Those Order Takers Are Now Gone In California
The Ventura County Star reports from California. “According to Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project…a foreclosed home in California sells for $200,000 less than a traditional home. Until foreclosures are worked through the market, ‘we don’t think the real estate market can clean itself up,’ Watkins said. ‘There’s no reason for a big turnaround in the market — the economy is weak, which is going to depress demand, and foreclosures are going to provide excess supply for months.’”
“Watkins projected foreclosures to peak next summer, a result of the weak economy and resetting interest rates on adjustable rate mortgages. ‘Next summer is going to be bloody,’ he said.”
“Michael Greaves has two words when asked to describe the real estate market. ‘It’s dead,’ the Ventura real estate investor said. ‘This whole year has been a joke.’”
“Greaves said he doesn’t think prices will drop much more than they already have. But if prices continue plunging, he said he’d be able to weather the storm. He paid cash for a five-bedroom house he bought in Ventura eight months ago that he fixed up and listed for sale by owner three months ago for $435,000.”
“He hasn’t had a ton of calls, but there’s been some interest among investors and ‘ridiculous’ offers as low as $280,000. As much as he’d like to snatch up more bargains, he said, he can’t because his money is tied up in the Ventura property.”
“‘I’ve thrown in the towel until next year, just like everyone else,’ Greaves said.”
The Union Tribune. “Carlsbad home builder Barratt American has filed for bankruptcy reorganization, derailed by the housing bust and a dispute with its key lender, Bank of America. Barratt American and three sister companies, including its mortgage lending arm, sought protection from creditors with a Chapter 11 filing on Christmas Eve.”
“Two days before Barratt sought protection, Bank of America foreclosed on seven of Barratt’s current subdivisions or condo projects. The company is believed to be the largest locally based builder to file for bankruptcy in the current housing slump. Barratt is an example of a builder that over-committed at the peak of the housing boom, said Gary London of the London Group, a real estate consulting firm.”
“‘They had a lot of projects,’ London said. ‘Ultimately, the big guys might not survive (this housing downturn.) The boutique companies are pretty much going to get wiped out.’”
The North County Times. “North County’s economy was shaky at the beginning of 2008, and entire sectors are in free fall as the year nears its end. The sharp turn downward, coming after a decadelong boom, may have seemed unthinkable to real estate agents, car dealers and furniture store owners whose customers had spent beyond their incomes for several years.’
“But vanishing home equity slowed spending in 2007, and tighter credit squeezed it in 2008. The ranks of the unemployed have swelled by 32,000 people, a number that includes self-employed people, recent graduates and others who have thrown themselves into the labor pool without finding work.”
“Economist Christopher Thornberg said such results had become inevitable by 2004, as home prices grew to four, then five and six times as large as family incomes. Lenders inevitably had to raise their standards, and when they did so this year, the losses were large.”
“‘It’s not a credit crisis,’ Thornberg said. ‘It’s credit withdrawal. All the debt junkies have been yanked off the debt needle, and they’re having withdrawal.’”
The Voice of San Diego. “Nearly 30 percent of homes in San Diego County with a mortgage are worth less than their owners owe on their mortgage, according to new data. Local real estate analyst Gary London said the underwater statistic was somewhat irrelevant in the market — a number that only matters if an underwater homeowner decides to sell.”
“Still, continuing economic strife and a rising unemployment rate could put more people in a position of distress. For all other homeowners, he said, ‘This is the time in the market when you keep your blinders on.’”
“‘If you sell right now you’re by definition either distressed or stupid,’ London said.”
The Santa Cruz Sentinel. “As many as one in 10 homeowners in the county didn’t pay property taxes by this month’s deadline, the highest level of delinquency in years and a sign that the toll of the nation’s housing crisis is likely to grow. ‘When you see people making a choice to not pay taxes, you know they’re in trouble,’ said Ken Cole, recently named executive director of the county’s Housing Authority. ‘It’s a shame that there’s such a high percentage of people on thin ice.’”
“‘We don’t know to what degree the problem is mortgage-related or job loss, but those are the two likely scenarios,’ Cole said. ‘I would imagine that the problem is going to continue to get worse in the near-term.’”
“Auditor-Controller Mary Jo Walker said the level of unpaid taxes was higher in South County, where most new housing has been built. The bulk of those who haven’t paid their taxes, Walker suspects, bought their homes in recent years when housing values were at record highs.”
“Treasurer-Tax Collector Fred Keeley said housing problems are bad locally, but not as bad as some areas. ‘We’re certainly feeling the effects of the bursting of the housing bubble … but coastal counties are doing a bit better than when you move inland,’ Keeley said.”
Bay Area Newsgroup. “It has got even harder for low- and moderate-income first-time home buyers to find an affordable loan, thanks to the state’s budget problems. The California Housing Finance Agency has temporarily suspended popular programs that help people get into homes through 30-year, fixed-rate loans and down payment help.”
“The programs were suspended in response to action taken last Wednesday by the Pooled Money Investment Board, which halted nearly $4 billion in state loans for various infrastructure programs. CalHFA also suspended a program that helps teachers and school employees buy homes and local governments and non-profit housing groups provide mortgages to qualified borrowers.”
“‘The state basically shut down the down payment assistance program,’ said Ken Giebel, CalHFA’s director of marketing. ‘It hurts a lot. It’s really a state budget issue and we just had to react to that.’”
“‘It will have a huge impact on the number of first-time home buyers that qualify to buy,’ said Leanne Odom, a mortgage professional with Prospect Mortgage in Concord, who estimates that in the last two years most of her loan volume has been linked to CalHFA programs. Odom said CalHFA lending programs are designed to help ‘the first time buyer who has good credit but just needs help with the down payment. It’s really one of the last programs that offer special financing for first-time buyers.’”
The Fresno Bee. “The incoming president of the Fresno Association of Realtors says 2009 will be similar to 2008, with houses becoming more affordable and the local real estate market continuing its move toward equilibrium. As the market turned from a seller’s to a buyer’s, people had trouble adjusting. Jared Martin, who succeeds Don Scordino on Jan. 1, talked about a big ‘disconnect’ in 2006 and 2007 between sellers who wouldn’t drop prices to match the decline and buyers who assumed values were lower than they were.”
“‘The sellers were up here,’ Martin said raising his hand, ‘and the buyers were down here,’ he added, lowering his hand.”
“The association has 2,872 members, down from 3,500 in 2006. Martin and Scordino both say the tougher market is weeding out inexperienced and weaker agents. ‘Real estate agents have to go back to work,’ Martin said. ‘We are sales people, not order takers. In ‘04 through ‘06, we were order takers. Those order takers are now gone.’”
The Sacramento Bee. “Ruben Ramos, owner of a Marysville real estate office, got attention in real estate circles this week after explaining in Sunday’s Bee how he encourages troubled borrowers to walk away from their homes. His comments – during a real estate round table with three other panelists – went off like a bomb in an industry that constantly tells people to hang in and try to save their homes.”
“‘It’s not the right thing to do. I wonder if this is what we want taught in our colleges, to defraud lenders,’ said retired Sacramento homeowner John Lewis.”
“Leigh Rutledge, a Sacramento real estate agent, said, ‘There was part of me that thought The Bee shouldn’t have printed it. The other part is that as a Realtor I’m incensed that this guy … that this is what people think of us. It’s not how most Realtors feel.’”
“No apologies, says Ramos. ‘If people don’t think it’s a reality, they better wake up.’”
“To be fair to Ramos, another dialogue on the topic was edited out for space. He talked about working first with banks to get loan modifications. If the bank is willing, give it a try, he said. If not, leave. ‘If I see that the modification only benefits the lender by keeping that borrower on the hook and slamming the door harder in their face two or three years further down the road, I’m going to be the first one to say, ‘Walk away.’”
The Pasadena Star News. “Losing money is bad enough. But it’s worse when the loss occurs because your bank failed to inform you that your deposits exceeded the federally insured limit.”
“That’s what Fran Quittel says happened to her as a customer of IndyMac Federal Bank. Quittel, who had two business accounts with the Pasadena-based lender - then known as IndyMac Bancorp - said the bank aggregated her accounts together without telling her, putting her over the $100,000 cap that was then insured by the Federal Deposit Insurance Corp.”
“As a result, she lost $17,500 when IndyMac collapsed and was taken over by the FDIC in July, re-emerging as IndyMac Federal Bank. ‘I felt like I had been hit by a two-by-four … I went to bed for a week,’ the Emeryville resident said.”
“FDIC spokesman Andrew Gray said there is no statutory mandate that requires the FDIC to inform depositors when their deposits exceed the insured limit, which has since been hiked to $250,000 for regular accounts. IndyMac spokesman Evan Wagner agreed with Gray. ‘I don’t know of any bank that informs customers when their funds are non-insured,’ he said.”
“Quittel also claims that FDIC spokeswoman Sheila C. Bair knew IndyMac was engaging in increasingly ‘risky loans’ but failed to act.”
“Wagner disagreed. ‘I don’t think you can say that IndyMac’s loans were becoming increasingly risky … because IndyMac’s loans were almost entirely plain vanilla, conforming loans in the year before its failure,’ he said.”
“He hasn’t had a ton of calls, but there’s been some interest among investors and ‘ridiculous’ offers as low as $280,000.
This is too funny!
He thinks an “investor” who says he’s “interested” is less ridiculous than someone who makes a bona fide offer for $280,000?
In a year, he’ll know who’s being ridiculous, when he can’t sell that house for $100K
“He hasn’t had a ton of calls, but there’s been some interest among investors and ‘ridiculous’ offers as low as $280,000.
I lived near downtown Ventura for almost a year, until threatened violence against my Asian wife by local skinheads drove us out. I think the average resident has a 9th grade education and makes $10/hour with an actual job or a bit more with the meth lab in back. The pricy areas are along the cold, foggy, debris strewn beaches where a few people have little boats bought on credit during the HELOC boom. The nearest well paid jobs are an hour away. I can’t fathom how anybody would pay more than $300K for a house in Ventura, except perhaps a retirement mansion in the hills, and even that is a stretch. I can’t believe there are “investors” buying in podunk little towns with no industry and no real tourism.
The social consequences of the collapsing economy are what really scare me. The implications of millions of young guys feeling completely powerless and disenfrancised, with no hope for the future, is a scenario ready-made for the rise of various extremist ideologies and false saviors.
Hopefully most of them will be too busy gaming texting and watching the tube. Today’s warrior class is already in the military or in prison, not sitting in mom and dad’s basement.
I wouldn’t call them the “warrior class.” More like the “Someone’s going to pay for my crappy life” class.
True. You were speaking of the blind followers more so than revolutionaries.
I agree.
The consequences are already here. I’ve been reading lots of disturbing articles in the news lately, like twenty something year old thugs beating up older ladies for their purses- that sort of thing. Ugly.
Some call it deflation or disinflation of the economy.
There is a better case for calling it the disintegration of the system.
I don’t think monetary or fiscal policy is going to fix what we have now.
This time, it’s different, sorry to say.
The social consequences of the collapsing economy are what really scare me.
————————
My biggest fear too, Sammy.
Got firearms?
Clearly we’re already seeing that; for example the ease at which the LDS folks get people to cough up millions in this economy to fight scary demons like same-sex marriage.
This is clearly history repeating itself…
He didn’t know that he was a victim of a ponzi scheme, not by Mr.Madoff, but whole U.S. economic establishment…
There is no US economic establishment. It’s just people making deals.
I hope you don’t mind, but I just sold you on e-bay.
That’s cool. I know the bidders, and they said they are going to eat you when you come to pick up the payment. So no harm, no foul.
Eaten in THE ROAD sense, or in the…well, never mind.
What?! So you mean I’m out my 10 bucks?! Dangit!
So I’m being eaten by Olympiagal? I’ll hurry right over.
Darn it…..never got a chance to bid.
Dear Mr. Big V, sorry I meant Soviet Socialist United States of America, that the last several years we have created to replace United States of America…
Big V is not a man. Other than that, you’re both right. A socialist scheme of the US government was to put a House in every pocket. Superlow interest rates and various tax incentives. This scheme resulted in Just People Making Deals that gave us a House boom and now a House bust.
Socialist scheme? Evidence? Prompted by banks and assured by research subprime was rolled out to the masses only after it was shown to work. Even now a large majority of subprime loans are current, which is very different from the dot com bust when there never was any kind of real asset backing anything. The government was corrupted and offered white collar criminals a way to make a quick buck with NINJA loans and such and never realized what was going on until the game was over. Naive? yes; Socialist conspiracy? Just incompetence. There were plenty of warnings, but the conservative government is the problem crowd prevented anything from being done.
It is funny how no one called socialism while the burn rate for US cash in Iraq went up to billions per month. The housing bubble burst is a nasty mess, but the cost to the government won’t ever be as much as the trillions spent on a useless war. Spending more money overseas instead is not a way of avoiding socialism through discipline.
“Naive? yes”, “Just incompetence”,”People Making Deals” … people making deals only in FREE MARKET ECONOMY, there is no free market in United States. We should abolish Federal Reserve and let People Make Deals and be responsible for it, not Bailout “people” with other peoples money, since it is not “Naive” or “Incompetence” but it is a Crime towards “other peoples” who paid their taxes “naively” hoping that Socialist Republics of U.S. will use it properly…
A number of good writers have made this point in the MSM. For instance:
Dean Calbreath: Madoff is a bit player compared to Wall Street
2:00 a.m. December 28, 2008
$100,000, now thats truly dreaming!
The Santa Cruz Sentinel. “As many as one in 10 homeowners in the county didn’t pay property taxes by this month’s deadline, the highest level of delinquency in years and a sign that the toll of the nation’s housing crisis is likely to grow. ‘When you see people making a choice to not pay taxes, you know they’re in trouble,’ said Ken Cole, recently named executive director of the county’s Housing Authority. ‘It’s a shame that there’s such a high percentage of people on thin ice.’”
The suckers who are paying taxes will soon start withholding theirs! I’m hoping that some of the non-deadbeats will be able to successfully sue the County for not doing their job to collect taxes from everyone.
Most of those that don’t pay do it knowing full well that if there is a lender, the lender will do a forced escrow. SO why pay your taxes when you can get your lender to do it anyway. They will just adjust for it in the monthly payments.
if they are going to walk and dump the keys to the lender, why pay property taxes?? now is probably the perfect time to stop paying it all, foreclosure delays, too many properties to deal with!
“As much as he’d like to snatch up more bargains, he said, he can’t because his money is tied up in the Ventura property”
Isn’ the Fed counting on guys like this to use more of their easy credit to ’snatch up more bargains’? Can nobody see what is wrong with this picture? I hope his money stays tied up right here for a long time.
lol
I read this guy’s quote and then Thornberg’s:
“‘It’s not a credit crisis,’ Thornberg said. ‘It’s credit withdrawal. All the debt junkies have been yanked off the debt needle, and they’re having withdrawal.’”
And here is a sign of a Ventura ‘Debt Junkie.’ Someone needs to give him a credit fix so that those darn low-ballers don’t actually get homes for $280k!
ROTFL.
Oh… the Schadenfruede… Is that bad on the 3rd day of Christmas?
Got Popcorn?
Neil
‘It’s dead,’ the Ventura real estate investor said.‘This whole year has been a joke.’
LOL! If you think 2008 was a joke get ready to laugh your freaking butt off next year 2009 is going to be a regular laugh fest!
“Greaves said he doesn’t think prices will drop much more than they already have. But if prices continue plunging, he said he’d be able to weather the storm. He paid cash for a five-bedroom house he bought in Ventura eight months ago that he fixed up and listed for sale by owner three months ago for $435,000.”
“He hasn’t had a ton of calls, but there’s been some interest among investors and ‘ridiculous’ offers as low as $280,000. As much as he’d like to snatch up more bargains, he said, he can’t because his money is tied up in the Ventura property.”
“‘I’ve thrown in the towel until next year, just like everyone else,’ Greaves said.”
Hey Greaves next year is next week, so get ready dude it’s going to be a great year for ’savy’ ‘invfestors’ like you.
He paid cash for a five-bedroom house wonder how much?
I’ve thrown in the towel until next year next year is next week Greaves
good thing he paid cash, bad thing is he’s going to live in Ventura
Wmbz..agree.
I have a new rule. Every time I see the word “savy”, I substitute
if with “stupid”. Works every time.
i’m waiting for all these knife catchers to spend what cash they have left…then you will see the real declines as there are still many speculators in the game that thought 2008 was the low!! my bet is there will be fewer buyers and banks will be desperate to dump for whatever price in 2009-2010..
“Ruben Ramos, owner of a Marysville real estate office, got attention in real estate circles this week after explaining in Sunday’s Bee how he encourages troubled borrowers to walk away from their homes. His comments – during a real estate round table with three other panelists – went off like a bomb in an industry that constantly tells people to hang in and try to save their homes.”
“‘It’s not the right thing to do. I wonder if this is what we want taught in our colleges, to defraud lenders,’ said retired Sacramento homeowner John Lewis.”
My understanding is that lenders were supposed to filter these people out. And what about all those Realtors® who knew damn well these people would never pay off the mortgage, but assured them they could refinance (into what?) later?
As for “hanging on,” just what part of “30 years” do they not understand?
I’m so sure. The lenders are the innocents in this human scam. Whatever. They all did something wrong. Let them mire in their own muck.
The so-faux sanctimoniousness by Ramos’ realtor peers is nauseating. Yeah, his moral compass maybe isn’t set to true north, but his sin of telling FBs to walk away from untenable financial situations pales in comparison to the sins of the “Suzanne Researched This” crowd, who unscrupulously put their naive and foolish clients into such “deals” in the first place.
Why would anyone take financial advice from a realtor? That’s like taking medical advice from a realtor
Exactly. My hackles are raised every time I read “Great Investment!” on a listing. WTF does a used house salesperson know about investments?
Pardon the CL link here, but it seems most relevant to this thread. Here a developer split a couple of big lots into double lots. People questioned the demand and recommended smaller homes with a bit of room left for landscaping. The developer predictably bulldozed as much as he could, scraped away as much as possible from the trees that couldn’t be ripped down, and built the biggest thing that could fit. The result is big, but doesn’t fit with the neighborhood or expectations for the area. As a result it is not selling and the developer is in deep trouble over this. The terrible shame is that the resource they started off with, a woodsy retreat lot with plenty of trees, has now been wrecked and it isn’t clear what use the McMansionesque structure now there serves. This whole mess is a very expensive wipe out that has repercussions extending way out into the future
My bad karma, let me show you it: Palmer Lane monster [craigslist]
Their asking over $2MM for the house, and the RE agent can’t even take the time to get his hair cut for the picture?
“Let the Bee Gees sell your home!”
Funny, I was thinking the guy looked like a porn star from the 70s. Cool!
That’s quite a house. I think the realtor is cute, in an 80’s kind of way. My goodness. All that hair. All that pseudo-gothic ( ? ) furniture. All that hardwood flooring. Somehow, they all blend together into one big mortgage.
Mole Man,
Are those pictures real? They look like an artist’s rendering of what the house could look like.
In real life it looks even cheaper. I think they mixed some kind of plastic in with the plaster to make it retain dampness. This neighborhood has mostly tasteful mansions on wooded lots, so this building has a “Why is this thing here?” feel to it. My guess is that anyone who buys it will be modifying the property to make it look less crappy.
I don’t know where to begin Mole Man!
2M and no freeking appliances!
Grrrrr.
Leigh
No swimming pool either. If I ever bought a $2M home(not that I would), I would demand a swimming pool and jacuzzi.
MP is soooo overpriced. the Bay area is interesting in that the late 90’s with the dot.com boom saw a massive number of citizens used their stock sales to fund buying into traditional up scale neighborhoods such as MP and new trendy spots such as emerald hills. They knockdown older homes, did huge rehab’s bought any new home available in older area’s and generally forced up home values all over the bay area. Now the wave of IPO’s, employee stock options and large bonus payments in tech is over and the old wave of buyers are now the new stranded high tier homeowners both in the new trendy area’s they helped create and the older established neighborhoods. Move up buyers don’t have near enough downpayments nor the monthly incomes to afford these areas so the sellers or wanabe sellers sit and wait.
It’s oh so convenient that this MP McMess is a stand-in for a mausoleum. The owners will never have to move. Epitaph: “I told you I was sick.”
That is one ugly, overpriced eyesore. Why does every kitchen look the same? For a few mil, I want something special, not some builder beige run of the mill craptastic stucco box on a postage stamp lot. I thought it was going to say 3 acres, not 10,000 square feet. Gimme an F, gimme an O, gimme an R, gimme an E, gimme a C…
Real estate agents have to go back to work,’ Martin said. ‘We are sales people, not order takers. In ‘04 through ‘06, we were order takers. Those order takers are now gone.
Now, please, don’t tell me this is so. I was going to go to real estate schoool and let the orders and money just roll in.
Go bigger - broker school!
Leigh
–
A Six-Figure Car at Silicon Valley’s Repo Man:
http://valleywag.gawker.com/5118652/a-six+figure-car-at-silicon-valleys-repo-man
“Cisco stealthily laid off employees even as its cheerleading CEO John Chambers said the company wouldn’t cut staff.”
No one lies all the time but good liars know when to lie.
Jas
As a result, she lost $17,500 when IndyMac collapsed and was taken over by the FDIC in July, re-emerging as IndyMac Federal Bank. ‘I felt like I had been hit by a two-by-four … I went to bed for a week,’ the Emeryville resident said.”
CAN I SWING THE 2X4? OH PLEASE, OH PLEASE. THERE ARE A FEW FOLKS THAT DESERVE GETTING HIT (GREEDSPAN, MADOFF, YUN, LIRAEH, FRANK, DODD, ETC)
Democrat senator Schumer from NY wrote a memo about the credit worthyness of INDYmac, that was leaked and caused a run on INDYMac for eleven days until the Feds took over the bank. He’s another crook with Dodd on the Banking committee. It has cost the US taxpayers over 8 billion. Just like the twirp Barney Franks partly causing the housing crash by pushing the Community Reinvestment Act and not regulating Freddie and Fannie.
“‘I’ve thrown in the towel until next year, just like everyone else,’ Greaves said.”
Uh huh. This is why I’ve decided to extend my lease for another year. Greedhead Greaves and his ilk have imbibed enough NAR Kool-Aid that they genuinely believe, as they have for the past two years, that their much-touted RE miracle recovery will take place “next year.” However, I’m guessing that by the end of this Summer’s (non) selling season, when the grim reality of the situation has imposed itself on the most ardent of deniers, they’ll be joining millions of other FBs and flipper crispy critters in fleeing from their underwater “investments.” Only then can the final capitulation play out. Only then will Sammy the Vulture take wing from his comfortable roost.
“comfortable roost”
Me too. My rented abode is doing a fantastic job of keeping me warm and dry, providing a quiet and comfortable retreat from the world with a view. No strings attached.
It is a serene feeling, is it not? And my kids and dog don’t mind the fact that mom gets to stay home with them, and there is no overhanging financial stress causing a fraying around the edges.
Summer sounds like the capitulation point, just like Hillary Cramer said on Nightly Business report. Several things will have happened: We’ll know for sure if the Big Three will survive, we’ll have one more dismal Spring Selling Season™ ,the weak retailers will liquidate, and also by then we’ll know which industries will be touched by the hoof of Obama’s magic pony-up. The only bright spot, if that, is that oil will probably stabilize.
“We’ll know for sure if the Big Three will survive,..”
It is a given. Now that the govt has taken the first step, there is NO WAY that an Obama administration will let them fail and send all those UAW members packing.
Shareholders will be wiped out, bondholders might get 10 cents on the dollar, and political hacks will replace the boards and top management. But the Detroit Three (not the Big Three) will continue to churn out stuff that, for the most part, no one wants. All subsidized endlessly by the taxpayer.
Thing Soviet command economy.
i saw a chart that showed the first wave of foreclosures is over or should be by summer, but the second wave is option arms due in 2010-2012 and that wave is just as large. most of them are only paying the minimum interest and racking up the morgage debt…this is my question on timing? but, then you can expect Obama to try and prop up the market or help all the deadbeats, one of the things i think should not happen. hopefully it wont work and probably wont as most buyers began to see homes as investments and will therefore walk in the end! 2009 looked like the low in foreclosures on the chart, the only thing not included in the chart are all the job losses so it could be more like 2-3 years for a low! i’ll buy when it seems like a steal and it is cheaper than renting!
Yup.
My sisters, mom and me are doing great living in our comfortable rental. We have a great landlord. Whenever there is a problem, he is fixing the problem right away. This is the same landlord that let us paint the inside of the house any color we wanted. He likes that we are stable tenants, pay our rent on time and take care of most of the minor repairs. When we ask to do something his reply is “whatever makes you ladies happy”.
Same here. Been in our comfy rental (SFH, 4/2 with a yard to boot!) for over 4 1/2 years. It’s in our target n’hood, well-maintained (we help with the small stuff) and our rent hasn’t gone up in years, and probably won’t for some time. We don’t have to worry about prop taxes, large maintenance issues, or being stuck if we should need to move for any reason. It’s rather liberating.
These bubble-headed sellers can just sit and rot for all we care.
Probably has cameras throughout the place. Sleep well!
Agreed. I will rent for another year as well and wait for some good cash deals to approach. I’m looking for a bottom around 2012.
Local real estate analyst Gary London said the underwater statistic was somewhat irrelevant in the market — a number that only matters if an underwater homeowner decides to sell.”
Yet another RE “expert” revealed as a drooling imbecile. That number is VERY relevant to FBs who see leaving the keys on the granite countertop and walking away as their most viable course of action - further feeding the self-perpetuating downward spiral of walkaways, foreclosures, and credit withdrawal.
Real estate expert™
Nice.
“Michael Greaves has two words when asked to describe the real estate market. ‘It’s dead,’ the Ventura real estate investor said. ‘This whole year has been a joke.’”
And a very comical and enjoyable joke. At least I know IIIII’ve been laffin’ a whole bunch.
Like this: ‘HahahahahahHAHAHAHAHAHAHAAAA!
I thought is was
HarrharrharrharrharrharrHAW!
“…when asked to describe the real estate market. ‘It’s dead,’”
I believe this quote is as close as you can get to:
“…and then it went dark.”
hehehehe…hehenhenhen…hehehehehe
No, the puddytat said it’s like this:
BWAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAAAAAH!!!!
In ‘04 through ‘06, we were order takers. Those order takers are now gone.’”
Oh, they’re not gone. They’ve just changed jobs. But they’re still taking orders. “Would you like fries with that, sir?”
“Sir, can we super-size your happy meal?”
“Will that be paper or plastic?”
Nirvana is to know one’s place in life
How do you get a realturd of your porch..
You pay for the Pizza !!!
“Nearly 30 percent of homes in San Diego County with a mortgage are worth less than their owners owe on their mortgage, according to new data. Local real estate analyst Gary London said the underwater statistic was somewhat irrelevant in the market — a number that only matters if an underwater homeowner decides to sell.”
Nearly 30 percent of homes in San Diego County have a current market value less than what their owners owe on their mortgages, and this fact is somewhat irrelevant to the market. That sure makes a lot of sense.
By the way, I did some back-of-the-envelope San Diego market analysis just now, using price per square foot data from Radar Logic (thanks Jas!). I started by comparing the price per square foot on 4/23/2007 ($337.19) to the most recent value in their data($210.00 on 10/21/2008). The PPSF went down in a near-straight line trajectory over this period, which I used as the basis of my estimated calculation of the falling knife cost of owning a San Diego home over the period.
Here is what I came up with:
4/23/2007 $337.19
10/21/2008 $210.00
Number of Days 547
Dollar Loss/SqFt/day $0.232522852
Assuming this is a reasonable approximation for homes of different sizes, here are my estimates of the amount lost per month (assuming 30 day months) and per year (assuming 365.25 day years) for owning San Diego homes of various square footages since April 2007:
SqFt / Monthly Loss / Annual Loss
2000 $13,951 $169,858
3000 $20,927 $254,787
4000 $27,903 $339,716
That is a hefty negative wealth effect, and it does not even consider the various components of PITI!
Yeah, but at least some of those dollar-losers still get to call themselves homeowners (for now). The important thing is not to be renter.
HarrharrharrharrharrharrHAW!
You don’t think they feel whatsoever bad about throwing away hundreds of thousands of dollars on home ownership? We could pay our rent for a decade or so on what some of these house-proud owners have lost in market value over the past twenty months.
Oh, Mr. Bear…now just a moment…what “they” are counting on is that “they” will recoup all that lost $$$$$$$$$$ & plus add even more $$$$$$$$$$$$ after… they reach the end of their new refinanced 50 year mortgage loan!
P.S. It is also informative to compare the implied values of a SD 2000 SqFt home on 4/23/2007 versus on 10/21/2008:
4/23/2007 2000*337.19 = $674,380
10/21/2008 2000*210 = $420,000
Implied loss = $674,380 - $420,000 = $254,380. With a median household income in San Diego of $68,237 (Money Magazine), this represents 254,380/68,237 = 3.7 years worth of pretax income for the media San Diego household, and anyone who listens to Gary London’s sage advice and hangs on to their house while prices are dropping at the fastest rate in history gets to lose some more.
Of course, none of this has anything whatever to do with the market (snark!)…
Professor Bear
Dollar Loss/SqFt/day $0.232522852
23¢ per square foot per day
how many Americans like Greaves still think that the market will pick up next year? This is the year that they find out that it isn’t.
God bless America!
23 cents per day does not sound like much of a loss, but when you multiply by the size of a typical San Diego starter home (say 2000 square feet), that gets you up to a $460 loss per day. Five days worth of $460 losses equals $2300, which is what we call one month’s rent around our place.
Prof, just did the same analysis for Seattle, and it’s only just under 8-cents/sq-ft/day.
So, roughly a third of the negative weather effect here thus far.
28-Aug-07 $236.16
26-Dec-08 $198.38
$37.78 PPSF decline since peak
486 Days of decline
($0.0777) / sq-ft / day
You guys are trailing SoCal in the correction. We are the bellwether, as you guys will also get to experience what we are currently, only a year or two down the road.
“It has got even harder for low- and moderate-income first-time home buyers to find an affordable loan, thanks to the state’s budget problems.
So the Nanny State is running out of vote-buying money - cry me a river. So “low income” borrowers, aka riff-raff, won’t be able to move in and destroy formerly decent neighborhoods. So home prices will have to sink to historic, sane norms of 3X people’s incomes, and people will have to practice fiscal discipline to save enough for a 20% downpayment. There has to be a downside here, but I’m not seeing it.
I don’t think anyone got to move into a better neighborhood than they would have before the bubble. Yes, lending got looser, but the prices also went up, so the same people were still living in the same neighborhoods.
Not so. We have some prize lowlifes who moved into mine in 2005, thanks to creative financing and guvmint programs, and the neighbors can’t wait to see the last of them (they’re being foreclosed on).
Section 8 destroyed my parents’ neighborhood and the value of my parents’ house. And I guess Big V forgot about examples such as the strawberry picker who got a mortgage on a $700,000 house in the Gilroy, CA area. Must be a socialist - only blaming business and not individual specuvestors / liars.
Both borrower and lender are to blame for this mess - and our government of course
The berry picker example really doesn’t work. How many such examples where there? One? Perhaps more? And they “owned” homes for how long? Several months? In the end that Monterey area community has continued to gentrify and push out ordinary working class folks. There is still no evidence that subprime loans as originally conceived are a problem. Most of the people working the system were white collar criminals using NINJA loans. As long as reserves and employment history were checked the low down payment loans worked fine.
If there were reasonable regulations in place then the government never would have allowed the bogus loans to be made in the first place. The blame goes with the government is the problem crowd who blocked regulators even after danger signs were being raised.
All the berry picker with the neg-am has to do is set the comps for somebody else to buy with 3-year I/O. And the bubble is prolonged.
Let’s not forget the berry picker wouldn’t have been able to set the comps without the help from the banks, mortgage brokers, and the so called real estate professionals.
There was also the illiterate carpenter in Ashburn, VA that bought a house for $750k. My guess is that his neighbors were tech workers at AOL or MCI.
There was also the grocery checker making $12/hr in South Riding, VA that bought a townhouse for $410k. I know that neighborhood, and one of her neighbors was a professor and the other an IT worker (both bought in 2002 for about $240k).
There was also my maid, who bought a 4000 sq/ft house in Woodbridge, VA for $600k.
Mortgage fraud was massive in Salinas and other Monterey areas. That’s why there are so many foreclosures; last summer Salinas alone was running hundreds of foreclosures per week.
They weren’t foreclosed upon because they had documented incomes.
I wo.uldn’t call Big V a socialist, or even a liberal. I’d call her a fiscal conservative. But you’re right, a lot of people “bought” houses in neighborhoods they previously could not afford.
“It’s really a state budget issue and we just had to react to that.’”
“Issue”? That might be the understatement of ‘08!
“‘It’s not a credit crisis,’ Thornberg said. ‘It’s credit withdrawal. All the debt junkies have been yanked off the debt needle, and they’re having withdrawal.’”
And it’s a beautiful thing to behold.
I can’t really type because my arms are sore from over Wii-ing. Anyway, what’s more ridiculous? Putting in the highest offer at $280k, or holding out for hundreds of thousands of dollars more than the highest offer. “Weather the storm”, huh? Puh-lease.
“‘The sellers were up here,’ Martin said raising his hand, ‘and the buyers were down here,’ he added, lowering his hand.”
I wish the HBB could do “where are they now?” follow-ups of all the ‘I’m not giving my house away’ greedheads of the 2006-2007 period, when they were turning down very reasonable offers. Many of them were asking double or triple what they’d originally paid, and still felt entitled to buyers personally funding their retirement. “How much for your ‘investment’ NOW, greedhead?” Hehehehehehe…..
“I wish the HBB could do “where are they now?” follow-ups of all the ‘I’m not giving my house away’ greedheads of the 2006-2007 period”
And it has been going on everywhere to greater and lesser degrees as you know. In our broke ass state of South Carolina, we looked a 2 acre lot last year that sold for $10,000.00 in 2000 they were asking $215,000.00 Of course we weren’t looking to buy just wanted to see it, like the area. Now the asking price is $80,000.00, nice heavily wooded lot. We will keep an eye on it, I am interested at $15,000.00
“I am interested at $15,000.00″
Make the offer. It’d be good, cheap entertainment if nothing else.
And you could even make a quick profit, because I might be willing to pay you $16,000. Do I hear $17K anybody?
In my silly mind, what I see is:
A profile of an Leslie Appleton-Young icon going dancing left to right across my computer screen…doing the “Egyptian”
I’ve been making one lowball offer per week for the past two months, and they are all rejected. Oh well, I’m just impatient for prices to fall further. Plus it’s kind of fun to do.
A couple of weeks ago I interviewed an engineer (civil) for a project manager position. She had a BS in engineering and an MBA. She had a four-year lapse in her engineering resume in which she had gone into the real-estate “investment” biz.
She did great for a while and is now feeling the pain, thus looking to re-enter the engineering field for a salaried position.
We spent most of the two hours talking about her, and her real estate “empire”. Her focus was clearly not on what value she would offer to me.
Although I appreciated her entrepeneurial spirit, in the end felt this was something she only wanted to do to tide her over until the market turned around. As such, I felt strongly that she would be soaking me for a salary for several years while the burdens of her crumbling empire would significantly distract from her responsibilities relative to earning her salary.
She was summarily dismissed as a candidate.
Sad for her. She evidently was between the bargaining stage and acceptance stage by going back into engineering, but went back too far into the denial stage, which is what you detected. Spending 2 hours talking about RE! How come you let her waste 2 hours of your time? 90% of any interview should be on what can person A do to help company B.
Bill, you are correct in that I should not have spent that much time with her.
However, I spend a whole lotta time reading this blog too. Getting the FB perspective in person was, if nothing else, an entertaining use of my time.
Which may call into question, what am I doing for my company. In that event, criticism well founded sir.
Bill,
My previous response was lost. My point being, you are right in that I should not have spent that much time hearing about her RE misadventures. However, I spend lots of time reading this blog and others, and hearing it first hand, well, let’s just say I got sucked in!
Although I appreciated her entrepeneurial spirit, in the end felt this was something she only wanted to do to tide her over until the market turned around.
Good == Companies lay-off employees until the market turns around
Bad == Employees leaves when market turns around
Its funny when people still talk about being loyal to a company when companies have patiently explained over that last two decades that all employees are interchangeable and outsource able.
Even CEOs know they can’t trust their own companies and have that company loyalty written up in a contract.
Comment by skroodle
2008-12-27 15:54:39
“Even CEOs know they can’t trust their own companies and have that company loyalty written up in a contract.”
Everybody, during employment negotiations, should at least try to do this. What is good for the goose, is good for the gander. I can say from experience that it has served me well, and will surprise how effective it can be.
“It has got even harder for low- and moderate-income first-time home buyers to find an affordable loan, thanks to the state’s budget problems. The California Housing Finance Agency has temporarily suspended popular programs that help people get into homes through 30-year, fixed-rate loans and down payment help.”
Good this is just what needs to happen, these first time buyers that may be shoe horned into an over priced shitbox, don’t know it now, but they are damn lucky not to be ‘helped”.
Yup.
“Hi…I’m your local RE Agent and I’m here to HELP you ”
Ho ho ho !
The government has helped generations of families to go on welfare and not achieve their potential. Sometimes, it’s better to help yourself.
Despite my warnings, my ex roommate bought a condo in 2006 since he got “help” fr. first time buyer program. Now he is $50k under water and I’m kind of tired of hearing his complaints.
you are not the only one who warned people, my brother bought at the top 1.5 million selling now for 1.1 million, my sister made 200k on a house in 2 years bought another with her new husband and put the rest into the stock market. warned her a year ago to get out of stocks-she said she was in for the long term and it would come back, same with my buddy, no one listened. only my mom listened on stocks so she did not get hosed. i think my buddy will listen next time…but i will only give advice to those who will listen!!
“According to Bill Watkins, executive director of the UC Santa Barbara Economic Forecast Project…a foreclosed home in California sells for $200,000 less than a traditional home.”
Why is this? Does it reflect the propensity of foreclosed former owners to lock live pigs in their home in order to completely trash the interior, is it more a matter of seller (bank) desperation to unload foreclosure properties before they become so numerous that the bank itself has to go into bankruptcy, or is the appearance that foreclosed homes sell for less a red herring, due to the fact that foreclosures are almost the only thing that is selling with the market crash in overdrive?
Red herring with a smoke screen on top.
Foreclosure is the new tradition. Mr Watkins needs to wake up.
From my perspective, the foreclosure market is on fire. Looks like they are the only ones who know what the **market price** is.
The idiots who sit with their overpriced listings are NOT “the market,” they are “for sale” sign farmers.
I would like to bring up a new point. I actually think when all of this unravels the people with 30-year fixed will be MORE screwed than the people on the ARMs. Eventually what will happen is all of the riskier loans will default and the market will be down 50%-70% and these people on the 30-year fixed who think they “did the right thing and are safe” actually made the WORST decision. Are they really going to keep paying that 30-year loan when they can foreclose and get the identical place next door for 30-50% of what they are currently paying. I think not. I hear people at work using this theory all the time and I’m almost afraid to tell them.
Maybe. The thing is, if you walk, you destroy your FICO and you usually can’t take out a mortgage for years. It doesn’t matter if you’re a subprime with no down payment and a bad FICO to begin with — you just go back to renting. But if you’re a prime with a fixed, you won’t have to FICO to buy that house next door.
The only way would be to buy the second house then walk on the first one, and credit is too tight for that.
There are many ways around this problem. I saw people put the new house in the name of a relative, do the new purchase before dumping the old, etc. in the last big bust. We’ll see it again, and the walkaways are just getting rolling IMHO.
“if you walk, you destroy your FICO”
When I worked at Countryfried I noticed that mortgager behavior did not seek to conserve FICO scores. Even if good credit is necessary (NOW) to get in another loan, I somehow doubt that people will suddenly change their behavior. If their dream mansion can be had for 40% less down the block, they will walk away the first time they lose a job, get a divorce, or go through any life challenge.
man, the vicious sentiments here are startling. but they are merited. to witness such willful greed and stupidity and to witness its celebration by a slobbering, unquestioning press are rare experiences in life. it will be even rarer in life to witness the painful sobering up of the american people, which will be attended by numerous divorces, spousal batteries, and murder-suicides. a lot of americans have never been told to face limits.
After 3-4 years of enduring high-pressure advertising, enduring bragging from co-workers, thowing bricks at rate-obsessed bleach blondes on CNBC, seeing realtors acting like drug pushers, throwing my money away on rent (which is true during a normal market) and watching my government — with academic “experts” in tow — all fail to “forsee” what we were forseeing…
yeah, I’m feeling pretty vicious right about now.
“throwing my money away on rent (which is true during a normal market)”
NOT TRUE in a “normal market”—-unless you also consider for comparison purposes the amount of money you would be throwing away on interest (tax-adjusted, of course).
Welcome BT, stick around a while and you’ll learn a few things.
“‘If you sell right now you’re by definition either distressed or stupid,’ London said.”
Selling now would be a very good move if you are able to do so. Prices are still way over fundamentals and for those who bought prior to 2002 or so still represent an excellent opportunity to cash out of the market with a significant profit.
I would however say “‘If you BUY right now you’re by definition either delusional or stupid>
If the FED is successful in inflating their way out of this mess, it is possible prices may stabilize, but if and only if they can get tens of thousands of dollars into the hands of consumers and fast! With more and more layoffs every day I cannot see how this will happen.
+1
Talked to a Franchise sandwich shop owner today and he said they are lowering their prices…again. I asked how they expected you to pay your lease and he said they expect more business to come thru the door.
Sounds like a case of we only lose a little on each item, but we make it up on volume.
CRE is going to get HAMMERED.
Can anyone give me some insight on this…? I recently looked at a house (which is bank owned) that had several additions on it. I asked the realtor if the additions had been done with city permits. They said they didn’t know but assumed they had been. I checked with the city and it turns out that the house has been more than doubled in size WITH NO PERMITS! I called the realtor back and asked if it was legal for them to advertise the house as being twice the size as the recorded public data? They told me it didn’t really matter if it was permitted or not. What are the implications of this? Can the city come and tell you to tear down the additions or would they just re-assess the property etc.
Thanks in advance for any help on this.
Stay away from this house (period).
Angel of Death
Also stay away from this realtor.
What are the implications of this? Can the city come and tell you to tear down the additions or would they just re-assess the property etc.
———————–
1. Talk to a RE attorney who is knowledgeable in this area.
The following is just what I believe to be true, and different cities, counties and states have different laws and enforcement (not a lawyer or RE agent/broker, etc.).
An agent cannot include unpermitted SF in the listing. The city/county can ask the owner to rectify the unpermitted add-on either by tearing it down or getting the proper permits after-the-fact. This can be very difficult, and once the authorities are notified that there “might” be problems, it’s likely you’ll be on their enforcement list…so don’t count on just letting it slide and using the unpermitted portion w/o a permit, as they will probably check once they think something is awry.
Good luck!
The city can order the owner to tear down all additions without permits, demand fees and/or inspections.
Banks have their own purchase agreements for buyers to sign if they want to buy foreclosures. These agreements basically require the buyer to sign away any possible contingencies. In traditional purchases of houses, sellers have lived in them and are required to disclose problems. Unfortunately, most buyers sign them because they get carried away by the excitement. I know several people who bought foreclosures this year to rent, who are now stuck with roof and furnace replacements and negative cash flow.
The house we sold in late ‘04 had an unpermitted MIL apartment. We did not list it in the square footage nor Bed/Bath numbers. IMO this seller and their agent are opening themselves up to big liability if they are not disclosing this unpermitted addition. Most towns in California will order a tear down and not even give the option of inspection/fine.
I would only offer on that property what it’s worth without the additional square footage.
“No apologies, says Ramos. ‘If people don’t think it’s a reality, they better wake up.’”
Yes, realtors better wake up and start working……….
.
Slightly off-topic, but I just have to pass along a conversation that I had the other day:
As I do at the end of every year, I purged my house out of old clothes I never wear & just take up room in my closet. As a guy, I really only wear the same top 10 outfits every day anyways.. time to get rid of the rest.
This year, instead of just dumping it all to charity right away, I decided to go to the local used clothes store to see if I could turn any into cash. Any clothes left over.. go straight to charity.
At the counter, I had quite a long conversation w/ the retail sales girl. It was quite informative:
- She just graduated from “design school” w/ student loans totalling $36,000
- She said that there are “NO JOBS ANYWHERE” in her industry
- She works for $10/hour at the store (started off @ $8/hour)
- Says all of her friends are out of work
While we were talking, an older lady & her grown son were next to us & they chimed in saying how bad the economy is. She compared it to 1990. Her son lived in Germany & said that things are HORRIBLE there.
TB
You wear 10 outfits everyday? Are you sure you’re a guy?
Observed in Pasadena:
About two years ago, I parked my car off the street near Caltech in Pasadena, Ca. I noticed a worker buliding a WALL Fence in the lawn before a big house.
A few days later, I found the same worker demolished the finished WALL. The reason revealed by the worker: NO City Permit!