the freeways.
Thanks!
~Misstrial
LOL!
You’re pushing maximum density on the geographical cliches…
LMAO.
Mattel or whomever ought to program their latest line of talking dolls or Muppets to say such classic lines with a squeeze of the tummy.
Jen Bones, I understand you used to post here in days gone by. If so, thanks for your re-appearance now. Us relative newbies shall have fun getting acquainted with you! Please carry on.
Jen only posted for a short while, but was really funny and popular. I like to think that she’s actually a famous hollywood comedian who plans to make the rest of us rich and famous like her someday.
“Paul Castor, a corporate attorney, is reluctant to buy a home for his family in San Diego at current prices. He has a down payment of more than 20 percent and has made two offers in recent weeks, but the sellers’ asking prices ‘were unrealistic and I wasn’t going to budge.’”
++++++++++++++++++++++++++++++++++++++++
Sounds like sellers need to drink their Castor Oil. I was thinking it would stimulate the sellers to get off the pot, but now I’m thinking it will remove the toxic $hit that’s been festering inside for a few years. Toilet timeouts for everyone!
Note to Tim (if you’re reading):
If you read my letter(s) to Congress on the forum, then you will see that I suggested they guarantee the counterparty contracts of failed banks. Would that cost less than $700B? You say that Congress should not listen to its constituency because we are “in the dark”. The truth is that, unless they are acually going to READ the information/suggestions that people are sending them, then they are the ones in the dark. I know they can’t personally read ever letter that comes through, but that’s what staffers, interns, and volunteers are for. The ideas ought to be bundled and passed on.
I think we are on the same page. I have stated multiple times I am not in favor of the bailout plan as it is not narrowly tailored to assuring the markets that failing entities will remain on the hook for their obligations which is all that is needed. The Wallstreet v. Mainstreet debate is meaningless politics. I also stated that I respect many of the opinions of those that also dont support the bailout. I, however, believe that statistics such as X% of the population is for or against something that only 20% of the population has a basic understanding of is irrelevant. It is not a slam against any group for or against. Nor do I even blame ppl for not understanding. There are many things I dont understand, and I intentionally refrain from giving an opinion on them because I understand my vast lack of knowledge on many subjects. Also statistics of that nature are usually based on faulty questions. For example, if you phrased it “are you willing to pay for others mistakes” most would be against the concept. If you phrased it “should the Country spend X to save Y (which is a greater amount)” the answers would be significantly different. I trust neither the accuracy of pollers questions, nor the opinions of the masses on complex issues which are not general knowledge.
Unfortunately, the clueless representatives of “the [clueless] masses” are the ones who will be voting on the issue. “Complex issues which are not general knowledge” will need to be explained or will not be dealt with rationally by those who have to foot the bill.
This discussion assumes that more information always leads to better decisions. Some information is always better than none, however, there is a line where more information simply makes you over confident in your decisions.
I think Americans are quite right to reject this proposal for what it is and was: a bailout of Wall Street. You don’t really need to understand the whole situation to recognize the orginal proposal as a “get out of jail” free card for the people who created the mess.
You also don’t need understand the complexities of CDOs to recognize that we’re throwing good money after bad. We only have 2 choices from here: hyperinflation to make wages and commodities match asset prices or deflation.
I don’t see how we escape deflation or more bank failures with any proposal, even if we throw trillions into the mix. In the end I see us have a god awful combination of a debased currency within a deflationary environment.
For once, I think the masses are spot on in their assessment of the situation. Okay, it so happens that I agree with the masses.
But still, it’s a very dangerous road to say that Joe 6Pack is always stupid and always wrong.
“. . . it’s a very dangerous road to say that Joe 6Pack is always stupid and always wrong.”
When did I ever say or even apply that? I really dont understand that how ppl can be against the premise that such decisions should be informed and effective and not geared towards political gamesmanship.
There’s a reason they call him Jeff “Kidney” Stone. If anyone should know about painful times, it is our man Jeff. This economic storm will pass to as he said with a devious smile…
++++++++++++++++++++++++++++++++++++++++++
“‘I don’t have to tell you these are painful times in many sectors of our economy,’ said County Supervisor Jeff Stone, whose district takes in much of the Temecula, Murrieta, French Valley and Wine County areas. ‘We are facing the worst housing crisis since the Great Depression.’”
I hope this isn’t a repost.
FOR TIM:
If you go to the forum, you will see that I sent a letter to Congress suggesting that they guarantee couterparty contracts. Would that cost less than $700B? You say that Congress shouldn’t take the advice of its constituency because we’re in the dark. However, Congress is the one truly living in darkness because it won’t take any input from the public. They should use their interns, staffers, and volunteers to bundle input and pass it on.
Depending on whether or not this Bail out bill passes or doesn’t my feeling is Banks are still hesitant to make HELOC to anyone with less than stellar credit. My thought is to become a hard money lender?
It would be only on homes in zips 90274 or maybe, maybe 90275.
Thing is, and this might seem a bit odd or like really odd.
I’m not at all interested in getting my money back.
I would only lend on a house I would be interested in owning and at some future date moving into.
Question is what is a fair interest rate to ask on say a loan up to 100-200K.
And should I care about borrowers credit as I could less if they pay loan back since I am wishing they would not so I could foreclose if they miss on my payment or their 1st?
Oh and if I only get interest and my 2nd loan is repaid I’ll have to deal with it.
Would 12% on principle and a 5 points be fair.
And for those who don’t know 90274 is over there between Long Beach and Redondo Beach. That big hill sticking up with 9500 mostly old homes.
It is illegal to lend mortgage money with the intention of taking the house. That’s called predatory lending.
‘It is chaotic,’ said Fred Grimes, CEO of a pair of commercial real estate sales and leasing companies. ‘Lenders are being very, very cautious.’”
++++++++++++++++++++++++++++++++++++++++++++++++
I always get Fred Grimes and Fred Gripes mixed up. It is silly that lenders are being cautious, it’s not like its their money.
What is the deal with the Republicans’ proposed FDIC-style insurance on already-doomed mortgage paper — this sounds like insurance for an unlimited amount of losses, and possibly worse than a bailout?
I think they are saying that the Banks will pay the insurance on the loss that the taxpayers might not recover .Are we going to recover the
interest lost on the money that is being extended and all the other loss.
Really if the recovery would be even half of what they are projecting
we will get back by buying the bad bad bad loans ,the insurance pay off would bk them again .
I think it is more prudent to just take the really good paper off the hands of the banks ,stuff that has low chance of default .The bad stuff is actually a liability . Those loans made between late 2004 and mid-2007 have got to be the most fraudulent toxic junk around ,so I would only take paper from 2003 backward and no equity loans and no second TD’s because they are already toast .I wouldn’t take any of that junk that is based on Ghost towns out in the middle of nowhere either . The banks say they want to free up money ,so why can’t the taxpayers take the good stuff so they can free up money ?
You see Paulsons idea of Good Bank and Bad Bank is that there is good paper and bad loan paper and the taxpayers get to be the Bad BanK that gets all the bad paper and the real banks get to be the Good Bank with the good paper or performing paper not likely to default .
This makes my Top 10 list of idiotic quotes from economists. Ross, remember that saying “Life is hard, it’s harder if you’re stupid”? I think I may just get that saying engraved on a nice piece of wood and nail it to his office door at UCSD.
+++++++++++++++++++++++++++++++++++++++++++++++++++++
“‘Right now, it’s not as much fun as having a housing boom, but they took the punch bowl away from us,’ said Ross Starr, an economist at the University of California San Diego. ‘We should recognize that California’s centers of research have been centers of growth for decades, and San Diego participates actively in those. If all you had was real estate, life would be harder but you’ve got real estate and brains.’”
I got this text message this afternoon ….
Saturday, September 27, 2008
Kristol: A Genuine and Immediate Crisis
I’ve received phone calls in the last hour from two economists I respect, one of them Larry Lindsey, the other in a position where he’d prefer not to be named. Both have government experience, neither is alarmist by nature, and they say this:
The huge European bank Fortis is apparently about to fail. The ripple effect on the American banking system could be disastrous, with bank runs, liquidity crises, and stock sell offs possible Monday. Wachovia may well fail next week. As Larry put it, this really will be 1933 soon if we don’t move rapidly to stabilize the banking system.
And here’s the bad news: the current bailout bill, whatever its merits and likelihood of passage, does nothing to address this.
Congress should pass by Monday simple legislation doing two things:
1. Giving the FDIC authority to provide unlimited deposit insurance through the FDIC for transaction accounts in banks.
2. Authorizing the Secretary of the Treasury to provide unlimited protection of principal in money market funds through the Treasury’s exchange stabilization fund.
Maybe my acquaintances (and I) are too worried; maybe this legislation wouldn’t quite be the right solution. But I wanted to sound what may be, unfortunately, a needed alarm.
Posted by William Kristol at 01:45 PM
General | E-mail the author | E-mail article
http://www.weeklystandard.com/weblogs/TWSFP/2008/09/kristolw_a_genuine_and_immedia.asp
Don’t know what a “transaction account” is, but apparently it differs from the accounts the FDIC has been insuring for 75 years. Having the US Treasury insure all funds in money market accounts to an unlimited degree is just asking for a run on bank deposits, if the banks don’t raise the interest rates on deposits to match the money market accounts. Another opaque proposal.
Kristol Meth and his neocon cronies have been disastrously wrong on just about everything in the last eight years, at a cost of thousands of lives and hundreds of billions of taxpayer dollars.
The only value in reading Kristol is to work out how to do the opposite.
My connection is spotty, so I apologize profusely if this is a triple post. I really want Tim to read it:
Look at my letter to Congress on the forum. I suggested that they guarantee the counterparty contracts of failed institutions. Would that cost less than $700B? Congress, not the people, is in the dark because they are not listening to public input. How else are they going to come up with fresh ideas? We are not stupid!
Post eater.
What happens when instead of Californians, the gov injects refugees? How happy are people going to be then? And no lawsuits allowed, per Treasury.
Did I need to say, refugees have some money. That is a buying pool that is not exhausted.
Dog now adopted and doing well, but such n-a-s-t-y people… no wonder we are having the housing crisis. Nasty and dumb people.
“Haus’s owners sold their home and left him inside. The home was purchased and, when the new owners arrived, Haus was inside suffering from lack of food or water, infested with fleas and extremely malnourished.”
http://tinyurl.com/3eduwd
These are the type of people who are asking for a bailout.
I think I want to blame this 30 to one leverage game that the unregulated lending gamblers were making for this melt down .
.When you add to that the bets and side bets and insurance bets that were made on the real estate loan paper ,it was a big Gambling Casino making a bunch of people and Companies really rich for a while .
I just about puked the other day when a Billionaire on TV was almost bragging about all the money he had from playing this stacked deck Wall Street Casino .The guy was bragging about his skill with fleecing the system .This rich guy had boats ,houses ,marble and gold throughout his
Mansions , dozens of cars , a jet ,and everything a jerk getting off on toys could have . The interview ended up with the fleecer saying his goal was to get more because it was a challenge to increase his net worth, in essence . These are some of the people that are getting off the hook
for the part they played in the Housing Ponzi- Scheme.
L.A. Dudes:
Please give me some recent on the ground info you see re: SFV, esp Sherman Oaks, Van Nuys, N Hlywood area. much thanks!
M.B.A - haven’t been around too much recently, but from my ZipRealty searches, things in SO, Encino and especially Tarzana are starting to come down a little. As in $1+ million coming down to $800K+ in the really toney areas below Ventura.
Van Nuys - last I looked, places near me are asking less than $500K. Don’t really have any info on N Hollywood, but I’d hazard a guess its priced somewhere between SO and Van Nuys.
Still insanely overpriced, all of it.
thanks! still in denial, but amazing it is holding up like that!
LOL - never underestimate Angelino’s ability to hold on the their ’special’ prices.
yes, the eastern san fernando valley has dropped,but all single family homes still start at 500k,there are a lot of rich people in this area who just want a house…..this part of the world will make you money if you catch the bottom and wait…..i did that here when i sold in 2004 and made 500k from my 175k home i bought in 1992…still renting but the wife is ready to kill me if i dont buy again soon.. i loved this bubble
Yeah…yippee.
Nothing like seeing the savers punished, people who can’t manage their money received the nicest houses, and all of America putting their lives on hold waiting for their shelter to make them rich.
I can’t wait to it all happens again.
“KB Chief Executive Jeffrey Mezger said that foreclosed houses being sold at fire-sale prices were continuing to pull home prices down.”….
What are you smoking pal?.. “fire sale prices”… yea, right.. try “less than peak prices” is more like it… we’ll get to “fire sale prices” in another year or two (we hope)…
“‘I don’t have to tell you these are painful times in many sectors of our economy,’ said County Supervisor Jeff Stone, whose district takes in much of the Temecula, Murrieta, French Valley and Wine County areas. ‘We are facing the worst housing crisis since the Great Depression.’”…
Sorry to disagree with you Jeff….. the “housing crisis” was from 1998 to 2006….. what we’re seeing now is an unwinding of the real housing crisis… housing needs to be put back inside the bottle where it came as it yielding far too much influence on everything…
“‘Normally, as long as the rest of the economy is strong, the housing market follows along, but now it’s been the opposite,’ said economist Kelly Cunningham of the San Diego Institute for Policy Research. ‘The housing market has dragged our economy into a recession.’”
Well, sir, that’s because our economy was largely based on buying and selling homes to one and other and getting further and further into debt vice other real industries or manufacturing… what you saw as a strong economy, others saw as a house of cards…
The powers can continue to make capital injections that allow the banks to de-leverage with time . This would give banks times to fold, merge ,sell out assets ,or do what ever it takes to rearrange their losses . Yes ,that would mean that less banks would be standing ,but smaller banks and solvent banks will pick up the slack with time . In the mean time the government runs and backs F&F and they can make funds available to banks for mortgage loan making .I would rather the government make
new money available and perhaps back those with a insurance (so they could be sold in the secondary market ). This way the government doesn’t have to pick and choose who the winners and losers are going to be .Solvent banks after they de-leverage would rise to the top and bad banks
and investment firms would most likely be bought out . The government already injected billions into F&F to take care of losses ,but that Company needs to become smaller . IMHO the government is already into this bail
out for a trillion ,so another 700 billion would be close to 2 trillion .
IMHO Paulsons Plans takes on to much of the loss that the banks/Wall Street should bear and shifts to much to the taxpayers .
IMHO trying to save homeowner who lied on their loan application or committed loan fraud or saving speculators are a waste of taxpayers
dollar because these are not good or potentially good loans . The Banks had a duty to re-work the loans for their own self-interest on their own
dime ,but they just want the government to take that function off their hands . So now your messing with Contract Law and discrimination and violations of the Constitution when the government injects relief to borrowers that don’t deserve it . In the final analysis ,this is going to
make the responsible people mad that they do not get any relief while they bear the cost of flakes and inflation and future taxes . Cram downs for liar loan borrowers is not a function of relief for the government
IMHO . Relief is a decision on the part of the Bank that made the contract to begin with regarding the borrowers . In fact , in cases of clear fraud ,the banks could get relief by their legal recourse .
I am not the most educated guy in the world, however….
I knew that this was going to end in a huge mess when my friends relatives that recently came over from the Philippines qualified for and received a 565,000 loan for a home in San Diego.
This was with two jobs paying 8 bucks an hour each.
Sheesh……
for the life of me, i can’t understand why people in many cases are buying all of these foreclosed homes here in southern california. when and if stabilization occurs, it would make sense to me. but there are,as reported on a los angeles television station, whole neighborhoods where people are walking away from their homes. this would cause me to imagine an increase in crime, drugs, worsening community services due to falling tax revenue, stores shutting down, and a host of other problems. i used to work for ibm, when they finally relented, and started “workplace reductions”. a guy who had been there a while, told me that you never want to be the person turning off the lights. i wonder what he would think of trying to keep the lights on, when they are begin to flicker?