October 24, 2008

We’re Never Going To Go Back To The Heyday

The News Journal reports from Delaware. “For Delaware in particular, key industries are sensitive to national economic conditions. That point has been hammered home in recent weeks with employers dumping bad news on workers. ‘”If you look at the major industries in Delaware, they all do seem to be exposed to recessionary conditions,’ said Robert Dye, an economist for PNC Financial Services Group in Pittsburgh. ‘Delaware is definitely going to be feeling the effects of the downturn, and we do expect that to get worse before it gets better.’”

“As incomes have dropped relative to the rest of the country, Delawareans also have watched median home prices in the state fall 9 percent after peaking in late 2006. John Stapleford, an economist who covers Delaware for Economy.com., said housing sales are not likely to match the pace of earlier this decade, when a housing bubble inflated and helped spark the current economic crisis. ‘We’re never going to go back to the heyday,’ Stapleford said.”

From WTOP in Maryland. “A Maryland woman is among the thousands of people losing their homes to foreclosure. But she’s actually using the situation to her advantage. While she foreclosed a couple of years ago, she’s still living in the home - and paying nothing. Deborah was renting a townhouse in Gaithersburg in the north Montgomery Village area in August 2005, when the owner decided to sell the home. ”

“Although Deborah was making less than $32,000 a year and had just been through a divorce, she decided to purchase the home. She was told she could qualify for a home in the $200,000 - $250,000 range, but the townhouse was $379,000 — and escalated to $405,000 at closing.”

‘In order to buy the home, Deborah got what’s called a No-Document Loan, meaning she did not have to document any income as long as she got a certain credit score. Deborah combined the No-Document Loan with another loan and was able to buy the townhouse.”

“Deborah knew she couldn’t afford it but says she planned on finding someone to rent the basement of the home. She never found someone to rent. Deborah tried to refinance in April, but didn’t qualify. She tried to sell the home in June 2006, but didn’t receive any offers. In September 2006, her home went to foreclosure auction.”

“‘It’s very hard to repossess a house and get someone out of it,’ Deborah says. ‘It just means I’m smart.’”

“It’s been 42 months since Deborah moved into the home, and she has not paid a single penny for her mortgage. She says her situation is fair. ‘I made my choice fully knowing what I was doing and knowing it was a gamble,’ Deborah says. Deborah plans to rent next, and says she has a deposit down on a building under construction.”

The Virginian Pilot. “When the dividend check he expected in April didn’t arrive, Tim Moore made repeated phone calls to WexTrust Capital’s offices in Norfolk and Chicago. The check eventually came, but it bounced. Moore’s trusted adviser, Paul Clemmons, said he expects to recover much of what he put into a warehouse, a hotel and other WexTrust real-estate deals. Clemmons, who recommended WexTrust to investors and helped some refinance their homes to raise investment funds, said he, too, borrowed on his home to invest. Because of the lost income, he sold his home in July and refinanced an investment property.”

“‘I’ve gone from home ownership to renting, and I got rid of my toys,’ including a $130,000 Mercedes-Benz and a boat, Clemmons said.”

“Moore figures that whatever he recovers will come too late to help save his house. Earlier this month, he and his wife put it on the market for $595,000 but have yet to hear from any prospective buyers. Moore said he already asked their mortgage lender, ‘Should I give it back now?’”

“Foreclosure activity in Hampton Roads continued to climb last month and has increased more than threefold since last year. Vinod B. Agarwal, an economist at Old Dominion University, predicted that the number of foreclosures would continue to rise in the coming months.’

“‘There’s anxiety right now in many households,’ he said. ‘The other problem is the credit conditions have tightened up so much. People with adjustable-rate mortgages they cannot afford cannot refinance that easily.’”

The Daily Press in Virginia. “The market in Hampton Roads, including the Peninsula, is righting itself, said Cliff Wells, managing broker of Century 21 Nachman Realty’s Norfolk office. Historically, real estate doubles in value every 10 years. For a long time, that didn’t happen in the Hampton Roads market, including the Peninsula. Prices only went up a few thousand dollars between 1980 and 2000, until the real estate boom hit, he said.”

“‘In a year’s period of time, in essence, the market picked up that double that had been missing the first 10 years,’ Wells said. ‘In the second or third year, it picked up that second double.’”

“Then, in some cases, values continued going up, but it’s now dropping down to the value where it should be, he said. ‘We’re back to a stable market, with prices holding,’ he said. ‘It has come back to the ‘real’ real estate market.’”

The Falls Church News Press. “One of the region’s foremost economic forecasters warned Tuesday that Northern Virginia may be ‘behind the curve’ in planning its next economic driver, once the defense contracts buoyed by the war in Iraq expire and the war winds down.”

“John McClain, senior fellow at George Mason University’s Center for Regional Analysis, said that the regional office market is ’softening’ as a follow-on to the housing downturn, with vacancy rates climbing from nine to 12 percent.”

“While housing values in the District of Columbia and inside the Beltway in Northern Virginia and Maryland have remained relatively stable, they’ve dropped dramatically in areas like Prince William County, McClain noted, making the D.C. Metropolitan Region the victim of the sixth-highest rate of housing foreclosures nationally, behind only Los Angeles, Phoenix, Miami, Las Vegas and San Francisco. This was after the region had the lowest rate of foreclosures in the entire U.S. only two years ago.”

“Average housing prices have declined 31 percent in Northern Virginia, and the number of homes on sale for less than $400,000 has tripled. In Prince William County, which he called ‘the eye of the storm’ in the region, the average housing price has dipped from $415,000 to $285,000.”

“In the last four months in Northern Virginia, he said, 4,500 construction jobs have been lost, mostly due to the housing slowdown, along with another 1,500 in the retail trade and 2,000 in financial services. Nationally, McClain said, ‘2009 will be worse than 2008,’ noting that (Former Federal Reserve Chairman) Alan Greenspan’s ‘irrational exuberance’ between 2002 and 2006 created the current crisis. Job growth turned from two million annually to a net loss of 600,000 jobs in 2008. ‘In this national environment, I wouldn’t want to be anywhere by the D.C. region,’ he said.”

From Bloomberg. “Home sales are booming once again in Prince William County, Virginia, an area hit hard by the housing bust. Foreclosures are responsible. Lenders are modifying some mortgages to prevent defaults and keep loans on their books. But because each mortgage-and-borrower pairing is different, there’s no one-size-fits-all solution.”

“‘If a borrower has no job, or other income, we can’t help,’ said Evan Wagner, an IndyMac spokesman. Nor is the bank accepting offers from investors to pay off a loan at a big discount. ‘We’re not erasing principal,’ he said.”

The News Record from North Carolina. “One thing is sure: The number of foreclosure filings against Guilford County homeowners has increased since this time last year. There were 1,106 foreclosures in Guilford County’s two major cities during the third quarter. That’s an increase of 192 percent compared with the third quarter of 2007 and a 10 percent increase from the second quarter of this year.”

“The rise in foreclosures continues a trend that dates back a decade but has accelerated recently, said local economist Don Jud. ‘Beginning about 10 years ago, the banks started making weak loans, weaker loans than they had ever made before,’ he said. ‘What we’re seeing now is the weaker loans are being foreclosed on.’”

The Times News from North Carolina. “The number of foreclosures in Henderson, Polk and Transylvania counties continues to rise as the effects of bad loans, job losses and a sagging housing market set in. They are worrisome numbers that have only gone up in recent memory, said Wanda Sizemore of the Henderson County Clerk of Court’s office.”

“‘Where we used to have one or two a week, now we have between five and seven a week,’ she said.”

The News & Observer from North Carolina. “The global economic crisis has struck indiscriminately at North Carolina’s most resilient industries. In the past few weeks alone, the roiling economy has taken out several thousand jobs in the state as businesses reduce production and close facilities.”

“Because its arrival lagged in this state and because real estate values here never overheated and didn’t crash, some had hoped we might be spared the worst. ‘It’s here,’ said Harry Davis, an Appalachian State University economist. ‘We’ve got to admit it. It’s in the room.’”

The Star News from North Carolina. “If you heard a builder singing Friday, it must have been the blues. Gathered for a general membership meeting, the local builders heard the sober reality of the Wilmington market: ‘The marketplace is ugly,’ researcher Bernard Helm told the Wilmington-Cape Fear Home Builders Association Thursday. ‘The outlook is dismal.’”

“Sales of new-construction homes were down nearly 40 percent in New Hanover, 37 percent in Brunswick and more than 56 percent in Pender, according to data from Helms. The local sales declines came on top of figures for 2007 that showed a more than 25 percent decline from 2006.”

“But fish gotta swim, birds gotta fly, and builders have to build if they’re going to make money. (Apologies to Oscar Hammerstein and Jerome Kern.) Two subdivisions with certified green-built homes are newly open in Brunswick County, and sales have begun for a planned for 4,500 homes on 2,000 acres in (where else?) Leland.”

“All aboard the foreclosure bus tour of Carolina Beach. In a sign of the depressed housing market on Pleasure Island and in other beach towns, Century 21 Brock has signed up 30 people so far to tour 20 properties Saturday that range in asking price from $112,900 for a 500-square-foot condo to more than $400,000.”

“‘It’s very unusual for this area. This is our first one,’ said Faye Brock, owner of the agency at 265 Racine Drive in Wilmington. ‘Every three months we’re going to have a foreclosure preview for our clients.’”

“‘Values at Carolina Beach and Kure Beach were driven up by speculators,’ said Clinton Howlett of Century 21 Brock, ‘and the problems with foreclosures in these two beaches is probably as bad as some parts of California and Nevada.’”




RSS feed | Trackback URI

80 Comments »

Comment by sf jack
2008-10-24 08:57:21

“It’s been 42 months since Deborah moved into the home, and she has not paid a single penny for her mortgage. She says her situation is fair. ‘I made my choice fully knowing what I was doing and knowing it was a gamble,’ Deborah says. Deborah plans to rent next, and says she has a deposit down on a building under construction.”

*****

What ever did happen to personal responsibility?

Comment by Arizona Slim
2008-10-24 09:07:10

And, if you were a landlord, wouldn’t you just love to have Deborah as a tenant? [ sarcasm off ]

Comment by Bill in Carolina
2008-10-24 09:16:44

I once worked with a guy who actually had a nervous breakdown over his inability to get a non-paying tenant out of his Maryland rental property. His legal fees were not trivial, and no progress was being made.

The laws in Maryland heavily favor tenants. I guess they heavily favor FBs as well.

Comment by DinOR
2008-10-24 09:27:07

Today “Tom Vu” only lives on websites that feature “All Time WORST Infomercials” but this is the very “strategy” he advocated! LOL!

“You get apahtment”

“You no pay rent”

“It takes Lantload 6 munts to kih yu out”

“You start business like me and have yacht and chicks!”

Folks, I’ve been very depressed about the fact that the housing bubble is managing to drag us all down and that there were no ‘winners’. Well! I think we found (1)!

( Apologies in advance to all our Asian friends and posters, but this guy was a World Class doofus )

(Comments wont nest below this level)
Comment by Left LA
2008-10-24 11:33:11
 
 
Comment by potential buyer
2008-10-24 12:43:15

Deberah’s landlord is herself. She’s not paying rent or her mortgage. Probably socking it away so she can buy her bldg under construction. What she doesn’t realize is — she no longer qualifies for the loan, so she will always be a renter.

This whole picture truly annoys me though - she lives rent free because she was irresponsible to begin with.

(Comments wont nest below this level)
 
Comment by ChrisO
2008-10-24 13:25:45

DC’s laws are even more tenant-friendly than Maryland’s. Some of the more unscrupulous tenants know how to game the court system so that they can stay in an apartment for years paying little or no rent.

This idiot woman probably isn’t doing herself any favors by advertising her scam before she gets a place to rent, however…

(Comments wont nest below this level)
 
Comment by taxmeupthebooty
2008-10-24 14:48:26

MD is a peoples republic
in NV you can , or used to , be able to get folks out fast

(Comments wont nest below this level)
 
Comment by aNYCdj
2008-10-24 17:01:30

Bill

I’ll bet ya it was an ILLEGAL apartment…and the dumb landlord should have just paid him to move instead of the lawyers

But most landlord are MORONS…and refuse to pay a tenant to move and be done with it….so his breakdown was probably his own damn fault

————————————-
I once worked with a guy who actually had a nervous breakdown over his inability to get a non-paying tenant out of his Maryland rental property. His legal fees were not trivial, and no progress was being made.

(Comments wont nest below this level)
 
 
 
Comment by exeter
2008-10-24 09:31:35

“What ever did happen to personal responsibility?”

It went to the landfill along with the other low cost/no cost BS like “integrity”, “honor”, “character” and “compassionate conservatism” back on Nov5 2000.

 
Comment by Mirtika
2008-10-24 12:10:37

“‘It’s very hard to repossess a house and get someone out of it,’ Deborah says. ‘It just means I’m smart.’”

No, it means you’re a scammer and a thief and a scuzzbag. I hope karma bites this beeyotch big in the financial butt.

She disgusts me. And these are the pigs that McCain and Obama want to help?

Geez.

Comment by Sammy Schadenfreude
2008-10-24 16:31:50

Well said. Some “victim.”

 
 
Comment by Muir
2008-10-24 12:46:29

Well, obviously Deborah is a member of ACORN and is a one of those minorities with a sense of entitlement that so many here point out as the cause of all of this.

 
Comment by taxmeupthebooty
2008-10-24 14:47:13

we have bail for all now
I don’t know or associate w anyone w bad credit

Comment by DinOR
2008-10-24 15:47:46

taxme,

I can understand if I guy has been through a divorce, illness or lay off, but this was done by design. Deborah is a skank.

 
 
Comment by Mot
2008-10-25 10:29:32

42 months without a payment sounds pretty fair to me!

 
 
Comment by Tim
2008-10-24 09:03:00

$32,000 a year and a $405,000 house. “Deborah knew she couldn’t afford it but says she planned on finding someone to rent the basement of the home.”

She can’t afford more than 1k on housing per month, and P&I, plus maintenance, taxes, HOA, utilities, etc, on a home that price should run around 3k per month. Must be some basement if she was counting on 2k or more per month renting it out.

Comment by salinasron
2008-10-24 12:08:14

Consign her case (and others like it) to a law firm to go after her for lying on loan doc’s and attach her salary.

Comment by autolykos
2008-10-24 12:24:19

What the MSM is either too stupid to understand or unwilling to report is that “No Doc” Loans don’t just mean that you don’t have to document your income. You still have to state what your income is. She clearly massively overstated her income. I don’t see how this isn’t out of out fraud.

 
Comment by diogenes (Tampa)
2008-10-24 13:19:55

How mean!
She deserves to live well in Amerika.
The “homeowners” need help from the government so they can stay in their homes.
That’s the talk from both Obama and McCain.

 
 
 
Comment by scdave
2008-10-24 09:04:11

Sorry…OT but the Bits is so full I don’t know if I can catch hoz…

hoz…your post yesterday…I recommend:
Nicholas Kaldor “The Scourge of Monetarism” 1986

Is this a book ?? If so I could not find it on Amazon…

 
 
Comment by Anthony
2008-10-24 09:15:40

“‘It’s very hard to repossess a house and get someone out of it,’ Deborah says. ‘It just means I’m smart.’”

Fraud. Pure and simple. And yet, the MSM portrays these people as victims and the government is tripping all over itself to bail these people out. More stories like this need to get out there so that the public will become angry at this.

Yesterday I was watching a special on CNBC and they were taking calls from the public and one lady said “what happened to personal responsibility…why should I have to pay for someone who made bad decisions and bought a house they couldn’t afford…it was a house of cards.” The moderators completely skipped over even addressing the comment.

Comment by exeter
2008-10-24 09:34:06

Hey… it’s acceptable if Wall Street does it but it’s fraud when someone on Main Street does the same?

Comment by denquiry
2008-10-24 16:55:09

Yea…just look at goldman-skanks. Selling you securities and shorting them behind your back. Nuthin personal, just business.
Until they throw a lot of WS skanks in jail and throw in a few pols to boot TRUST is never going to be restored in wall street. Financials’ sh*t on manufacturing thinking they were the king. Financials’ just provide a service but a country cannot survive without manufacturing. IMO, a lot of wall street does can be construed as treasonous. Destroying the country financially is no different than destroying it with bombs.

 
 
Comment by DinOR
2008-10-24 09:39:22

Anthony,

I was watching CNBC after work at home and they had a 32 y.o gal from MN calling into that new gal and she said ( you’re going to LOVE this )

“I ran up some credit card bills “that I need to get rid of” and you see those ads on TV where they settle your debt for 40 cents on the dollar? ( Host shaking head in disgust ) Well, I was just wondering if they are legit and if they are… is this something I can myself without having to pay their commissions?”

Wait a minute, you’re “just walking away” from mountains of CC debt and you’re worried about ’someone e-l-s-e’s’ credibility!? And the way she ‘couched’ “that I need to get rid of” ( like it was nothing more than a really bad blind date’s cell number from her phone? ) Oh, and you don’t want to have to pay any fees… because you’re ‘careful’ w/ your money!? Again, agreed. Fraud. Debt ran up w/ NO intention of EVER being repaid.

Comment by Bad Chile
2008-10-24 11:49:15

Ticks me off…I just got a distressed sale 2007 American Made Telecaster for 60% of the street price and I think I’m savvy. In reality, I should have put it on the credit card, got it new with a warranty, and then called a talk show to see if I could get it discharged (which I know I can’t, I stupidly have money in the bank).

Comment by DinOR
2008-10-24 12:33:12

Bad Chile,

Well I don’t know how one could go wrong buying a “Tele” but your point isn’t lost on me. I was just beside myself ( as was the host ) at just what an evil consumer we’ve spawned? It’s such compulsive behavior it borders on bulimic?

(OT) I’ve only had (1) Yankee made Strat over the years and hands down it’s a better instrument but for gigs I have a Squire w/ maple neck and some pretty professional set up. If it gets dinged up I don’t get all upset. I have a G&L that never leaves the house though.

(Comments wont nest below this level)
Comment by Muir
2008-10-24 13:01:28

DinOR, Bad Chile
“just what evil consumer we’ve spawned? It’s such compulsive behavior it borders on bulimic?”
-
“When they struck, they wanted to create an atmosphere of fear. And one of the great goals of this nation’s war is to restore public confidence in the airline industry. It’s to tell the traveling public: Get on board. Do your business around the country. Fly and enjoy America’s great destination spots. Get down to Disney World in Florida. Take your families and enjoy life, the way we want it to be enjoyed.?”
http://www.whitehouse.gov/news/releases/2001/09/20010927-1.html

 
Comment by exeter
2008-10-24 14:07:59

If you guys spot a PRS for sale (not the retail price BS) let me know.

 
 
Comment by ChrisO
2008-10-24 13:17:32

I bought an aftermarket parts stratocaster for less than half of what a new USA Strat would sell for, and it’s better than anything I’ve played from the Fender Co. in a long time.

(Comments wont nest below this level)
Comment by NOVAwatcher
2008-10-24 14:27:42

Built a couple of Warmoth strats myself. They maybe ‘parts’ strats, but they play, and sound, incredible.

 
Comment by DinOR
2008-10-24 15:26:24

ChrisO,

(OT) As I’ve said in the past, I basically run an “orphanage” for unwanted and discarded guitars and amps, so I hear ya’. My only “collecter” is a G&L that the Great Kim Simmons of Savoy Brown personally autographed. ( Huge fan ) Other than that it’s pawn shop stuff and soldering skills?

 
Comment by DinOR
2008-10-24 15:51:18

NOVAwatcher, (OT)

I’ve seen Warmoth’s website because they’re the only guys that offer basically a “3/4 Scale Neck”. It’s not that I can’t handle a full scale but it’s an effort for me and the 3/4 is much easier to “man handle”, how would you rate the tone/quality?

 
Comment by novawatcher
2008-10-24 19:14:00

A+.

I’ve built a variety of guitars, both regular Fender and their short Gibson scale. 1 mahogany (chambered), 1 mahogany with maple cap, and 2 swamp ash. The one with the Gibson scale has a mahogany neck.

The playability (assuming you know how to do a basic setup and don’t mind buying a set of nut files from Stewart McDonald) is first-rate. In all honesty, they are the best playing guitars of my arsenal (my worst is a Gibson). My only nit-pick is that i’ve got one swamp-ash guitar that doesn’t quite sound ‘right’ (or sounds OK, but not great), and even unplugged it sounds deader than my other guitars. But, swamp ash is known to vary quite a bit, and that’s the gamble one takes when you pay before you play.

As long as you pick quality parts (hardware, pickups) and known good combinations of wood (the exotics are a real gamble), you can easily put together a top-flight guitar.

One hint: if you do decide to go that route, think twice before finishing (painting) the body yourself. It’s a lot harder than it looks, and I would suggest practicing on scrap lumber before making your final decision on whether you want to finish it yourself or not.

P.S. The coolest part is that they are all one-of-a-kind originals that I made myself. I eventually got into amp building. So, I’ve got top-flight, one-of-a-kind gear, that cost me a fraction of what it would cost new, and they actually mean something to me, because I put some of myself into making them. And, I now know how to fix and hot-rod my gear (e.g. cascaded Plexi amp; tone control for neck pickup rolls off bass, not highs, etc.).

 
 
 
 
Comment by Mikey(2)
2008-10-24 10:45:22

Fraud, exactly. This is how criminal minds work: faced with a law, they seek a way to circumvent it to achieve their selfish objectives.

Not to get all political, but this “Joe the Plumber” guy is another one of these types of people; he plans on making $250K, but is looking for a way to not pay taxes on it.

Comment by Xiaoding
2008-10-25 19:14:31

“Not to get all political, but this “Joe the Plumber” guy is another one of these types of people; he plans on making $250K, but is looking for a way to not pay taxes on it.”

Typically, you overlook that a tax is theft as well, a crime of the state against the individual. Also, I believe the plumber guy DOES pay taxes, so your wrong on that too.
You are letting your political beliefs blind you to basic facts.

 
 
Comment by WT Economist
2008-10-24 12:18:54

“And yet, the MSM portrays these people as victims and the government is tripping all over itself to bail these people out. More stories like this need to get out there so that the public will become angry at this.”

Actually, aside from the renters whose lease was voided when their landlord defaulted, I have yet to find many MSM articles that aren’t about real “victims” as opposed to people like this. They have trouble finding any.

 
Comment by denquiry
2008-10-24 14:01:27

why ….the pols and wall street are stealing and not going to jail. Hey…if it works for them it will work for me. Crime pays.

 
Comment by Blue Skye
2008-10-24 14:03:45

I wonder will the bank be so negligent in prosecuting for fraud when the bank is the US gov? FBI and IRS can make life miserable for people like this. That’s where I want some of my tax dollars to go.

Comment by DinOR
2008-10-24 15:18:02

Blue Skye,

Ex….cellent point. And here’s how I do it. Rather than rummage through pile upon pile of defaulted mortgages trying to determine if fraud played a part… simply do it the way the old NASD would have?

Simply go to your local Temecula/LV/PHX mortgage broker and say… “We have a number of complaints that all seem to center around your firm’s ____ branch and we want to see your records, all of them and NOW thankyouverymuch!”

Just put yellow crime scene ribbon in front of their door and start pulling files and getting depositions. Start with the foreclosure hotbeds and work your way out. I’d like to see some “earmarking for THAT! Christ, let’s take care of business here.

 
 
 
Comment by Tim
2008-10-24 09:17:42

“All aboard the foreclosure bus tour of Carolina Beach. In a sign of the depressed housing market on Pleasure Island and in other beach towns, Century 21 Brock has signed up 30 people so far to tour 20 properties Saturday that range in asking price from $112,900 for a 500-square-foot condo to more than $400,000.”

Ben had an add for a Denver foreclosure bus tour in two weeks posted on this site this morning. I signed up, not to buy but to ppl watch and hear what the Realtors say. My interests are perverse.

Comment by Captwweedwacker
2008-10-24 14:37:55

Carolina Beach aka Redneck Riviera. It’s always been a blue-collar beach for the inland NC mill workers, a smaller version of Myrtle Beach. Then all the equity locust swarmed down on it (and countless other NC beaches) and ruined it. If you check into the listings for CB/Kure Beach, these idiots were paying over 1 million for beach front homes. Houses which less than 10 years before were 50k. I’ve gotten kind of numb to it over the years, I’ve officially named this pillaging “The second carpet bagging of the South”. The locals hate their guts or as we like to say, “I wouldn’t piss down your throat if your guts were on fire!”

Comment by DinOR
2008-10-24 15:44:45

Captweedwhacker,

No problems here? And there you have it, one of the last places a working guy ‘could’ bring the wife and kids… spoiled! Ruined. Just as a side note though ( we were all “carpet bagged” pretty much from coast-to-coast ) but I get your point.

Oregon Coast, same deal. And the Equity Locusts were only too happy to oblige! In fact, when you’re working your way up the “property ladder” the more jacked up the better.

 
Comment by SV_Renter
2008-10-24 15:55:47

Ah no, Panama City Beach is the real Redneck Riviera!

 
 
 
Comment by novawatcher
2008-10-24 09:20:34

“She was told she could qualify for a home in the $200,000 - $250,000 range”
—–
She wasn’t even qualified for that much — $100k at most!

Comment by climber
2008-10-24 09:33:42

No doubt. People have let the monthly payments totally blind themselves to the huge amounts of money they’re “playing” with.

Comment by Michael Fink
2008-10-24 10:52:30

Indeed. My gf was an excellent example of this for me. Only looking at 500/mo to buy a car. Not even thinking about the 30,000 dollar obligation she was taking on. People, it’s 1/4 of a MILLION dollars, it’s a TON of money, more then most will EVER have in their entire lifetimes. So, think a bit before signing up to buy it on a payment plan for the next 30 years.

Comment by hd74man
2008-10-24 14:36:18

RE: it’s a TON of money, more then most will EVER have in their entire lifetimes.

Damn right it’s a ton of money Mike. I was crapping my pants when I did a $150k new construction loan with $60k down in ‘98.

However, I think people become oblivious to the economics involved. They want bragging rights at their XMas parties and don’t have a clue about the bottom line.

Remember this is Instant Gratification Nation.

Day after day they see these totally outrageous asking prices of house after house in the newspaper real estate section.

After awhile they’re brainwashed into thinking-hey, what’s a crummy $$$ quarter mil…look at all these places @ $600-800k! WTF-I work hard-I’m entitled!

Throw in the siren song of sleazebag originators and their henchmen, RealtorWhores, and before you can say, Mazillo… POOF!…You’re in the tar pit!

(Comments wont nest below this level)
 
 
 
Comment by Carlos Cisco
2008-10-24 10:59:57

Thanks to the politically correct Northern Ohio is about to lose another 5000 jobs. Thanks Washington. Thanks HUD. Thanks NYC finance. National City Bank is to be sold for body parts; adding insult to injury, it is a deal being done with the $700,000,000,000.00 bailout which these same clueless goons are thinking we here are going to pay for with more taxation. Looks like forcing our regional banks to lend to the unwashed masses turned out badly. Watch this space to learn just how bad.

Comment by novawatcher
2008-10-24 19:22:23

I don’t think anyone forced National City to make those crappy loans.

I’ve got a relative who is a manager in Natonal City (in a non-residential division). His words to me this summer were basically “Those morons up in the Cleveland office have ruined the company. What were they thinking making those loans? My division would never be allowed to make loans like that or we’d be fired.”

 
 
 
Comment by climber
2008-10-24 09:29:32

‘We’re never going to go back to the heyday,’ Stapleford said.”

Wrong again Stapleford. If there’s anything to learn from this bubble it’s that someday, maybe 100 years hence, there will be almost the exact same debacle all over again.

The near total inability of people to comprehend cycles baffles me. Do they still mourn the waning of the sun every winter and rejoice in January that their pleas have caused the sun to start to return?

Comment by Ian
2008-10-24 11:34:06

Humans are not so far off the scale from pack animals like Elks or zebraes or gnus… we think otherwise but our collective behaviour has the intelligence of a school of fish.

Comment by Bill in Carolina
2008-10-24 14:00:26

I’m thinking more like lemmings.

 
Comment by Blue Skye
2008-10-24 14:10:54

Zebras are not pack animals actually. That is why they cannot be domesticated. They are not programmed to follow the leader. Cows would work.

 
 
Comment by Left LA
2008-10-24 11:50:40

Here is where I fail: dotbomb was easy to spot in its early stages. None of it made sense from about 96-99. I closed out most of my risky positions and got out. For the next two years, I was surrounded by everyone day trading and bragging about their gains. So I jumped back in, albeit more on the conservative (equipment manufacturers, etc) side. Outcome: ass burned.

Fast forward to late 2001. LA condo I owned and had grown to hate had gone up in market value by 50% in 18 months. I sell. Bank the gains. Rent. I continue to watch LA prices go through the roof. I warn friends - they brush me off as some lunatic. Outcome: missed another 150% of gains in the subsequent 5 years.

Now: sold my ETF shorts at about Dow 9500 expecting a big bear bounce. It never came. Outcome: missed big jumps in SRS, SEF, SDS, and SKF.

Lesson: I see these irrational trends far out, but I forget that MOST people are delusional and panicky in both directions causing blow off tops and overcorrections. I lose the strength to trust my gut position when the fundamentals go out the window. However, the reality has been that the blow off top (long) and overcorrection (short) are where you make the serious returns. Next time…

Comment by DinOR
2008-10-24 16:08:08

Left LA,

DON’T, DO NOT get down on yourself! I’m going to tell you something that is going to remove all doubt ( and depression ) from your mind.

An old stock trader told me years ago, “You can’t time the market… ( but you damn sure can time the fundamentals! )

My story is nearly identical. I sold my home ( which frankly I’d grown to hate as well ) in early 2004. ( Missed out on 2 MORE years of great “appreciation” ) Wife went along reluctantly. It wasn’t until I showed her all the closings ( rather the LACK of closings ) in our old neighborhood that she felt better.

For all the run-up in home prices, only a select few were able to bail at peak! Now they’re stuck with too large homes and too large mortgages/maint. and declining households. You’re doing just fine, keep your focus on timing the fundamentals.

 
Comment by Bronco
2008-10-24 16:33:31

I am with you LA. The timing is the hardest part. I dumped the SKF, SRS and even the FXY way too soon. I wish I could have profitted more from this (foreseeable) nonsense.

 
Comment by Vermontergal
2008-10-24 19:10:50

Left LA:

Don’t get down on yourself! And stop calculating “what you could have earned” if you had done xyz - it will drive you nuts.

Instead, consider yourself fortunate to have enough vision to know where trends are going. Casual observation suggests that it’s a gift not given to the masses.

Your only “dumb” move in all that was getting back in to the dot com after you knew better. It’s possible to predict trends, but knowing when the music stops on any bubble is like saying you know exactly what time the rain will start after it clouds up. Get the umbrella out early and don’t worry about it.

 
 
 
Comment by rich
2008-10-24 12:04:37

Why would someone assume the risk of buying when they can rent for 50% cheaper? Both:
a)Maintenance risk(buddy had a pipe explode in his house last year- $7K plumber bill- fact) and

b)Now, value decline risk.

I’m still confused. They say renters are “Throwing money away on rent.”

What about the interest the bank gets on a mortgage?

Isn’t that throwing money away too? And property taxes? Owners don’t get either of those back, do they?

Comment by Tim
2008-10-24 12:20:23

Well you get a tax deduction assuming you have a job, which is a stretch these days. Like others have said so many times before, paying a dollar for 30 cents back is not exactly a winning strategy.

 
Comment by Skip
2008-10-24 14:20:28

If you believe hyper-inflation is on its way, it makes sense to lock in a payment for 30 years as opposed to paying market rate for 30 years.

 
 
Comment by Jen Bones
2008-10-24 12:21:14

“John McClain, senior fellow at George Mason University’s Center for Regional Analysis, said that the regional office market is ’softening’ as a follow-on to the housing downturn, with vacancy rates climbing from nine to 12 percent.”

Most interesting, Mr. McClain … Mr. John McClain of George Mason University. Unfortunately, this time the D.C. metro economy won’t be riding off into the sunset. And while every commercial real-estate enterprise within a twenty mile radius of Kashkari’s new office crumbles like the Nakatomi building on Christmas Eve, Hank will be sitting on a beach somewhere earning ten percent. Yippie-ki-yay indeed, Mr. McClain.

Luv,
Jen

 
Comment by Professor Bear
2008-10-24 12:31:45

“We’re never going to go back to the heyday”

Which one? The S&P 500 stock market index is rapidly approaching pre-heyday (1997) levels…

 
Comment by ChrisO
2008-10-24 13:21:07

“While housing values in the District of Columbia and inside the Beltway in Northern Virginia and Maryland have remained relatively stable, they’ve dropped dramatically in areas like Prince William County, McClain noted, making the D.C. Metropolitan Region the victim of the sixth-highest rate of housing foreclosures nationally…

I can attest to stuff inside the Beltway not falling in price very much…yet. It’s coming. There are still a few idiots willing to pay $500k+ for 80-year-old shacks, but they’re taking longer to move. And since dramatically lower housing prices are just a few miles away, a fall is inevitable.

Comment by taxmeupthebooty
2008-10-24 14:50:00

I’m a mile from the beltway in 22151 and we’re off 22% since 05

 
Comment by Ben Jones
2008-10-24 15:25:44

test

 
 
Comment by diogenes (Tampa)
2008-10-24 13:26:32

“Historically, real estate doubles in value every 10 years.”

Another assinine comment from a “realtor”(tm). Historically, real estate tracks wages which typically track historical measures of inflation.
For 10 years, going on 20, adjusting for inflation (the Jimmy Carter Administration way) wages have GONE DOWN, except for the top 5%.
This means real estate is grossly overpriced, even at current prices.

But, then, you are supposedly an expert, so go buy up a bunch of it….it’s such a great deal. Stop trying to pawn it off on me!!

 
Comment by Jack Jones
2008-10-24 14:27:33

I AM a realtor “tm” but only for the past 12 years or so. As a group, I have never been associated with a more ill-educated ignorant bunch (or is it pack) of doofusses in my life. I was actually called on the carpet a few years back for advising a client not to buy now, as the trend was unsustainable and would surely end. I wonder if that nitwit Walls with C-21 ever bothered to look at the History of Home Values put out be Robert Shiller. Clearly house prices do not “double every ten years” Any more than the stock market returns 10% a year. (I was a stock broker for 12 years…. another great scam)
Don’t trust a real estate salesman, nor even BEGIN to trust your “financial advisor” It’s harder to detect the financial advisor, ’cause he usually has a coat and tie and conservative (dark) suit.
You all should read Taleb’s “The Black Swan”, and “Fooled By Randomness”

Comment by Lost in Utah
2008-10-24 16:08:30

HBBers, see, it IS possible - an intelligent and honest realtor ™. I’m sure there are others out there, please stand up.

Welcome aboard. :)

Comment by Vermontergal
2008-10-24 19:12:28

I know one myself and she handled the sale of my home (after we sold a condo ourselves.)

 
 
Comment by diogenes (Tampa,Fl)
2008-10-24 19:16:36

Just so you know of my contempt, I was a Realtor back in the early 80’s when interest rates were pushed up to 17% by Paul Volker. It put me out of business.
But, during the last 8 months i was still open, i advised people that based on RATES, prices were too high.
No one wanted to hear that the house they bought 3 years ago could be worth less. I was a pariah.

That’s when “adjustable rate”, Graduated Payment, Interest only 5/25 loans first were used to try and hold up prices. The inflation rate was very high up till that point, also.

Realtors are used house salespeople who parrot whatever headquarters tells them is the proper stance to take………..”rates are low, choices are high, it’s a great time to buy!!”……….and “we know best, because we are experts.”…………..hahahahaha!!

 
 
Comment by aqius
2008-10-24 14:57:34

hmm, interesting . . . thats the umpteenth time I’ve seen the book ” The Black Swan” mentioned in this blog.

maybe I’ll go buy a copy. nahh, then again I’ll just do the usual & camp out at Barnes & Nobles for a few hours (fast reader).

I remember the scowls from the store staff years ago as I read/studied for some missing medical info from the stacks while prepping for med school tests . . . reading for hours each day at the tables instead of actually BUYING. hell, I eventually joked w/the manager that they made WAYYYYY more lucre off me with my many Earl Greyer cafe purchases each day than just outright buying a book to take home. and unlike the oddball social misfits/singles cruise scene/homeless people, I actually took extreme care not to damage the book & REPLACED them each day. like a library but financed thru cafe purchases.

oh yes, also dropped hundred bucks or so, easily, every other weekend, browsing w/my son on visitation days for kids books !

small child = chick magnet!!! lordyyy. I think I was actually the only single dad who really WAS in there just to look for books w/his son . . heheh. the women were a distracting annoyance, to be honest.

(and what was even more humorous was to see ‘em dismiss me as “oh, he’s probably gay ” to their girlfriends when I politely ignored flirting attempts)

ok, I’m done. for now

 
Comment by aladinsane
2008-10-24 15:18:52

“John McClain, senior fellow at George Mason University’s Center for Regional Analysis, said that the regional office market is ’softening’ as a follow-on to the housing downturn, with vacancy rates climbing from nine to 12 percent.”
———————————————————————————

I always get my John McClain-McCain’s mixed up…

Which one is the fallow senior and which one is the senior fellow?

Comment by SV_Renter
2008-10-24 16:01:29

Hmm, see if you can work “follow senor” in there somehow as well. I guess that would be Juan McCain?

 
 
Comment by Sammy Schadenfreude
2008-10-24 16:40:50

“It’s been 42 months since Deborah moved into the home, and she has not paid a single penny for her mortgage. She says her situation is fair. ‘I made my choice fully knowing what I was doing and knowing it was a gamble,’ Deborah says.

While Deborah and the millions of others of her ilk are contemptible human waste, the real point here is that she illustrates the reality of the kind of collapse of morality, decency, and responsibility in society at large. Lenders will finally be forced to recognize this and respond accordingly, despite the craven attempts of politicians like John McCain and Barak Obama to pander to the “homebuyers were innocent victims of Wall Street” or “subprime mortgages were the problem” Republicrat party line. And that means, no more credit will be forthcoming to potential deadbeats, which make up a disturbingly large segment of the American public. Less competition for me next Spring - I like it.

Comment by Vermontergal
2008-10-24 19:15:29

Does anyone else read the word “ilk” as “elk”?

Why do I only read the word “ilk” here on the HBB?

Comment by diogenes (Tampa,Fl)
2008-10-24 19:18:59

Because we think elk are some kind of moose or caribou.

 
Comment by Cassandra
2008-10-25 07:48:25

“Elk”, it’s what’s for dinner.

 
 
 
Comment by JH
2008-10-24 17:09:41

in regards to forclosure bus store - it brings to mind the discussions on this forum (and predecessor) around 2005 at the height of the mania about (idiotic) “investor investor bus tours” -one for example leaving NYC for all the supposed bargains in inner city Baltimore.

 
Name (required)
E-mail (required - never shown publicly)
URI
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post