A Through-The-Floor Bust In California
The Wall Street Journal reports on California. “The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth. About 75.5 million U.S. households own the homes they live in. After a housing slump that has pushed values down 30% in some areas, roughly 12 million households, or 16%, owe more than their homes are worth, according to Moody’s. Among people who bought within the past five years, it’s worse: 29% are under water on their mortgages, according to an estimate by Zillow.”
“Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.”
“At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman. ‘We were quite shocked,’ she says.”
“The Kirschenmans thought about sending the keys to the lender. But their financial planner, Christopher Olsen, helped persuade them to stick with the house, noting that they could still afford the payments.”
From Business Week. “When Mark Akers got an offer from his mortgage lender in September to slash his monthly payments down to $2,500, from $4,200, he jumped at the chance. The Norco, California resident ran into trouble earlier this year after his wife got sick and he lost his job managing a factory that made doors for houses. His bank, IndyMac…stepped forward to halve the interest rate on his fixed-rate loan to 3%, for a period of five years. In exchange, the bank will add Akers missed payments to the loan principal, hiking it to $611,000.”
“Akers says he’s grateful. ‘Our neighbor across the street just lost his home,’ he says. ‘I said to my wife: ‘We’ve got a house we’ll die in.’”
The Contra Costa Times. “Bank of America’s new program to enable some homeowners to modify existing Countrywide mortgages may help people stay in their homes — but also could shove borrowers into a new cycle of loan failures, analysts said Monday.”
“‘Maybe the loan won’t blow up now, but it will blow up in five years,’ said Sean O’Toole, CEO with ForeclosureRadar. ‘A lot of what we have seen from Countrywide so far is more of the same, maybe worse.’”
“He cited the restructuring of a mortgage with a $930,000 balance for a house valued at $500,000. Bank of America rewrote the loan with a fixed interest rate of 2 percent that would last five years. ‘Bank of America and Countrywide are kidding themselves if they think that house will be back to $930,000 in five years,’ O’Toole said.”
The Mercury News. “The bank’s ‘Home Ownership Retention Program for Countrywide Customers’ was devised by California and 10 other states to settle predatory lending lawsuits filed against Countrywide. ‘This is going to help some families,’ said California Attorney General Jerry Brown, ‘but the overall economy is in the hands of God at this point.’”
“Presided over by Chairman Angelo Mozilo, Countrywide soared during the real estate bubble but was dragged down by the subprime crisis. Though the settlement ends the lawsuit against the company, the lawsuit continues against Mozilo and former Countrywide Home Loans President David Sambol, Brown said.”
“Mozilo ‘earned enormous sums of money and now we have catastrophic damage. We want to find out what he saw and what’s his culpability.’”
The Daily Bulletin. “Caroline Urso and her husband are hoping Bank of America will either rewrite their mortgage or lower the monthly payment on their Beaumont home. With financing from a Countrywide loan in September 2006, they bought a $425,000 home that’s now valued at $220,000, she said.”
“The couple haven’t defaulted on their Countrywide loan, but they’re struggling financially due to the softening economy. ‘For people like us, there’s nothing keeping us here in this home, other than our obligation to not deliberately default,’ Urso said. ‘There are people being told to deliberately default in order to gain some negotiating leverage with their lender, but we’re hoping the mortgage company will help us and appreciate the fact that we haven’t defaulted.’”
From ABC 7. “Like the rest of Main Street America, this Daly City neighborhood has seen its share of foreclosures. ‘Just in this little block here we’ve had like three and a couple more possibly going up now. It’s the economy, it’s really bad,’ says Colleen Seck, a Daly City resident.”
“Mortgage brokers are desperate to jump start the housing market. One way is to reduce home prices. From October 10 through the 19th, Coldwell Banker will ask clients to lower the price of their home by 10 percent. While this is a national event, the Bay area is not participating. That’s because the local Caldwell brokers say the Bay Area is not one of the hardest hit markets.”
“‘The problem is people don’t realize what good deals are out there and now is the time to buy,’ says Terri Nettles, a mortgage originator.”
The San Francisco Business Times. “The developer of a halted Oakland condo project at 630 Thomas L. Berkley Way is restarting construction, but the complex will hit the market in December as rental units. The developer originally planned to sell units for $520 per square foot. He now estimates that if the units did go on the market, they would fetch prices in the $400 per foot range.”
“‘You just can’t come anywhere near the cost of development,’ Dones said. ‘Until there is some rebound in the price in the residential market, developers are either going to be in a position to rent out units or wait.’”
“Many developers with just-finished projects or projects under construction have either lowered prices significantly or switched their units to rentals. Madison Park Financial Corp. began leasing units at its Il Piemonte project in June after only eight of 26 units sold. The same occurred with Signature Properties’ Broadway Grand and 288 Third condo developments. And Meritage Metropolitan Living put its remaining 11 units up for lease at the 67-unit Jade project.”
The Fresno Bee. “About 54% of the deals last month were foreclosures. Through the first three quarters of 2008, 1,756 bank-owned properties were sold in Fresno and Clovis. That compares with only 213 in the same period in 2007. Some experts argue that a ’shadow inventory’ of bank-owned properties is not being counted. Those are houses that are repossessed by banks and not immediately listed for sale — either by design or because the lenders don’t have the capacity to process them faster.”
“‘Banks are sitting on the inventory and don’t have them listed yet,’ said Sean O’Toole. He said 565 houses were auctioned off at the courthouse steps in September in Fresno County, and most of those went back to banks. Many have yet to hit the market.”
“In the dismal new-home market…production has hit bottom. The 92 building permits issued in Fresno County in August were down one-third from July and were a 37.7% decrease from August 2007. ‘It’s tough for the builders [to reduce prices enough to attract first-time homebuyers] given that a lot of them bought land at a premium,’ said Michael Gilmore of Royal Charter Mortgage in Fresno.”
The North County Times. “Over the past year, auctions of beaten-up foreclosures have become increasingly prevalent as a sales tactic. Now, as the nation’s financial infection spreads, new, upscale “estates” are popping up for auction, with starting bids 50 percent off the original price.”
“Shone Wang, president of Los Angeles-based developer National Security Construction, purchased a 14-house subdivision in Escondido after its original builder could not pay the construction loan. Most of the properties are sprawling ranch houses of about 4,000 square feet sitting atop a ridge overlooking East Valley Parkway.”
“Originally listed between $825,000 and $1.2 million, the houses, known as Windstone Estates and located in east Escondido, will go to auction this Saturday with prices ranging from $385,000 to $575,000. Unlike many foreclosure auctions, the houses do not carry an unpublished ‘reserve price’ that would allow the seller to reject final bids not high enough.”
“Defaults on construction loans have started to pile up as builders said they could not sell houses for a profit and the few interested buyers could not qualify for loans. ‘It’s almost impossible,’ said Tom Dobron, CEO of an Escondido builder. ‘Every one of my projects is in default, and it just didn’t have to be that way.’”
“Wang said he purchased the houses from Bank of America for $5.9 million and spent an additional $2 million finishing the project. That means if the houses sell at the minimum bids, Wang’s company would lose about $700,000 on the project.”
“He is selling in a market where sales are down 30 percent from 2005 and prices have fallen each month for the last two years. ‘If you tell anyone, ‘I’m going to buy a house,’ today, everyone would laugh at you,’ Wang said. ‘So the only way we can sell these is through an auction.’”
“Auctions are not always successful. Dobron, the Escondido developer, said an auction for one of his projects could not have gone worse. Dobron tried to sell 14 houses in the Central Valley project. Eight sold at the auction and only four or five of those sales actually closed escrow, he said. ‘It was a disaster,’ Dobron said. ‘It’s a way to make auctioneers rich.’”
The Bakersfield Californian. “Bakersfield home prices slipped closer to pre-bubble levels in September, according to the latest report from local appraiser Gary Crabtree. The median price for an existing single-family home in the greater metro area was $179,000 last month, the Preliminary Crabtree Report shows.”
“That’s a mark passed sometime between May and June 2004, when local home prices entered a mad spike that peaked two years later. In May 2004, the median was $175,000; the next month it reached $193,000. ‘That’s where it really took off,’ Crabtree said.”
“Over the next two years, the number shot to its high-water mark of $299,925 in June 2006, Crabtree said.”
From Forbes. “We examined the median home sale prices in the country’s 500 most expensive ZIP codes with data from First American CoreLogic. Then, we looked at July foreclosure rates in these areas, according to foreclosure listing firm RealtyTrak.”
“Laguna Niguel, California has 61,891 residents and borders glamorous beach cities like Laguna Beach and Dana Point, but it has the highest number of bank-owned properties–210–of the ZIPs we examined. These foreclosures have likely contributed to the decline of the area’s median home price, which has fallen by $52,750, or 7.2%, to $679,500 in the last year.”
“San Juan Capistrano, Calif., was second on our list with 190 repossessed properties among 33,826 residents. Just a few miles away, banks own 181 homes in the 4,000-acre, 23,140-person planned community Ladera Ranch.”
“In Northern Orange County, 24,044-strong Tustin Foothills came in at No. 4 with 165 bank-owned homes. The San Jose-area ZIP 95148 has 44,401 residents and lands at No. 5 with 157 bank-owned properties.”
“Sen. Dick Ackerman might argue that weather plays a role. He represents a sizable chunk of South Orange County, including Laguna Niguel, and says that there is something about the desirability of the area that makes the real estate market swing a little too far during boom and bust cycles.”
“‘People bought high-end homes when the economy was good, and then the economy went down a tick, and now some people can’t make their payments,’ he says. ‘It happens in cycles, but this time we’re seeing more of it.’”
“Moody’s Economy.com economist Mark Zandi agrees. ‘The combination of rising unemployment and falling home prices drives foreclosure,’ he says. Southern California is experiencing both. ‘It was a through-the-roof boom and a through-the-floor bust.’”
“The bank’s ‘Home Ownership Retention Program for Countrywide Customers’ was devised by California and 10 other states to settle predatory lending lawsuits filed against Countrywide. ‘This is going to help some families,’ said California Attorney General Jerry Brown, ‘but the overall economy is in the hands of God at this point.’”
I didn’t realize Jerry Brown was religulous.
It was a disaster,’ Dobron said. ‘It’s a way to make auctioneers rich.’”
Oh, now he has something against the auctioneers that HE hired. It surely must be someone else’s fault besides his.
If it wasn’t for those autioneers, he wouldn’t have sold his 4 or 5 properties.
Governor Moonbeam? That’s what happens when you do the term limits thing. Jerry Brown will hold every political office in California before he dies. By the way, he was the guy in 1976 campaign who said we needed to live with less, and drove a 1974 Plymouth state car when he was governor.
Term limits would not prevent Jerry from becoming Governor again.
Jerry Brown….he is also responsible for that monsterous glut of apartments…errr…condos in downtown Oakland and reported on in Ben’s above links, while he was mayor of Oakland…big subsidies, too.
Called it his downtown “10-K Plan”….would transform the city into a destination, etc, etc, etc…
Failure it has been…creepy vibe most of the time, too.
Eastern Bloc early 60’s look to a lot of it….a few nice looking, but still overpriced developments.
These loan workouts seem to depend on housing prices coming back up ’soon’.
Since the likelihood of that happening is near zero, are we not going to see additional foreclosures occurring?
In other words, as someone stated, a lot of these loans should have been called ‘foreclosure loans’ from the beginning.
His aura smiles and never frowns…..
Soon he will be president
I didn’t realize Jerry Brown was religulous.
IIRC, he was once a Jesuit seminarian. Didn’t finish the program.
You recalled that correctly In Colorado
“I didn’t realize Jerry Brown was religulous.”
what’s the saying? “there are no atheist in a foxhole.”
Professor Bear, d’ya think now would be a good time to “buy the dip”? LMAO!
Not until BB and HP stop talking (every time one of them publicizes another rescue attempt these days, the stock market sells off…).
Walk softly and carry a big bazooka.
Yes, PB, I’m writing in from your home computer right now. I just want to let you know that I drank your last beer and you’re out of dip. Can you pick some up on the way home?
Thanks,
BV
Big V,
This almost sounds stalkerly
‘Cramer said sell everything now’. We’re close to the bottom. Mybe 200 more pts.
Are you kidding? He was in the seminary.
“I didn’t realize Jerry Brown was religulous.”
He studied for the priesthood…so I guess he is/was.
I didn’t know he was gay.
“Stephanie and Jason Kirschenman …agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.”
“At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman. ‘We were quite shocked,’ she says.”
“The Kirschenmans thought about sending the keys to the lender. But their financial planner, Christopher Olsen, helped persuade them to stick with the house,…”
Wait a minute, if they put 20% down, their loan amount was approx 366.5 K. If the house is now worth 385 K, the are about 18.5 K to the good. Oh, the equity loan. Just imangine that was borrowed from Benny the Bookie. It’s a just a loan, nothing more.
They used the money they borrowed to “pay off some bills”. They simply replaced one bill with another one. Why are they upset that they have to pay it back?
I think many of these people did not realize that home equity money isn’t free.
Why, don’t you know that the best way to pay off your bills is to give crooks lots of money to shuffle your debt around? And, to top it off, you can turn unsecured debt into secured debt by putting your house on the line! It’s brilliant and is all part of the Scam eCONomy.
But a mortgage broker recently estimated its value at well below the $380,000
Notice how they relied on a mortgage broker to estimate the value of their house? I’m sure he was very unbiased in the information that he gave them.
“Stephanie and Jason Kirschenman …agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.”
And I’ll bet that 20% down payment $458K*20%=$91.6K came out of escrow from a foolish lender who lent to the GF who bought their starter home. These idiots couldn’t have possibly saved up $91.6K from their earnings. Mainstream media just doesn’t get it…we’re looking at housing prices going sideways for a decade or two after they finally stop plummeting. Neil, please pass the popcorn.
Got diversified assets?
John Fogarty was right about Lodi.
Stuck.
Or, how about Buck Owens:
“You don’t know me, but you don’t like me. You’ve never had to walk the streets of Bakersfield”
I liked this part best…
“Akers says he’s grateful. ‘Our neighbor across the street just lost his home,’ he says. ‘I said to my wife: ‘We’ve got a house we’ll die in.’”
You already lost your house buddy. You are just taking your future with you too. And yeah, your probably going to die there.
There was a professor that claimed the secret to sucess was to fail quickly, so that you could move on. These people are hanging on for what? Waiting for the next bubble. This is all going to take a long time.
I have never seen a more socialistic country in my life. Rewarding the speculators and hammering anyone trying to act responsible.
I will not make the same mistake ever again.
You don’t think much of socialism, do you?
FYI socialism is government control of large parts of the economy to benefit the LESS WELL OFF. This is something else.
Try feudalism.
It’s the opposite of what Robin Hood had in mind. Steal from the rich and give to the poor.
There’s a reason that legend has stayed with us, it resonates with the average person.
We will be making new legends for our children’s children to tell around the campfire.
That’s what socialism purports to be. We’ve seen how that works in practice, right in our own country.
you ain’t seen nothin yet
bail for everyone !
it’s the FREE-er healthcare that will kill you
Socialism is government control over large parts of the economy, allegedly to benefit the LESS WELL OFF, but in actuality to benefit the controllers.
No, that’s Communism.
When I said socialism, I meant socialism for the rich at the expense of the middle class and poor. Obviously this isn’t the same socialism any reasonable country would practice.
Bottom line: this country is a disgrace on many levels. Morally and Financially BK.
Socialism is SUPPOSED to benefit the less well off, in reality, it never works out that way.
If you think this is Socialism - then you’re doing it wrong….
From each according to their stupidity.
To each according to their greed.
No. It’s to each according to his connections.
The Aristocracy of Pull.
>> I will not make the same mistake ever again.
? like you don’t want to be born in the US. I didn’t know they offered me such a choice.
Socialism is the system that actually benefits the people in power and their friends. As for the rest of the people they just help them a little bit so that they don’t start complaining and raising hell, but they never let you get ahead, even if you’re responsible and hard working.
Sounds familiar? That’s our government, congress and wealthy are in bed together. + they help bring the lazy and poor to middle class when they didn’t put in effort!. What the heck? why not? it all the same people for the people in power!!!
3 years Ago, I couldn’t wait to wipe off the smile of an acquaintance of mine who a bought a house in Modesto, CA with:
- No money down
- A 15/hr. job
- 3 year arm
Refinanced and pull out 100K. Bought an Escalate SUV, and dropped about 10k on rims and t.v. screens for the back seats. bought big 60″ plasma t.v. for “football” I went to the Superbowl party.”
And check this story!
My cousin’s girlfriend’s brother worked in Vegas for a casino for $25/hr. managed to buy 5 houses from which he pulled out a lot of money in refis and bought a Ranch in Mexico cash $$$. well he’s lost the houses and he says he has no worries this prick. WTF
The U.S. system of free money. No wonder the many Africans and Ukranians want to come to America where you can sweep $$$ on the street with a broom.
I am so happy to know that my money will be used to bail out those idiots, either in the form of higher taxes, run away inflation, or overall economic collapse.
The sad part is that they’ll be at the head of the line of the next scam and will get bailed out again, and again, and again…
I don’t get this.
“Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.”
“At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman. ‘We were quite shocked,’ she says.”
“The Kirschenmans thought about sending the keys to the lender.
Okay - 20% of $458K is about $90K, so their mortgage was $368K. Now they owe $380K, so they apparently borrowed another $12-15K. And for this they want to walk away?
with a fixed interest rate for the first 10 years.
Note that they’re paying a “teaser rate” now! Maybe they’re looking forward to when it adjusts up.
(WHY anyone with 20% down would get an ADJUSTABLE mortgage at a time when interest rates were at a 40 year low is a mystery!)
B/c Alan Greenspan & David Lereah told them it was “smart” to do so.
No mystery. They couldn’t swing the real payment.
Precisely - no way could they afford the real payments, but since “real estate always goes up!” and “you can always refinance” it was a done deal.
Maryland is full of this crud: people buying houses at 5x to 10x their income using stupid “fixed-rate” loans that explode after various conditions are met. But, since they are not “subprime” and since their house is 4,000 square feet with room for the Hummer and Escalade, clearly it will all working out fine… right…
$380K is very generous for Lodi, just another CV agtown. If they had to sell now I doubt it would go for any more than $200K. Therefore they are about 180K in the hole now.
Gameplan…
Insert keys in envelope, seal nicely, mail to lender.
Strip house down to the 2×4’s on the way out.
Compose a victim sob story for the media.
Press for a bailout.
“Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years.
Accept for the price in that area, it sounds like they were being relatively prudent.
Two years later, they took out a second mortgage to pay off some bills.”
And at this point, they stopped being prudent.
And no, it doesn’t make sense to want to walk away from your home simply because it is no longer saleable for what it once was. Of course, that’s assume that you actually view it as shelter,–a place for you and your family to live–and not the “biggest investment of your life.”
“Stephanie and Jason Kirschenman thought they were being prudent when they agreed in late 2004 to buy a new four-bedroom home in Lodi, Calif., for $458,000. They put a substantial 20% down and chose a loan with a fixed interest rate for the first 10 years. Two years later, they took out a second mortgage to pay off some bills.”
“At the time, the home was appraised for about $550,000. But a mortgage broker recently estimated its value at well below the $380,000 the family owes on it, says Ms. Kirschenman. ‘We were quite shocked,’ she says.”
“The Kirschenmans thought about sending the keys to the lender. But their financial planner, Christopher Olsen, helped persuade them to stick with the house, noting that they could still afford the payments.”
=============================================================
Ode to CCR…
Just about a 4 years ago, they set out on the road,
Seekin’ their fame and fortune, lookin’ for a pot of gold.
Things got bad, and things got worse, I guess you know the tune.
Oh ! loan, stuck in Lodi again.
Rode in on a substantial 20% down, they’ll be walkin’ out if they go.
They were just pissin’ away dough, might last seven months or more.
Ran out of 2nd mortgage money, looks like they’re at a dead end.
Oh ! loan, stuck in Lodi again.
The man called a financial planner said they oughta still pay.
Somehow the house had lost value, ran out of options to play
They came into town, a one-house stand, looks like their plans fell through
Oh ! loan, stuck in Lodi again.
Mmmm…
If I only had a Dollar, for evr’y FB song I’ve sung.
And evr’y time I’ve had my say while people sat there punch-drunk.
You know, they ought to catch the next train back & no longer give
Oh ! loan, stuck in Lodi again.
Oh ! loan, stuck in Lodi again.
http://www.youtube.com/watch?v=yA7iGxV6rt4
Well done! ( And one of my favorites )
Ahhhh Creedence Clearwater Revival. Sure brings back memories. Lookin’ Out My Back Door one of my favorites by CCR.
I guess I’ll never quite understand the stock market:
Lennar Corporation shares were up 2.8 percent at $10.74, a day after the No. 2 U.S. builder cut its dividend 75 percent to 4 cents per share.
Up?
Nobody really understands the stock market, even though many claim to understand it.
I understand the stock market more and more every day. It’s like the craps table. When someone says, “You betta git on this one, the trains rollin’,” it’s often a good time to get on. But when the table is cold and you can’t tell the pass line from the field and the croupier stops pushing chips and starts raking them, it’s time to go home.
“The relentless slide in home prices has left nearly one in six U.S. homeowners owing more on a mortgage than the home is worth.”
Sorry thing about these stats is that one person could have purchased 6 houses so that the stats as published mean nothing, nothing, nothing!!!
For some, their negative equity may be due to a relentless slide in house prices. For others, it may be due to a relentless borrowing against phantom equity. The latter population is one of opportunists who took unmitigated risks with other people’s money, and former is one of Greatest Fools. I do not misplace my sympathy with either.
“The bank will add Akers missed payments to the loan principal, hiking it to $611,000.”
“Akers says he’s grateful. ‘Our neighbor across the street just lost his home,’ he says. ‘I said to my wife: ‘We’ve got a house we’ll die in.’”
==============================================================
I can’t imagine anybody else paying $611k for a house in Norco, so yes, they’re debt and gone.
‘We’ve got a house we’ll die in.’
Perhaps he is planning a murder-suicide escape.
jbun,
You beat me to it!
‘We’ve got a house we’ll die in.’
What does this mean exactly. I think it means renting is a fate worse than death?
Xactly. Far better to owe 3X what the place is really “worth” (via area rents/incomes) than to *gasp* R-E-N-T (the *Horror*!).
Grateful Kool-Aid-drinking status zombies like this make me question my natural tendency to feel empathy for the less intelligent.
“His bank, IndyMac…stepped forward to halve the interest rate on his fixed-rate loan to 3%, for a period of five years. In exchange, the bank will add Akers missed payments to the loan principal, hiking it to $611,000.”
For this he is grateful? What a rip-off to add missed payments to the principal of the debt, those missed payments WERE PART OF THE PRINCIPAL ALREADY!!!!!!
No, the principal portion of the payment was part of the existing principal, the interest portion that was missed was not and will be added on to the principal.
“I can’t imagine anybody else paying $611k for a house in Norco, so yes, they’re debt and gone.”
Norco is justy north of Corona off the 15 fwy. A ton of new developments went up there during the IE housing explosion boom of 2003-2007. Very dull flat area, very hot, choking yellowish smog, and cow manure smells, typical of much of the IE .
The developers (KB?) were selling these brand new homes for over $ 600.000 at the peak in 2005. Now i do not think they are worth more than $300,000 tops, and that for the largest 5/3 4000 sq ft platial estate homes .
Norco is an IE armpit, period!
This is a bit OT for the cali thread (and I hope it’s not a repeat), but speaking of a through the floor bust (businessandmedia dot org) - Lehman CEO Richard Fuld busted (in the nose):
“From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.”
Ward determined Fuld deserved the beating based on his testimony before the committee.
“I thought he was shameless,” Ward said. “I thought it was appalling. He blamed everyone. He blamed, as you say, ‘naked short sellers’ over and over in case we didn’t get the point, when in fact hedge funds like Harbinger had money locked up in Lehman and was shorting it to try and make the most of the money that they already had. He blamed everybody but himself.”
sounds like Barney Frank
What kind of a jaqueasce uses a heart monitor at the gym? Unless you’re 80, that is. Why would a company pay someone that much money if they’re that frail? Make no sensie.
Lots of people who work out use heart monitors. I use one to make sure I work hard enough. Polar & other companies sell them.
I use one when I run, to keep me from running too fast. It counts calories too. A good lunchtime run = 800-1000 calories.
Guys: If you’re running too fast, you will know it. If you’re working out too slow, your ass will grow. Heart monitors make you look like a sissy.
That wasn’t too harsh, was it?
Just a tad bit Big V
Tell it to Lance Armstrong.
All serious athletes use heart rate monitors. It’s not surprising the average joe has started to use them; it’s a far more effective measure of how far you can push yourself than a chart.
“Akers says he’s grateful. ‘Our neighbor across the street just lost his home,’ he says. ‘I said to my wife: ‘We’ve got a house we’ll die in.’”
Watch out, Mrs. Akers.
Yeah, I was thinking that that story had an awful lot of foreshadowing in it….
‘We’ve got a house we’ll die in.’”
“grow old in” - could be there awhile
“we’ll die in” - could be as early as today
Losing a house isn’t that big a deal. Losing shelter or your life is.
The odd thing is these “workouts” to keep people in their homes are only delaying the foreclosures by 5 years while putting said people even deeper in debt. And these poor sods think they are getting a “deal” when they really should be just mailing in those keys. How soon before the MSM catches on to what a scam this is and people start walking again ?
I doubt five years more like one or two at the most. They are out once the credit cards are maxed out again.
That’s what people don’t realize about these FBs. Sometimes the HELOC money is spent BEFORE they even borrow against the house. It amazes me the percentage of people who just can’t seem to live within their means. They just get deeper and deeper into debt every year. The housing bubble just gave them the ILLUSION that they weren’t going broke.
The banks aren’t really trying to stop foreclosures, they are merely trying to stem the tide. They figure they can prop prices up a little that way.
I agree with this. An orderly crash is better (even for us) than a chaotic crash.
An orderly crash is better (even for us) than a chaotic crash.
I 100% disagree with this. A quick, painful correction is far FAR preferable for the responsible and prudent vs. a ‘death by a thousand cuts’ Japan-style 20-year correction. Who here wants to lose 2 entire decades waiting for prices to become affordable again?
Hear! Hear! Testify it to the heavens, bro’.
And yet, homes in Japan are still not really affordable, thanks to super low interest rates.
Japan is completely and 100% addicted to cheap loans, like a junkie on heroin.
“I agree with this. An orderly crash is better (even for us) than a chaotic crash.”
So far, we seem to be on the orderly crash route. Prices are falling steadily and substantially, but without panic selling. Bailout efforts aren’t interfering too much with the fundamentals.
Put me down if favor of a more orderly and fairly rapid decline versus a chaotic crash. Getting to a more sustainable economy faster would be a good thing. I’m not sure how we do that or if it’s even realistically possible, however.
So, we hear a lot today about how house sales have gone up. But, I can’t find a comparison of the average or median house price sold this August versus last August…
Someone always has to be trying to start a panic. Problem over - sales up. Move along quietly.
Here is the word from Cali on August. I would post links but they usually end up lost.
“An estimated 37,988 new and resale houses and condos were sold statewide last month. That was . . . up 13.6 percent from 33,429 for August last year. . .. The median price paid for a home last month was $301,000, down 5.3 percent from $318,000 for the month before, and down 35.3 percent from $465,000 for August a year ago.”
Can’t help but wonder what the state-wide price per sq. ft. looks like in comparison to the last few years. -50% already?
Oh…well…that’s very different, isn’t it?
Never mind…
The median price is…well…just…that and doesn’t say anything about how much space you get. I am curious to know how much more square footage the median will buy you today.
“Sen. Dick Ackerman might argue that weather plays a role. …and says that there is something about the desirability of the area that makes the real estate market swing a little too far during boom and bust cycles.”
Oh, now I get it! Good weather makes people behave like
greedy morons.
Anyone know his website URL so I can send him some re-election money?
We need more people like Sen. Ackerman in government.
www howdidigetelected gov
““‘The problem is people don’t realize what good deals are out there and now is the time to buy,’ says Terri Nettles, a mortgage originator.””
It’s always a good time to but. Especially with a depression looming on the horizon, credit tightening and the job market breaking away.
Long time reader, first-time writer…
I appreciate all the wise comments shared on this blog and I am always amused by the hilarious remarks on the FBs. All kidding aside though, we are all affected by this economic downturn. The foreshadowing of the Great Depression 2.0 is happening. What is one thing you are doing to survive these dark times? Buy gold? Bonds? CDs? Cash out? Move out of CA? Move out of country?
rent
pay down debt
minimize expenses
minimize commute
cash is king
gold
bearx
Don’t panic or become fearful, it clouds your judgement. Beware of those who try to make you panic, they may have something to gain.
Get out of debt, rent, save money, don’t buy anything discretionary, work on being in good health, have an emergency stash of money, cold drinks, and some good books, so if all else fails, you can go enjoy yourself relaxing and reading under a tree.
I recommend “Walking it Off” by Doug Peacock.
Rent, cash is king…amongst other things. There are oppotunities even in a down cycle. Pay attention and keep reading and sharing information.
Welcome to the gang, ak924. Help us out, too, by sharing your own observations and experiences.
Moving out of US probably not the answer. Many people on this board can laugh at me for my position in (no kidding) Icelandic government bonds. Luckily I can afford that loss since I have no stocks. My point, though, is that when there’s a real panic, people all over the globe are still fleeing to US dollar. So far. Lotsa whip-saw in this market; next week it could be big gold boom again. Or maybe by next week everyone will be stockpiling dry food. Things move very fast these days.
Calif? - hi guys, I’ll be there for the winter by December 10.
Will you be staying in Monterey (or was that Morrow Bay)? Maybe we can have an HBB meetup near your place. Hubbie and I wouldn’t mind taking a little vacay down there.
I’ll be back in CA on Dec. 2nd - Morro Bay is nice (too bad about the power plant though) and a definite possibility for me and Mrs. VV.
Fortunately, I have a steady job (so far) and no debt. I have no individual stocks, some CDs, some GLD. I converted 401k to mostly bond funds. But it looks like the thoughts of buying my first house in the next decade(s) have been dashed even if the prices come down.
Anybody have an opinion about Bank of America?
My observations so far are much like what others have described. 1. Most of the general public are still oblivious to the state of the economy. 2. There are still houses on my block that are listed way too high and some have never been lived in.
Sometimes I wonder if knowing too much information is a bad thing. I wish I could live more carefree like everyone else. I’m just wondering if all these years of nervously watching the economy and angrily seeing my tax dollars go to waste could be a detriment to my health.
I was born and raised in CA so I’d hate to leave but…
House prices in CA are going down at an accelerating rate so if your desire is to own a wooden box that sits out in the rain rotting, wait a year or two and you will have your piece-of-the-american-dream(tm). Do underbid whatever wishing price a realt-wh@re is giving you though by at least 20% ;>
FYI: my justification for this prediction: 1) am aware of an actual foreclosure on the most expensive street in piedmont california. Think high 7, low 8 figures mansion. 2) alt-a timebomb will be going off in 2012. 3) markets always overshoot on both the upside and the downside. Wait wait waith for the spring 09 price slaughter as the country realizes it is in a recession + that the election pres obama or mccain wont do diddly for this housing crisis.
You are not the only one who has pondered whether “knowing too much” has made life more onerous! My husband and I ask ourselves this question all the time. We are debt free, renting and slowly saving for a house. We chose not have children due to not having family nearby and the cost. We are constantly discussing the economy and political situation. I guess we care too much! Life would be so much simpler if we did not care and only lived for today, but it would drive me NUTS! I guess we are stuck with who we are! Like it or not.
EastBayRenter,
Haven’t seen you post in awhile. How are you and your husband doing? Still commuting to SF?
Another long timer/first timer here.
My advice: stop keeping up with current events and stop being emotionally invested in affairs you have no control over. Spend the time you would otherwise use educating yourself on those “important” matters either making yourself or others happy or pursuing a hobby you can eventually share.
Also, I understand that you are debt free, have a steady job and a variety of saved assets. So if you love California, why leave? I would personally be very angry at myself for the rest of my life for leaving a place with great weather and pretty girls unless I had no other choice.
Another long timer/first timer here.
I wrote this reply or something like it earlier but I think it got chomped. If it shows up twice, I apologize.
My advice to you is stop paying attention to current events and stop placing an emotional investment in activities beyond your control. Is the government wasting your money? Obviously. Can you/will you do anything significant to stop it? No. So you might as well not care. Your time is better spent either making yourself happy, making loved ones happy, or investing time in a hobby that will eventually make people happy.
Also, since you have a relatively steady job, no debts, and a variety of savings, why leave California? Just rent or something. You will regret it if you leave a place you love without a very good reason.
Why leave CA? Well, we’re a highly taxed state. I don’t see the tax dollars go to good use. We have two young children going to public schools which are poorly funded. Things are going to get worse with the budget shortfall. I post on this board to seek opinion because if most smart people think leaving is the solution, I don’t want to be the last one “holding the bag.”
” My point, though, is that when there’s a real panic, people all over the globe are still fleeing to US dollar.”
Not the dollar this time and not for a long while. The flight is to Yen. The US Treasuries are losing value when they should be rising. The only ones fleeing to the dollar are US funds. The dollar and US Treasuries are the last refuge of the incompetent.
The real panic will occur when everyone tries to flee the dollar.
I have 13-15 years to retirement, I think; my 401(k) has about 95% equity in it, and I plan to keep it that way. I keep my contributions at 15% (got a bit of a late start + had divorce 10 years ago). I’m not freaking out.
A 37% loss doesn’t cause you to freak out?
I would be screaming bloody murder. Based on the average return for the last 13 yrs, from this level -by the time you retire - you will get back up to were you were last October. Whoopp -dee - friggin- doo.
A 37% decline does not cause me to freak out, that is because, like this person, I have been contributing month after month into the stock funds (I am also about 90-95% stocks). The 37% decline is from the high and we did not buy all of our shares at the high, the concept is called dollar cost averaging, and this is a method of investing, not speculating.
When you are an investor, you don’t need to panic, if you are speculating, go right ahead and panic.
gambler
95% equity, as in 95% stocks?
“The foreshadowing of the Great Depression 2.0 is happening. What is one thing you are doing to survive these dark times? Buy gold? Bonds? CDs? Cash out? Move out of CA? Move out of country?”
I have moved most of my monies into vanguard Us shrt treasuries and MM’s. Very liquid so i can switch out or move it very quickly.
Will soon move a large amt into a B of A CD paying 3.75% for 7 month term. Or Citi has a cd at 4% for 8 months, haven’t decided yet which bank to use.
Am seeking employment close to home in a new career move in a field which i think is depression -proof, Petroleum refinery safety. (I live close to Port of long beach/LA - lots of refinery operations here).
Have my house secure against vandals and the mob with dogs, guns, perimeter lighting, iron bars, and good watchful neighbors.
Only buy cheap at 99 cents or wal-mart for necessities.
No long vacations just short trips to the local beach to ride my 10 speed Bike and swim SO as to get the stress out And keep in shape.
No PM investments in gold except for jewelry items and a large coin collection which I keep stored away in case things really go bad.
peter m: if you need some info on refinery safety, let me know. My girlfriend used to do that. She still works in the refinery (now as a project coordinator) for one of the subcontractors. She’s at the ExxonMobil refinery in Torrance, but has also worked at a few other local refineries so she knows people at most of them. BTW, if you do refinery safety, you better have good patience because you’ll find yourself having to tell people the same thing over and over again because they just don’t listen.
“The bank’s ‘Home Ownership Retention Program for Countrywide Customers’ was devised by California and 10 other states to settle predatory lending lawsuits filed against Countrywide. ‘This is going to help some families,’ said California Attorney General Jerry Brown, ‘but the overall economy is in the hands of God at this point.’”
==============================================================
Angelo Mozilo is God?
No, carrot. Angelo Mozilo is a carrot. Get it straight.
Would that carrot be 10, 14, 18, or 24K?
None of the above… Fools gold.
Totally OT - but I wonder if y’all have some linkage/advice?
Friend of mine just moved into a new place, and was told by a neighbour that the previous occupant committed suicide. At this point I don’t know for sure whether he bought or rented - but I was under the impression that both sellers and landlords had to disclose that kind of thing? BTW, this is in CA, and I don’t know if this is a State thing, or what.
Having trouble looking it up on teh googles because I’m not sure of the search terms - anyone have any leads on where to look next?
All help gratefully received
I think in CA, you have to disclose a death within the property if it occurred within 3 years.
The die-hard spooks do 3 years in a heartbeat, so to speak.
speeding pullet — I think you do have to disclose in CA if the house for sale was the scene of a violent crime. As I recall, the Tate/Polanski house was for sale for a very long time because of the stigma of the Manson murders and that crime had to be disclosed. No one bought it till somebody came around, bought the property, tore the whole house down and rebuilt, plus changed the address.
I don’t think a suicide is considered violent. I sold a house here in San Diego some years ago and I did not have to disclose that the former owner had died of natural causes in it.
Is he afraid its contagious?
No, I think he’s just a little creeped out by, understandably. And pi$$ed off that he wasn’t told beforehand.
“Material Facts are commonly referred to as anything that would affect the buyer’s decision to purchase or the price and terms the buyer offers. In other words, if you have knowledge about a defect, it should be disclosed. In California, sellers are to notify buyers if a death has occurred on the property within the last 3 years. Some buyers are creeped out by knowledge that a seller died in the house.”
Found at: About.com
What Should Sellers Disclose to Home Buyers?
By Elizabeth Weintraub, About.com
I hope this helps you.
You have to disclose such in Colorado.
I looked at a rental and the owner told me about the previous renter’s suicide. I thought I was pretty pragmatic, but in all honesty, it affected my decision to not take it.
Along those lines, my last rental, a beautiful log house in the Colorado mtns, was cool, but the neighbor told me the previous renter had stalked her and stolen from her and I should burn some sage to get rid of the bad vibes. She’s a teacher and I always thought teachers were pretty sensible.
I never did burn the sage, but I never felt really good the whole time I was there. I wrote it off to the altitude, but several friends said the same thing when they’d come visit, they had bad dreams.
I know a Navajo who’s a plumber and he worked on a townhouse complex in Moab he swore was on an Anasazi burial. He saw weird things and his other Navajo friend working there was sick the whole time he worked on it, his legs would get weak. It was called Coyote Run, and the Navajo are very superstitious about coyotes.
I decided my log house was built on wildlife habitat and the elk and deer and other critters had cursed it. Can’t say I blame them.
Yeah, I’m a little sensitive to ‘atmosphere’ myself.
I’ve heard about the Sage - never tried it myself - but I’ve heard it gives good results.
As for the townhouse complex in Moab - that might just be good old high EMF (electromagnetic frequency) readings - when it gets too high, like in uncompleted buildings with uninsulated wiring/pipes, it can have weird and spooky effects on some people.
Anyway, thanks so much for the advice guys - you never let me down
This Navajo guy saw huge ghost-like shamans with glowing eyes, guess that could be an electric phenom, we don’t know a lot about that stuff.
{shudder}… rather him than me!
I used to see all sorts of freaky stuff when I was a nipper, but managed to block it out as I got older, cos it scared the living @#$p out me.
Kind of glad I left that childhood ‘gift’ behind..
Lost in Utah,
Ever read any Tony Hillerman books. Great mysteries that take place in Navajo country. The main characters are Navajo police. One of my favorites by him is “A Thief of Time”
I’m saving Hillerman for when I’m old and in Whitman’s stables. Haven’t read any, but everyone says they’re good.
If you’re from Colorado you don’t want to own/rent near where Al Packer lived. Yes, you’re right Sally, he’s the guy who ‘wintered up’ with two others. Next spring, Al was the only one who came out. Had gained a few pounds by the way. hehehehehehehe
Landlords only have to disclose it if asked. My ex-boyfriend used to always ask potential landlords whether or not the apartment was haunted. One guy said “I don’t know”.
Maybe so, but sellers are required by law to disclose.
saying I don’t know is probably the best answer, cause some people’s haunting is their own mind, IMHO.
My former neighbor was an FBI Agent who committed suicide in the Master Bedroom. We pulled up to our driveway one day to find a coroner’s wagon in their driveway.
He was a really decent guy. Too bad it wasn’t his wife. What an itch with a “B”. She waited quite a few years to sell, but I am sure the new owners found out the gory details with our gossipy Stepford McMansion wives.
McCain’s plan: “I would order the secretary of the Treasury to immediately buy up the bad home-loan mortgages in America and renegotiate at the new value of those homes — at the diminished values of those homes — and let people be able to make those payments and stay in their homes,” he said.”
I can’t help but wonder if the government largesse with our money will also extend to ALL first time buyers?
Is McCain in idget or what? Doesn’t he realize that such behavior can only cause a worse problem? Why does he think that our economy will be saved as long as we can keep housing unattainable to most people? Our economy will begin to recover as soon as the housing market hits bottom.
Apparently housing is not unattainable to McCain. After all, he owns ??? houses.
He’s not an idiot, just a very opportunistic (and increasingly desperate) politician. He’s trying to “one-up” Obama’s bankruptcy cram-down proposal b/c it would be enormously popular, not b/c it makes good sense.
I was very upset when I heard this!! Even Palin said people who could only afford $100k homes and bought $300k homes are the problem and should not be rewarded. He must be really desperate. I never really liked McCain, it’s Palin who has my vote. Sure she needs to learn more, but at least she’s not socialist!
We dont have a good choice, regardless of party.
I’m righting in Ron Paul to make a statement.
Sure better than not voting
Have sent letter to my Congressman, up for
re election this Nov. Advised not voting for him.
I would like to see all ALL incumbants OUT. That would sure make a statement.
People cannot be ignorant and free - Jefferson.
Dear Wizard,
write ins for unregistered candidates are usually not counted. E.g. if you want to run a write-in campaign and have the votes counted, you have to register in some way. So if you want to protest, you are probably better off voting for Bob Barr or one of the other non R-D candidates.
Zillow Malarky-
I have been tracking my former residence. At the peak (after I sold) it was $1.4M
It was down to $859.5K Aug 20th 2008
I tracked it every week and used a calendar to record it.
It was up to $867.5K Oct. 2nd, 2008
It was up to $878.5K Oct. 8th, 2008 today
So Ca McMansion that has a $11K jump in a week? Yeah, right.
Zillow can only come up with a rough estimate based on recent sales in the neighborhood. If you do the math, $11k is less than 1.5% of $867k. It’s not a big change. There must have been a sale in the areas the 10/2 and 10/8 which caused their software to make that small adjustment in its estimate.
True, and besides looking back just isn’t healthy. We had a real nice gal on the BA Blog and she let the goings on at her former res. drive her quite insane!
Drawing all kinds of conclusions on whether the lawn was cut, how many people were ( or weren’t ) living there, the buyer’s loan etc. I’ve looked at my home sold in 2004 TWICE since they invented Zillow. I try not to drive by looking in the rear view mirror. IMHO.
Why would she care whether the lawn was well-maintained at a house that she no longer owned? People are nuts.
Zillow gives a range of values. Their Zestimate is just like the midpoint of the range or something. Even the range is only accurate to a certain level of confidence. 1.5% is not a statistically signifigant change.
Did anyone else catch McCain pandering to the homeloaners at the debate? (Not that Obama is any better, so please don’t take this as a partisan slam). I am wondering, his plan is to renegotiate the principal down to what the house now would cost. So, that’s the bailout for the idiots that bid up prices. What do the prudent who refused to do so get?
IAT
You get to join the rest of us with pickaxe and shovel as we bludgeon those who got free housing and take all of it back.
Wait, did I just say that out loud?
Glad to see you back, sleepless.
Thanks, but now I have to actually pay attention again.
Train-hopping through Italy (and ignoring this malaise) was much more relaxing…
Any climbing/hiking in the Dolomites?
Not on this trip, unfortunately. Although I did spend about 3 days on Lake Como thinking, “if only i had my windsurfing gear with me right now…”
Mostly a sightseeing trip. Dolomites head up the itinerary next time though.
be sure to fine tune your vertigo before you go.
Sleepless,
Where did you stay in Lake Como? When I was in Italy, I stayed in Varenna.
Lost in Utah,
When I was in Italy, I did hike part of the Dolomites. Stayed in a town called Castelrotto and did some hiking in the Alpi di Suisi. Just magical and beautiful. I’m ready to go back.
Get out….Varenna is EXACTLY where I was!
And now you’ve got me p*ssed I didn’t do some hiking. Well…I walked everywhere, just not in the mountains.
Sleepless,
Do you use any suggestions provided by Rick Steves?
Yes, and I believe Varenna was one of them.
or were you joking and already knew that based on my choice of place to visit?
What do we get?
THE BILL, of course!
The goal is to force the next generation to buy unaffordable housing to fund the greed of the current home-”owners.” But don’t worry, “housing only goes up” and “you can always refinance” - hahaha!
“‘The problem is people don’t realize what good deals are out there and now is the time to buy,’ says Terri Nettles, a mortgage originator.”
Please, please pardon me for my ignorance, oh wise Terri. I’m not worthy of your sage intelligence.
“For Jost Ivancic, a 22-year-old student in Ljubljana, Slovenia, the situation makes it “even more improbable I could get a bank loan to buy a house or a car. I have no money to speak of right now.”
I saw this in an article from Reuters. The title “Wall Street panic rolling over consumers worldwide”
This has got to Stop! They are out there fear mongering! This is only going to make things Worse by spreading Fear among people who dont Understand!
Just got a call from Citibank. My niece is trying to get a student loan (very small amount, 2k) and wanted a co-signer, I said sure.
They asked if I owned my home. I said, “of course,” she was a bit taken back and congratulated me.
I didn’t tell her it was the camper on my truck.
Oh no, we’re back to a world in which a 22-year-old doesn’t qualify for a mortgage? What ever shall we do? What ever DID we do prior to 2000 or so?
When I was a 22-year-old student, I had no delusions about getting a home loan or a car loan. It never even crossed my mind to apply. I always thought it was perfectly normal to rent an apartment and drive an old car that I bought with cash. That’s what all my classmates did. Have I been living in a bubble?
You just don’t understand. Gen-Yers are precious little Snowflakes that cannot be caught dead driving an old beater or going to a pay-as-you-go community college.
My 22-year-old niece, for example, received a new Acura coupe (wrecked inside 3 months), then a new Benz (wrecked in 4 months), and now drives a Lexus, c/o rich Boomer mom & dad. She is also taking some “time off” from her (3rd) Freshman year at U of Miami, also 100% paid for by rich Boomer mom & dad. Oh, and she also lives in a mom & dad rented luxury condo right on the beach.
Cuz, like, paying for your own junk and living within your means is sooo uncool.
Uhh…
Who’s got the problem here? I’d say that the 22 year old is making out like a Bandit. (Sign me up!!)
lol –point taken. Problem is, her insanely indulgent parents are not doing her any favors, as evidenced by her total lack of work ethic or marketable skills, plus the type of ‘friends’ she currently associates with –loaded, no morals, shady business dealings.
So true. Being a member of the Second Spoiled Generation (aka Gen-Y; the Boomers were the first), I see this kind of utter nonsense daily. The Millenial/GenY crowd has absolutely no idea as to what money/wealth actually even is; raised in environments where parents always “got rich” off of bubble “investing” (i.e., dot-com craze, current real estate sh*tshow), they think irrational windfalls are normal, markets always go up, the US will always be #1 at anything that matters, etc. Lazy as f*ck, they drink their way thru college, get some worthless degree in journalism, “fashion merchandising” or business administration, and then head back home to live with their parents for years after graduating. (WTF is with that!?! I wanted out of my parents’ place in a hurry and these goons want to go back?). I’m not proud of my generation and I feel like I was supposed to be a member of a different one.
Well, I made it back to Utah. Staying in the house I sold and that the new owner totally remodeled, it’s really nice. She redid it in authentic Santa Fe, the real deal, not Santa Faux. She’ll be gone a month, wanted a housesitter.
Never thought I’d be back living in this house, especially all redone. It’s weird, your brain keeps trying to process the previous setup, but it’s all different (she put on another story and bumped out the front and back, added decks, etc.). My cats thought we were in a new place until they saw the back yard, now they’re very confused but enjoying the confusion.
The moral: don’t ever try to outgun the universe, you’ll lose every time in the control/plan your life category.
That’s great Lost. I hope the new owner gets foreclosed on, and that you can buy the house back for 1/2 of what you sold it for, upgrades and all. You can burn some sage on that thought if you want to.
I actually thought of that, but she’s pretty wealthy and I’m pretty poor.
Plus, she paid cash, dangit.
Wait, she paid it to ME, so I guess that’s OK.
Drinks on Lost. Wheee. Lost (of the big spenders) from Utah. I’ll go for the good stuff. Beer me.
Right, Hoz, Last, that’s me (usually)…
And how’s the brewery going? You know, the one WE started with all the clever names, the one YOU’RE supposed to have up and running by now…
Lost, where will you be when it starts to snow?
Probably in Moab, and inside somewhere, I hope.
“The Kirschenmans thought about sending the keys to the lender. But their financial planner, Christopher Olsen, helped persuade them to stick with the house, noting that they could still afford the payments.”
Meaning that they wouldn’t get away with bankruptcy, and it’s a recourse loan, so walking away is not an option for them. The implication is that we should admire their honesty, but they don’t have any. All they have is a financial advisor who’s smart enough to know the law.
Coldwell Banker are encouraging their sellers to drop their prices 10% — except in the Bay Area which hasn’t been hit as hard as everywhere else, according to them.
Have they visited the East Bay at all, or even East San Jose. More of the same to keep attempting to prop up prices. Silicon Valley has survived on stock - in case CB didn’t notice, those just got wiped out recently!
About 75.5 million U.S. households own the homes they live in.
I’m not sure I believe this number, or want to. US population is what, 310 million? So 1 in 4 people in this country are ‘homeowners’?
I won’t even go into the fact that these aren’t really homeowners, they’re just rubes who pay rent to the bank while also being responsible for all upkeep costs.
We are so so screwed.
That number has to prove that many of those upside down are 2nd and 3rd homes. It’s the only way the math works… 1 in 4 people in this country are not homeowners…
There are about 110M households in the US. Of the homeowners, only about 1/3 own their homes outright without a mortgage. The other 2/3 are actually long term renters with LEAP (multi-year) options to buy the house.
Well, to use my family (me and siblings) as examples:
I have three siblings–three of us (including self) live in homes that are 100% paid off, and one has the home more than 2/3 paid off, and no second mortgage on it, just the original fixed 30 year one.
So, hey, maybe the stat is for real.
Mir
Pine Flat Reservoir above Fresno is sitting on 12% capacity, and it’s so low that you can see the flooded out town now, that used to exist before it was turned into a reservoir 60 years ago…
Got Water?
We just have Lake Michigan…but I am afraid that somebody might have peed in it
Good fishing below the dam in the San Joaquin River. Monster trout. C&R (catch and release). By the way, 115,000 ac feet is nothing to sneer at. It’s going to be a wet winter.Last weekend, snow on the tops.
Kings river - sorry. Too much single malt tonight. hehehehehehehe
Used to water ski there as a kid in the 70’s. That’s low.
“That’s a mark passed sometime between May and June 2004, when local home prices entered a mad spike that peaked two years later. In May 2004, the median was $175,000; the next month it reached $193,000. ‘That’s where it really took off,’ Crabtree said.”
I call BS….the median price in Bakersfield was $110,750 at the end of January 2002. I think there was some pretty healthy appreciation well before May of 2004.
Get a load of the sales history on this from 2005 to 2006. Talk about bizarro world.
http://www.redfin.com/CA/SHERMAN-OAKS/14827-HARTSOOK-St-91403/home/4815315
They probably bought the lot or a crappy house on the lot, tore it down and built new.. Prices are still crazy, though.
Not to say the current listing price makes sense, but that is definitely not the same house that was sold in 2000 and probably not the one that sold in 2005.
The 2005 sale was likely a teardown where the owner started from scratch and re-built for the re-sale in 2006. Although there could have been some mortgage fraud hanky-panky.
Houses that were originally built in Sherman Oaks in the 40’s and 50’s don’t look like that one.
The other houses on that street are blah and the no side walk looks cheap.
Too true - SO is McMansionville, especially south of Ventura Blvd.
And they’re still knocking them up too, there’s a behemoth on Hayvenhurst that they’ve been constructing for over 2 years now, complete with proscenium roof over the entrance way. Corinthian columns too, of course, had to chose the most ostentatious of all the Greek styles
Has what looks like 20 bedrooms, and zero yard space.
Though, if you get into the back streets - down near the Encino Revervoir - there’s still some very pleasant 50s/60 Ranch SFHs with nice big lots. Still over $800K, so no hope of getting one until the next Millenium…
“The problem is people don’t realize what good deals are out there and now is the time to buy,” says Terri Nettles, a mortgage originator.
Any chance this person can be slapped upside the head with a glove stuffed with rocks?
For all of you that like Mother’s Cookies, an Oakland institution since 1914 is shutting down and filing for bankruptcy.
Dang, they make a great iced oatmeal cookie and a taffy creme sandwich cookie, both great for dunking in a glass of ice cold milk, or dunking in a cup of coffee.
Here’s the link: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/10/08/BU6413DQQO.DTL
it took way too long, but the wasters and spendthrifts are going to have their comeuppance. i hope only that the comeuppance is loooong and painful.
“He cited the restructuring of a mortgage with a $930,000 balance for a house valued at $500,000. Bank of America rewrote the loan with a fixed interest rate of 2 percent that would last five years. ‘Bank of America and Countrywide are kidding themselves if they think that house will be back to $930,000 in five years,’ O’Toole said.”
when bubbles end its often for a long time, Gold bubble in 1980 , Japan stock bubble in 1990, nasdaq bubble 2000, with the exception of Gold all down by more than half . so good luck with the rebounding home prices
So I was on the 44 in Missiouri and I see this Uhaul towing a car trailer with a suv on the back with California plates.
So I rolled down the window and asked him,
“did you turn out the lights when you left?”
I’m here in the middle of the meltdown (Merced,CA) and its frustrating that I finding it difficult to secure a mortgage. My wife and I are both professionals in our mid 20s with a Fico in the low 700s, and we make approximately 95K a year (gross). We have both been in our respective local goverment careers for only two years total, and with our current agencies for 1 year apiece.
As of today we are in a position to put 10% down on a house with an income to payment ratio of 14%. Our total debt to income ratio is also, low however we are getting the run around are I feel like we are being shaken down with fees and a crappy interest rate.
Do you folks think we would be better served to sit on the sidelines and build a war chest over the next months and/or years? We could easily save 1,000-2,000 a month even after living comfortably and paying down remaining debt such as student loans. I feel like we are being punished for being responsible during the boom times and these sob stories make me queasy.
If that’s the best they’ll offer you, go elsewhere. Or wait.
We’ve applied for a loan and got a much better deal— low fixed and such. We also asked the loan officer to structure it in such a way that our total PITI payment would be less than our current rent so that we won’t buy above our means.
Unfortunately, our down has evaporated since we didn’t sell the stock the moment we applied for the loan. Live and learn, I guess. (The stock is for a company with insane cash reserves and no debt, so we’re holding on to it until it has some value again. Which will be a while.)
“‘The problem is people don’t realize what good deals are out there and now is the time to buy,’ says Terri Nettles, a mortgage originator.”
Can anyone….anyone….point me in the right direction as to what and where these good deals are and where they can be found?
It’s not exactly “good”, but if you shop hard and can pull the trigger quickly you can get something that just about cash flows. That’s only in limited areas and types of housing. The more upscale stuff is down, but not down nearly enough to be reasonable.
The county I live in has a media sale price down over 50% from peak.
Of course the cash flow argument assumes rents will be stable; I think they’ll drop.
“Mortgage brokers are desperate to jump start the housing market. One way is to reduce home prices. From October 10 through the 19th, Coldwell Banker will ask clients to lower the price of their home by 10 percent. While this is a national event, the Bay area is not participating. That’s because the local Caldwell brokers say the Bay Area is not one of the hardest hit markets.”
“‘The problem is people don’t realize what good deals are out there and now is the time to buy,’ says Terri Nettles, a mortgage originator.”
HAHAHAHAHAHA!!!
Oh… oh, that’s great! So, we’re going to lower the price on houses that are 100% to 200% overpriced by 10%, which is nowhere near enough, except in the most grossly overpriced areas, we won’t lower the prices at all and will instead deny the reality of the housing market (no sales!) and salary vs. price by parroting “it is a great time to buy!” Hey, maybe people don’t see any “great deals” because the sellers and Realtors are unwilling to LOWER THE PRICE!!!!
“his plan is to renegotiate the principal down to what the house now would cost. So, that’s the bailout for the idiots that bid up prices. What do the prudent who refused to do so get?”
One proposal I’ve seen or heard floated was that any later appreciation on the house, if the idiot sells it, does not go to said idiot. It goes back to the government, i.e. taxpayers. That seems only fair.
Also, what we get is the satisfaction of not losing our life savings to dwell in our dream of home”ownership.”