A Housing Cycle Gone Bad In California
The Santa Cruz Sentinel reports from California. “September’s median price for a single-family home in the county plunged to $475,000, down 32 percent from a year ago. Last month, the median was $582,000; in September 2007, it was $702,500. The median price hasn’t been this low since January 2002. With so many homes for sale — 1,286 listings, near last year’s peak — sellers are at a disadvantage. Heidi Brown would like to sell the home she bought with her partner, a general contractor, for close to $1 million in 2004 and downsize, now that their three grown children have moved away.”
“It was worth $1.6 million at the peak of the market, according to Zillow, Brown said. The asking price is $1.3 million; Zillow’s estimate is $1.13 million. The mortgage on the property is the type where payments will escalate.”
“‘We can afford to pay it, but I don’t want to,’ said Brown. ‘I want simple.’”
“Aptos accountant Patricia Beckwith, who has been watching the market for two years hoping prices would fall, is disappointed. ‘Home prices don’t appear to be dropping very much in our part of the county,’ she said. ‘While my agent, Sabina Brown, e-mails me more frequently about homes being reduced to $499,000, I still think spending half a million dollars on a small house is ridiculous.’”
The Marin Independent Journal. “The California Employment Development Department survey estimates that 1.425 million people were unemployed in California last month. That’s up by 4,000 over August, and up nearly 400,000 from September 2007. With the ongoing housing and credit slumps, construction and financial jobs were among six categories that together lost 18,800 jobs in September, the state reported.”
Inside Bay Area. “The East Bay lost 2,100 jobs, adjusted for seasonal changes, during September, the state’s Employment Development Department reported. The region now has lost 19,800 jobs so far during 2008. During the 12 months that ended in September, the East Bay lost more than 21,000 jobs.”
“‘We are seeing a lot more people who are out of work coming into our career centers,’ said Patti Castro, assistant director with the Alameda County Workforce Investment Board. ‘A lot of people who are looking for work have lost jobs in the mortgage industry, in retail, light manufacturing, finance, call centers, people who were with banks.’”
The Record Searchlight. “The unemployment rate in Shasta County in September hit a 14-year high, the state reported Friday. ‘We’re at the end of the housing-driven recession but at the beginning of the consumer-driven recession,’ Stephen Levy, director and senior economist at the Center for Community Study of the California Economy in Palo Alto, told the AP.”
The Ventura County Star. “From a year ago, the county is down 7,400 jobs. In the past year, the sectors hit hardest include construction, which lost 1,800 jobs; manufacturing, 1,300; professional and business services, 1,400; and financial activities, 900. ‘I’m starting to hear anecdotal evidence for firming of the real estate — perhaps that bodes well for the employment situation for Ventura County, said Edward Fredericks, a finance professor at Pepperdine University. But don’t expect construction jobs to rebound for awhile, if at all, he said.”
“‘For things to get frothy again would be difficult to fathom,’ Fredericks said.”
The Daily Breeze. “The Los Angeles County jobless rate jumped from 5.2 percent in September 2007 to 7.8 percent last month - an increase of nearly 35 percent, the EDD said. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said the state’s jobless report was compiled during the second week of September and it does not reflect the financial market situation that worsened later in the month. ‘October’s numbers could be a little bit frightening,’ he said.”
The Desert Sun. “Inland Empire economist John Husing, who has studied this economy since the 1960s, gave the valley economy a ‘D-minus.’ ‘Everything you look at in the newspapers, all the events occurring worldwide goes back to the problems in housing in California, Arizona and Florida,” he said, predicting more waves of foreclosures ahead.”
“Jobs are being lost for the first time in decades, he said, noting the region has lost 81,500 jobs between August 2007 and August 2008. In the valley, the job loss count stood at about 25,000 over the same period. ‘It’ll be the first time in at least 44 years that we’ve seen the overall region and this valley lose jobs,’ he said.”
“Home prices rose like a rocket — up 30.8 percent in 2004, then another 22.6 percent in 2005 and then another 7.7 percent before turning down. Through the second quarter of 2008, the price of an existing home fell more than 21 percent compared to the previous year, Husing said. Median home prices back-pedaled to the 2004 level of $365,000. The median has fallen $104,313, or 30 percent, to $376,045 in the past year.”
“‘The economy is facing the short-term issues from a housing cycle gone bad,’ Husing concluded.”
The Recordnet. “A developer’s bid to build 7,000 homes on a Delta island south of Eight Mile Road was blessed Thursday by the Stockton Planning Commission. Commissioner Christopher Kontos dissented, saying Grupe’s plan is sound, but its timing is off. Similarly, the Sierra Club’s Eric Parfrey said in a telephone interview Thursday that it is unreasonable to approve a major housing project in a market now saturated by houses in foreclosure.”
“‘It doesn’t make any sense to be approving any major housing projects now,’ he said.”
The Press Enterprise. “With lenders less willing to lend and homeowners not wanting to spend, the pool construction industry has found itself treading water in the deep end. ‘We cannot get money for our customers. It’s pretty much shut down the pool industry,’ said Larry McNeely, manager of the California Pools location that oversees Corona, Norco, Canyon Lake and Lake Elsinore. ‘It’s probably the worst we’ve ever seen.’”
“In a high-end Corona cul-de-sac off Eagle Glen, a backyard pool behind a foreclosed home sits half finished. The empty pool was to blame for the first offer on the house falling through because the buyers didn’t want to spend $40,000 to fix it, said Rich Zembrzuski, owner of Corona-based Aquascapes Inc.”
“The bank agreed to pay to finish the Corona pool and landscape the front yard when a buyer offered a high enough price — in this case, $779,000, said Bob Livingston, the real estate agent representing the house.”
The Orange County Register. “Bank robberies in Orange County have increased by more than 50 percent in 2008 when compared to last year, a sharp increase that authorities credit to a stumbling economy. ‘There’s definitely a direct correlation with the economy,’ said Jim Amormino, spokesman for the Orange County Sheriff’s Department. Several of the arrested robbers decide to try to rob a bank while hitting personal economic troubles, Amormino said.”
“‘A lot of people are down and out, losing homes,’ he said.”
From rr. “Downey Financial Corp., the California lender that’s lost 95 percent of its market value in the past year, shuttered a mortgage unit that accounted for more than three-quarters of loan production. Downey, among the biggest issuers of option adjustable-rate mortgages in one of the hardest-hit states in the country, has reported $600 million in losses over the past four quarters.”
“Downey, with 170 branches in California and five in Arizona, said deposits increased in August after falling the previous month. ‘They’ve done everything I think they can to be proactive to get this problem solved,’ said David Lykken, co-founder of Mortgage Banking Solutions, and 34-year industry veteran. ‘The damage has been done.”’
The Daily Bulletin. “Patty Rivera can’t wait to move into her new home at 12767 Province St., Rancho Cucamonga. For $220,000, Rivera will have her first house. The home’s original listing price was $265,900 in June.”
“Rivera, who has always been a renter, said the transition is frightening. While she knows she can make her payments on time, she also knows she needs to prioritize. ‘My last big purchase was in 2002, and that was my car, and that was a big deal,’ Rivera said.”
The LA Times. “Classic houses by Modernist architects — once relatively immune to swings in the real estate market — are no longer able to fetch the premiums they once commanded, if recent prices are any indication. John Lautner’s 1949 Schaffer residence in Glendale, originally listed at $1,958,000 in the spring and then reduced to $1,775,000, has been reduced again, to $1,573,000.”
“In Palm Springs, one of Modernism’s most iconic works — Richard Neutra’s magnificently restored 1946 Kaufmann house, which in May fetched $19.1 million at auction in a deal that fell through — was listed last week for $12,975,000.”
“‘In earlier downturns good architectural properties saw an increase in price,’ said Crosby Doe, the listing agent for the Kaufmann house and an instrumental figure in fostering the market for homes by California’s Modernist masters. ‘This is the first time I can recall prices going down and inventory, select though it may be, increasing.’”
The Financial Post. “One in every 18 homes received a foreclosure notice in Chula Vista, zip code 91913. In the office of the ‘Santa Barbara’ development…sits Hella Formariz. Ms. Formariz has just been through foreclosure hell. ‘I still have to deal with the aftermath,’ says the petite brunette in a near-whisper. ‘It’s not over. I have an equity line. I have to deal with having to pay that back.’”
“Back in 2003, she and her husband were pulling in a combined US$180,000 a year in their jobs in real-estate sales and loans, respectively, much of it on commission. With the money rolling in, it was no problem for them to get a loan for their 2,600-square-foot dream home in Otay Ranch.”
“She bought it for US$500,000, funded by an adjustable-rate mortgage. She sunk another US$35,000 in upgrades. ‘I was making a good income, prices were going up,’ Ms. Formariz recalls.”
“Her problem was not that she did not understand her mortgage, it was that she believed the boom would go on forever. Instead of paying down her mortgage before it reset, she invested in other real estate.”
“Ms. Formariz’s income began to fade just as her adjustable-rate mortgage began to shoot up. Her monthly payments increased from US$2,500 to US$4,000. Eventually, she stopped making payments. It foreclosed about three months ago, selling recently for US$400,000. Her marriage did not survive the stress and she now lives with her young daughter in a home she rents for US$1,500 a month.”
“‘I can’t really blame the banks because I was making the money when they gave me the loan,’ Ms. Formariz said. ‘But I do blame them for not working with me. If they were able to modify my loan I could have got a roommate and I knew I could make it. They didn’t want to.’”
“‘There was perception back in ‘05 that if you did not buy a house today you wouldn’t be able to afford it tomorrow,’ said Mark Goldman, a loan officer at mortgage corporation Windsor Capital. ‘And also, if somebody bought a home and they were concerned about making a payment, the market was saying ‘don’t worry about it, the house will go up in value, you’ll refinance and use that to make the payments. We were on this amazing credit binge.’”
“Fannie and Freddie themselves were on a mortgage securitization roundabout. As publicly listed companies they wouldn’t dare slow things down with stricter credit requirements. In came the subprime loans, adjustable-rate mortgages, balloon mortgages and teaser rates. If you wanted a loan all you had to do was state the income — little or no documentation was required.”
“‘A few years ago you couldn’t give a loan officer your [client's] pay-stubs,’ said Dawn Lewis, a San Diego-based real-estate broker. ‘Loans were all geared to stated income — what can you pay? Did they just not want to deal with the paperwork? All those negative amortizations then gave people a false sense of security.’”
‘The California Employment Development Department survey estimates that 1.425 million people were unemployed in California last month. That’s up by 4,000 over August, and up nearly 400,000 from September 2007.’
Wake up Washington. This is the real problem this country faces, and the price of houses or the financial situation of Wall Street doesn’t have a darn thing to do with it.
From my perspective deleveraging has everything to do with the the economy’s situation. It’s too big to stop, and stable equilibrium can’t be reached without letting it run its course. The only question is whether targeted intervention to limit collateral damage is for the greater good.
Slows it down, drags it out, but you eventually end up on the same floor…
If you believe that if some can survive the short term volatility they can remain viable long term, addressing the volatility may help. Note that for even for those of us, which is almost all, that believe we will return to historical means, the historical mean for a period with 10% plus unemployement is not the same as that with 5% unemployement. I agree pain is unavoidable, but death can me limited on the extremes in my opinion. I have never been part of any organization in which I was the optimist before. Interesting.
unemployment - im not actually an idiot, but type almost unconciously and me trying to proof and edit on a blackberry is almost an impossibility
Tim would you rewrite that post.
Thx.
Tim — I always enjoy your posts. Don’t stress over editorial issues, as anyone who regularly reads here learns to compensate for first draft quality writing…
I usually do, but with jetlag came added confusion and trying to understand.
It wasn’t meant as a criticism, Tim has added expertise in this area. Just needed a clarification.
Thx!
This unemployment thing has me thinking about the whole “college as a way to a job” mentality passed on to us by the 60s generation. I recently interviewed tons of people for a couple paralegal positions. I was floored by the number of 25 yr. olds who had NEVER held a job. All had soft science majors (psychology, social sience, poli sci, etc.) and huge student loan debt (one 26 yr. old atty with no job history and $150k in student loan debt). I told each of them that I can’t hire someone who can’t operate a copier. My Depression-era dad barely had a high school degree but worked for General Dynamics teaching missle guidance and other weapons systems to foreign Govts. He was self taught and always had a job.
My brother never went to college, and he is a very successful software programmer. The big thing about success in life is much more work-ethic and the ability to learn than it is degrees. Degrees are often just a cover for a lack of initiative (or, sadly, intelligence).
Thank you for posting Tim. And you are correct, its the deleveraging…for example, Lehman Credit Default Swaps deleveraged last week.
This week and upcoming through December its the hedge funds deleveraging.
Then the Alt-A resets began in August and those will continue for another couple of years.
We’ll probably see the DOW at 7000.
Lots of swings….this country is going from up-side-down to right-side-up.
What’s that license plate frame??? “Get in, sit down, hold on and shut up.”
~Misstrial
Its going to be a while. Lots of time for new business to form and establish themselves.
We also have all the zombie companies like Chrysler, Ford, GM to deal with.
Only hope is the bailout money eventually goes to some sort of productive venture.
Its going to be a mess for a long while.
Those companies are real as are their products and all the innovation that has come out of that industry… problem with Detroit and the car manufacturers is that housing got out of control which caused them to make dumb decisions based on short term trends due to housing appreciation … remove all the hype and fraud from housing and GM wouldn’t be at $4 / share today or whatever it is… they milked the SUV for too long because of housing..
Barney Franks,Pelosi, Dodd and the other idiots(ACORN) are still pushing affordable housing and the Community Reinvestment Act. Freddie and Fannie to buy 20 billion$US each per month of subprime and Alt A. Didn’t we just get off that bus. Oh, the watermellon man is about to be elected! The realtwhores will get another chance at the US treasury. Is anyone mad or is J6pk only concerned about the tax on beer.
Stop worrying about the watermellon man - Alan Keyes doesn’t have a prayer.
They are going to relearn that lesson.. the hard way.
All economic theories mean zilch if there is no economy of any significance.
I disagree. You need to have a theory in order to analyze and predict. However, your theory needs to be grounded in historical analysis and real world observation. That is where folks like Reagan, Friedman, and Greenspan failed us with kooky theories about supply-side economics, monetarism, and laissez-faire regulation.
Friedman and Reagan didn’t fail us but the FED and Greenspan sure did!
Friedman/reagan did indeed fail us, and so did the folks that supported them and their theories.
Reagan appointed Greenspan, and the two generally shared the economic ideology.
don’t see where Freidman was followed at
all -we’ve been a regulated economy since 1933
So, what regulation would have avoided this? Isn’t the problem overregulation, as in people in DC meddling in monetary policy (Fannie/Freddie, CRA, the Fed’s and Treasury’s market and interest rate manipulation, even FDIC)?
Before the government began trying to set rules for loans, banks didn’t lend out 100% down, no-doc loans to illegals. “Fair” housing regulation certainly didn’t help. I don’t see how giving the idiots in DC *more* power to micromanage the economy would have prevented this.
Even more heavily regulated economies - France, Britain, et al. - are going to fare even worse, unless we complete the slide into nationalization. That would be bad for us.
” what regulation would have avoided this? ”
Oh, maybe the Glass-Steagall act, which was repealed in 1999 and followed soon after by the dot com bust and them by this housing boom and bust. And maybe vigorous enforcement of anti trust laws to keep these “too big to fail corporations” from becoming so big.
Considering that the sword of damocles hanging over this market is the 55-62 trillion dollars of off-the-books completely unregulated credit default swaps, I hardly think over - regulation is an issue here.
Satan:
“They [WE] are going to relearn that lesson.. the hard way.
All economic theories mean zilch if there is no economy of any significance.”
—————
No apples in Mich…
No nuts in N.E. …
No articokes in Cali…
Trade stops…
WE trade in…
Local?
Barter?
We still need roads and bridges…\
Math…
Whom will save us, from ourselves?
Where are the smart ones?
Where are the ones that do the right action,
For, the right action to do?
Here!
Best Always,
Leigh
You said this over 2 years ago.
I did not appreciate the truth of this.
-
True, you did have a previous example to draw on, but credit has got to be given: when no one even saw the problem, you pointed out the solution.
????? Really Ben ???? I must be reading things wrong then.. the price of housing has everything to do with the rising unemployment… it’s the unwinding of the leverage, largely in the form of inflated housing prices, that is (now) causing the unemployment… we need to spank housing once and for all and put it back in it’s corner.. not kill it, just control it tightly and force the economy and jobs to grow elsewhere where it matters.. my take anyhow..
Gosh, it would seem that before Housing became the major mover in our economy, it was, years ago, manufacturing and other things.
Not it is all about this one industry. Or was.
Congress critters should all be hanged for allowing this bs to continue ad infinitum since reaguns era.
I really don’t think housing is the core problem. Unemployment, underemployment, and stagnant or declining real wages means people can’t afford needs (and wants to some extent) which leads them to borrow. The house some people are renting from banks became the collateral for loans. But the underlying problem is not change in the value of the collateral, it is the need to borrow in the first place. And that need is based in unemployment, underemployment, and stagnant or declining real wages.
Ask yourself this–if house prices returned to exactly what the person owes on their mortgage so no one is underwater, could those people afford to jump-start the economy? No. Now, ask yourself this–if wages returned to real appreciation and employement of native born Americans went up, would those people be able to jump-start the economy? Yes.
I rest my case.
IAT
Not only is underemployment and stagnant incomes are the problem, but it also has a cousin - the _excess_ of capital. There is too much capital chasing too few borrowers, resulting in ridiculously low interest rates and mispricing of risk. Excessive wealth accumulation by the few leads to inefficiencies in the capital markets, as the capital has nowhere to go.
This is the core argument against too much wealth disparity.
The Powers That Be have made the connection, however, that the price of housing and Wall Streets financial interests are intimately tied to unemployment and Joe-6Pack’s hope of economic prosperity.
Who is advancing the theory that rising unemployment is a separate issue entirely? I would argue that:
1) The overemphasis of stockholder interests over worker and customer interests (as shown by Enron, Bear Stearns, and Yahoo) and
2) The lack of “can-you-fog-a-mirror” lending practices have led to a decline in consumer spending that is dangerous in a consumer products driven economy (as opposed to R&D and infrastructure driven spending like we had in the 50’s and 60’s).
have actually been the strongest contributing factors to the job losses we have seen recently. The rest is a domino effect. The best way to increase employment? Improve the education system, fund needed public works projects, and fund R&D, even though it will show up as deficit spending for awhile. There needs to be a concomitant increase in taxes to fund this, unfortunately. The ones who benefited most from Voodoo Economics (i.e. the financial sector and defense spending) should be the ones to shoulder most of the burden. The process of economic nationalization has happened already, anyway. Might as well make it a productive long-term investment.
Don’t worry, President Obama will bring the military/industrial complex to its knees.
…and you will NEVER forgive him for that, once the inevitable results take place.
Obama is going to give a tax credit to companies who employ Americans. I’m hoping to get our tariffs back soon, but I don’t know if he can accomplish that. If he can get our economy back to normal, then we won’t have so many people relying on the military (aka “huge tax hog”) for a paycheck. Trust me, Obama is not the problem here.
He’s hoping that you continue to hope.
~Misstrial
“The only question is whether targeted intervention to limit collateral damage is for the greater good.”
If this targeted intervention will inspire hope then I’m all for it. The greater good will be served if hope is kept alive.
Sometimes I wonder if others see it for what it is really is, or whether they still associate Wall Street with equity only, when all the real action in the last decade has been on the debt side. It is one big pyramid with mortgages, car loans, credit card debt, etc. on the bottom with Wall Street on top. To encourage inflow at the bottom levels secondary derivative products had to be created to allow leverage to grow exponentially and various forms of pressure and influence had to be inserted to puff up valuation. Obviously it was a short term play, and those at the top had exit strategies and the aid of the government. Ppl still question the the intelligence at those at the top, not realizing retiring in 10 years with 20 million or more is not exactly a dumb strategy and that most of these ppl dont care what happens now, other than the fact the the greater it falls, the more they can buy with their war chest, and the more they can make in the next decade.
Your argument that all those golden parachutes for CEOs encourage reckless behavior on Wall Street makes me very scared and cynical that we have someone like Hank Paulson as Treasury Secretary, managing bailout funds and overseeing “reform”.
I wish the presidential candidates would state who would be their cabinet appointments before the election. Putting failed CEOs who embody ideology and identity politics like Meg Whitman or Carly Fiorina in charge of the Treasury would be a stupid idea and a throwback to the policies of the past 8 years, IMHO.
I agree.
Huh?
I never thought the people at the top were dumb. I thought they were vicious, too-smart for their good sharks who cared not an iota about the impact on their organizations or the people who would be hurt once the ponzi scheme collapsed. I mean that in the nicest possible way, of course.
Wall Street was completely aware of the semi-dead economy and managed to bring Main Street along for the ride for a while by making them feel rich for a few years via their houses. (Which is why there’s no point in laying blame - the bubble was created by everyone’s inability to say “no”.)
The reality is that intervention may have no effect whatsoever, other than to make the problem worse. Either asset prices must come down to meet wages or we must inflate wages to meet assets prices. There are no choices - like natural systems, economies demand a balance of forces.
In regard to the comments above, it seems like every schoolbook on the America reads that the biggest mistake was that no one intervened initially during the Great Depression. I think the jury is very much out on that one. We don’t have a “control” economy from then to prove the point and many of FDRs actions actually made the crisis worse. We seemed to really have only come out of the Depression thanks to the mass forced saving plan was WWII rationing and/or a return of a mass of people at the top of their economic earning power.
I was speaking about about the mass media, where they still keep the fiction that ppl at the top were caught by surprise or that those at the top who claimed to be the brightest in the room (bad Enron reference) were in fact ignorant. Scamming ppl out of billions by inflating housing by over 100% is pure genius, albeit amoral at best. This was the biggest con in US history. There has also been some views expressed that seeing certain entities collapse is good based on some theory of justice, ignoring the distinction between the independant contractors working on commission or those that have great severence packages v. the company itself. This is especially true of investment banks. A place were the brain trusts are all they have, and who are fully protected. They are not failing because of incompetence. They are failing because certain ppl decided to max out and retire early or move on. That’s why I believe it best to keep them obligated to the extent they can, as bankruptcy is a form of debtor relief rather than punishment and limits collateral damage.
The intervention was not as targeted as I would like, yet LIBOR has been stablizing in the last week. If this didnt happen the stock markets would be down at least another 20%. We are in serious trouble in any scenario, but if we dont play are cards right the whole thing is coming down at once and the devastation will be mind boggling.
They are not failing because of incompetence. They are failing because certain ppl decided to max out and retire early or move on.
Here I would tend to disagree with you. The system is failing due to the systematic risk built in by lending people money against depreciating assets without doing the brain check to make sure people could pay back the money. There’s incompetence everywhere I look. CEOs golden parachutes are just the tip of the iceberg.
The intervention was not as targeted as I would like, yet LIBOR has been stablizing in the last week. If this didnt happen the stock markets would be down at least another 20%. We are in serious trouble in any scenario, but if we dont play are cards right the whole thing is coming down at once and the devastation will be mind boggling.
Which means the intervention maybe having no effect whatsoever. From a strictly scientific point of view, it’s impossible to tell if any interventions are actually working or the economic (and organic) systems are somewhat on the mend by the themselves. We have no control systems against which to test.
As far as I’m concerned, we might as well be applying leeches to the economic system. Most people did survive blood lettings and recovered in spite of them, not because of them. No one to date has admitted to understanding what happens when derivatives blow up: my vote (not that it matters) is to leave the leeches at home.
Also, given that you don’t have your life savings tied up in the stock market, what’s the big wonk about it being down? Seriously. The world doesn’t end when the stock market goes down. It may feel like it to the major contributors of political campaigns but it really shouldn’t be a national crisis.
I’m really not for anarchy (really, really)
- but it’s hard to rationalize any prolonged propping up of a system that was never sustainable. It must change and the faster we do that, the faster we can move on.
“Here I would tend to disagree with you. The system is failing due to the systematic risk built in by lending people money against depreciating assets without doing the brain check to make sure people could pay back the money. There’s incompetence everywhere I look.”
I don’t think you’re getting Tim. He’s telling you the people you think were incompetent knew they were setting up a house of cards. But they also knew they wouldn’t be the ones to pay when it fell. They’re perfectly competent, just not compassionate.
“Here I would tend to disagree with you. The system is failing due to the systematic risk built in by lending people money against depreciating assets without doing the brain check to make sure people could pay back the money. There’s incompetence everywhere I look.”
I don’t think you’re getting Tim. He’s telling you the people you think were incompetent knew they were setting up a house of cards. But they also knew they wouldn’t be the ones to pay when it fell. They’re perfectly competent, just not compassionate.
I said “No.”
IAT
“The Los Angeles County jobless rate jumped from 5.2 percent in September 2007 to 7.8 percent last month - an increase of nearly 35 percent, the EDD said. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said the state’s jobless report was compiled during the second week of September and it does not reflect the financial market situation that worsened later in the month. ‘October’s numbers could be a little bit frightening,’ he said.”
L.A.C.E.D. with foreboding, Kyser rolls over and plays debt…
Did you see the headline? “Jobless rate holds steady.” My left…
From the Daily breeze article Ben provided:
“California is moving from a housing-driven slowdown to a consumer-driven recession,” he said.
Ya think!
Now wait… I know of too many layoffs that will occur 2Q2009 and 3Q2009.
Also: Of these, 2,200 jobs were at with sporting goods, hobby, and music stores. How many from candle stores?
Where are the auto sales? Freeways haven’t been this clear in six years yet the city must be bulkanized into quadrants due to the incredible commute times.
Scary times ahead.
Got Popcorn?
Neil
On a serious thought of roads…
Neil,
Quants aside, Unemployment is Supersised.
How do we -
Can we -
Outlaw greed?
Is it posible?
Frack, I don’t know -
Leigh
“‘A few years ago you couldn’t give a loan officer your [client's] pay-stubs,’ said Dawn Lewis, a San Diego-based real-estate broker. ‘Loans were all geared to stated income — what can you pay? Did they just not want to deal with the paperwork? All those negative amortizations then gave people a false sense of security.’”
Did they just not want to deal with the paperwork?
NO, liar loans simply payed out MUCH higher commissions than full-doc loans. As if this RE broker didn’t know that.
“Bank robberies in Orange County have increased by more than 50 percent in 2008 when compared to last year”
These modern day robbers missed the boat- They should have been in there when it was legal to rob the banks big time via EZ mortgage fraud.
If the stupid criminals only realized that post offices are a much easier target, full of money, they’d leave the banks a loan, instead.
If the stupid criminals only realized that post offices are a much easier target, full of money, they’d leave the banks a loan, instead.
You know this from experience??
I used to go the post office every day to mail stuff out, and a tremendous amount of moolah passes through their hands, mostly a one-way street, all coming in.
Must have been a lucky robber.
I went to my WF branch last week, to draw out 20K in bills. Could only give me 10K. Had to return in 3 day for balance. Then they could only give 7K. It’s back on monday for 3K.
They should try that with the robbers.
funny
Gotta love that ‘fractional reserve’ banking system we have. Or is it the ‘no reserves’ banking system?
Huh? Do you realize the recourses thrown at postal theft? They’d get away… once.
Much easier to fill out the liar loan paperwork…
Got Popcorn?
Neil
When you’re robbing a post office, you’re fooking directly with the federal government. No, thanks.
I’ll take a bank robber who holds a gun over the bank robber who chairs a boardroom anyday…
at least the bank robber goes to jail where the exec gets his golden parachute.
Hey I have an idea. Give these jerks a REAL golden parachute - maybe 50lbs of bullion. Tie it to their neck and throw them out of a plane at 10K feet over the desert. They can always go retreive the gold later on.
My son’s coach from little league is sitting in the slammer awaiting trial for bank robbery at this very moment. THe guy lost his job at fed ex and robbed a couple of banks. His poor wife and kids are now left to fend for themselves. Dumb. He’s facing 25 years for each robbery. He’s been indicted for two robberies and they are trying to link him to two or three more. The guy was an ex cop too…
Ugh. Ex-cops tend to get really severe treatment in prison from the other inmates.
“In Palm Springs, one of Modernism’s most iconic works — Richard Neutra’s magnificently restored 1946 Kaufmann house, which in May fetched $19.1 million at auction in a deal that fell through — was listed last week for $12,975,000.”
Wow, a 30% haircut in 5 months? That house has been a stock example of modern architecture for decades, and recently underwent a much-ballyhooed renovation. Now the trophy homes are tumbling…O, how the mighty hath fallen!
O, how the mighty hath fallen!
Funny thing happens when its cash only above $10M, you see who the truly mighty really are… Funny how few of them are really out there…
All evidence points to high down payments being required in California above ~$417k. Even ‘conforming jumbos’ are requiring largish (25%) down payments. Now who would have thought that…
35% for > $729k is now required for the down payment. Whoa! You mean to look rich you have to have savings… someone call in the Governator!
Got Popcorn?
Neil
Still waiting for more house prices to tumble out here.
In the Indio, Coachella, Desert Hot Springs, Cathedral City area they are, but the other “good areas”, prices are slow to come down.
This Winter Snowbird season should be a harbinger.
Wonder if things will sell?
The glaciers in Alaska have expanded this year.
One thing about these Moderinist & iconic type homes is that they require a tremendous amount of upkeep - far more than mere mortal cookie-cutter box homes. My sis is an architect that works for a major university, partly in charge of preserving historic architecture….my land. Major considerations just to remodel a 1920’s dorm, or build a new underpinning ( truss system ) for a heavy slate tile roof on an historic law quad building. The old copper ones rot out, evidently. She and her husband had a chance to buy a Minoru Yamasaki house on a nearby lake ( he deisgned the World Trade Center ), which we used to ride by on our school bus. Lo and behold, after carefully considering the purchase, which would have been about $600,000, she figured out that to put the house back in it’s original shape, ( it had kind of gone to pot since the subsequent owners couldn’t afford to keep it up over the years ), it would take another $ 450,000, and the area it’s in is nice, but not the home of million-dollar hosues. Regretfully, they had to pass.
“A developer’s bid to build 7,000 homes on a Delta island south of Eight Mile Road was blessed Thursday by the Stockton Planning Commission. Commissioner Christopher Kontos dissented, saying Grupe’s plan is sound, but its timing is off. Similarly, the Sierra Club’s Eric Parfrey said in a telephone interview Thursday that it is unreasonable to approve a major housing project in a market now saturated by houses in foreclosure.”
Why would a developer want to build 7000 homes in what may easily be the worst housing market in the country??? Easy, he feels he can still make money.
…and so goes the problem. Prices are still way TOO HIGH and don’t appear to be dropping fast enough to even convince a developer, in Stockton of all places, that it’s not a good idea to build. There are still a lot of people that think it’s better to maintain inflated house prices, than to let the market work…MAYBE they will see the results by the action of this developer.
I could show you 100 failed housing projects in the Central Valley, and i’d be barely scratching the surface, as there’s a bunch more than that…
“Aptos accountant Patricia Beckwith, who has been watching the market for two years hoping prices would fall, is disappointed. ‘Home prices don’t appear to be dropping very much in our part of the county,’ she said. ‘While my agent, Sabina Brown, e-mails me more frequently about homes being reduced to $499,000, I still think spending half a million dollars on a small house is ridiculous.’”
Half a million is indeed a ridiculous sum to spend on a small house, but not to worry — between a recession, a credit crunch, a foreclosure crisis and a growing glut of homes for sale against the backdrop of double digit rate of home price declines, those Californians who are patient and financially qualified for home ownership should eventually be rewarded for their willingness to wait until the dust settles on this falling knife market.
I sold my house in San Jose to a FB back in May 2006. For a 1,000 square foot stucco box the buyer paid $670K. Well he just recently short-sold it to a new buyer for $540K. That’s still a lot of scratch for what the house’s intrinsic value should indicate.
Who is still handing over buckets full of easy money to buyers with boxes of stupid?
That’s a knife catchers delight!
$670K - $540K = $130K
That’s 65 months of rent - for a place that may not rent for $2K a month.
I hope the bottom callers, or near bottom callers, or those at the CAR understand this equation, for it just may have more than another $130K to go.
These prices are STILL way out of whack with incomes…Santa Clara Co median household income: 67K=240-250K median home price. Santa Cruz: 52K=180-190K. Home prices are like gas prices real sticky on the way down.
I agree.
The Santa Cruz area is going to be absolutely crushed over the next five years.
As you noted, the incomes are lower and the opportunities are far fewer in a place where the median house prices were not far behind many much “wealthier” areas in Santa Clara County.
“Aptos accountant Patricia Beckwith, who has been watching the market for two years hoping prices would fall, is disappointed. ‘Home prices don’t appear to be dropping very much in our part of the county,’ she said. ‘While my agent, Sabina Brown, e-mails me more frequently about homes being reduced to $499,000, I still think spending half a million dollars on a small house is ridiculous.’”
I agree completely, by now you think that prices in OC should be according to DJ is ( in their 8000 levels) but they are still $499,000 for an old house with around 1000 s.f., and some economist “cheer leaders” are calling it “tremendous opportunities”. Tremendous opportunities of what? To buy some bodies trash for “half a million $$$”.? It is hard for sellers to forget that some “loony grass cutters” were paying astronomical prices…?
Where are those “intelligent” buyers now?
O, they are now buying “bargains again”… foreclosures for $400.000… In my opinion bargain foreclosures should be similar to bargain GM stock $5 ( for houses in OC it should be in around mid $100,000)…
Put the thought of getting a bargain on the back burner for a few years…you’ll be glad you did.
It looks like I have to put my life’s few year’s to the “back burner” because of some “loonys” who just wanted to have “American dream”… in their own way…
The events are what they are.
Your response to events is what matters.
Dear ” Faster Pussycat” it is not much what ” my response to events matters” , but what “Great American Business Leaders” are going to do the next, to chit American public. Since they move real business to India, China and…NAFTA… the only way for them to make money inside U.S. is to manipulate public and markets and make a Profit… stock market 1998-2002, housing market 2000-2005, … now they want to buy foreclosed houses with my and your tax money, to prevent “house values” to go down… I and you are going to buy houses with prices, not what free market dictates, but what “America’s Business Leaders” decide…
Gal, do you believe the Fed and Treasury can stop values from going down given the state of the overall economy among many other factors (ability to borrow, willingness to lend, etc). I don’t. Prices will continue to go down and the taxpayer will carry the debt burden for generations to come.
You won’t find anyone on this blog or elsewhere who thinks this is a good time to buy, including me.
Having said that, I bought a house last month because I want to get on with some of my life plans…and fully admit that I don’t want to wait out the market or reward the Ponzi players. I scaled back some of my expectations, bought at a price that is 2x my current annual salary, and drove a very hard bargain with a somewhat desperate seller for a home I actually really like. I plan to live here for at least 10 years, maybe for life. I still paid 20% more than its inflation-adjusted Y2K value, but figure I’ll make some of that up by paying off the mortgage early, say in 5-10 years. Maybe I’ll regret it someday, but I’m happier right now than I’ve been for a very long time.
But no one has to tell you that the longer you can manage to wait on buying, the better off you’ll be financially. I decided my current happiness was worth a 20% premium on what my home probably costs in uninflated dollars. Ultimately, you’re the one who best knows your own needs. Good luck, whatever happens.
So you were renting and now you’re a homeowner? Did that really have a big effect on the level of your “current happiness”?
I’ve read some research over the past few years regarding happiness. For most humans, happiness is determined by things like their health, their relationships with family and friends and whether they find satisfaction in work and/or hobbies.
Buying a house typically gives a flush of happiness for a short period. After a year, you probably won’t be any happier than you were renting. I think that this is the reason that people spent years spending money on the renovating the kitchen, buying giant SUVs, flat screen TVs, etc. Each purchase gives a charge of happiness that lasts for a short period only.
Congratulations! Did you have a warming party? Any gifts?
But the American Dream was an illusion for many, an it became the American Nightmare…although your patience is being tested, the real American Dream is not far away for you. Good luck.
In my case, the thought has been on the back burner for over three years and running already. I am willing to rent until the day I die if home prices stay unaffordably high compared to the cost of renting.
I personally find it much easier to wait this out while prices are plummeting….(yawn)…wake me when the only difference between renting a house and buying it is having a substantial down payment and solid credit.
I’ve just gotten out from under a crappy landlady, but on the whole, I agree with this whole renting gig. We do the paint and the curtains and they worry about roof, the siding, and in my neck of the woods, the septic. Ahhh!!! That’s nice…
Barring a streak of insanity in my current landlords, we should be good to go for a while, much cheaper than I could buy and with about 1000x more flexibility.
Dear “Judicius” I’m sorry but I think it is time for American public, middle class, instead of “waiting” until “business leaders…” decide what game are going to play next…, to stand for their rights… Democracy should not come from “higher ‘ authorities , who decide to start wars to make money, or to bailout thieves who stole trillions, but democracy that comes from people who goes to work 8-5 to feed the family. Democracy should not only be for the for people who live in “America that is in Madam Sara Pelin’s country side” only for rich (six pack) white boys but for guy’s of any color who believe in this country, real Democracy who feel real pain for working class AMERICA…
We, Americans were sitting and waiting too long, believing the past greatness of America, it is time to make it real GREAT country…
Sorry for political outburst…
A few years ago there was a newspaper story about a man who lived in a small rented room in a shoddy hotel in the mid-west.
He died in his 90’s while asleep and when
the police? went through his belongings, they
discovered that he was worth a couple of million bucks, all socked away in banks and
T-bills.
He was frugal, saved, and from what people
knew of him, enjoyed his life.
It would appear that capitalism requires stooooopid people. Give the masses TV, gambling, and hookers. Trickle down, gushes up economic theory. The people, what a bunch of stupid F*cks, is probably what the great decider is really thinking, IMO.
“I still think spending half a million dollars on a small house is ridiculous.”
FINALLY, a little progress.
Sitting in Redondo Beach, CA right now lokking out at the Pacific. Everyone, including my wife, was telling me in ‘04 and ‘05 how foolish I was to think prices would be collapsing in this “oh so desirable” place to live. I was frequenting this blog back then for support (thanks), and have remained a regular reader (not much for posting, however). Oh man, were they wrong.
I lived in the area 3 years. I’m heading back there next weekend to look for an apartment and hope to put in a deposit. You were probably along the Esplanade looking over the Pacific! Great place!
Prices are only beginning to fall there. I get zipRealty feeds from a realWhore representative for the 90277 and 90254 zip codes. Prices still too high. Suffering is only in the beginning stages. Rent is far cheaper.
Your wife is partly right. The areas has the best climate in the U.S., is near a lot of high tech jobs, is near great colleges, and good access to LAX. So those qualities are what will keep prices elevated for awhile. Not many poor people would be able to qualify for a house within 2 miles of the ocean, so I am not sure if foreclosures are a huge problem there.
Talked to a couple here in town that sold their house in Riverside County a few years ago (it took them 8 months to sell it) and the person that bought it has already been foreclosed on…
Is anyone in the market for a San Diego home at the $1,299,000 price point? Because this is the median list price in our zip code (Rancho Bernardo West — 92127), and there are six homes offered at exactly this price. It is pretty hard to tell if this is fair market value, as there are no comps on ZipRealty shown as selling since July 2008.
From San Diego ZipRealty:
7972 PURPLE SAGE, SD - Rancho Bernardo, CA 92127** Foreclosure
Beds: 6 Type: SFR Sq. Ft.: 4,453 Lot Size: 11,761 Sq. Ft. MLS #: 080065232
Baths: 6/1 Built: 2004 $/Sq.Ft.: $292 List Date: 09/20/08 On Market: 28 days
Description
Wow, check out this bank-owned foreclosure in one of san diego’s best residential communities! This quality, davidson-built home is spacious and luxurious, and is situated on a cul de sac lot with large yard complete with fire-pit & plumbed for spa! You’l l enjoy the casita, perfect for teen or guests, 4-car garage, expansive travertine flooring, lavish granite and stainless kitchen and dual fireplaces! A rare opportunity for the prudent buyer!
Comps:
Address Beds/
Baths Sq.Ft. Year
Built Date Sold Distance
(miles) Sale Price Price/
Sq. Ft.
1
14457 CAMINITO LAZANJA 5/5 4,077 2003 04/23/08 0.35 $0 $0
2
14641 CAMINITO LAZANJA 4/4 3,022 2003 06/16/08 0.54 $995,000 $329
3
14257 CAMINITO LAZANJA 3/4 3,892 2004 07/11/08 0.22 $1,109,000 $285
4
7404 RANCHO CATALINA TRL 4/4 3,975 2004 05/16/08 0.30 $1,090,000 $274
5
14412 ROCK ROSE 5/5 4,077 2003 07/01/08 0.08 $0 $0
6
7355 RANCHO VENTANA TRL 4/5 4,572 2004 05/30/08 0.39 $1,650,000 $361
Here is a better sample, ranked by date sold, including regression predictions after fitting a log linear model to covariates including date sold. The important part is that the (logarithmic) trend for these comparable homes drops from a level of about $1.7m near year-end 2006 to about $1.140m currently. These homes have dropped in value by roughly $560,000 in two years. Good luck trying to sell them for $1.299m ($155,000 over current market value).
Address Distance SalePrice Predicted lnSalePrice Beds Bths SqFt YrBlt SoldDate
14257 CAMINITO LAZANJA 0.22 $1,109,000 $1,140,781 13.918969 3 4 3,892 2004 7/11/2008
14641 CAMINITO LAZANJA 0.54 $995,000 $960,695 13.810498 4 4 3,022 2003 6/16/2008
7355 RANCHO VENTANA TRL 0.39 $1,650,000 $1,416,139 14.316286 4 5 4,572 2004 5/30/2008
7404 RANCHO CATALINA TRL 0.3 $1,090,000 $1,193,107 13.901688 4 4 3,975 2004 5/16/2008
7547 DELFINA 0.27 $1,200,000 $982,693 13.997832 4 4 3,022 2003 4/1/2008
14413 ROCK ROSE 0.09 $850,000 $1,021,493 13.652992 3 3 3,323 2003 3/28/2008
7824 VISTA LAZANJA 0.23 $1,160,000 $1,194,503 13.963931 4 4 3,878 2004 2/22/2008
7431 RANCHO CABRILLO TRL 0.28 $1,475,000 $1,420,616 14.204169 4 5 4,572 2005 2/19/2008
14216 CAMINITO LAZANJA 0.12 $1,327,500 $1,317,333 14.098808 4 5 4,259 2005 2/14/2008
7771 TIERRA TESORO 0.39 $1,452,000 $1,178,597 14.188452 3 4 4,005 2006 12/27/2007
7404 LA MANTANZA 0.35 $1,400,000 $1,433,720 14.151983 5 5 4,234 2003 11/8/2007
7371 RANCHO CATALINA TRL 0.32 $1,575,000 $1,505,316 14.269766 4 5 4,572 2004 11/7/2007
14444 ROCK ROSE 0.12 $905,000 $1,160,801 13.715690 3 4 3,531 2003 10/19/2007
7415 LA MANTANZA 0.39 $1,565,000 $1,959,165 14.263396 5 5 5,425 2003 9/4/2007
7507 GARDEN CT 0.22 $1,245,000 $1,328,866 14.034646 4 5 3,861 2003 8/21/2007
14445 CAMINITO LAZANJA 0.34 $1,089,000 $1,329,262 13.900770 4 5 3,861 2003 8/20/2007
7968 ENTRADA LAZANJA 0.06 $1,300,000 $1,496,716 14.077875 4 5 4,453 2004 8/20/2007
14385 CAMINITO LAZANJA 0.32 $1,132,500 $1,268,968 13.939938 4 4 3,878 2004 8/3/2007
14484 CAMINITO LAZANJA 0.38 $1,694,000 $1,423,674 14.342603 5 5 4,077 2003 7/25/2007
7977 PURPLE SAGE 0.05 $1,600,000 $1,530,533 14.285514 4 5 4,453 2004 6/6/2007
14420 RANCHO DEL PRADO TRL 0.32 $1,455,000 $1,324,222 14.190516 4 4 3,975 2004 6/1/2007
7389 RANCHO CATALINA TRL 0.3 $1,550,000 $1,325,406 14.253765 4 4 3,975 2004 5/29/2007
7371 RANCHO VENTANA TRL 0.37 $1,410,000 $1,335,314 14.159100 4 4 3,975 2004 5/4/2007
7413 RANCHO CABRILLO TRL 0.27 $2,150,000 $1,636,459 14.580978 4 5 4,572 2003 5/1/2007
14393 CAMINITO LAZANJA 0.32 $1,244,000 $1,305,393 14.033843 4 4 3,878 2004 4/30/2007
7782 TIERRA TESORO 0.4 $1,625,000 $1,632,967 14.301018 5 6 4,735 2006 4/24/2007
14416 ROCK ROSE 0.07 $1,238,500 $1,378,461 14.029412 4 5 3,861 2003 4/20/2007
14646 CAMINITO LAZANJA 0.55 $1,465,000 $1,300,195 14.197366 4 5 3,570 2003 3/7/2007
6923 ROYAL BIRKDALE PL 0.58 $2,800,000 $2,580,185 14.845130 4 5 5,986 2000 1/31/2007
7778 TIERRA TESORO 0.4 $1,403,000 $1,694,416 14.154123 5 6 4,735 2006 12/21/2006
7762 TIERRA TESORO 0.39 $1,595,000 $1,549,735 14.282384 4 5 4,259 2004 11/16/2006
7758 TIERRA TESORO 0.38 $1,345,000 $1,366,482 14.111905 3 4 3,892 2004 11/13/2006
The other interesting detail: Homes were selling at a fairly steady rate of 1.6 per month over the period from 11/06 through 7/08 (32 homes / 20 months = 1.6 homes/month), then completely stopped after 7/08. I strongly suspect that the availability of jumbo loans to purchase homes in our area priced north of $1m has completely dried up since this past July.
Upon reflection, it occurred to me that the sudden drop off in sales after July 2008 may be due to the incontrovertible evidence that San Diego entered a serious downturn in June 2008. As a post in today’s bits bucket points out, the San Diego economy lost about 5000 jobs on average each month from June 2008 through September 2008. Who wants to buy a $1m+ home when the economy is entering a bad recession?
Being from Sili Valley, I’m not very familiar with the San Diego area but I’d be interested in taking a look. Where are the most desirable SD county areas these days? Rancho Santa Fe, Carmel Valley?
La Jolla, Solano Beach, Torrey Pines, Carlsbad would be most desirable areas
Having returned to the Bay Area/San Mateo coast after seven years in north San Diego county I’d have to there are no desirable areas but then I guess I’m just way over So Cal.
If you must move there, consider, parts of Carlsbad, Solano Beach, Encinitas, Leucadia. There are some nice places in Fallbrook and Vista out in the Gopher Canyon area (forget those Shadowridge/HOA hell areas). There are even some nice places in Oceanside around Rancho Del Oro(NON-HOA)& Fire Mtn areas as well as some places off Sleeping Indian Rd. and down by the beach near the Buena Vista Lagoon between O’side & Carlsbad.
Olivenhain, Rancho Santa Fe, La Jolla, Point Loma, Coronado, Cardiff by the Sea & Del Mar can be mega pricey but they are nice areas. These properties go from big estates to modest CA ranchers to oceanfront properties. There are some nice neighborhoods in San Diego proper, like Mission Hills, Kensington as well. Not a fan of PB, Mission Beach or Ocean beach areas.
Funny I always think of Rancho Bernardo as a big retirement community. I know it’s not but it’s damn quiet out that way and can get pretty hot in summer/fall. I guess Carmel Valley is OK. It seems to have a lot of newer McMansions in a “master planned” community. Too sterile for my taste. I tend towards the coastal areas because when the Santa Ana winds blow it sucks being inland along the I-15 corridor and frankly the “views” there offer a lot of rocky hillsides, brush and real dry landscape. Not my thing. Well that’s my two cents on San Diego.
I rent in fire mt. o’side. it is quiet and very lush with palm forests, nice houses and close to the beach. of course now cramer says people need to live with family members in this new economy.
I still think spending half a million dollars on a small house is ridiculous.’”
A succinct statement of my feelings when still living there, which kept me from buying there. In Bay area, some were higher.
I’ll one up you: I think spending a quarter of a million dollars on a old small house is ridiculous (which is what they go for right now in VT). It doesn’t cost that much to actually build a house *brand new*, excluding land costs.
Right now lots of people in VT want $80K-$100K for their building lots, which pushes total costs up to the $250K mark, depending on how you build. When we were pricing 8 years ago, a $20K lot blew the budget in terms of making a new build affordable and most lots we looked at were $25-30K. Building costs haven’t changed all that much, but people want about 3-4X what they should for the land right now.
At least spending $250K on a brand new building means, in theory, no replacing anything for at least 10-15 years. Having pulled down a ceiling or two in my day, any older house is going to need to have a serious price reduction in my book.
It’s amazing how few people factored in the age when pricing and looking during this bubble.
“It’s amazing how few people factored in the age when pricing and looking during this bubble.”
Even better is the thought of the sheer number of FBs who waived the contingency inspection to have a better shot at getting their foolish offer accepted.
Knowing this, unscrupulous sellers galore had a once in a lifetime opportunity to dump properties with structural problems onto foolish lenders (in the end after the FBs walk away). Those haircuts could reduce a property’s value down to the land value minus demo costs.
Just a note in all of this joy.
http://www.bloomberg.com/apps/data?pid=avimage&iid=ibDX8eWtKfZs
Looked at the bloomberg map about areas effected by the forclosures. LA was at 7B, ventura at 13B, Orange at 10B, San Diego 30B and Stockton was another 30B, SB 5B. Doesn’t spit out the San Fran area numbers.
Arizona, probably fed by our locusts, is only 14B. Florida is a much smaller bust. So are Dc and Atlanta.
There is going to be massive anticalifornia sentiment across the country for years. People are going to deny having lived here in the crisis to avoid lynch mobs. Its going to hurt during budget appropriations as well.
The sheer momentum of all of this is going to be freaking massive. Just watch, California is going to be a dirty word. Banks/Soverign funds will be avoiding investing here like the plague. The stink of this is probably going to last more than 20 years.
Its going to hurt during budget appropriations as well.
That’s what I find funny about this state. One of the richest states expects to be bailed out by the poorer states. Well… The faux wealth is about to be exposed by the outgoing tide.
Got Popcorn?
Neil
Actually, if you look at the statistics, California really isn’t one of the richer states. I looked up median family income by state. One web site that I saw showed that the median family income is 18% higher than the national average and another showed 11% above. Neither figure is significant, considering the higher cost of living in California.
I was reading about the high school dropout rate in the newspaper last year. The national dropout rate was 30%. In CA it is actually 33%.
Another interesting statistic is the percentage of people without health insurance. About 15% of Americans have no health insurance. In CA, I believe the number is 18% - 20%.
So, considering the state as a whole, California is not a rich state, though it does have a lot of rich people.
I think this is one instance where the “average” is more meaningful than the “median.”
Was in Vegas last month and was talking to my cabbie about housing.
He was so happy that he bought his house for 180k in agated community a 3 br /2 bth. I asked him if there are more available in his community and he said as a matter of fact there is a bank owned for 130k for a simmilar house. I figured he bought last year and asked him. Guess the answer -this june. S he is down 50k in 4 months. Asked his down paymetn and it was 15%. Asked the taxes and he smiled sheepishly and said I am not good at that stuff and my wife takes care of it. We are all screwed!
When the cabbies, as a group, tell you to avoid housing, then you know we’re at the bottom.
Got Popcorn?
Neil
why isn’t anyone looking at the guilt realtors have in all of this??
http://www.youtube.com/watch?v=Hv9hSLtEwOM
There are a number of realtors here in CA losing their own homes - looks like some of them were buying into what they were shoveling.
Hi All:
Let’s meet up at LJ Quinn’s Lighthouse Pub in Oakland on Saturday, November 8th at 7 PM. I will make reservations if you guys RSVP to BigVHBB at gmail dot com.
Address:
51 Embarcadero Cv
Oakland, CA 94606
Phone Number:
(510) 536-2050
Website:
quinnslighthouse dot com
See you guys,
Big V
Sorry if this is a repost. Bad connection today.
Hi All:
Let’s meet up at LJ Quinn’s Lighthouse Pub in Oakland on Saturday, November 8th at 7 PM. I will make reservations if you guys RSVP to BigVHBB at gmail dot com.
Address:
51 Embarcadero Cv
Oakland, CA 94606
Phone Number:
(510) 536-2050
Website:
quinnslighthouse dot com
See you guys,
Big V
I have visited this site many times throughout the last couple years. I just want to share what I am purchasing. It is house that is just shy of 3000 sq ft. It is in Oceanside in an OK neighborhood. It appraised for 660,000 a couple of years ago. I made an offer as a short sale and even negotiated some repairs. I am paying about 295,00 when it is all said and done. It has a ocean view and it is on a 11,000 sq ft flat with gentle slope away from the house. I have to insure just the structure for more than I am paying for the entire property. It does need some work, but I am paying less than 100 dollars per sq. feet of living space. To me it was too good of a deal to pass up. I hope I am not catching a knife, but the numbers make sense. It is less than rent. I am so grateful that I did listen to this site. I almost bought in 2005. Everyone was spot on. I was told that I would never be able to buy a home in S. Cal again. It was ridiculous how the cool aid and fruit loops were being consumed. Anyways, I just wanted to share that. I look forward to reading your responses.
Congrats, and good luck. From the price you paid and the fact that your mortgage is less than rent, it sounds like you did well.
Wow. That sounds like a really good deal. I’m glad you waited. See, you got something nice and you can afford it. That’s the way it should be.
househunter surfer;
i am off fire mt. is your new home near me? let’s party.
People are not paying enough attention to the fact that realtors are a huge factor in this mess… huge!! Watch this clip from oprah of what a realtor told a woman who could clearly NOT afford a home…just as a sample of what must have gone on millions of times to get us in this mess:
http://www.youtube.com/watch?v=Hv9hSLtEwOM