A Fine Mess In California
The San Fernando Valley Business Journal reports from California. “Gangi Development of Burbank has decided to go the auction route with their new Glendora townhome development. On Dec. 14, the companies hope to sell all 20 of the units in the Vermont Avenue Lofts complex in one fell swoop. Given that the craftsman-style homes are expected to fetch about prices about 50 percent lower than what the developer anticipated when the project was conceived a few years ago, the cost savings of the auction format are very appealing, said Frank Gangi.”
“‘Instead of selling over an eight, nine or 10-month period, we’re basically selling the units in one day,’ said Gangi.”
From KTLA. “On Saturday, thousands turned out for two events aimed at providing some relief; a food giveaway and free mortgage help. In Montebello, nearly 5,000 turned out for a food turkeys and other Thanksgiving Day items, a number that stunned organizers. In Van Nuys, about 2,000 homeowners attended a workshop promoted as ‘Home Preservation Day.’”
“To the dismay of many, property owners discovered that they have to be behind at least two months with their mortgage and facing foreclosure before they can restructure their home loan. But some of those not yet behind in their payments complained that bankers need to do more to prevent looming loan defaults and home foreclosures.”
“IndyMac spokesman Evan Wagner was sympathetic. But he said his Pasadena-based thrift is limited in its flexibility to rework loans. ‘We’re stuck enforcing existing contractual agreements’ with outside institutions that own about 93% of IndyMac’s loans, Wagner said.”
“‘The program is evolving. We’re helping people today who we couldn’t help a month ago,’ he said. But loan modifications are ‘not about a better deal. . . . There’s no principal reduction.’”
The LA Times. “Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, the latest period for which the Mortgage Bankers Assn. has figures, easily topping the previous record of 1.97% set in 1985. In California, with a jobless rate topping 8% and home prices down more than 40% from their peak and falling, the situation is significantly worse, with 4.15% of prime loans seriously delinquent. That far exceeded peaks of about 2.6% reached in the recessions of the 1980s and 1990s.”
“The bleeding housing market had drained the equity from Judy Jones’ home in Murrieta, but her life still seemed secure. She had a government job, after all, and a 30-year fixed-rate mortgage at 5.875%, unlike the shaky, variable-rate loans of many of her Inland Empire neighbors. Then her employer, the city of Corona, decided to deal with the economic slump by eliminating 112 positions, including Jones’ job.”
“She moved from El Cajon to Murrieta in 2005 with her adult daughter, who provided $20,000 of the $80,000 down payment on the new three-bedroom home. With property values still rising, they took out a second mortgage for home improvements in 2006, a 15-year loan for $40,000 with a fixed interest rate of 9.25%, bringing their total mortgage debt to about $355,000.”
“Jones figures she owes about $100,000 more on the mortgages than her home’s current value. ‘Every week at church, somebody else is out of work,’ Jones said. ‘I’ve been a homeowner a long time — the last 10 years as a single mother — and I never missed a payment. Now look at me. And it could be you — any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months.’”
The Press Enterprise. “Modifications used by lenders range from adding the past due amounts to the loan balance — which results in a higher monthly house payment — to temporarily halting rate increases on adjustable mortgages, lowering interest rates and lengthening the life of the loan. Reducing the mortgage balance is the rarest solution, experts say, because it is often unpopular with the investors who own the loans.”
“Paul Lloyd said he works seven days a week — weekdays as a water delivery man and weekends as a handyman — and his wife works as a nurse so they can continue to make a $3,800-a-month, interest-only payment on their house in Fontana. They worry that they may lose the house to foreclosure in eight years when they will have to start making an even larger monthly mortgage payment to cover principal and interest.”
“The couple is counting on their good credit and work record to enable them to qualify for the federal government’s new Hope for Homeowners refinancing program which could lower their loan balance. Lloyd said he believes lenders are reluctant to make any concession. ‘You have to keep pushing and hope you are one of the lucky few to qualify,’ he said.”
The Desert Sun. “More than 50 new and used home buyers poured into the Riverside County Education Center in Indio to discuss a litany of problems over adjustable rate mortgages and depreciating home values in subdivisions across the Coachella Valley. ‘It’s a ticking time bomb,’ said Chris Young, an organizer for Alliance for Homebuyer Justice. ‘We want to make builders accountable for their role in the housing crisis.’”
“The Alliance has said its examination of mortgage data in sectors of the country that had explosive home-building growth shows a pattern whereby some large home builders in the Coachella Valley were issuing adjustable rate mortgages. More than a third made by builders in 2006 involved five-year ARMs that will reset in 2011, they said.”
“‘There is no question there are abuses in the mortgage side and underwriting,’ said Fred Bell, executive director of the Desert Chapter of the Building Industry Association. ‘But to go after the builders who are a minute portion of that is disingenuous. The reality of it was the industry at large has had its challenges.’”
The Orange County Register. “For a few delirious years, subprime mortgages brought fat profits to Orange County lenders – plus Mercedes, Beemers and the occasional Lamborghini for their salespeople. Subprime loans left a more lasting impact elsewhere, in places like Fresno and Moreno Valley, Florida and Michigan – areas now suffering from massive foreclosures.”
“In central Santa Ana – today the county’s foreclosure hotspot – the subprime share topped 40 percent. A series of maps shows subprime lending spreading year by year from the South to California to the Midwest and Northeast.”
“John Mahoney, director of the Real Estate & Land Use Institute at Cal State Fresno, has studied the new home market in Fresno for years. Between 2004 and 2006, said Mahoney, the number of new housing units produced each year doubled. The median price also doubled. Easy money was ‘the primary component that fueled the overbuilding, the overpricing,’ Mahoney said. It was ‘a marketing cycle that fed on itself.’”
The Fresno Bee. “In Merced County, existing-home prices fell 43.2% to $130,300, and the area now is the most affordable market in the state. The median price of an existing home in Fresno County tumbled almost 32% to $168,000 last month from a year ago and on new houses fell 12.7% to $248,000.”
“Bank-owned houses are increasingly the product of choice, totaling 56% of the 799 resales in October, said MDA DataQuick. Only a month earlier, foreclosures represented 54.4% of all the sales. They comprised 15.4% of the market in October 2007.”
“Production and sales are down so far that the president of the California Building Industry Association is predicting a shortfall of new housing. ‘California needs to be building around 230,000 units per year to keep up with population growth, but we won’t even build a third of that number this year,’ said Robert Rivinius.”
“The association is trying to juice sales by pushing Congress to increase the temporary homebuyer tax credit of $7,500 enacted earlier this year, and to make it a credit that does not have to be repaid.”
The Recordnet. “Federal regulators issued a cease-and-desist order on Delta Bank, National Association effective Oct. 14, giving the bank until the end of this month to comply with numerous conditions to ensure its future stability. Stockton banking expert Joe Johnson, who spent 36 years in commercial banking and now teaches entrepreneurship at University of the Pacific’s Eberhardt School of Business, explained that a cease-and-desist order is the most serious level of enforcement action the OCC can take.”
“‘They are going to want to see those things done. Regulators these days are feeling their oats; they will do what they think they have to do,’ Johnson said, adding that such an order indicates significant problems and concerns that demand the attention of the bank’s entire management team and board of directors, who can be held personally liable for noncompliance.”
The Contra Costa Times. “On Friday night, federal regulators seized the iconic Inland Empire institution that was started on Christmas Eve 1892 and sold it to the subsidiary of Minneapolis-based U.S. Bancorp. Walter Hackett, a former PFF commercial loan department manager, said most, if not all, of the lawsuits against PFF executives probably aren’t going away.”
“‘You’ve still got board members who are worth millions,’ he said.”
“Hackett is also a witness for a group of shareholders who are building their case against PFF - one of several suits claiming PFF executives and board members foresaw financial losses and sold their stock while telling shareholders everything was OK. ‘I still think it warrants an investigation by the Department of Justice,’ he said.”
“Upland resident Jack Peterson walked out of PFF’s Upland branch after he checked to see if his PFF checks would still be honored. He said he was told they would be. Peterson was watching television that morning and noticed that PFF had been seized by the government. ‘I assumed everything would be fine, and it is, if you want to call this fine - a fine mess,’ said Peterson, a 25-year customer. ‘I wish they had spent more attention on banking rather than making money. Of course, they aren’t the only one.’”
The Press Democrat. “At the southern edge of the greater Sacramento area’s seemingly endless sprawl lies a road to nowhere, a wide parkway in Elk Grove built to reach homes yet to be constructed. A condominium project in Carmichael looks completed from the exterior, but a closer inspection shows unoccupied units, unfinished interiors and missing balconies.”
“These and other stalled development projects throughout the once red-hot Sacramento real estate market make up much of the wreckage of Exchange Bank’s construction loan portfolio. For a bank that had never lost a dime on a construction loan, the reversal of fortune has been agonizing.”
“Exchange Bank felt comfortable lending money to Rancho Cordova-based Reynen & Bardis Communities in part because of its size. But even this veteran developer has run aground. Founders John Reynen and Christo Bardis both filed for personal bankruptcy this year, citing a staggering $1 billion in development loans that they personally backed.”
“Another residential project Exchange Bank has been forced to foreclose on is a subdivision in Rancho Cordova by Cambridge Homes. After completing all of the streets, curbs and site improvements, the builder ‘folded up the tent and went away,’ said Bill Campbell, principal planner for the city of Rancho Cordova.”
“Cambridge, which had planned to build more than 100 homes in Anthology, found demand had evaporated for its modest homes, which started in the high $200,000s. ‘They can’t even give them away at that price,’ Campbell said.”
“The bank is facing losses because property values have fallen faster and further than anyone ever could have imagined, said bank President William Schrader. ‘The values of development properties have dropped down in many cases more than 50 percent, and no developer can withstand that type of situation, and no lender can escape those types of conditions,’ he said.”
The Mercury News. “San Jose property owner Salvador Ruiz paid a company $8,950 to renegotiate the terms of his loans on two houses four months ago, but he says they did nothing and haven’t returned his money. ‘They tell me everything’s OK, but they haven’t done anything so far,’ said Ruiz, who is filing a complaint with the California Department of Real Estate.”
“The state Attorney General’s office is prosecuting First Gov, also called Foreclosure Prevention Services, a Los Angeles company that promised to renegotiate loans for $1,500 to $5,000 but instead ‘ripped them off for thousands of dollars’ while their homes went into foreclosure, according to the Attorney General’s office.”
“East Side real estate broker Jaime Alvarez says he’s successfully modified the loans of six people in the past four months, charging $1,200 upon completion. But he says he doesn’t like to advertise the service because success is so rare. Alvarez doesn’t need state approval because he doesn’t get paid until after he gets a loan modified. ‘It’s constant phone calls, faxing, going from one department to another department, from one negotiator to another. These banks are backed up. It can take three to four months to get these through.’”
“It’s a ‘hot market,’ Alvarez said. ‘There are a lot of people getting into it that are probably not knowledgeable about real estate, but see an opportunity to make money from desperate families.’”
The Union Tribune. “Back when it seemed the county’s real estate prices would just keep rising, land-preservation groups struggled to keep pace with their goals for protecting habitat from bulldozers. How times have changed. Conservationists say fast-falling property values and dwindling development are allowing them to snatch up open space.”
“‘We have brokers that are chasing us in the street. . . . They have significantly cut their asking prices, sometimes just trying to unload their land for whatever they can get,’ said Mike Kelly, president of the San Diego Conservation Resources Network, an alliance of land trusts also called conservancies.”
‘Every week at church, somebody else is out of work,’ Jones said. ‘I’ve been a homeowner a long time — the last 10 years as a single mother — and I never missed a payment. Now look at me. And it could be you’
Wait, isn’t this the LA Times that was trying to roust up a bottom call in the last year? I guess after getting a certain amount of egg on their face during the boom, they went back for some biscuits and gravy. Don’t worry boys and girls, there is still plenty of flap-jacks and syrup left!
An oldie-but-a-goodie -
‘Nestled on the western shore of the Salton Sea, the town doesn’t have a supermarket or movie theater or drugstore. But it has as many as 250 homes for sale, most of them newly built, a huge supply for a place with just 1,440 people. When real estate values began soaring a few years ago, builders flocked here. Land was cheap. Builders figured that people priced out of Los Angeles and San Diego would discover Salton City and the other towns in Imperial County.’
‘Now, with home values sliding, mortgage rates edging up and gasoline prices on an upward trend, that assumption appears premature at best. Imperial County, at least for the moment, seems a subdivision too far. ‘Builders are like lemmings. They saw a few of their peers going to Imperial County and they all joined in,’ housing consultant Patrick Duffy said. ‘They didn’t do market studies. They just crossed their fingers.’
‘Not far away is the Ranch, a 273-house project by Stockton-based Matthews Homes that is just getting underway. A steady stream of potential buyers has come to check out the models, which cost up to $355,000 for a four-bedroom, 2,600-square-foot home. Sales agent Teresa Castillo said she had sold three. However, two of the deals are ’shaky. The buyers are having credit issues,’ Castillo said.’
‘In a tightened lending environment, it’s common for deals to fall through or for buyers to simply change their minds. New-home sales in Imperial County in the first four months of 2007 totaled 259, according to DataQuick, down sharply from 677 in the same period a year ago. Deals are getting done. Credit the rock-bottom prices. Some brand-new homes sell for less than $200,000 and, thanks to the oversupply, are getting even cheaper.’
‘ERA Investment Group, the biggest Salton City developer, touts the community as both ‘California’s last frontier’ and ‘the next hot market.’ ERA’s sales brochure…touts ‘breath-taking views’ and claims the sea ‘teems with fish.’
‘Carol Hines, an office temp worker in Brawley, remembers camping on the shores of the sea about 15 years ago. ‘This developer came bounding up and said, ‘Are you interested in buying some land?’ Hines said. ‘I looked around at the dead birds and the dead fish and said, ‘I’m kind of sorry I’m even visiting.’
Ummm, I’m embarrassed to say I bought two homes in that Salton Sea development (no joke!) However, by some cosmic irony, the building boom was so strong in 2004 that building materials were scarce and they couldn’t deliver the homes in time. I dumped them (and got all my deposit money back) right about the time I started reading Ben’s blog. So Ben, a big thanks to you!
Wow. I think you have used up your greatest blessing you’ll ever get. Might as well just sit out the rest of life.
ROTFLMAO
CVG:
You are the luckiest damned FB that ever did live. You sure have something to be thankful for this Thanksgiving!
“Ummm, I’m embarrassed to say I bought two homes in that Salton Sea development ”
What use is living there if u can’t swim in that water. Or can U?
Are there fish in that salty sinkhole? I know that the two large lakes in the IE - lake matthews and lake esinore, are nothing more than gigantic sterile sludgeholes and worthless as recreational lakes.
You do NOT want to be swimming in the Salton Sea. A whole lot of sewage and toxic agricultural run-off drains right into that puppy.
I wouldn’t mind a nice house somewhat distant from the neighborhoods full of houses that are one foot apart from each other. As long as there is broadband internet. Maybe put up a metal building behind the house as a shop and manufacture something that could be directly marketed on the internet worldwide. That’d be cool.
Builders figured that people priced out of Los Angeles and San Diego would discover Salton City and the other towns in Imperial County.’
and why wouldn’t they?
They did discover it. Then they figured that renting locally was better.
And thus the great experiment came to its inevitable end.
FPSS
Yes, the end was inevitable.
For anyone who hasn’t been to that area of the country, as an aside, it is perhaps one of the last places I would chose to live. Barren, stinky hot, polluted, dry, about to run out of water, plus you are overrun by alfalfa workers looking for fields.
I have nothing against noble employment. Desperados who have nothing to lose, well, I try to avoid that group.
For anyone who hasn’t been to that area of the country, as an aside, it is perhaps one of the last places I would chose to live. Barren, stinky hot, polluted, dry, about to run out of water
Are U referring the salton sea or the IE. These are some IE spots which fit that description:
Norco
Ontario
Perris
Banning
fontana
Lake elsinore
hemet
chino
sun city
moreno valley
This is a short list
Norco
Ontario
Perris
Banning
fontana
Lake elsinore
hemet
chino
sun city
moreno valley”
Sorry, none of those compare to Salton Sea…not even close. SS was originally planned as a development back in the 60’s. It was platted, electrified and…died a quiet death. 100 miles from the nearest job (other than the alfalfa harvesters mentioned earlier), water as polluted as Chernobyl and dying Corvina and the pelicans that feed on them, it’s like something from the Twilight Zone. There used to be the shell of a restaurant that extended out over the “sea”, windows all broken, graffiti scrawled and just plain bizarre. The list of towns you gave are all ugly as sin but legitimate human habitations. Salton Sea does not qualify as such.
LA Times is no different that any number of papers across the country. No different from papers in AZ, TX, FL, OH, NY, etc. etc. etc.
“And it could be you — any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months.”
Well perhaps…but then again I would never have signed up for a 9.25% house equity loan in an era of historically low interest rates…so then again - no maybe it won’t be me.
Tell the whole story lady!
Indeed. Notice how so many of these stories involved equity loans for “home improvement”. How many of these “improvements” were really necessary? My bet is not too many.
Now, it’s one thing if your roof is leaking, but to take out a 9.25% loan for granite countertops, well… that’s just silly.
I have a front window that leaks like crazy. Not water, but air. And, with the cold weather rolling in later this week, I don’t want a draft old window to cause me any more heating bill grief than it has already.
So, I’ve been sealing up the leaks. Total cost has been under $20.
The cost to replace this particular window will be around $1700, which I don’t have at the moment. But, when I do, that window’s going bye-bye.
In short, my plan is called, “When I have the money, I do the improvement.”
Cold weather where you are Slim?
Prolly about as cold as Fresno. ;>
Brrrrrrrrrrrrrr!
Also, just repainted the kiddo’s room.That was my remodeling. Might splurge for some decorative receptacle plug plates. Bought a bag of $5 bird seed, for fun. (Outdoor use, not the the room.)
I’m guessing Slim is a Pella or Anderson man.
Slim is a chick, my dear.
Slim is a chick, my dear. (Big V)
Er–fuzzy mind.
I do not think so…
Tooooooooooooooooo many AZ…
SLIM?
Leigh
Damn-it!! I always find out too late!
I was never sure if Slim was a woman or man.
I made the same mistake, referring to Slim as a guy. I think Slim’s a female.
Not that it matters a great deal, but I think Big wins the bonus round in the category: Gender for $20.
Have you thought about doing it yourself? Most dual-pane vinyl windows at Home Despot are around $150-$300, and that includes the nice UV filter ones. You could probably swap it out in a day.
Heck when I was fixing up my San Jose house for sale in late 2005 I installed a Home Despot rollup garage door. It’s not rocket science.
” have a front window that leaks like crazy. Not water, but air. And, with the cold weather rolling in later this week, I don’t want a draft old window to cause me any more heating bill grief than it has already”
U need a double or triple insulated window. Yes they can run some money. Windows are extremely complex and expensive housing components, at least well insulated ones designed to keep out both heat and cold. U can stuff sealant into the sills and rim areas but a single pane window will allow cold outside air to pass right thru that pane and chill any interior.
An extra heavy curtain or drapery might help as it would create an air space between the window pane and the curtain. Thta is how Insulated windows work-they have 1/4″ or 1/2 ” air spaces between the panes which gives then high R-values. As a temp measure U might wedge a 1 inch thick rigid foam insulation panel as a temp stopgap into that window during the cold winter months. If it is a front showpiece area of the house such as the living room it might not look good to guests but it will insulate well .
Not that it’s someone else’s fault..but I hear a chirpy realtwhore in these transations: ” - of course after you move in you can always get a 2nd mortgage to get new cabinets/floor/countertop blah blah - because real estate always goes up!”
I agree, but even the HELOCs for leaky roofs are part of the problem of people buying houses that they really couldn’t afford. Because if you can’t afford to make a substantial downpayment AND the mortgage payment AND the taxes, insurance and maintenance/repairs on the house, then you can’t afford the house.
Yet, I still see shows on HGTV and TLC all the time where people are making both cosmetic and necessary improvements/repairs to their homes, and they are invariably seeking to “tap equity” in order to execute such improvements. The idea that a house isn’t affordable for you if you can’t afford to maintain it or pay for inevitable repairs out of pocket has gone out the window.
If you need a roof and are unemployed, why not do it yourself? It’s not rocket science although it’s bloody hard work. I did my own roof when I was frantically saving to take three years off to go back to law school. It took a week of my labor and about $1,400 worth of materials back in 1992. But I did a much better job than the hire-from-Home-Despot-parking-lot guys.
I also lost 25 pounds over a two week period. Roofing is damned hard hot work.
Amen!….have only roofed a garage (and did a tearoff first) and it was some of the hardest work I’ve ever done….but I’d do it again if finances dictated a DIY job
“Notice how so many of these stories involved equity loans for “home improvement”. How many of these “improvements” were really necessary? My bet is not too many.”
Not only that, but consider the inflationary effects of a large pool of cheap money driving up the costs of renovation. A friend just told me today how their parents’ bathroom remodel cost $70K a few years back. In many places you can get a whole house for that. I wonder if they can still charge that amount these days. Doubt it.
Picture the guy from the sit-com who spews his coffee everywhere. That was my response.
Right. I “could” be a short-sighted nitwit, but I’m not. How cool is that?
So far the illusion of banks being able to weather the storm financial, has been kept up vis a vis computerized prestidigitationary measures, and all remains calm…
But what about food banks that can’t hide the illusion of nothing?
=====================================================
“On Saturday, thousands turned out for two events aimed at providing some relief; a food giveaway and free mortgage help. In Montebello, nearly 5,000 turned out for a food turkeys and other Thanksgiving Day items, a number that stunned organizers.
We only need to find the financial equivalent of “two loaves and two fishes” and everything will be ok!
Ignore him. He’s a gold dealer.
He has to p*mp gold just the the NAR has to push houses. Fear is the meme.
We can act as if desperation isn’t here, or instead best prepare ourselves for the idea that many people are on the verge of not eating if it wasn’t for handouts that may not be there soon.
This has nothing whatsoever to do with my financial angle, as these people would never be clients of the League of $carlet Pimpernels, they’re just sheep that got sheared and may turn into lions soon, when they start missing meals…
This sort of rabble is always wrong until by the strength of sheer numbers, they rightly revolt.
This has totally everything to do with your financial angle. You are no different than the NAR brigade whose goal was to get people to “buy before they get priced out forever”.
What bugs you is that you got called out on it, and we’re gonna call you out every single time because you’re a biased liar whose only goal is to peddle your gold.
Fear needs no salesmen, as manias sell themselves.
Right, so you’re p*mpin’ gold here, because?
Anyone who has to fear can make up their own mind. They don’t need 40 posts a day from you on why to buy gold.
You’ve been stripped and exposed. You’re a gold dealer. You’re a liar and your job here is to sell your stuff no different from a NAR thief.
Pussy Galore,
The bottomless pit in your stomach as you watch your life’s saving disappear into the void, as a result of the dastardly double dealings on Wall Street?
That’s Fear.
I offer Hope.
Fear meme.
Modus operandi of salesmen, liar and thieves, but I repeat myself.
Hope is the last refuge of the religious rascals, and your religion is gold.
It’s just elite money, nothing more.
It’s just no commissions for you, darling, not any more now that your cover’s been blown.
What commissions would I receive?
I’ve never once made any specific recommendation as to whom to buy the precious from…
Please try a little harder with your groundless accusations~
Talk about the Odd Couple –
*Fits of laughter*
I love you guys!
Happy bird, TG, haarup day!
Lad, PF, –
Best Always,
Leigh
We can’t tell whether these people were showing up for the turkeys or the “mortgage help”. Peole hear that and they’re hoping for some bailout money. They haven’t figured out yet that all the bailout dough is going to THE BANKS, not to any of us.
Comment by aladinsane
2008-11-24 13:17:46
It’s late Alad.
“But what about food banks that can’t hide the illusion of nothing?”
Some are sifting through - forage.
As others suffer or find joy.
The shifting forces.
Is Are.
Leigh
“In Montebello, nearly 5,000 turned out for a food turkeys and other Thanksgiving Day items, a number that stunned organizers”
That area :montebello and the adjacent communities of monterey, rosemead, el monte ,baldwin park not too rosy. Kinda like the rear end hindquarters of LA. Lots of poor and down trodden there, including a good number of recent latino immgrants. That article is just a snapshot and a snippet of an ever growing problem of unemployment & needy families emmenating out of the LA area , which never had the aura of bubble properity attributed to it by the myopic LA times, which for a long time chose to focus on the lives of the rich and famous hollywood elite than look deep into the poor and working underclass which make up the vast majority of this city. Only now as this recession turns really bad is the LA Times now doing a shift into reporting these kind of stories.
Maybe they see a profit motive in doing this Dickensen reporting, sort of like ‘if it bleed it leads’ becoming ‘Desperate times revives the La Times ‘
the companies hope to sell all 20 of the units in the Vermont Avenue Lofts complex in one fell swoop. Given that the craftsman-style homes are expected to fetch about prices about 50 percent lower than what the developer anticipated
I hate to ask, but what the heck is a Craftsman-style loft?? It is of course safe to assume that, like everything else built during the bubble, it’s no good.
it’s just a style… It looks like something you wouldn’t need blueprints to build.. simple lines where form follows function. Picture the average ToughShed and add some windows and you got “craftsman”.
Craftsman houses developed in the early 1900s in response to the arts and crafts movement of the era. Typically, roofs had broad overhangs with wooden brackets supporting the gables. Siding textures and details expressed materials and became more complex. Windows and doors played a greater role in their design as elements. The style became very distinct but also universal in applications, probably because of the proliferation of trade magazines and books promoting that new popular style.
3-w’s dot behmdesign.net/craftsmanstylegarages.aspx
Craftsman style normally refers to a detached bungalow. Most lofts are refurbed warehouses. Beats me what the author was talking about.
What’s a detached bungalow? I always thought that bungalows were 1-story attached apartments.
I’ve never heard of an ATTACHED bungalow. On east coast, bungalow implies stand-alone, single-family house.
“computerized prestidigitationary ”
.. usually implies so is likely to be of service to the parlor magician for its content or to the collector of vintage prestidigitationary (is that a word? …
“And it could be you — any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months.”
Always assuming, of course, that you use a special definition of “middle-class” that means “no savings in the bank.”
I try to keep at least 6 months salary in the bank. If I get laid off, all the extras go out the window and we could probably milk that for up to a year. That’s presuming no unemployment insurance and no temporary work.
Don’t these folks qualify for any kind of unemployment benefits? Didn’t I hear Bush extended benefits again? Where’s the beef?
Thousand Oaks (91360) starting to crack…at least a little bit….maybe. The median SFR per square foot price declined 5.4% from September to October after staying right around $300/ft for six months - could be an anomaly, could be some actual movement.
According to DataQuick, the median SFR was $700,000 in September 2007 with an SFR per square foot median of $379. As of October 2008 the SFR median was $439,000 with a per square foot median of $280.
The problem is, that’s a 37% decline in the median SFR price, but only a 26% decline in the per square foot median - which means that the majority of houses that are selling are the smaller ones that tend to sell for a higher per square foot price, but probably lend themselves to loans below the $417,000 conforming limit.
Still frustrating, but hopeful that we may see some decent downward movement in the per square foot median in the next six months….I guess the real question is whether we will have a functioning financial system at that point…..
Where the F are these people getting the money to keep homes so high in places like Thousand Oaks, Glendale, Pasadena?
I think a lot of it has to do with the fact that the “average amount of time” living in these areas for many families is pretty high - meaning that a substantial percentage bought well before the runup and are willing to ride it out and they can afford the homes since they purchased them at half (or more) of the peak prices and have had salary increases since they bought.
This is the exact opposite of places like Stockton, Sacramento, Riverside, San Bernardino - where the vast majority are new residents and did pay peak prices in the last few years.
The higher-end areas don’t have enough “forced” selling pressure…..all you can really count on is some recent arrivals that got in over their heads or HELOC abuse…..
If you look at the ownership records of many of the residents in Thousand Oaks, a substantial number have lived there in excess of 15 years….in some areas over 20…..
Not to insult –
It’s different(t)here –
What happens when the jobs are…er…
Gone?
Leigh
“Where the F are these people getting the money to keep homes so high in places like Thousand Oaks, Glendale, Pasadena”
Actually Pasadena is seeing rather healthy drops in recent sales prices. Have looked at Oct dataquick and Pasadena is finally crashing. Prices still too high but % wise i am seeing drops of 50 and 70% in two of the zips, though the volume of sales very low. Bet 100% pasadena prices don’t improve this winter and next spring.
“Paul Lloyd said he works seven days a week — weekdays as a water delivery man and weekends as a handyman — and his wife works as a nurse so they can continue to make a $3,800-a-month, interest-only payment on their house in Fontana.
I guess I’ll just never understand why on earth a person/people would enslave themselves to a stack of bricks and mortar, or sticks and Styrofoam, what ever the case may be. Mans needs are really very simple, a little food and water and shelter of some sort. The lessons that will be learned this go around, will be meet with resistance all the way down.
Someone remind again about the advantages of an I.O. over renting. I’m not sure, but I think it had something to do with X % being “in the bag”. I forgot, it’s been awhile.
You are just throwing your money away if you rent….
Also, you are paying someone else’s mortgage when you rent….
And, you get to paint the walls any color you like if you own….
And most important, now is a great time to buy because they aren’t making any more land…..they aren’t making any more EZ Financing loans either, but that’s beside the point…..
And by the way, it was 15%….then it was 11%…..then it was, “I had no idea what kind of mortgages were being written”….
I have the feeling that these people may not actually know what an interest only loan is. Someone needs to sit down and explain to them that they are paying nothing towards the principle and the likely hood that the house will be worth more than the loan is 7 years is extremely unlikely. After busting their hump for 7 years to make payments, they will end up with nothing to show for their efforts.
No, no, it’s all about joining the prestige club.
Some airhead just bought the house down the street from me. That house was on the market for about 6 months at $880k. Then they got a new agent, reduced the asking price to $735k, and got it sold. I really, really, really hope the airhead didn’t pay more than $500k.
At any rate, I introduced myself to her as I was walking around the lake and she was out on her balcony. I said “I live down the street.” Then she said “Do you live on XXXX Street?”. Like if I had told her that I live on one of the other (non-lake-view streets), then I wouldn’t be in the club. Well, I passed her little test FOR NOW. Wait until she finds out that I’m really just … A RENTERRRR!
LOL! I have a similar setup. I pay less than $750 a month in one of Portland’s more posh areas. I’m one of the younger guys in the hood so I always get a second look when I pass others.
“Paul Lloyd said he works seven days a week — weekdays as a water delivery man and weekends as a handyman — and his wife works as a nurse so they can continue to make a $3,800-a-month, interest-only payment on their house in Fontana.”
WOW, how many things are wrong with that sentence? What on earth possessed someone to agree to pay that much for something in Fontucky?
I’m rootin’ for him and his wife; I’m hoping they’ll work harder. The bank (and we taxpayers) need all the money they can send.
Yeah, I hope he works extra shifts. The future of SS depends on him.
WOW, how many things are wrong with that sentence? What on earth possessed someone to agree to pay that much for something in Fontucky
U can now get property probalby like his for under $200,000 in even the nicest part of fontucky-there is a small new part of fontucky located at the farthest northern built up area(north of the new 210 fwy) which is the ‘nice” part, not the lower butt-end funtucky which girdles the 10 fwy.
I use ‘nice’ in parentethes because nice is a relative term when applied to an IE community.
Why is it so difficult for this poor fellow to conclude it would be better to walk away from this albatross ? Not only are they not building equity they face the likely prospect of being forced out anyway once their loan resets with nothing to show for it.
“The couple is counting on their good credit and work record to enable them to qualify for the federal government’s new Hope for Homeowners refinancing program which could lower their loan balance.”
There is no free lunch and you can’t count on a hope.
Seems like the free lunch counter is still open in Washington, D.C. Vitals running short, though.
No free lunch - rather, the allurement of a free lunch. What we really have here is a sandwich in a bear trap. Take the bait and be enslaved forever.
Don’t you just find it extraordinary that they choose voluntary servitude?
Maybe you don’t; I just find it extra double-plus astonishing.
Gone are the days of chasing ‘em down with the JT. Now they all line up with their hands raised screaming “Me! Me! Me! Oh please, ME!!”
Noted.
I don’t know about y’all, but my household carries a whole lot of people on our backs with tax bite. Some need help, many many many are *free*loaders.
Good also to have no master: financial or otherwise.
Besides, I don’t like bear meat.
I guess I’ll never understand why someone would make a housepayment of $3,800 per month to live in a complete $hith0le of a city like Fontana, or its neighboring blistered butthole of city, Rialto.
My husband and I grew up in the area. Back then houses were crappy stucco boxes that were hard to get rid of at $80-100K, and most of the areas were high crime. Last time I went through the area visiting family I was amazed that the same POS houses now went for for the $300K+ range, $400K+ if you wanted new construction. And the crime still looks like its there (and in some areas appears to have gotten worse).
It’s the “American Dream”.
Lots of social pressure to buy a house as a badge of belonging to the “middle class”, particularly among the more traditional, family-oriented and religious elements of the population. For many people, owning has a status value that makes functionality or costs of owning-versus-renting fly out the window.
From the personal anecdote department, I’ve seen friends get reluctantly dragged into some unwise house purchases through pressure from their wives who wanted it as a status badge of ’settling down and starting a family’ or marker of stability and ‘growing up’.
From the personal anecdote department, I’ve seen friends get reluctantly dragged into some unwise house purchases through pressure from their wives who wanted it as a status badge of ’settling down and starting a family’ or marker of stability and ‘growing up’.
But… Suzanne researched it!
My g-friend owns five properties in so cal.
She needs a sedative to open up her property tax bills and she is constantly on the phone with home america insurance.
Own a home and get bogged down by paperwork for the rest of your life!
Hey rental property ownership is a piece of cake! Everyone should do it…it’s totally stress free and adds years to you life.
If you’re masochist…buy rental properties. You’ll be chasing money for the rest of your life.
Sure, you’ll have a nice “nest egg” when you are about to die and can’t eat, can’t drink, can’t pee, have uncontrollable bowel movements, have cataract, can’t see, and can’t walk…but hey…you’ll be RICH!
Preach it, Noz!
Property tax bills = rent the owners get to throw away in perpetuity
Please don’t argue facts. This is no longer allowed.
“She needs a sedative to open up her property tax bills and she is constantly on the phone with home america insurance.”
I need a sedative everytime i hear another politician spewing forth some idiotic headline grabbing idea. Such as Villarigosa spewing forth on installing solar panels all over LA.
I think General Franco had it right - eliminate politics and politicians.
…“Production and sales are down so far that the president of the California Building Industry Association is predicting a shortfall of new housing…
Exactly which solar system is this guy from?
Even if the inflow of new residents into California
that he quotes is true, not everyone can afford a McMansion.
If anything, the opposite will be true — families will double up
in a former McMansion. The days of a SFR 5BR/5ba with
granite are long gone.
Here’s another gem:
http://www.dailynews.com/antelopevalley/ci_11052876
“Honey, it’s already 3:30 a.m. if you don’t get up and shower now that water hog across the street will use it all up!”
Well, they must’ve found SOME way to water those lawns. They look mighty green to me.
That’s not water, that’s paint.. I think the color should be called Foreclosure Green…
“Cambridge, which had planned to build more than 100 homes in Anthology, found demand had evaporated for its modest homes, which started in the high $200,000s. ‘They can’t even give them away at that price,’ Campbell said.”
Something Yogi Berra-esque about that statement.
I’m glad I wasn’t eating or drinking when I read that!
‘They can’t even give them away at that price’
Nobody goes there any more - it’s too crowded.
Looking at the NAR Existing Home Sales figures, two things struck me.
1. There’s a HUGE regional disconnect between;
the West (October 2008 prices about 30% below Full Year 2005), and the rest (October 2008 prices about 11%-13% below Full Year 2005).
Does this imply there’s more to come elsewhere, or has the West fallen furthest because it bubbled highest? (Or both?)
2. This is the first time I’ve seen the median/mean for the West lower than for another region (the North-East), but I haven’t been looking at the figures all that long.
Does anyone know when it was last the case that the West was NOT the region with the highest median price?
(1) West is later in falling, now playing catch-up, (2) West sales are of smaller homes on average than previous sales (sales, not actual house prices, are being compared), (3) previous West sales had more inflated closing prices, due to greater loan fraud and kickbacks.
I believe people want to try to work out the loan before missing payments so they can try to save their credit. I have no facts to prove this, but I would bet it is a major factor.
These people want to lower their payments and loan balance and not even get dinged on their credit for it!
Watch for walk aways after Christmas, when the thought of “not spending the holidays in our home” seems a little farther away.
“Paul Lloyd said he works seven days a week — weekdays as a water delivery man and weekends as a handyman — and his wife works as a nurse so they can continue to make a $3,800-a-month, interest-only payment on their house in Fontana.”
How in the hell does this work? How much money does a handyman and waterboy add to the family plan? As a nurse she might be doing ok. Taxes,insurance, utilities, etc haven’t even entered the picture. I’m beginning to wonder if there are any thinking people wandering around out there.
I guess it hasn’t occured to them that busting their hump to *rent* their house. And they get to pay for the roof, property taxes, etc, etc.
Hopefully someday they’ll sit down and do the math in their 2 hours off.
HD47,
barb luv song at yahoo dot com
For hire–Will pay for advise.
Leigh
I wonder how many of those loans for “home improvement” were actually lost at those Indian casinos or in Las Vegas?