Great News: Prices Have Fallen In California!
The LA Times reports from California. “The median sales price for homes in the region fell to $300,000 in October, a level not seen since 2003 and a 41% drop from the peak price set in the spring and summer of 2007, according to MDA DataQuick. Los Angeles County’s median home sales price was $355,000, down 29% from a year ago. Just a year ago, several market analysts interviewed by The Times predicted that Southern California home prices would drop 15% to 25% from their peak.”
“It took only until July for the median price to fall 25% below its 2007 peak of $505,000, and it has kept falling since. Those earlier forecasts proved off because ‘it was hard for people to get their arms around just how bad lending standards had gotten,’ said Thomas Davidoff, a UC Berkeley economist.”
“In October 2007, 16% of the homes sold in Southern California had been foreclosed, compared with 51% last month. The ripple effect from that put even more homeowners underwater — owing more on their homes than they were worth — and led to more foreclosures.”
“Now, ‘we’re probably seeing an over-correction’ in the most depressed inland areas, Davidoff said. In communities overrun by foreclosures, ‘you couldn’t build a house for less than what [existing homes] are selling for,’ he said.”
The Union Tribune. “San Diego’s prices have come down so much – off 37.5 percent from the peak in November 2005 – that the area ranks as only the 31st least affordable out of 222 markets surveyed. That’s the best showing since the builders began tracking affordability in 1991. Just four years ago, San Diego ranked as the least-affordable market nationally. MDA DataQuick reported yesterday that…prices dipped to a median $323,500, a number not seen in six years. Foreclosures made up nearly half of all resales, their highest proportion so far.”
“The National Association of Home Builders’ Housing Opportunity Index is based on how many homes of all types sold that are affordable to households earning the median income and at prevailing interest rates for both fixed-rate and adjustable-rate mortgages. While nearly 39 percent of San Diego homes sold were affordable in the third quarter, the New York City area was deemed the least affordable with only 10.6 percent of homes sold at a median $500,000 and within reach of the median-income household earning $63,000.”
“Four of the least-affordable markets were in California: San Luis Obispo, 13.4 percent; San Francisco, 16.6 percent; Los Angeles, 20.7 percent; and Napa, 23.2 percent.”
The Press Enterprise. “The median home price in Riverside County fell to $230,000 in October, a drop of $7,500 from September and a decline of 35.4 percent in the past 12 months. In San Bernardino County, the median price declined to $200,000 from $205,000 the previous month, but fell 39.4 percent from October 2007.”
“DataQuick analyst Andrew LePage said about 68 percent of Riverside County sales and 65 percent of San Bernardino County sales in October were foreclosure-related. Both counties were well above the 51 percent figure for Southern California as a whole.”
“Steve Johnson, a director in the Riverside office of MetroStudy, said bargain hunters and investors are currently drawn primarily to resale homes in older neighborhoods, sometimes being sold in the foreclosure process at up to 50 percent off their original list prices.”
“San Bernardino County plans to use $22.8 million in federal funds to help the local housing market get through the foreclosure crisis. About 42,000 homes in the county are now in foreclosure, said Mitch Slagerman, director of community development and housing for the county.”
The Ventura County Star. “Ventura County’s median sales price was $375,000, down 2.6 percent from $385,000 in September, but off 29.9 percent from $535,000 a year ago. Kay Wilson-Bolton, broker in Santa Paula…estimated that about 60 percent of the housing inventory countywide involves short sales or bank repossessions. ‘Those are the homes being offered at the most affordable prices,’ she said. ‘Now we’ve got mortgage payments bumping up against rent payments.’”
“People want homes and they can’t pass up a bargain, said Dennis Torres, executive director of real estate operations at Pepperdine University’s Graziadio School of Business and Management. ‘Yes, more and more people are being laid off, and those people can’t afford to buy a house,’ Torres said. ‘But the majority of people are working.’”
The Modesto Bee. “Great news: Home prices have fallen! At least that’s great news for people buying homes. New statistics show home affordability has soared in the Northern San Joaquin Valley. ‘About 90 percent of the loans we do in our office are for first-time home buyers,’ said Kim Arivett, owner of Residential Pacific Mortgage and president of the Mortgage Lenders Association of Stanislaus County.”
“‘The buyers are just absolutely thrilled to get their house keys,’ Arivett said. ‘It’s heartwarming for our staff because we know they really can afford these homes.’”
“But many workers in the region have lost jobs this year, and unemployment is rising. ‘Income numbers often lag,’ cautioned Dr. Stephen Endsley, a Modesto real estate investor. ‘It may look like we have housing affordability, but do we really consider unemployment? First-time buyers have to have confidence before they go out and buy, but many of them have questions about (the stability of) their employment.’”
“Endsley said nearly 11 percent of Stanislaus’ workers are officially out of work, and he estimated an additional 4 percent are underemployed and another 4 percent have become discouraged and dropped out of the job market. But home prices have fallen so low, Endsley said, that ’speculative investors have come heavily back into the market.’”
The Press Democrat. “Falling home prices stoked Sonoma County’s hot housing market. Two out of three of the 512 homes sold in October were either bank-owned houses or properties unloaded by sellers who could no longer afford their mortgages. The drop in home values has sent the median price tumbling 42 percent from its record high in 2005, according to The Press Democrat monthly real estate report.”
“Agent Deke DeKay has a Healdsburg listing for $370,000 that is $205,000 below the price the owner paid two years ago. The owner must sell because monthly payments on his adjustable-rate loan are set to go higher and he will take less than he owes to avoid foreclosure. ‘Some of the buyer expectations are kind of unreasonable. People are just thinking the sellers will sell for anything,’ DeKay said. ‘This is severe.’”
The Sacramento Bee. “Gasoline prices have fallen $1 in a month and more than $2 since the all-time high in June. But motorists aren’t dancing. The effect of cheaper gas is being overwhelmed by the housing crash and the financial crisis. So-called ‘equity extractions’ in California – the dollars generated by home equity loans, refinancing or outright sales – have fallen by $41 billion this year, according to MDA DataQuick.”
“Not surprisingly, Californians aren’t suddenly reopening their wallets. ‘We’re doing the same things that we did when gas was almost $5,’ said Marty Walter of Orangevale during a stop at a Union 76 station in Roseville on Monday. ‘We’re getting into the pattern of saving – let’s not do anything unless we have to.’”
The San Francisco Chronicle. “Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties. Records show that Wu and his wife went on a property-buying spree starting in 2004. From June to October 2005, they bought two rental homes and five vacant lots for $526,000 in Hot Springs Village.”
“The couple also bought at least five homes and six lots in Washington north of Portland, in the communities of Anderson Island, Vancouver and Ocean Shores. In California, they bought a modest home in Elk Grove and a bare lot near Lake Shastina in Siskiyou County.”
The Pine Tree. “Governor Arnold Schwarzenegger today launched Global Entrepreneurship Week at the first-ever Governor’s Conference on Small Business & Entrepreneurship. ‘The important thing also is that’s why we have a special session now where we deal with the unemployment rate, where we want to stimulate the economy. And where we also want to make sure that we keep people in their homes, because there are too many people that go through foreclosure. And I think that it is terrible to see the mistakes that were made by the lenders and also by the borrowers but that doesn’t help us to look back now at where the mistakes were made. The key thing now is to keep our people in their homes, which will also help our economy.’”
“‘I talked yesterday again to some builders and they are in a disastrous situation because a lot of homes are half-finished, people are not interested in buying it — even though those numbers are coming back right now of more and more people buying homes again because the prices are so low. But we really need to go and do everything we can to keep the people in their homes right now, so I hope that we solve this problem also in our special session.’”
“A proposed four-month foreclosure moratorium that would crank up the heat on lenders to rewrite more of California’s troubled mortgages downshifted to the slow lane Monday. Assemblyman Ted Lieu, D-Torrance, agreed to delay a committee vote on his plan to speed up the pace of loan modifications. Last week, he said he expected the committee and full Assembly to vote on it this week.”
“California Department of Corporations Commissioner Preston DuFauchard said the Schwarzenegger administration deliberately limited its moratorium proposal to 90 days. ‘We felt that over 100 days you’re probably sending a message that it’s OK to stop paying your mortgage, and we want to discourage that,’ he said.”
Dow Jones Newswire. “Historical evidence suggests that even when lenders modify mortgage terms for at-risk borrowers - cutting interest rates, principal or extending the loan’s life - a hefty portion of those borrowers default within a year or two anyway. Besides, in many cases with subprime loans, so many borrowers had so markedly inflated their income status, that even a vastly modified loan still won’t make it affordable for their true earnings.”
“According a 2007 Fitch Ratings report, 35% to 40% of borrowers default on their modified loans within 12-24 months. Research from Moody’s Investors Service and other firms have found similar, albeit bleaker, statistics.”
“Dr. Joseph Mason, a banking professor at Louisiana State University’s business school, cites research suggesting that borrowers substantially inflated their incomes in about 70% of loans. ‘If modifications are given to borrowers that are not well suited for homeownership in the long term,’ Mason writes in his report, ‘the loan modification only serves to delay the inevitable.’”
The Voice of San Diego. “San Diego plans to spend $9.4 million to help homebuyers purchase foreclosed homes, and buy foreclosed homes itself to rent out to low-income families, as part of a federal grant program intended to stabilize neighborhoods ravaged by foreclosure.”
“Those potential 122 houses that would be purchased with the help of grants represent about 2 percent of the 6,111 homes in the county that went through the entire foreclosure process between July 2007 and September 2008, according to the agency’s report.”
“Lynn Hastings, a local real estate broker who sits on the task force, said it seemed unlikely that a buyer’s offer would be accepted contingent on the money coming in from the government. She said the winning offers in neighborhoods where low-priced foreclosures are getting competitive are from buyers paying all cash or making a large down payment.”
“‘I’m not sure how the program matches the marketplace,’ she said.”
The Legal Newsline. “San Diego City Attorney Mike Aguirre will look for new ways to protect homeowners facing foreclosure despite losing a bitter re-election campaign on Nov. 4, he told Legal Newsline. Aguirre thought a populist campaign that reached out to minorities, the working class and faithful Democratic voters would be enough to win. He admitted being surprised by his defeat despite the obvious opposition.”
“‘I was not anticipating getting the s— kicked out of me in the election,’ Aguirre said. ‘I got it from every angle: North, South, East and West. I united people who never worked together before. Unfortunately, I united them against me.’”
“Despite the political setback, Aguirre said the enormity of the housing crisis and the problems within it will continue to motivate him as he returns to private practice. ‘People have no idea of the massiveness of the subprime problem,’ Aguirre said. ‘It became literally the financial highway that everyone rode on to create trillions of dollars.’”
The Santa Cruz Sentinel. “A new Web site created by the State Bar Association to help people facing foreclosure sounded promising. But after seeing what’s available for local residents, I was disappointed. There’s plenty of free information, but good luck finding free legal advice unless you’re over 60 or your family of four makes under $26,500. Which raises the question: How can a household income of $26,500 be enough to buy a home in Santa Cruz County?”
“It’s not as if Santa Cruz County has escaped the wave of foreclosure activity. So far this year, 1,557 default notices have been issued and 780 homes sold at foreclosure sales — double the numbers from a year ago.”
“About a dozen people showed up for a free workshop Friday. One woman related that she and her husband had been unable to pay their mortgage since he lost his construction job. Another man was looking for information relating to foreclosure on a mobile home.”
“An 84-year-old Aptos man was frustrated. ‘Unless I’m in default, no one will talk to me,’ he said. ‘It’s easier for me to buy another house than to stop a foreclosure.’”
Everybody was kung-fu loaning…
“Jing Hua Wu, the engineer who police say fatally shot three executives at a Santa Clara startup company last week just hours after being fired, spent the last few years amassing a large portfolio of investment properties.
Snatch blade of foreclosure from hand, grasshopper.
Has anyone read the current issue of Money? (I only do because I get it free). Anyway as usual it’s full of the don’t panic, don’t sell, keep buying stocks&RE BS. Anyone there a timeless quote by a laid off “public relations manager from a major department store”. She was lamenting how she can’t get a job after 6 months, previously earning $120,000. She says she been flexible and will “even accept a slight pay cut”. ROTFLMAO I told my wife they probably eliminated her position as useless or replaced her with a minimum wage worker. She probably will never earn of $50,000 again in her lifetime. The arrogance and entitlement to say she will consider a ’slight’ pay cut is sickening. I know people happy to get a job earning 40-60% less.
I used to work in a PR shop. And I learned (not the hard way, thank goodness) that a PR job is like layoff bait for management. The minute things turn south for a company, whack! The axe comes down on the PR jobs.
So, Yours Truly saw the writing on the wall and got out of the PR field.
Just a few miles from me….
Sad to hear. More innocent victims of specuvestors. If you’ll recall we went through similar tragedies after the dot.com implosion. The one fellow that barged into the “QuickTrade” in Atlanta had actually killed his wife for an insurance claim… that, as it turns out provided the money to fund his daytrading account.
Sick world folks.
Always has been, probably always will be.
At least they’re more civil about these things in the UK.
http://news.sky.com/skynews/Home/UK-…o_Repossession
‘..that, as it turns out provided the money to fund his daytrading account.’
So, how’d he do with the daytrading?
You left out the most important part, man.
No, he mentioned the bisque
We checked our life insurance policies after that happended.
it looks like mortgage rates are starting to drop. fed will create a massive refi-boom - starting with rates in the 3-4%, then they will drop them 2-3% and so on and so on - last ammo left to fight this mess.
Yeah right, all of the people whose credit is stellar and who owe less than the value of their house, and have high interest loans will be wanting to a refinance. All of those people will be boom all right.
Just like in Japan.
Besides, I’d rather buy cheap assets w/ expensive money than vice-versa. ( You can always re-fi later )
( You can always re-fi later )
Wasn’t that the sales pitch used by many a mortgage broker as they were baiting and switching, errr, providing valuable expert financial advice to the FB’s?
Mr. Drysdale,
True, but they were using it as sales gimmick to get people to buy ‘into’ momentum ( not -waiting- for a bottom )
In short I guess I’d rather buy a house/warehouse/aircraft hangar for 300k at 9% than a 900k property at 3%. You can always re-negotiate the int. rate ( you can’t ‘typically’ re-negotiate the PRICE )
was what I meant to say.
Plus your taxes will be lower on the 300k property.
Just put on my tin foil hat. Reading the post by KR read like a troll. Am I being too suspicious?
Yes. I think you are being too suspicious.
The 10-year drooped to 3.39% today. The rates are dropping. This is all out deflation right now. Lenders will try to get paid at 4% or less rather than being stiffed. It’s coming.
Anybody else notice that the fear at their workplace is off the charts? You can just sense it here in Fantasyland.
I didn’t see any troll in KR’s post either. Just a hint at how desperate the PTB is to keep people buying houses on some terms or other.
I thought KR looked like a troll.
Dude, put down the pipe and your sisters panties. There ain’t gonna be any re-fi boom. The Fed doesn’t control mortgage rates. You should know that by now. We may see the banks give a little here in the near term, but once the buzz of govt stimulus wears off and the loses continue to mount, lenders margins will increase once again to offset the deficiency their loses create. Why do you think a lot of credit cards have gone up. That’s right, the responsible get to make up for the irresponsible.
But, even if rates did drop back to historic lows, who’s going to participate? You remember that little thing called minimum LTV. MUST HAVE EQUITY TO PLAY! Also that little thing called minimum DTI requirements. MUST HAVE JOB AND VERIFIABLE INCOME TO PLAY! Oh, and one other thing, since FICO requirements have now gone through the roof. Since most of the world is in default in one form or another, guess what that means?…..
NO SOUP FOR YOU!!!
loses = losses…..sentence structure wavered at the end there, but you get the picture
afternoon coffee buzz
See? “We’re ALL Herbie Stempls!”
your not paying attention. treasury is going to take fannie and freddie over in full and start buying mortgage bonds and artificially push rates very low and probably throw a lot of qualifying out the window. This is all they have left, think with head not heart…
With what money?!! Are you like so many that feel there is no end-game to the economic and monetary policies we’ve been engaged in? If we go any further down the bailout this and nationalize that road, buying and selling homes becomes a moot point. Personally, I already think it’s too late.
KR,
Take them over with… what!?
Even if they fabricate yet another TAF/TSLF/TARP “payday loan” device, how is that not ultimately dumping it back in the taxpayers lap?
don’t know how they are going to do it, but they will. this is not to stop home values from falling, it’s more to try and help sell inventory and to lower peoples monthly nut (refis) so they will consume more and maybe even cash out to go and consume. This is a last ditch effort. I don’t agree with it, it’s just where it is headed.
That’s what I just posted, but no show yet. Apparently some still believe the economic and monetary policies we’ve engaged in for the last several decades can carry on in perpetuity. Rude awakenings await!
“don’t know how they are going to do it, but they will.”
You don’t know how they will do it because they are just as clueless as you are. The PTB have been humping the football at full speed for over a year now. Are we any closer to home price stabilization? Ha! We’ve been enduring the hand-wringers on this blog for over 2 years on how govt will intervene and keep home prices from falling. Ummm, hasn’t happened yet…..still waiting! My thinking is when we’ve finally reverted to mean or a little below, the govt will announce “They’ve Done It! - Home Price Stabilization!!” …..and then we’ll drop a little more.
“don’t know how they are going to do it, but they will.”
Okay, once again, my posts are vanishing, so this will probably be redundant. The reason you don’t know how they’ll do it is they are just as clueless as you are. The PTB have been humping the football full speed for over a year now. Have they prevented anything? HA! There have been hand-wringers on this blog for over two years sweatin’ out the possibility of govt intervention preventing house value decline. A lot of good that worrying did them. 30% - 40%+ declines later and your still worried. Tell me then - what makes you think they’re finally gonna get it right?
you aren’t getting it! This isn’t to stop price declines in housing. It will be to fuel consumption. Why should this shock you? You know damn well they will do whatever they can to TRY and stop the end game and I am not saying that it will work. It’s already being talked about that the fed may have to take the unconventional approach and start buying treasuries and mortgage backed securities. How it will play out, I don’t know, how will they pay, I don’t know.
“unconventional approach”
The only one I see having potential to work is a good oldfashioned fund raiser. Sell tickets at a $1000 for a shot at reaming Dodd and Frank with a hot curling iron, followed by…yep, you guessed it, a hand tuned JT! That might work.
Ole Barney Frank is a repulsive dude - can’t stand to watch or listen to him.
No, they shelved the “buying mortgage bonds” idea, remember? Besides, even if they manage to prevent foreclosures, the cannot force banks to give new non-repayable loans, and they cannot force people to borrow more than they can reasonably hope to pay back. They also can’t convince people to buy real estate now. Not anymore.
they shelved buying bad mortgages from banks and investment companies. I’m talking about the fed buying fannie and freddie bonds directly which actually control mortgage rates. This is what they are considering. This is not (for the last time) to stop hosusing prices from falling. It is for the main purpose of allowing as many people as possible to refi to very low fixed rates to save extra money so that they can consumeeeeeeeeeee.
Troll.
Just kidding. I don’t think most people realize how nervous lenders are getting. Even responsible borrowers are going to be given better rates, just to prevent any thought of them walking away. The blood in the lending industry is getting deeper and deeper. The pump is failing and they are up to their shoulders in the red stuff.
I needed a new name… The only thing I have heard is if they do decide to do something on a grand scale like lowering rates is, I’m not sure it will be a typical refi boom, meaning that it may be set up for the good and bad borrowers to get the rates reduced directly from their current lender. I don’t think it would be a Loan Officer’s wet dream. It’s all just talk right now.
Don’t walk away Renee…
“There ain’t gonna be any re-fi boom. The Fed doesn’t control mortgage rates.”
Bingo! Mortgage rates are tied to long-term interest rates, and the l-t T-bond yields are awfully close to 4 pct, given that the short end of the curve is near 0 pct. How often in the history of interest rates have you seen a persistent 4 pct spread between the two ends of the yield curve? Not very often, I think…
“it looks like mortgage rates are starting to drop. fed will create a massive refi-boom - starting with rates in the 3-4%, then they will drop them 2-3% and so on and so on - last ammo left to fight this mess.”
There was a rumor mentioned on CNBC today that the FED was buying T-bills, to get the 30-year rates down, in an attempt to lower mortgage rates.
If only house prices dropped as fast as stock prices have…
Kim, you are pointing out that stocks may become attractive to buy before houses become attractive to buy. Not yet, IMO, but perhaps sooner than houses.
From my vantage point I’m just not seeing it. I’ve been back visiting sis-in-law in the Hollywood Hills and her house is still holding its nose-bleed valuations pretty good, and what homes come onto the market near her small, humble $900K abode are selling at/close t o asking. I’m not trying to pie-in-the-sky anyone, but prices need to come down a lot more. The homes in my old neighborhoods of Los Feliz and Calabasas are holding their values too. I’m all for “the sky is falling”, but for some homeowners it’s not. Stockton? Yeah, sucks. That’s not, as the old credit card tag line used to say, “were you want to be”.
same story for a few zips in md just outside of dc (suburban MD) - some price drops, but not like everywhere else in the area
Yeah, it’s only the biggest real estate crash in the history of man. Nothing happening at all!
it’s not happening as fast as I would like. I need a shack and have been waiting, but certain zips won’t come off. I wish they would, but so far very little.
Hey, if it takes a Greater Depression to get you into a house - then what the heck - why not?
Just be prepared, because this event will fundamentally change the equation of houseownership in this country. The middle class stability of 1950-2000 is gone…and the neighborhoods/suburbs it produced are in jepoardy.
That’s not to say there won’t be opportunities, it’s just that they won’t be so obvious/easy as simply buying houses, sitting on them, and selling them to others.
The higher-end areas are always the last to fall.
The owners are higher up the food chain as far as when layoffs occur, or they are business owners themselves - so it will take a little longer for the sliding economy to affect them.
These areas also usually have gone up as people have taken their equity gains from the mid-range areas and used them as downpayments with EZ financing to bid up the prices in the higher-end areas to ridiculous levels. It will take a while to burn through all of that equity to the point that homeowners in the high-end areas throw in the towel.
Also, in my opinion, the length of ownership in the high-end areas is longer than the low- and mid-range areas - once someone gets into the high-end areas, they tend to stay for a while, so you probably have a significant percentage that purchased well before all of this nonsense started (pre-2000) and that leads to homeowners “riding it out” since they are still have equity approaching 50% given the price run-up in the last 8 years. This results in pretty low inventory in these areas and not enough desperate sellers - unlike the areas with tons of foreclosures and new construction.
The point is that you have to be patient - there is a reason the “good” areas are desirable - and people have historically “stretched” their finances to live there. The subprime loans have worked their way through the system for the most part, but there are enough people in the “good” areas that used stupid financing or HELOC’d excessively and 2009 and 2010 will be their day of reckoning.
It may be big, but it’s taking it’s time where I live.
Time scale is everything. The NASDAQ crash took 2 years to complete and all those transactions happen in real time and are settled in 3 days.
Each house transaction takes at least a week to negotiate and at least a month to settle. It’s important to expand time scales accordingly when waiting for prices to correct.
VT was behind the curve in the boom and I fully expect everyone to sit on their inflated prices for another season or so. The spring maybe a crash for N.E. or it might not hit until spring 2010.
What’s really amazing is how fast some areas of the country have dropped already, especially in CA. The % drops are astounding given how long it takes to buy and sell houses.
In San Diego prices have come down, what, 37% in a year? Yet you won’t hardly find a single person willing to admit that their place is worth any less than in 2006. Amazing.
It’s the attitude that short sales and foreclosures have no effect on values in the hood. Anyone that bought before 2000 will be excluded from all comps
14% off peak in San Francisco, which is a drop in the bucket, as far as I am concerned.
I’m giving it 2 more years, and then if my “middle class income” ($110K year between the two of us) can’t buy a house with a reasonable mortgage, it might be time to say bye to my fair City by The Bay.
sfrenter,
3 x $110K family income, which is the normal conservative benchmark, = $330K.
September Dataquick median for San Francisco county was $675K (October numbers are due out within a few hours). This is 19% down from the May 2007 peak of $835K, so I guess your 14% is from a different metric. No matter.
As other posters have pointed out, the highest-end areas tend to fall last. And yes, they usually fall rather less.
I don’t want to rain on your parade, but if prices reach the point where you can buy a good house in San Francisco with a historically reasonable mortgage, people really will be calling it a Depression rather than a Recession.
I don’t want to rain on your parade, but if prices reach the point where you can buy a good house in San Francisco with a historically reasonable mortgage, people really will be calling it a Depression rather than a Recession.
I suppose if the market correcting itself following the largest debt orgy in history can be routinely called a “financial crisis”, then equating affordable housing to a “Depression” isn’t that much of a stretch.
HARM,
I hear what you’re saying, but there’s a big difference between affordable housing in the San Fransisco area and affordable housing in San Fransisco itself.
According to DataQuick, the median house price in San Francisco didn’t exceed $300k until mid-1997. Assuming 3% annual inflation, that is equivalent to about $400k in today’s dollars. Absent the dot-com and housing bubbles, prices should normalize to about that level. They’ll probably overshoot on the way down, so the above-cited $330k is hardly out of the question. But even if they don’t overshoot on the way down, $400k is within reach with a $110k income, provided the buyer has a 20% downpayment.
I posted this earlier in the week. Its still very early. They are still advertising low downpayment bridge loans and other such stuff every weekend.
There are still plenty of knife catchers. Also the stronger hands tend to fold last. Lots of those people will keep holding on until all the buyers are gone.
Apparently in the last bubble, westside LA was still high for a couple years after the rest of the crash had occurred. Two years or not until 1994; where the rest of LA went under in 1992.
Sit back watch, wait and listen. Real estate is going to be so completely crushed you will not be able to talk your spouse into buying it.
We have to keep an eye on population statistics and other inflows. This has the capacity for a triple “bottom”. The credit crisis might end in 2010-2011 but the demographics will drag on this even more. The only hope is that stupid fence and hopefully some landmines, keeps all the mexicans from leaving.
When I say triple bottom I mean two plateaus before we reach the ultimate bottom. First plateau will be when the majority of the ARM products are down and cascaded damage clears. Should be a year after the resets. Then the demographics will have shifted and more of the baby boomers will require less extensive housing. Think nursing homes or wooden boxes. That retirement wave will also kink the stock market.
Enjoy. Some wildcards in there like BHO but figure that cooler heads will prevail. Even as the democrats announced their majority; more conservative blue dog democrats made gestures that spending might need to be contained.
Good luck all.
I love when I go way out on a limb and am completely wrong. Could go faster, could go slower.
There a vast miasma of misinformation in many locales, where it’s ‘different there’.
The low end is San Diego is getting hammered. Prices in my old neighborhood are back to 02. Most of your sales are also in the low end.
Where I live now Serra Mesa, 92123 I’m seeing it creep back up. Houses were going for $350k to $400k and a few as low as $299k. Now they are $400k to $428k. This is just an average neighborhood. Okay, it does have a nice central location but it doesn’t have great schools or residents with a lot of money. It’s a bit discouraging. I know it has to come down but damn I’m tired of waiting.
Realtors and others LIE to you. Get used to it.
‘Comment by Rintoul
2008-11-19 15:12:36
Realtors and others LIE to you. Get used to it.’
I always read your name as ‘Ritual’, and immediately I think about daggers and censers. How about you change your posting name to, ummm….lessee…’Sad Sandwich!’ How’s that? ‘Sad Sandwich’ is a nice, good, simple posting name.
there is nothing in Serra Mesa worth 400k, I would rather move out of state then put down that much money on one of those 1950’s tear down’s with over head power lines that pale in comparison to the high voltage lines above those, a true urban wasteland. Don’t waste your money.
Sigh, are all people in the North County so snooty? I like Serra Mesa. I’ll agree it’s not a $400k neighborhood but come on, an urban wasteland?
But…But…but Ben, it’s Different There!
Same deal in my East Bay hood. Prices have come down from their peaks. What was around 600-650k is now 500-550k. But still… That’s way too much for a small home. Whats irritating is that nothing is moving, yet the prices stay the same. No real price drops per say.
My plan is still the same: Save up my phony California money, and move to TX,NC,AL,GA,TN… or some other less than crazy place along with the other 25-35 year olds.
Whats irritating is that nothing is moving, yet the prices stay the same. No real price drops per say.
Because many Easy Bay residents have not yet hit the point of capitulation (2, 3, 5 & 7-year ARM resets, followed by the inevitable NODs and foreclosures). Remember the Credit-Suisse and BofA reset charts? Nothing’s changed since then –there’s still a massive tsunami of option-ARM/neg-am coming from now through 2013.
I know it’s frustrating (I’m 40 and in the same boat), but this is how housing bubbles work. The foreclosures will be slow and steady for years –because not everyone’s jumbo option-ARM resets at the same time.
Rent cheap, travel, carefully invest, and enjoy not having to be shackled to an underwater mortgage, property taxes, maintenance, etc. Your time will come, just not as soon as you would like it to.
And for the record, “owning” a house (or BEING owned by one) ain’t “all that”. Truly.
That’s kind of a no-brainer.There are always people out there who will pay a hefty premium just to live in some trendy, “upscale” neighborhood. Even if the house is a little crapbox, it’s worth it for bragging rights alone if the city is trendy enough. Never underestimate the willingness of certain people to heap tons of money onto their sagging self-esteem in hopes of generating envy among peers.
Hollywood Hills, Los Feliz, and Calabasas are three such places. Wealthy enclaves are the market of the super-rich, and obviously not effected as quickly or severely by a general downturn.
You are talking Southern California here…the place where people drive $80k cars home to their ghetto 1br rental apartments. Image and zip code is everything.
LOL so true. I can’t tell you how many of the cars in my garage are BMWs, Range Rovers, Mercedes, etc - and I live in an apartment building in West Hollywood that is 100% studios.
I finally convinced myself that Silly Valley prices and mores were screwed up when I began to see Ferraris parked in open carports in apartment complexes.
“That’s kind of a no-brainer.There are always people out there who will pay a hefty premium just to live in some trendy, “upscale” neighborhood. Even if the house is a little crapbox, it’s worth it for bragging rights alone if the city is trendy enough”
Belive it or not Hollywoods hills, at least that part right above old hollywood or directly above Hollywood hole, i mean bowl, is rather crumbly and ragged. Astonishing! These homes were built right after the turn of last century and like silverlake the entire hood is rather ancient and decrept, but trendy because they are close to all the LA hot spots. The narrow winding roads are rediculusly small, almost like alleys as they climb steeply up the hillside..
It is a 100 yr old hillside community and no doubt the owners are clinging onto their hilltop abodes, and subletting out rooms and spaces to their siblings/tenants. They can thus ride out the Re bust as no doubt they have over a half a century, thus maintaining the illusion of ‘holding value’, even as the flatlands below are in RE/economic hell.
Ditto for laural canyon- the owners simply hang on to their decaying crumbly estates rather than sell in a down market, as they have a host of spoiled hollywood brat siblings to share the costs, and rent out rooms/shacks to assorted entertainment marginal workers.
Ria,
I follow the Hollywood Hills, Los Feliz and Glendale. Currently there are over 200 condos and over 350 homes for sale in Glendale. Condos are now starting in the high $100,000s and homes are starting in the mid $200,000s. This would have been unheard of just 2 years ago.
For those of you who don’t know Los Angeles, Glendale is on the other side of the hill from the Hollywood Hills and right next to Los Feliz.
I’ve watched the lower prices creep in from the exurbs to the suburbs and now to the foot of the high falootin’ Hills. It might be taking it’s time, but prices will come down.
Besides, I’m hearing that financing for movies is getting really difficult to obtain…
I see the same in my zip, 90039, which includes Silverlake, Atwater and part of Glendale. Redfin shows a drop in per square foot sale price from about $550 to $400. Interestingly, asking prices haven’t dipped as much.
http://www.redfin.com/zipcode/90039
My God man I would not live anywhere there if my freaking house was free. I don’t know how so many millions can do it. Don’t you wonder as you get stuck in traffic under an overpass that the next shaker might just make you the size of a pancake?
Que Sera, Sera …
Bought a condo on an attractive street in Glendale for $95,000 in 1994. Sold it in 96 for $104K because I had other plans and don’t like being LL. The buyer gave me a very big IOU which he paid off after about five years. IIRC he was then telling me the apartment was “worth” $300K or more. Perhaps I’ll go back there and offer him $95K some time soon. Just kidding. I have no regrets. It’s nice to know, though, that they’ll be affordable soon.
“It might be taking it’s time, but prices will come down.”
Those folks who have had their homes for more than 10 years and that would be majority in glendale, Los feliz, HH’s and other attractive older stable parts of LA, will not sell . If they were careful about extracting equity and still have some left to cushion a RE downturn, then they will hold on without selling. These areas are not high- turnover communities nor seen rampant new developments, except maybe dwtn Glendale which went ape-sh*t over condos. These homeowners, many of them seniors, will use all available means such as Cc’s, withdrawls of savings and 401 before selling at a loss or less that what they think their homes are worth.
That why the better more richer parts of LA fall slowly but fall they will, and the upcoming deprssion will accelerate this trend.
These homeowners, many of them seniors, will use all available means such as Cc’s, withdrawls of savings and 401 before selling at a loss or less that what they think their homes are worth.
And when they are finally evicted by the sheriff, they will be peniless in addition to being stubborn, delusional and stupid. At that point, it’s either homelessness or the Golden Joshua Tree Retirement Home, Ben Jones, proprietor.
Really, have you seen any data showing trends in the neighborhood? Are your sister’s neighbors asking less than they used to? Cause I’ve been hearing on the news that the rich folk are starting to feel it. Turns out they’re not really touched by God after all.
“From my vantage point I’m just not seeing it.”
The vantage point from thr hollywood hills is extemely myopic.
HH’s is that small cluster of ancient estate homes climbing up ether side of the Cahuenga pass right above the hollywood bowl. Losts of those folks subdivide and rent out portions of their units to up & coming or struggling actors/actresses. Others turn their homes into hollywood home=based businesses/ work studios or let out their homes to folks in the hollywood production business. If U can rent out a portion of your home U can hold on to that property forever without selling it-thus maintaining the mirage/ facade of ‘holding value”.
HH is not representative of the LA County RE market as it is .0001 % of the entire stock of homes. Ditto for Calabasas-which is a weathy semi-rural community spread out in the far west san fer valley, and is mostly exclusive horse ranch estates of the hollywood elite.
The homes of the LA rich and famous in the westside , HH, and the few beach enclaves are no more that 5% of the total LA county RE stock and land area. There are 30 fancy westside LA zips and 2/3s of then saw significant declines in Re Values in Oct 2008.
I stll maintain the the LA fancy WS Zips will see catastrophic declines in 2009. I am talking 30-40% -book it.
“HH’s is that small cluster of ancient estate homes climbing up ether side of the Cahuenga pass right above the hollywood bowl.”
That refers to the older more decrepit eastside HH’s -that side east of Cahuenga Pass or hollywood 101 fwy.
The west side of Cahuenga pass is more lush & upscale, and better kept overall than the eastide. Better more substantial lush estates & hillside homes including several owned by such famous hollywood producers and diirectors such as Renny Harlan & Quentin Tarantino.
Hollywood hills is a confused terminology which most folks think refers to all homes in the hills above LA westside. There are actually 10 + distinct hoods in the hills above LA westside and HH is just one of them. The most well- known of the Hilltop hoods are beverly Glen, Bel aire, brentwood, Pacific palisades, as well as HH’s.
To the still few left who still belive that the good parts of LA won’t fall hard!!
Here is one city which many thought was immune from any RE bubble declines. Here in LA is one city which is thought of as the most civilized font of culture and visually attractive in all LA. Who would have thought Pasadena would crash!! This is Sept dat quick . You think Oct charts will be at better. Think again !!
Pasadena 91103 15 $353 -70.6%
Pasadena 91104 19 $498 -27.3% 1
Pasadena 91105 9 $990 -30.7%
Pasadena 91106 6 $800 -71.8%
Pasadena 91107 30 $699 -13.0%
I have some dept of knowlege regarding the calamitous declines in zips 91103 and 91105. Too much speculative new mega-mansions being put up in those hills which are west of and above the Pasadena Rose Bowl. I am talking about entire hillsides simply being gouged out to plunk down some whimisical dreams of would be hilltop mega-mansion developers, which resulted in a scarred & demolished hillside. Lots of that crap went on all over Scal during RE bubble 2004-2007.
Here in greater Phoenix the wealthier zips are holding their value much better than the mean. But that is changing. In Scottsdale lender-owned sales now make up 28% of the market (a huge jump in just a few months).
But what will meaningfully hurry along the higher end’s decline is our recent equity debacle. This effects the wealthy disproportionately. A tremendous number of people have much less wealth (25 - 30%) than they did just two months ago. (And a 40-50% decline since the start of the year.)
..where you want to be.
Did Jing Wu go postal because of failed RE investments in addition to being fired?
I’m sure the post office people don’t even get that postal
I think Jing Wu went postal because of his failure in his and others interpretation of the “American Dream”. That is, to make as much money as possible with leverage by attempting to corner the market on the basic need of shelter. When he failed, it was everyone else’s fault, and they had to pay with their lives.
Idiot.
He went postal because he had just got fired from his job — then he truly had no income to pay off all his debts.
Same here - lots of homes on the market for sale or lease…more and more each day - but no price real drops. When something declines just a little its snatched up. You can’t buy a shitty 2 bed one bath in laguna beach for under 800k. dropping my ass. maybe in the desert…I mean who wants to live there? oh you do? great I have a 150k 3500 sq ft granite shithole to sell you…but watch out the schools lost their funding and there are no jobs. good luck!
DOW under 8,000, today.
When the price drops in those previously resistant areas, it will be vertical, and merciless.
Yes they will - “Slack Action” is term.
Picture a massive freight train. The weakest house markets are the locomotives at the front, the strongest house markets are at the end - the caboose.
The engines have already been moving for quite some time and building lots of momentum, but meanwhile the caboose is still standing pat….until BAM! the slack runs out and it suddenly leaps ahead.
Keep on renting dear friends, keep on renting!!
“The couple also bought at least five homes and six lots in Washington north of Portland, in the communities of Anderson Island, Vancouver and Ocean Shores.’
I like Ocean Shores very much. It’ s about an hour and a half from where I live, maybe an hour. Very pleasant, quaint, filled with little old sun-and sea bleached houses, completely quiet, except for the wind. The wind blows steadily right off the sea, so all the trees in town grow at pronounced angles. It fills up your head and washes away thoughts.
Oh, they have this GREAT shop, Mr Wacky’s Emporium, full of vintage and thrift stuff, and sometimes as you leisurely paw through dusty old dishes Mr. Wacky will just plunk himself down at his large rickey piano and start singing and playing away. He has a nice voice. I went out twice in the summer to a friends cabin, it was great. But this tiny little town is DEAD. I mean, there is NO employment handy, everyone living there is a retiree, or a small bunch of (mostly fairly eccentric) locals, probably making it on government assistance.
And yet this bubble reached alllll the way out there…craziness.
“The wind blows steadily right off the sea, so all the trees in town grow at pronounced angles. It fills up your head and washes away thoughts.”
are you saying, OlyGal that
you are an….
airhead?
‘you are an….
airhead? ‘
Yes. When I’m there I am. It’s like being washed in a wave of wind, steady and unceasing, in a fiery bright skein of the sky, which goes reaching in off the wide wild ocean to find you, and to read you, and wipe you clean as a pebble.
I find it difficult to believe that anyone can function effectively in an atmosphere of unceasing air movement.
Oh, wait, they don’t. Witness the town.
Olygal,
Every year I go to the Portland Boat Show they do a great job promoting Ocean Shores! It ‘is’ a wonderful place. I like Grays Harbor too.
‘I like Grays Harbor too.’
Ah, yes! Me too. I’m awful fond of Portland, as well. Portland is my favorite real city, I think.
I posted this in bits - a story about the engineer in NoCal that went postal when he lost his job:
Suspect in triple-slaying owned 19 properties
www dot sfgate dot com/cgi-bin/article.cgi?f=/c/a/2008/11/19/BATK146S1Q.DTL&tsp=1
Turns out that the guy fancied himself a Casey Serin-type. He bought several properties from the Erik “Ponch” Estrada late night informercials.
F-ing moron.
‘He bought several properties from the Erik “Ponch” Estrada late night informercials.’
How COULD Ponch lead us so very wrong? *shakes fluffy Olyhead sadly*
I recall when a few of my sisters and I would go up to summer sleep-overs with the cousins living in the Big City. These were fabulously exciting events to simple farm-girls such as us. The Big City of Provo, Utarr, that is, and we would watch the tremendously thrilling novelty that was the teevee, and eat white bread, and see people in clothes that their mom hadn’t made. We would eagerly absorb ‘CHiPs’. We weren’t very old, but we all loved Ponch, and to a lesser degree, his partner, ‘Jon’ was it? The blonde one.
One time Cousin Annie got married to Ponch. The groom was represented by a small framed poster. We fetched out the dress-ups and we all were really quite lovely. The bride wore white, of course, being as she was 7, and being as the white dress was the prettiest dress-up item. Cousin Erin was the officiator. I think the bouquet was some spoons? The handiest babies–always some handy, this was Mormon Utarr, after all– were arranged in a circle as the audience, and summarily hauled back should they be so rude as to crawl away from the august event.
After Cousin Annie married Ponch, we set up the ceremony again and I, yes, IIIIIII, Olympiagal, then got married to Ponch. We didn’t know about bigamy and stuff like that. Although you’d think we should have, being as this was Utarr, fer chissakes. Heckfire, you’d think bigamy would be covered in 2nd grade social studies, in Utarr.
It *is* hard when when former bride-grooms lead you astray. Ponch, how could you do that to Olympiagal *and* Cousin Annie??
I had a serious thing for Bo and Luke Duke when I was 10ish or so. How more manly can you get then never opening the door to your car? Also, they never got caught - well, except for a couple of episodes, and then they were out by the end. And Daisy just rocked!
What more could you want from a TV show??
‘And Daisy just rocked!’
I TOTALLY agree. Daisy Duke is probably the source of my fondness for gingham shirts with pearlized snap buttons and midget sized cut-off jeans with a handkerchief hanging sassily out the back pocket. It’s a question of style, and Daisy had it. Do you recall when they switched the Duke boys out for different boys? It seems to me I cried. Earnest, big, sincere tears of sorrow.
PS. And thanks for your sympathy about that big jerk Ponce. Did you know he never even remembers our anniversary? That insensitive lout!
That insensitive lout!
*knowing sigh* It’s the way with *all* of them. Ponch forgets all his anniversaries and then goes on to do slimy infomercials. You give the Duke brothers your undying affection (both of them, because how could you choose?) and they go and get replaced by people who just *aren’t* the same. Sure, Daisy is still there, but the magic is gone.
Thankfully, Ken was my (plastic) rock no matter what happened in the unstable world of prime time TV. He was supposed to have a “thing” for Barbie but I always knew better.
‘He was supposed to have a “thing” for Barbie but I always knew better.’
Yes, it is so true—I always knew Ken loved you best, Vermontergal, which is why I had to settle for an unreliable Hispanic cop named Ponch, who often forgot his kickstand and would drop his motorcycle over on the sidewalk. Jeeze, what IS that. That’s careless, man.
Ahhhh. I still have a thing for motorcycles. You know, I wonder if…?
Gadzooks! What if the ENTIRETY of my subconscious interior brain furniture comes from cheesy 70’s shows?
That actually could explain a lot. Unfortunately.
Hey! And let’s not forget ‘Charlie’s Angels’! Oh, my gosh, I loved them.
Speaking of CHiPs, I had an encounter with ‘Jon’ at my brother’s soccer game. Turns out his son was on my brother’s team. I was sitting in a chair on the sidelines when ‘Jon’ comes over, kneels down on one leg and asked if he could use the chair’s arm to help support himself. As a fan myself of the show, it was too much for me to handle being in the presence of TV royalty. I sat there for a few minutes, but then I had to get out of the chair because his aura and acting sangfroid was blinding me. The only other actor at that time who was bigger than ‘Jon’ from CHiPs would have been jack tripper from Three’s Company.
‘I was sitting in a chair on the sidelines when ‘Jon’ comes over, kneels down on one leg and asked if he could use the chair’s arm to help support himself.’
‘Use the chair’s arm to support himself…’
Oh. My. God. And you didn’t yank his clothes off right there?!
Wait: are you a boy? Oh whatEVER, who cares?! I can only hope you did jump him, and shake my head sadly if you did not.
What ARE you on about? Jon was WAYYYYY sexier than Jack Tripper. Jack was gay, after all, and more importantly, was twitchy.
However, he could cook. That makes up for almost any other drawback. In fact, every other drawback.
I wasn’t going for sexual innuendo seeing that I was a mere 7 years old at the time, so no, I didn’t jump him. But I may possibly change my name from friar john to friar jon in remembrance of the actor.
By the way, Jack was only pretending to be gay because the Ropers wouldn’t have any of that co-habitation amongst the sexes. Did you see the babes Jack would get? Half of my precociousness was a result of learning tricks of the trade from Jack and Larry. My chest hair and gold medallions are a lasting testament to Larry’s almost bestial charm that the ladies couldn’t ignore. Oh those swinging 70’s, when the hookers were loose and the ladies even looser, and that was just in my elementary school class too!
For all of you Erik Estrada fans out there, to the tune of the Pina Colada song…
I was tired of my TV, we’d been together too long.
Like a worn-out DVD recording, or your favorite bong.
So while the TV got repaired, I read the paper in bed.
And in the personals column, there was this letter I read:
“Do you like Erik Estrada, and watching shows about Abel and Cain.
If you’re not into yoda, you must not have a Star-Trek brain.
If you like peanut butter at midnight, and listening to 8-track tapes.
You’re even more of a freak than me, let’s us then both escape.”
I didn’t think about my TV, I know that sounds socially naive.
But me and my TV, films like The Dao of Steve.
So I wrote to the paper, took out a personal ad.
And though my pants have pee-stains, it really is not that bad:
“Yes, I like Erik Estrada, and buying Arkansas real estate on a whim.
I’m not much into tofu, or soybean products that keep you slim.
I’ve got to meet you tomorrow, and cut through all this red tape.
At a bar called O’Smally’s, where all the guys look like apes.”
So I smoked some dope, then she got in my face.
I didn’t care for her mug, or when she sprayed me with mace.
It was like nothing I imagined, and she didn’t smile much either.
And we cried for a moment, and I said, “not going to get any beaver”…
“When you like Erik Estrada, and eating masticated pecans.
While land prices have plummeted, and your neighbors are Arkansans.
If you like making dough at midnight, and the Ozarks don’t seem far
Erik Estrada has what you’re looking for, come and hop in my car.”
“If you like Erik Estrada, and oily salesmen to boot.
If you’re not into soda, Welch’s grape will make that moot.
If you like losing money at midnight, get your pre-approval ready.
You’re the one Erik’s looked for, and he also goes by Fast Eddie.”
Ah, so that’s where I got that 19 number. I thought he had shot 19 people!
Everybody was kung-fu writing
Those approvals were fast as lightning
In fact it was a little bit frightning
But they bought with expert timing?
They were funky loanmen from funky loantown
They were chopping them up and they were chopping them down
It’s an ancient greedy art and everybody knew their part
From a feint into a slip, and appraising from the hip
Everybody was kung-fu writing
Those approvals were fast as lightning
In fact it was a little bit frightning
But they bought with expert timing
There was funky Jing Hua Wu and his little handgun
He said here comes the big boss, lets get it on
He took a financial hit and made a stand, started shooting with the gun in his hand
The sudden motion made me skip now we’re into a brand new trip
Everybody was kung-fu writing
Those approvals were fast as lightning
In fact it was a little bit frightning
But they did it with expert timing
(repeat)..make sure you have expert timing
Kung-fu gunfighting, you had to be fast as lightning
http://www.youtube.com/watch?v=TId2NDiuu2s
WTP,
Most excellent indeed!
“It took only until July for the median price to fall 25% below its 2007 peak of $505,000, and it has kept falling since. Those earlier forecasts proved off because ‘it was hard for people to get their arms around just how bad lending standards had gotten,’ said Thomas Davidoff, a UC Berkeley economist.”
Long-time discussants on this blog not only got their arms around how bad lending standards had gotten years ago, but we got into bed with those bad lending standards…
“we got into bed with those bad lending standards…”
I’d say most of us were more like disgusted voyeurs — sickened by the sight, yet unable to turn away. At any rate, ‘it’ wasn’t good for me, thank you very much.
“more like disgusted voyeurs”
I felt that way from 2003 up until mid-summer. Now I feel more like a Herbie Stempl. We are ALL Herbie Stempls now.
O.K since nobody seems to recall wasn’t Herbie Stempl the character John Turtorro portrayed in the movie Game Show?
Incredibly intelligent guy but in the end the show’s producers concluded that even though he was immensely popular with viewers, it would turn off the audience if some “brainy Jew” won the top prize money?
So in the end everbody’s reputation ( including his gentile Ivy League competitor ) lay in ruins. It ends w/ a congressional investigation. Sound familiar?
Fortunately, game shows, like American Idol, can no longer be rigged.
Herbie Stempel = The Game Show Maestro = Alan Greenspan
“People want homes and they can’t pass up a bargain, said Dennis Torres, executive director of real estate operations at Pepperdine University’s Graziadio School of Business and Management. ‘Yes, more and more people are being laid off, and those people can’t afford to buy a house,’ Torres said. ‘But the majority of people are working.’”
sooooo…even at a hypothetical 49% unemployment professor douchebag would think it’s a great time to buy.
“‘Yes, more and more people are being laid off, and those people can’t afford to buy a house,’ Torres said. ‘But the majority of people are working.’”
The majority of the people were working during the GD too, but was that a great time to buy a house? Having shelter is always a priority. Buying a house isn’t.
‘It became literally the financial highway that everyone rode on to
createdestroy trillions of dollars.’Old news, but I noticed something in re-reading a DQnews article on decreased NODs in Cali.
It stated that the median NOD is now 5 months from when to debtor stops paying. With 4-6 months additonal before trustee’s sale.
Does this mean I might have 9-11 months rent free from the date of LLs last payment?
Kind of a crapshoot IMO. Probably depends on who the mortgage holder is, some may move more quickly than others. Just keep the utilities on and then demand an exit fee when they come calling.
Dude, it is also helpful to speak their language. The banks and realtors refer to payment for leaving a house broom clean as “cash for keys.”
Second, the way I’ve seen it work is the bank tells the realtor to offer the tenant, say, up to $2,500. Since the realtor wants to curry favor with the bank’s asset manager, they will often offer $750 to the occupant. This is not to keep any money, more a version of butt-kissing.
So if you are offered anywhere from $500 to $1,000 in your cash for keys deal, tell the realtor or bank rep that you heard people were routinely getting $2,500.
And if they squawk at that, you may want to add the subtle threat, as in, “Hey I just want to get on with my life and I’m not even thinking of using the court system to prolong your ability to reclaim the property.”
Frank,
Obviously not an enviable situation but if you as a renter find yourself there..?
I’m not sure what you’re asking, if you rephrase I’ll try to answer.
Frank,
I just meant to say that having your LL go “belly up” is not what most renters are prepared for. Your advice in this unfortunate circumstance would be valuable to anyone that finds themselves in that situation.
I was evicted because my LL went into foreclosure, I got $2000 for leaving it broom clean, just a tiny 1 bd rm 750sq ft condo. Some dolt bought it as a REO and I saw they ripped out the entire kitchen to flip it…. good luck with that.
That’s presuming you even get word that your LL isn’t paying.
I suppose it should be in the lease, but it’s not in ours.
Does the bank have any obligation to notify potential tenants of a default on the mortgage? As far as I can tell tenants are treated like mushrooms in my state.
Usually the bank has no such obligation, most of the time they don’t even know there is a renter in there.
In California you may be able to go to your county recorders office and file a “Request For Notice of Default” on the property.
In theory, you will receive a notice if a lender files a “Notice of Default”, which is the first step in the foreclosure process in California.
I say may, because I’m not sure if a tenant can file such a document - I know that lenders certainly can. Probably best to spend the money and ask a real estate attorney if you are really worried about it.
You know what would be helpful? If there were a 50 state guide to tenant’s right in foreclosure that were up to date. It kind of seems that would be something the Fed would/should produce, but it you engineer the nation’s finances to reward 69% of the population …
… you can screw the 31%!
Seriously, from what I understand the rules are different state to state, and there has been a lot of emergency stuff getting passed in various state houses to deal with the problem.
Here in NY it appears to be treated as: Bank takes control of property, discovers humans within. Bank tells humans to beat street, then sells house to new humans. IOW, you’re on my property, now get off’n it.
This is why, if you remember the story from a couple months back, The Cook County Chicago sheriff was refusing to kick out renters until they received 90 day notice of foreclosure.
‘As far as I can tell tenants are treated like mushrooms in my state.’
Wha…did someone say ‘mushrooms’? I LOVE mushrooms.
And what do you mean, ‘treated like mushrooms?’ Gathered up in baskets and sauteed with wine?
Well, okay…that might taste good. I suppose.
All my landlords (so far) are solvent. Seems best to keep it that way if you can. Using a long-established rental agency might help. No?
“Four of the least-affordable markets were in California: San Luis Obispo, 13.4 percent; San Francisco, 16.6 percent; Los Angeles, 20.7 percent; and Napa, 23.2 percent.”
California will be hard hit. Part of what sustained the state was the ‘property ladder effect.’ You would buy and then upgrade and at each step would move the equity.
Now its all be borrowed out and the easy money hid that little factoid. Its going down to purely what incomes can afford. Too many retirees cannot afford to ’stay put’ without that reverse mortgage. The house paying the way won’t be officially over before 2010, be we can see the end of an era.
Got Popcorn?
Neil
Home equi-plosion.
Home wrequity.
Good point about the reverse mortgages. I know a buncha people in VERY expensive areas who were using that method. South Pasadena is full of old ladies living on MEW that way. So “house-proud” too. They didn’t believe South Pas could ever depreciate. It will, and THEY will be the reason.
maybe they should read this:
Pasadena 91103 15 $353 -70.6%
Pasadena 91104 19 $498 -27.3% 1
Pasadena 91105 9 $990 -30.7%
Pasadena 91106 6 $800 -71.8%
Pasadena 91107 30 $699 -13.0%
S pasadena is not included but it will go down as hard as rest of pasadena. BTW reverse morts are simply another Re commission-driven scam to part old folks with their Money.
BTW reverse morts are simply another Re commission-driven scam to part old folks with their Money.
No shit –why not just sell the d*mned place and move somewhere cheaper? I hate moving too, but I hate the thought of the banks & sleazy mtg broker taking a huge % of my remaining equity even more.
Well, I guess you don’t remember Neil. Back in 06 you were thinking bottom in 2008-2009. I was calling for 2010-11.
I’m still looking at 2011 plus another drag due to BB retirements.
We should have taken bets.
Oh and the fraud market is still going well. Saw a foreclosure sit on the market for a while. Suddenly get an asking price increase.
Probably a fraudulent seller provided down payment scheme.
“Four of the least-affordable markets were in California: San Luis Obispo, 13.4 percent; San Francisco, 16.6 percent; Los Angeles, 20.7 percent; and Napa, 23.2 percent.”
Lucky us.
We seem to be second only to New York City in affordability. Good thing there are so many high wage jobs in SLO to support our real estate prices. Wall Street’s got nothing on us!
SLO….I was just there in pismo for four days…Prices have not seemed to have came off very much…
I saw an article just a few weeks ago mentioning that Pismo is the MOST resistant to depreciation (of SLO-County cities) so far. Nipomo and like that have slid quite a lot. Morro Bay and Los Osos have slid somewhat. Pismo might stand up for ever, I don’t know. Luckily I don’t care.
“California Department of Corporations Commissioner Preston DuFauchard said the Schwarzenegger administration deliberately limited its moratorium proposal to 90 days. ‘We felt that over 100 days you’re probably sending a message that it’s OK to stop paying your mortgage, and we want to discourage that,’ he said.”
There is already so much gvt incentive for FB’s not to pay that anyone who is underwater would have to be a fool to send in another mortgage pmt. Another 90 days of rent-free living, courtesy of our governator, is just icing on the cake.
Let them pay in cake…
“A proposed four-month foreclosure moratorium that would crank up the heat on lenders to rewrite more of California’s troubled mortgages”
Thee should be a 4 month moratorium on proposals by mealy -mouthed CA politicians to fix the Foreclosure problem. The most useless bunch of bloviating retards on the planet.
“An 84-year-old Aptos man was frustrated. ‘Unless I’m in default, no one will talk to me,’ he said. ‘It’s easier for me to buy another house than to stop a foreclosure.’”
84 years old and he’s got a mortgage?? The more stories like this I hear, the more I realize the extent to which Americans have lost all sense of financial sanity.
Right, even 64 you should be living mortgage free or wrapping it up.
Reminds me of the Dave Chappelle skit: Wrap. It. Up!
No kidding. I’m 62 and I’ll pay cash. ALL cash.
I agree that an 84 year old should not have a mortgage.
On the other hand, if someone offered me a mortgage at 84, I’d take it. You can’t take your money or your FICO score with you.
It’s just another artifact of living during the era of Insane Lending (TM). Banks with their heads on do not lend to 84 year olds.
I’m aware that banks aren’t allowed to discriminate based on age. However, I tend to think that minor points like “income” and “assets”, things they can deny loans for, would be all too obvious a reason to turn down an 84 who wants to take out a mortgage.
And why CC companies give credit to people over 65, in poor health, with no assets, I’ll never understand…it’s like guaranteeing you’ll be left holding the bag for their medical expenses. But that’s a story for another day..:)
I make a lot of loans to senior citizens. The trick is, low LTV ratio. Their estates will still have equity.
The trick is, low LTV ratio.
Which is why, I suspect, you are not having a personal “credit crisis”. (I’m right on that??) I was thinking of the lenders who treat actually being paid back as an afterthought.
When I was working as a well-paid house counsel job back 5 years ago, my friends constantly harped on me that I should go buy a modest home in Saratoga or Los Altos. They said something like “you can afford a $1.25 million dollar place”. To which I replied, “I could QUALIFY for such a loan, but that doesn’t mean I could AFFORD such a place.” I was 50 years old at the time. Did I really want to work long hours until I was 80 years old to pay off a mortgage?
DennisN,
Well you ‘could’ have but I think by the time you paid it off they would’ve been dragging you out “feet first” and what’s the point of that?
If you stay active and take care of yourself, you will have extended your life by moving to Idaho and leaving the Valley rat race.
You probably already know that…
I’ve lost 25 lbs since I quit my desk job.
Last month I hiked up to Alpine lake from the trailhead, which is about a 1,300 foot climb. Not a bad day hike and I didn’t even get “winded”. My feet were sore however.
“it was hard for people to get their arms around just how bad lending standards had gotten”
Here, let me help you. Y-o-u take your l-e-f-t hand…
Pffftt, then there’s no hope for Berkely at all I suppose? What a joke, when did you first suspect this might be the case?
I don’t get it either. People were joking at the height of the bubble that to get a loan all you had to do was fog a mirror. Now they say it’s hard for people to understand how bad loan standards were?
Dean Wormer was right. Fat lazy and stupid is no way to go through life. It does seem that many people have figured that ignorant, deceitful, and hypocritcal works just fine though.
Actually the Dean said “Fat, drunk and stupid”, but I was too lazy to verify the quote!
“Dean Wormer was right” LOL!
Right, just like the “poor” Mr. Bautista from yesterday’s thread. He exploited people’s sense of empathy by saying “We worked all those years to save up a down payment” ( but court records showed he “backed” the down payment out just 17 mos. later )
Given all that’s been exposed, how do we know that wasn’t just another straw ploy where he simply used a friend or relative’s MEW to begin funding his little venture and it was simply time to pay it back?
Does anyone remember when the bank used to go by “aged deposits” and make you retain that balance in YOUR account for at ‘least’ 90 days? Just to make sure it wasn’t being “fronted” to you? Remember the clowns in Vegas that set up shop to “loan” you assets to make any mortgage possible by making you look better on paper?
‘affordability’ is the latest greatest catchword, but words calculated to catch everybody may catch nobody…
‘The important thing also is that’s why we have a special session now where we deal with the unemployment rate, where we want to stimulate the economy. And where we also want to make sure that we keep people in their homes, because there are too many people that go through foreclosure. And I think that it is terrible to see the mistakes that were made by the lenders and also by the borrowers but that doesn’t help us to look back now at where the mistakes were made. The key thing now is to keep our people in their homes, which will also help our economy.’”
“‘I talked yesterday again to some builders and they are in a disastrous situation because a lot of homes are half-finished, people are not interested in buying it — even though those numbers are coming back right now of more and more people buying homes again because the prices are so low. But we really need to go and do everything we can to keep the people in their homes right now, so I hope that we solve this problem also in our special session.’”
yeah, Ahnie, when the bell rings, the air outside will turn green.
If the news couldn’t get any better, I have this gem from downtown San Diego…
702 Ash #701
San Diego, Ca 92101
MLS# 080078170
Price: $164,300
Beds/Baths: 1 / 1
Square Feet: 805 sf
Sales History
Date Price Held Return Annual
11/04/2004 $430,000 n/a - -
Even the exclusive penthouses are getting some trim…
500 W Harbor Dr #1317
San Diego, Ca 92101
MLS #080062485
Sales History
Date Price Held Return Annual
11/17/2008 $765,000 3y -23% -8%
11/14/2005 $999,000 3y 3m 59% 15%
07/30/2002 $629,000 n/a - -
http://www.johnberan.com/Nav.aspx/Page=%2fPageManager%2fDefault.aspx%2fPageID%3d1144381
Looks like prices are sliding into the oceans.
No they really are not!
Looks like prices are sliding into the ocean over here.
Well, not really.
http://www.johnberan.com/
And riddle me this to all of those who want to prop up home prices…
1240 India #1112
San Diego, Ca 92101
MLS #080068596
Beds/Baths: 2 / 3
Square Feet: 1,139 sf
Sales History
Date Price Held Return Annual
11/14/2008 $440,000 2y -40% -22%
10/31/2006 $735,000 2y 3m 9% 4%
07/16/2004 $675,000 1y 4m 91% 62%
03/14/2003 $353,290 n/a - -
I was very close to buying in this building back in 2001 when it was getting built. Even then I thought the PPSF was too high at $300/SF, but $650/SF at its peak? You’ve got to be JT’ing me.
yes a drop has come to trendy parts of calif in studio city calif a home sold for 829k in 06,is now in escrow for 629k,but here is the kicker sold in 1999 for 279k,so yes we have had a wonderful price drop in this part of southern calif but the prices are still way to high for the most buyers. i am hoping we get 1999 prices here.
This is the initial 25% drop for premium properties. The next 25% drop should come much faster as a result of the job losses and higher borrowing costs coupled with tighter lending. Nothing is immune to this across the board asset deflation (deflation == return to historical norms).
Thing about LA is compared to the rest of California, wages are really low but cost of living is getting close to the San Francisco range. Just moved out of LA to SF and my renting costs stayed the same but my cost for everything else went down - food, insurance, medical care, transportation. Another thing, $1 million will buy you a 1 bedroom crap shack in LA, but in SF, $1 Million buys you a really beautiful home in a walkable area. LA is absurdly overpriced, and when the crash comes, it will hit hard because the job base just isn’t there anymore. The entertainment companies are silently shedding jobs and without that, what else is there in LA?
The guy who said there was an overcorrection in the IE must have a pretty secure job. If your job does not involve water, food, clothing, shelter (I know), or fuel it’s not secure.
None of the above I’m afraid.
Wildfires: Did low water pressure hinder the fight?
http://www.latimes.com/news/local/la-me-wildfire-water-shortage19-2008nov19,0,7136716.story?track=rss
================================================
Nobody dared utter the word “drought” in this article…
If there isn’t much water in reservoirs, there isn’t any pressure is there?
516 S Gertruda Av, Redondo Beach 90277
Status: A MLS#: S08163418 List Price: $1,879,900
List Dt: 11/19/2008 PType:SFR/D Orig. Price: $1,879,900
according to Zillow
Last sale and tax info
Sold 08/29/2007:
$1,975,000 *
Can you say underwater big time given a 5 or 6 percent commission.
I’ve given up on the US economy…I’m moving to Somalia to hijack ships and collect ransom. Piracy, the new global bubble. See you later suckers!
I wanted to go see that new pirate movie coming out next week…
I think it’s rated “Arggggggghhhhh”
Okay, I’m going to leave and go drive over to the Evergreen state college and go swimming in their pool, because I fancy that activity on this chilly eve. Then I will come back and build a little fire in my wood-stove and eat a gallon of mango salsa with chips.
They have too much chlorine in their pool, which makes my hair even more floaty, so tomorrow I will look even more dandilion-esque. Oh, I cannot wait.
So, Vermontergal, if you have anymore delightful thoughts on 70’s shows, that’s why I’m not answering until tomorrow, but I still want to hear them allllll. Dish!
I hope you enjoyed the swim…
Evergreen state college - isn’t that the one where you just sort of show up for 4 years and they give a you a degree?? If so, I’m kinda surprised that they are organized enough a) to have a pool and b) have too much chlorine it.
But I digress…. Onto more important matters: men in 70’s/80’s TV shows that one could develop crushes on and/or marry as you could conveniently have their posters around.
There was of course, Knight Rider. Strong, handsome and yet another cool car. Of course my Dad’s Cadillac is now smarter and cooler than KITT, but still, the car was awesome then. And the resemblance to Ken (excepting the curly hair which was better) was overwhelming. And he was dark and edgy without being *too* dark and edgy.
It was difficult to have so many loves…. *sigh*
For me, my TV crush was Magnum PI
Good choice.
I can’t remember the name of the show with the two detective brothers in CA. Mom was always dropping in. One was the cowboy-esque vietnam vet and the other was a blondie, more staight laced. Had a good Christmas episode that I loved. Stuck in the Vegas airport or something with a bad crooner on the piano. Used to get stuck in airports a lot during the holidays.
Never could decide which one I’d let put their shoes under the bed. And I gave it some thought.
Simon and Simon
http://en dot wikipedia dot org/wiki/Simon_&_Simon
Ohh…very nice choice. Handsome, independent (well, sort of), and living in Hawaii. Always “defying authority” and another very nice car.
let’s not forget Remington Steele.
u and p, has a lot of splainin to do.
those two letters, appear more than any other combination on this thread.
up.
I look at strange combinations.
UP stands for the lost world of the Upper Peninsula. A place where Norwegian descendants dream of getting the ‘turdy point buck’ while swilling the fine Lienie’ and telling Sven and Olie jokes. It is pronounced as ‘yooper’
Swen was standing on the street corner one day when Ole drove up in a new car. Swen asked, “Olie, where did you get the new car?” Olie answered, “I was out parking in the toolies with Lena, and she took off all her clothes and told me I could have whatever I wanted - so I took the car.” Swen answered, “Well I think you made a wise choice, the clothes probably wouldn’t have fit you anyway.”
“Now, ‘we’re probably seeing an over-correction’ in the most depressed inland areas, Davidoff said. In communities overrun by foreclosures, ‘you couldn’t build a house for less than what [existing homes] are selling for,’ he said.”
He, he, he, just wait ’till the riots start in Fontucky.
Or Hemet.
Senate nixes auto vote:
http://news.yahoo.com/s/ap/auto_bailout_what_s_next;_ylt=AvqjjXyDPoQoUL5MSf.Dd.Ks0NUE
That’s what the Senate has to show for a week of bully pulpit antics: a no-decision. And now they are walking away from this PIVOTAL moment in US history to start a 2-month vacation.
It’s official: there is NO ONE running this country.
I thought an IRC live chat would be fun. Ya’ll can join me:
swiftco.wa.us.dal.net
#housingbubble
Real estate will collapse on the heels of the stock market. No one will have a dime after this depression is over.
Off topic, but as a CPA, I want to report on business temperatures that I’m seeing as I’m auditing 2008 results of operations in various industries:
September 2008 business falling off a cliff:
Trucking company doing $40 million a year in Inland Empire in CA: September revenue down 13% compared to sep 07. Sales down heavily in bedding company and bottled water company.
Nationwide blind retailer ($35 million in 2007) sales off 8% in Sep 08 compared to Aug 08.
Florida HVAC (heating & ventilation & air conditioning) company ($30 million in 07) sales down from $4 million in july 08 to $3.2 million in aug 08.
Patience, HBBers. A year from now when this year’s laid off people’s homes enter foreclosure the avalanche will really get going; rinse, repeat in 2010, 2011, 2012…
I’m thinking Isreal-Iran war is the end result, oil production facilities destroyed, $300 per barrel oil.
OCsandrenter/PortlandHomedebtor
“In communities overrun by foreclosures, ‘you couldn’t build a house for less than what [existing homes] are selling for,’ he said.”
———————————————————————————
I have to call major BS on this. You could develop and build a 1500 square foot home in SoCal for under $70k. With all other sales and escrow costs included, you could do it for around $85k. This may not be acceptable to some since this assumes vinyl floors, basic white appliances and standard tile countertops (tile is cheaper than laminate…I know, I was surprised too when I first found this out.).
Builders need roughly 15% gross margin (small builders may require more). What makes up the rest of this price?? Land. People can’t accept that Land is SoCal is not worth $250k per lot anymore. In other areas of the country, Land is dirt cheap. In SoCal, the Land speculators just can’t accept that it has lost its value.
A litle background on me…..I have been a long time reader of the boards here, but have kept my mouth shut. Why? I worked for one of the major national builders in SoCal…..and I agreed with most of what was being said on this board. Trust me, there were very few on the inside that shared my (our) opinions on the market. I’m not talking about just the sales teams, I mean from the top on down….most thought that the ride would not end, even after it had turned. They kept saying that the market would turn “in a few weeks”. This went on for the better part of two years before reality sunk in (for most, not all).
I took a lot of criticism for my views, and I was involved in all major decisions that were being made. You can’t believe the weekly mantra I had to deal with….”Prices can’t go any lower”…”You’re stupid for not buying a few of these as investments”.
Seriously, you guys would have loved 95% of the mantra thrown at me……It was fun seeing what I saw, while understanding the basic laws of economics.