Back To The 1950s
A report from the Daily Citizen. “U.S. Senator Johnny Isakson, R-Ga., spoke on the Senate floor last week and argued that Congress must take steps to jump-start housing demand in order to boost the slumping economy. On Jan.15, Isakson introduced the Fix Housing First Homebuyer Tax Credit Act to expand the homebuyer tax credit passed by Congress last year. The text of Isakson’s remarks is below.”
“‘Looking ahead, we continue to look at suggestions that throw money at the problem rather than getting to the root cause of the problem. In fact, with the best of intentions, I think people are struggling to meet the symptoms of a serious illness rather than treat the illness. The illness, as the Senator from Washington referred to, is the collapse of the U.S. housing market which began in the last quarter of 2007.’”
“‘I was in this business for a long time, and I called 10 people who worked for me a number of years ago last weekend in Atlanta. I talked to a lady by the name of Glennis Beacham. ‘She said: Johnny, I had nine people come to my open house last weekend…Every one of them had the money and they wanted to buy, but they were looking for two things: a short sale, which means somebody selling their house for less than is owed on it and getting a discount from the lender, which means it is a downward price or they are looking for somebody whose house is going into foreclosure that they think they can steal.’”
“‘They don’t want to even make an offer on the 80 percent of people’s houses in this country who are making their payments, aren’t in default, aren’t in foreclosure, but might need to sell. So the marketplace has died.’”
The Tennessean. “Nashville’s largest bank, Regions Financial Corp., swung to a $6.2 billion loss during the fourth quarter. Regions’ stock fell 24 percent Tuesday, part of a general collapse among many bank stocks. At Regions, Dowd Ritter, Regions’ chairman, president and CEO, issued a statement saying the bank was hurt by ‘continued declines in housing and residential-related construction project values, as well as rising unemployment.’”
“‘Prices of Florida-based properties remain under particular pressure, with the real estate downturn rippling through the economy,’ he said.”
“‘The losses were higher than expected,’ said Jefferson Harralson, an analyst with investment bank Keefe, Bruyette & Woods in Atlanta. ‘The banks aren’t really designed to be losing money.’”
The Atlanta Journa Constitution from Georgia. “Atlanta-based SunTrust Banks tumbled into the red during the fourth quarter. Georgia’s largest bank, whose housing loan business is chiefly in the Atlanta area and in Florida, cited ’significantly higher’ loan delinquencies among the reasons.”
“SunTrust is latest in a string of banks to report dismal financial results. ‘The fact that SunTrust is not alone in paying the the price of a deteriorating economy on our business and our clients does not make today’s results any less painful to report,” said James M. Wells III, SunTrust’s Chairman and CEO. ‘We are under no illusions as to the severity of this credit cycle.’”
The St Petersburg Times from Florida. “The fading hopes of Trump Tower Tampa just got fainter. A Tampa bankruptcy judge has ruled that Colonial Bank, owed $3.5-million by tower developer SimDag LLC, can proceed with its foreclosure against the project’s riverfront lot. The 1.5-acre property, which SimDag said is worth at least $15-million, could be seized or auctioned by the bank as part of the foreclosure. Trump Tower was supposed to be the region’s tallest skyscraper but could not get a $200-million construction loan.”
“When Jal and Shiraz Irani moved into Cory Lake Isles, they thought they’d found paradise. The developer had lined the streets with miles of brick, planted dense tropical foliage along the winding entrances and created a private beach and a fish-filled lake. The Iranis pay a few thousand dollars a year in community taxes for the amenities. But apparently, that may not be all they have to pay. The couple was stunned to discover recently that the house they bought two years ago carries a massive debt: $23,093.”
“If the owner ever decides to move, it will be virtually impossible to sell the house with a title that doesn’t come back clean. ‘Obviously, you have to inform the prospective buyer,’ said Realtor Russ Perkowski. ‘With as many homes that are on the market, I think a lot of buyers would look for something else.’”
“‘Just when I was thinking nothing more can surprise me, I am surprised,’ Shiraz Irani said. ‘This is shocking.’”
“‘Everybody’s been to real estate closings where you sign 100 times in three minutes,’ said James Nicholas, a retired University of Florida professor of urban planning and law who helped write much of the state’s community development district law. ‘They may have signed one of those.’”
“Neighbors packed the meetings, which grew so contentious that the community development district board hired off-duty sheriff’s deputies to keep order. As one meeting dragged on, a deputy remarked: ‘All these rich folks talking about $5,000 palm trees. That’s fine with me. It’s paying my mortgage.’”
The Orlando Sentinel. “When mortgage rates fell below 5 percent last month, broker Jeff Perdue’s phone lines lighted up as dozens of people tried to join the latest refinance boom. When the ringing stopped, only five were approved. The rest had good credit, good income and ‘decent equity’ in their homes, but that wasn’t enough, said Perdue, owner of Orlando Home Mortgage.”
“‘The value of their homes killed the deal,’ he said. ‘I had to call them and tell them, ‘I’m sorry. If your house had been worth what it was when you bought it, this would have been a piece of cake. Now the numbers don’t make sense for you.’”
“Even if you are creditworthy, don’t expect easy credit this time around. ‘Only good borrowers need apply,’ said Andrew Orr, a financial planner with OrrGroup Financial. ‘We are back to the 1950s, so to speak, when people wanted a home for shelter, not for an investment.’”
The Cape Coral Daily Breeze. “The residential real estate market that, when it fell, dragged the American economy into one of the worst recessions in recent history, hit Southwest Florida particularly hard. ‘Think of it as going to your favorite department store and seeing something you have always wanted on the discount rack and it’s 75 percent off,’ said Cape Coral Association of Realtors President Paula Hellenbrand. ‘That’s what the market is like now, and that’s why it’s trending upward.’”
“To emphasize her point, Hellenbrand cited a home that county records reportedly show sold for just over $150,000 as recently as 2005. ‘In a few hours, one of my buyers is closing on that house for $85,000,’ she said.”
The News Press. “Major crimes in areas served by the Lee County Sheriff’s Office were down almost 8 percent in 2008 from 2007. The number of criminals arrested was up, according to statistics the sheriff’s office released. The largest increase in crime in Lee County was with residential burglaries, which jumped by almost 500, from 3,070 to 3,563. The increase in residential burglaries is attributable to a spike in the crime in Lehigh Acres, according to the statistics.”
“‘Some of the theft we’re seeing is directly connected to the economy,’ said Sheriff Mike Scott. But Lehigh Acres also has a high number of unsold and foreclosed homes that are abandoned. Many of them are furnished, which makes them an easy target for thieves, Scott said.”
“Bo Turbeville, a Lehigh businessman and chairman of the Weed and Seed steering committee, attributes the increase in residential burglaries to the number of vacant buildings. ‘Am I surprised? No. Especially in the area of residential burglaries, with the vacant residential houses and the problems people have being out of work,’ he said.”
The Daily Business Review. “Lenders have always tried to be discreet when marketing their foreclosed properties for sale. But amid an ever-worsening foreclosure crisis, it’s not exactly a secret that banks have become some of the nation’s largest property owners. And lenders are starting to shed their low-profile approach as their portfolios bloat with foreclosed properties and pressures mount to unload the real estate.”
“Fred DeFalco, a long-time South Florida auctioneer, said he has been consulting for local and regional lenders and helping them develop strategies to unload their REOs. ‘They are definitely trying to get creative, but they are lost,’ DeFalco said. ‘Look at the Washington Mutual site, it’s a great idea but no one knows it’s there. Banks don’t know how to market real estate.’”
“But they are trying and they are past the phase of denial, he said. ‘I was having dinner with some other bankers the other day and they were all openly talking about their REOs and how they were dealing with them — that’s something you didn’t see before,’ DeFalco said.”
The Bradenton Herald. “Homeowner reports of Chinese drywall — associated with a foul odor, a corrosive effect on mechanical devices and health concerns — are on the rise. The Florida Department of Health has received about 39 complaints from homeowners around the state, including in Manatee, Sarasota, Pinellas, St. Lucie, Collier and Lee counties. So far, two developers, Taylor Morrison and Lennar Homes, have been associated with having homes built with drywall imported from China.”
“Maryna Haiduk and Tomas Vapsva were growing concerned about the problems with the drywall.
Strange things began to happen. Belt buckles, jewelry, mirrors and picture frames became tarnished, and their computers had to be repaired. Air-conditioning units experienced mechanical problems. Since moving into the home in 2006, Haiduk and the couple’s two-year-old son also have been having health problems.”
“‘For this house, I paid a lot of money,’ she said. ‘Right now, this house makes me sick and I cannot get rid of my house.’”
“Renowned Florida economist Henry H. Fishkind joked in front of a crowd of about 400 at Wednesday’s 2009 Economic Breakfast at the Bradenton Auditorium that he predicted a bottom at last year’s event and was wrong. ‘If you recall, when I visited with you last year, I said, ‘I think the housing markets have bottomed out,’ Fishkind said. ‘I surely did not see the financial panic in September of 2008 that drove those markets back down again.’”
“But Fishkind said when weekly jobless claims in the nation — reported each Thursday at 8:30 a.m. — dip below 350,000, it will be a sign the bottom has been reached. ‘Obviously you would like me to tell you when that would be,’ Fishkind quipped, getting chuckles from the audience. ‘And just as obviously, you know that I do not know the answer to that question, because if I did I wouldn’t be doing this stand-up shtick for a living. That said, my prediction is: Nov. 19 at 8:30 a.m., you’ll know the recession is over.’”
“But Fishkind was serious about the downturn the nation and the state of Florida have been through. ‘I thought I would never see a day that the sky was falling. I used to think that this Chicken Little stuff was kind of a joke,’ Fishkind said. ‘And then on Sept. 15, Lehman Bros. went bankrupt and the sky really did fall.’”
“Manatee County, in particular, has a challenge to create a more diverse economic base, given the sagging housing market and declining home values in the north and other parts of the country that may prevent people from locating here, Fishkind said. For awhile, Manatee had an advantage because it was more competitively priced versus places like Sarasota and Pinellas counties. But that is less and less the case, he said.”
“‘Some of the competitive advantage that you once had is no longer here,’ Fishkind said.”
The Herald Tribune. “Despite the economist’s predictions being widely off the mark for the past two years, more than 400 political and economic leaders from around Southwest Florida still packed the Bradenton Municipal Auditorium to hear Orlando’s Hank Fishkind prognosticate about 2009 and beyond.”
“Fishkind made several jokes about how wrong he had been about the economy in recent years, but audience members did not seem to mind. ‘He can’t be faulted for that because no one got it right,’ said Judy Shinn, an agent with Michael Saunders & Co. in Bradenton.”
“Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise. ‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
“Fishkind is expecting 2009 to be much worse than 2008 on the foreclosure front. He predicts 400,000 foreclosures in Florida this year compared with about 270,000 last year. In Manatee County, foreclosures will shoot past 12,000 from just under 8,000 last year and about 4,400 in 2007. ‘2009 will be another tough year,’ he said.”
This Daily Business Review report looks a lot of the games that I have been telling you guys about in the REO world. Again, there are a lot more defaulted properties out there than we are being told.
‘Fishkind is expecting 2009 to be much worse than 2008 on the foreclosure front. He predicts 400,000 foreclosures in Florida this year compared with about 270,000 last year. In Manatee County, foreclosures will shoot past 12,000 from just under 8,000 last year and about 4,400 in 2007.’
This reminds me of something that has been repeated over and over; just when everyone thinks it can’t get any worse, it does. And what has happened in Florida has later occurred elsewhere, many times.
What a revelation there. Next thing you know, Fishkind is going to be saying that incomes and home prices are related in some “hard to understand but meaningful way”.
What an idiot. Why do these people even print his predictions? How many times do you get to be wrong. 09 will be terrible. We all know that. What about the greater picture? At the bottom, what’s going to happen? Will the prices shoot up again (not a chance in HE**)? Where is the bottom (when homes hit about 2.5X the median local income, I’d say there’s absolutely a bottom)? Why not try and make a prediction that actually matters to people?
But Fishkind was serious about the downturn the nation and the state of Florida have been through. “I thought I would never see a day that the sky was falling. I used to think that this Chicken Little stuff was kind of a joke,” Fishkind said. “And then on Sept. 15, Lehman Bros. went bankrupt and the sky really did fall.”
_____________________________
Dear Mr. Fishkind:
As a Floridian and long-time proponent of “this Chicken Little stuff,” I can say without a doubt that it is you who are the joke. Does attributing the crash to Lehman Brothers make you and the ditzy real estate agents in your audience feel better? You’d accept part of the blame yourself if you had any courage. I’m not holding my breath.
Cue the seal.
[signed]
snake charmer
Tampa, Fla.
It wasn’t even “chicken little” stuff…..several on this blog were explaining back in 2005-06 the meltdown that would happen if even A LITTLE of the Wall Street paper went bad, using assumptions that were entirely within the realm of the possible.
As I was asking before, the last Credit Suisse reset chart I saw showed the ALT-A stuff hitting the fan in 2009-2010. Has any of that paper been addressed, or are the PTB responding to Hurricane Subprime, while ignoring “Hurricane ALT-A” (and “Hurricane Commercial”? …..and “Hurricane Visa”) coming over the horizon?
I’m getting the feeling that all these half-measures that the government is throwing out there are just meant to divert attention, to give the rats a chance to abandon the sinking ship.
I was playing with the NYTimes rent/buy calculator last weekend, just trying to steady myself against temptation. A brick fell on my head when I put 2% house price appreciation and 2% rent increase in the calculation. The incentive to buy a house in even a mild sustained inflation is enormous.
I believe the roots of this bubble do actually stretch back as far as the damned relentless inflation policy.
It’s easy to use a rent v. buy calculator. Or program one.
It’s harder to pay attention to economic trends and recognize that certain price increases are unsustainable or to actually see wage decreases on the horizon.
Btw, we’re there.
Negative wage increases screw up everyone’s calculators, thats why they don’t like to talk about it happening.
“This reminds me of something that has been repeated over and over; just when everyone thinks it can’t get any worse, it does. And what has happened in Florida has later occurred elsewhere, many times.”
-
Having a front seat in Miami, I can say that this is true.
A lot of people are just not paying their mortgage.
How’s that for a hidden supply of inventory.
Finally, you can now become a real estate salesperson in Fl by doing on-line course or CD.
for $129
Of course ’round here, the thinking is that the root problem is that house prices got to high. A problem that is correcting itself as we speak. Yes, we want the return to supportable prices to happen in an orderly fashinon, but keeping RE prices so high that they are affordable only with crazy financing is NOT a solution.
That is Maryland in a nutshell. People making $60,000 a year thinking a poorly built, $350,000 townhouse is affordable… DINKS making $120,000 a year buying $450,000+ McMansions, in which they store their leased luxury cars, etc. The mindset here can be insane at times: on the local bulletin boards at work, I’ll see clowns trying to sell used, 3-year old cars for like-new prices, a 10-year old cheap and worn sofa for $200, a 90+ year old house in a flood-zone in a blue-collar area for $290,000 (5+ times the income of the area), etc.
Everyone wants everything to be expensive for some insane reason; I guess they all think that they are “geniuses” and “investors” who will be able to sell their overpriced P.O.S. to some other sucker. Nobody every considers paying things off, saving money, or even asking what will happen if that sucker won’t buy their junk at an inflated price.
Something to add to the list of things to consider: Not buying overpriced junk in the first place.
those bb’s at work are always a laugh… trying to sell three year old mountain bikes for like-new prices. I felt bad for the person involved, but, dude, I buy bikes used for 25% of retail. anyone who would pay 100’s for a bike wants it niiiiuuuuuuwwwww.
of course, that was the old white collar job. in blue collar land I’ve seen some hilarious (but unhilariously desperate) postings about mobile homes for sale (at non-mobile home prices) or homes to sublet (uh-oh), and so on. also horses and goats, FS ASAP. hmm.
“……horses and goats for sale….”
Another question for the HBB Brain Trust…..daughter is going to college (maybe) next fall. I inherited her hay-burner as part of the custody agreement. Have told her that I AM NOT paying for/taking care of Dobbin for four years, while she goes off and parties…..
Has had horse for sale for 4-5 months……no lookers at all. Have been biting my tongue off trying to keep from saying “told you so……”
Here are my options (as I see them):
-GIVE THE POS AWAY!!!!
-Leave her outside during the next thunderstorm season.
or
-Anyone know anybody in Europe who might have some good recipes?
sadly, I think it’s actually illegal to sell Mr. Ed to the glue factory now.
with starving horses all over Marion County, methinks some “animal rights activists” have something to mull over … that being the concept of “humane” …
Certainly you can’t mean Marion County, Oregon… ‘can’ you!? My niece would likely take in any stray animal but I think GSFixer is in the MW.
Kansas City vicinity……
If you want to talk about succesful brainwashing, try taking a look at the job the “Equine-Industrial Complex”
has done on all the 9-15 year old girls in this country.
Why hire illegals to muck out barns, when you can find pre-teen and teenage girls that will do it for practically nothing?
Gs,
Take a look at the horse rescue organizations. I googled for your area saw some organizations.
oops, that should be “…prices got too high.” Somewhere one of my old English teachers is turning in her grave.
‘She said: Johnny, I had nine people come to my open house last weekend…Every one of them had the money and they wanted to buy, but they were looking for two things: a short sale, which means somebody selling their house for less than is owed on it and getting a discount from the lender, which means it is a downward price or they are looking for somebody whose house is going into foreclosure that they think they can steal.’”
I really wanna drive to where that btch lives and slap her a few times to make her think str8. What is she thinking?
Perhaps the first time buyers are looking at all the federal, state, local and assumed private debts they will be forced to pay back, with higher taxes and diminished government benefits.
And trying to take some of that out of the hide of those who caused the problem while they still can.
wishful thinking!!!
“..somebody whose house is going into foreclosure that they think they can steal.”
Hey, if you can wade through the school of beached dead housing whales and pay a few dimes on the dollar, it isn’t stealing, it’s JUST a good capitalist business transaction. No more, no less you house Commies
Maybe she is upset seeing all of those unsightly savers, renters and smarter people than her running all over the place with cheap houses sticking out of their pockets
The nerve of those nine people! If they keep it up with this wanting lower prices, they may just get them.
Johnny is shilling for the housebuilding and house selling lobbies. They’ve been hammering the airwaves here. Their package sounds like Help Me First and to heck with anyone else. IMHO.
yes, i’m one of those people who will only buy if i feel it is a steal. I don’t want just a deal! otherwise the banks can keep the empty house, let them get trashed more, and eventually i’ll have my deal! i’m waiting for bank owned unload desperation mode to begin. when the banks start to get desperate to dump at any price…well i’ll be there. otherwise, i rent and have cheap rent and all my cash!
Cory Lake Isles…. I live just down the road from that development. In fact, there are a TON of subdivisions in Hillsborough and Pasco counties that contain those CDD fees. I hate ‘em. Thank God the place we got is not in any kind of HOA.
“As one meeting dragged on, a deputy remarked: ‘All these rich folks talking about $5,000 palm trees. That’s fine with me. It’s paying my mortgage.’”
ROTFLMAO! Now comes the contempt from the working stiffs toward the posers. These folks aren’t really rich anyway. If you were truly rich, you wouldn’t live in Cory Lake Isles.
Yep, there’s money to be made on the squabbles of posers.
Did you guys see the new jackson hewitt commercials with majic johnson?Is this guy broke or what?I guess flipping homes didn’t pan out.You now have a friend in the tax business.
Isn’t Jackson Hewitt big on those refund anticipation loans? (Translation: Payday loans with your tax refund.)
Yep also known as loan sharks.
Might be a good idea to get a “refund anticipation loan” here in California. Who knows when (or if) we’ll ever get our state tax refunds…..so far the answer is no.
If the state stiffs us and says they are going to keep our money, does Jackson Hewitt take the loss?
Father worked for Jackson Hewitt. From his perspective, it’s stupid. He said people come in all the time… they’ve had the paperwork for 4 weeks, but come in at the last minute and demand some fast refund. He says if they need the money so bad, why don’t they come in early? He also says the fast refund stuff seems to be heavily popular with the people that don’t really pay anything in. The EITC stuff drives him up the wall. People come in that game their earnings so they get max EITC. Also he said people used to loan kids to relatives so they got more EITC, till the govt finally stopped it (have 4 kids, loan two to welfare relative so they get max EITC since it only helps you up to 2). He doesn’t like the super fast refund stuff, but you can’t help dumb people from being dumb.
So why don’t they and HR Block voluntarily stop taking food out of baby’s mouths?
Oh. I see.
He also says the fast refund stuff seems to be heavily popular with the people that don’t really pay anything in.
Are you trying to tell me that people are less careful managing stuff they get for free compared to stuff they have to work for?
NOoooo!!
It’s immoral to let a sucker keep his money.
these people literally think they might die tomorrow, so they’d better live it up now. they also have trouble connecting actions to consequences. that’s why they work crummy jobs and why they’ll always be poor.
they also tend to have poor impulse control and therefore many children… again, it is not morally right to punish children in a vain attempt to punish the adults. these people ‘never learn’ so what does starving their kids accomplish?
No one is “starving their kids”…except the people having the kids. It’s not like “feeding the kids” is the one place/time when these folks suddenly become responsible.
If you like, look at it like you are “starving their alcohol usae” or some such…
Nah, I’m gonna use the tax software that new Treasury Secretary uses. Won’t have to pay at all!
Yep, totaliarian living at its finest. Nice to read others hate them as much as I do. Our ex-HOA use to have jurisdiction over what hard and soft landscape changes we did to our backyard too. God, I hate them.
“‘The losses were higher than expected,’ said Jefferson Harralson, an analyst with investment bank Keefe, Bruyette & Woods in Atlanta. ‘The banks aren’t really designed to be losing money.’”
And cars aren’t really designed to crash, either. Is that last sentence priceless or what?
On the other hand, if banks had 1/100th of the crash safety protection that the typical car of today has…
The question is: “Are they designed to prevent the loss of money?”
Answer: “Not any more.”
‘She said: Johnny, I had nine people come to my open house last weekend…Every one of them had the money and they wanted to buy, but they were looking for two things: a short sale, which means somebody selling their house for less than is owed on it and getting a discount from the lender, which means it is a downward price or they are looking for somebody whose house is going into foreclosure that they think they can steal.’”
I’m not sure why Realtors, whose fees ought to be called stealing, are so upset about buyers wanting the best deal possible. A sale is a sale folks, even if your outrageous commissions are slightly less.
Because it’s their job! They deserve 6% :-\
I know of at least one transaction here where the commission was 8%. Freaking insane.
Don’t kid yourself!
She’s lookn’ to steal-her-a-deal too!
Now the Realtor’s are getting pissed because us “average Joes’” are getting RE Agent deals.
No one gets better inside info on houses going bad/good deals than the RE Agents themselves!!!
Too bad honey!
Shelby,
That is such an excellent point! I mean what’s the purpose of taking all… that “grueling” training and paying all those membership fees when any “average” Joe can swoop in and get a deal? ( As if being a lic. Realtwhore (TM) somehow inferred being “exceptional”, hell, even “professional” )
Before you know it Average Joe will be wanting access to pocket listings!
during our boom time (and still to this day) our craigslist is full of “owner/agent” listings. They “snapped up” the good deals to flip themselves.
“I’m not sure why Realtors, whose fees ought to be called stealing, are so upset about buyers wanting the best deal possible. A sale is a sale folks, even if your outrageous commissions are slightly less.”
Because those same morons told the OWNER that they should pay the ridiculous price they bought the house for, insisting it was a “bargain” and that if they didn’t buy NOW, they would be “priced out forever”.
Remember all those claims by Realtors(tm). Now they are proven to be morons and are embarrased about the new “offers”, the reflect current market value.
They are intimating that the deal the owner made was good. So, if you don’t buy at that price, you are stealing the property. What a crock.
This sounds fishy to me. If I were looking for a house, I could care less if it were a short sale or if the lender was offering a discount — all I’d care about is getting a house that best met our needs in the best condition and location for the least amount of money — period. Why do realtwhores always try to make it sound as if wanting to pay no more than they absolutely have to for a property is a sign that the buyer is an evil snake?
Buyers have learned to seek out foreclosures, REOs, or corporate-owned houses because its just not worth wasting time with sellers who are still anchored to their 2006 fantasty price.
Kim,
Wonderful observation. And I don’t think buyers take that route out of anything other than necessity. Oh and well maybe a sense of preserving one’s own sanity.
Yeah, unless you’re in an area that’s already been hit and hit hard ( or there are ample REO’s to pick through -already- ) why would anyone in their right mind subject themselves to “stealing” a property or forcing some hard working owner into “just giving it away”?
‘We are back to the 1950s, so to speak, when people wanted a home for shelter, not for an investment.’
This is a curious statement. We’ve discussed the idea that the housing bubble had been forming for much longer that most believe.
What I found more interesting is someone actually saying a house is for shelter instead of an investment.
What a truly bizarre notion!
We’ve had quotes from this clown in the past ( and he always seems to reference his tenure in that “career” field? ) As near as I can figure out, when he says “back to the 1950’s” he is referring to a “Pre-REIC Controlled Congress” era.
I suspect REIC will have little influence for the next decade, given that all the easy money has run out.
What is more disturbing is that Wall Street will be lobbying as strongly as ever that they can be trusted to police themselves.
And I think that the number of people who believe the Wall Street boyz will be much smaller than in years past. Something about all those shrunken 401k accounts…
It depends on what you consider as the proper “plateau”. If you look at the now-famous Shiller graph of home price values, it shows a plateau at an index value around 100 from 1890 - 1915, then a lower plateau around 70 from 1920 - 1945, then a higher plateau around 110 from 1945 to 1995, with two brief bubbles peaking in 1980 and 1990.
If you consider the 100-110 plateaus to be “normal” then no - the housing bubble didn’t start in the 1950’s it started in the late 1990’s. If you consider the 70-ish plateau to be normal then we’ve actually been in a bubble since about 1945.
In the end it’s pretty much moot - it’s actually valid for plateaus to change due to various long-term government policies. For instance just the removal of the credit card interest deduction in 1986 provided a little push towards home ownership and therefore prices, by encouraging people to shift their CC debt to mortgage debt. Similarly other changes like changes in capital gains rates and even just basic changes in income tax rates cause the homeownership plus/minus equation to change, and thus will nudge prices higher or lower as long as the change is in effect (which is sometimes forever essentially).
packman,
I absolutely agree, with the exception of it being “moot”. It’s actually quite germane. When we narrow the data down to “recent history” you’re right, but notice how when we shifted away from the c/c int. ded. things begin to slip in relative short order.
If the Autos are crying the Blues, isn’t this a perfect time to re-instate the auto loan int. deduction? This decouples consumer discretionary spending from home ownership. It’s a necessary step, but a simple one. I can’t see that it would cost a dime?
Why can’t we have cars that are cheap enough so you don’t need to take out a loan?
How would the parasite class get rich on that idea? Do you expect them to WORK or something? Can’t have that! Now, go out there and take out a loan on something you can’t afford today! Keep ‘merika strong!
Arizona Slim,
Good question. Why do we need legions of mechanical engineers to figure out how to reposition cup holders for the “new” model?
I understand why some people might want an awesome or collectible car for the weekends… but for commuting to work!? How did that get so out of whack?
“Keep ‘merika
strongshtrong!The other day I remembered back to my first “for work” car, that I bought new. It was stick shift, had roll-up windows, mini hubcaps, no auto locks, no cruise control, no auto lights, no power seats, no a/c. The only option on it was an am/fm radio.
I wonder how much prices would fall if cars were built this way again. My SIL’s dad bought a full-size Big-3 pickup truck, brand new, a year or two ago for something like $11,000 or $12,000. I rode to the store in it and was surprised that, just like my 1970 sedan, it had nothing extra - no a/c, no power windows, no power locks, nada. It might be that a huge portion of today’s costs are not the vehicle or even the air bags, but all of the stuff that used to be “options.”
The best selling car in India is made by Tata motors,tiny little engine, but 4 comfy seats and AC. Retail price = $2500
Does it have air bags? Crumple zones? ABS and ESC? How’zit do with respect to those nasty old emissions?
You’re right Bill.
I have to disagree with the way this idea is stated. The Rent or Purchase decision is arguably ALWAYS an investment decision. But as an investment, RE returns it’s dividends as HOUSING. (owner equivalent rent) People SHOULD look upon the purchase of housing as an investment, and carefully compare the estimated cost of purchasing, financing, and maintaining their housing versus renting it over the projected time of occupation.
The problem is that rather than looking at RE as a dividend producing investment, they looked at it as a speculative investment, whose primary return was anticipated rise in asset price. Not all investments are speculative, but speculators ALWAYS think that they’re “investing,” and that usually that they’ve found risk-free returns.
Except back in the ’50s your kids could play kick-the-can after dark without anyone worrying about them.
“Homeowner reports of Chinese drywall — associated with a foul odor, a corrosive effect on mechanical devices and health concerns — are on the rise. The Florida Department of Health has received about 39 complaints from homeowners around the state, including in Manatee, Sarasota, Pinellas, St. Lucie, Collier and Lee counties. So far, two developers, Taylor Morrison and Lennar Homes, have been associated with having homes built with drywall imported from China.”
The Chinese drywall - it’s killing me!
To the regulars who are in construction:
What is a good source for drywall that won’t land me in ER?
much obliged,
philly
phillygal,
Just when you think you’ve heard it all!?
I can live with the health issues, but I’ll be DAMNED if I’m going to put up with cheap @$$ Chinese drywall corroding and shorting out my built-in speaker system and home security!
Not to worry, it appears that Erin Brokovich is on it.
(And we thought the only things buyers had to worry about were the slapdash construction and chimichangas left behind the walls.)
Seriously, though, how much does it cost to move out for two months and hire some guys to replace all the drywall? I heard drywall hanging paid $9/hr, often under the table, last year, and yes, Americans were doing it.
Why are you trying to “dump the house” when this problem is so easily fixed? My dad is a physicist, not a handyman, and he installed some drywall in our old house! And I’m sure gypsum prices are down since 2006!
This isn’t mold or water damage, you outrageous idiots!
Personally, I’ve HAD my share of being around that stuff! And at that, the normal non-toxic/non corrosive stuff. Kind of like pulling carpet to “save” money. Do it once and you’ll agree it just wasn’t worth it.
Just like the Flipper shows were you see people “tearing into it with gusto!” ( Rookies ) The idea is to make it as surgical as possible.
pulling carpet is so worth it for the pleasure of seeing that thrice-damned old carpet rolled up on the curb!
There’s no question a lot of houses during the boom (if not all of them!) we’re build like cr*p. There was no incentive to do good. Neither buyer or seller cared.
However, I think the story about Chinese Drywall making their kids sick is a pile of hooey. They’re just looking for an excuse to scam their insurance company or file a claim against their builder. Most contracts exclude “mold claims” these days, so they’re looking elsewhere. (Maybe the kids are sick because they have greedy scammers as parents, causing psychological harm!)
Gypsum board is a major product here in Central Florida. National Gypsum located their main plant on US hwy 41 in Ruskin/Gibsonton area, near Big Bend rd.
The plant is huge.
They ship nationally.
The phosphate pits around here are apparently sources of gypsum.
No worries. It was only imported because USG’s output was being consumed. Any domestic drywall maker should be fine, and grateful for your business.
The FEMA trailor problem has been identified as Formaldehyde emitted by building products in the trailors. 90% OF THOSE PRODUCTS CAME FROM CHINA. Big law suit brewing
that is not a specifically China problem.
One of the methods used for producing the CHEAPEST wall paneling uses formaldehyde in its processing.
If your house has cheap wall paneling or cabinetry, it probably has the same issues, no matter where the product was produced.
I can remember when folks were BEGGING for those trailors.
The drywall issue really is something recent. All metal is attacked by the fumes the drywall emits. Switches and lighting fixtures, the HVAC evaporator coil in the air handler, home electronic equipment.
Yeah, it’s fixable but at major cost. Try tearing out the old drywall and installing the replacement sheets around rooms full of furniture, with carpeting on the floor, cabinets on the walls (oops, there’s drywall behind all those kitchen cabinets). Oh yeah, all your doorframes and window trim are normally installed AFTER the drywall. So all the trim comes off and its probably cheaper to replace it with fresh stuff. Big bucks.
“Homeowner reports of Chinese drywall”
Foul odors? Corrosive? Health problems?
Yep, it’s… from China. Ahem, how did our world get so turned upside down that it makes economic sense to ship freakin’ drywall from halfway around the world!? Is USG up today? God, the local mfrs. have GOT to be having a hardy belly yuck over ‘that’.
You’ve got to wonder don’t you. The stuff is heavy and it’s manufacture isn’t particularly labor-intensive.
Not only is it heavy, but it’s huge AND fragile. I can’t see how you could save money shipping drywall over the Pacific.
Actually–funny story–a lot of Chinese manufacturers negotiated prices at a loss, hoping to make it up on volume.
I find that story just sad. Sad because once again we fell for it because it was cheap.
DennisN,
I don’t suppose on your way up to ID you drove through Empire, NV? ( Didn’t think so )
It’s the oldest continuously operating mine in the U.S. Quite the sight. Gypsum stacked as far as the eye can see. Simply massive. Why o’ why would we need to outsource that? Oh and yeah, how much inattention does it take to totally e’f up a sheet of drywall?
Keep in mind the fine imported Chinese wallboard complements the fine imported Italian tile and the fine Brazilian hardwood.
*smacks forehead*
Of course, now all we need to complete the tableau are chairs upholsetered in fine Corinthian leather…
Good ole Ricardo Montalban said there is no such thing as Corinthian leather.
Back in the day, it was profitable to raise a herd of Corinthians to sell the leather to Chrysler.
A friend of mine told me he once purchased a Cordoba brand new, really liked it, very luxurious.
Isakson has consistently pandered and squealed on behalf of shack builders since 1999. Check the names on his campaign donation roster… Centex, KB, Pulte… all the usual suspects.
it’s 75 percent off,’ said Cape Coral Association of Realtors President Paula Hellenbrand. ‘That’s what the market is like now, and that’s why it’s trending upward.’”
“To emphasize her point, Hellenbrand cited a home that county records reportedly show sold for just over $150,000 as recently as 2005. ‘In a few hours, one of my buyers is closing on that house for $85,000,’ she said.”
Yep, she emphasized a point - basic math skills are obviously not required to get a UHS license.
Ya gotta point there, Mr D. $85k is 57% of $150k.
Actually, her math is perfect. You see (in her world) any house that sold for $150,000 in 2005 must be worth around $340,000 today. However, for some inexplicable reason, it is being sold for 75% off (i.e. $85,000).
I would also point out that (again, in her world) anybody who tries to get a price lower than what she proposes is stealing. I don’t know which appendage she suggests should be removed as punishment.
Best wishes,
NR
One of my favorite quotes by Jamie Hyneman from Mythbusters:
“I substitute my reality for your reality. Kind of appropriate here for our mathically challenged Realtor President.
It was Adam Savage:
“I reject your reality and substitute my own”
Is there a “dyslexic acalculia” syndrome? 75 = 57?
“Fishkind made several jokes about how wrong he had been about the economy in recent years, but audience members did not seem to mind. ‘He can’t be faulted for that because no one got it right,’ said Judy Shinn, an agent with Michael Saunders & Co. in Bradenton.”
Judy, Judy, Judy.
No one got it right, huh? Judy must not have read this blog in recent years. OK Judy, here’s one to remember -”You’re going out of business; the worst it yet to come; and MANY got it right when you and other RE types were dead wrong. You’re still a shill, Shinn”.
And I’ll make sure I never deal with anyone from Saunders….They still don’t get it.
I sent this to the reporter with the Herald Tribune:
How can you print comments like:
“He can’t be faulted for that because no one got it right,” said Judy Shinn, an agent with Michael Saunders & Co. in Bradenton.
Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise.
“No one saw this coming,” agreed Kathy Valente, another Saunders agent.
Give me a break – plenty of us on the Housing Bubble blog saw this tsunami coming way back in 2003. NOBODY saw this coming – you should be ashamed of yourself for not asking the right questions or calling these idiots on this BS.
This will make your blood boil. Moron whining about how he needs a principal reduction on his homes because they ALL (4 of them) are underwater. Who NEEDS 4 homes? WTF?
http://www.cnbc.com/id/15840232?video=1008119754&play=1
Nope, not one dime Vince. Take your JT. You’re a chiropracter so I’m sure their some joint manipulation you can do to take all four of those JTs. And another thing, next time you think you can get rich quick…anytime you see that phrase “get rich quick” your not the one getting rich quick.
I bet if you combined all the payments he’s made on those houses, he could have had enough to buy one entire house today.
just another greedy investor that was the cause of pricing homes out of reach for everybody. Now, he wants principle reduction, not so he can afford the payments, but so he can profit sooner on the houses appreciating. Maxed out the home ATM, lived it up, maxed out his credit cards, and now wants to be bailed out. This make me sick that americans like this are so F—– greedy. they are the scum of the earth! One good thing is there is resistance to allowing speculators to get away with the deal he wants. and, no it does not help out everyone that you get a reduction…it only helps you! My bet is they will do principle reduction, but watch how is causes the responsible to not pay their morgage and rack up their credit cards….so they get their deal. if only the irresponsible get help…well we are all learning that we need to stop being responible!
“‘Looking ahead, we continue to look at suggestions that throw money at the problem rather than getting to the root cause of the problem. In fact, with the best of intentions, I think people are struggling to meet the symptoms of a serious illness rather than treat the illness.”
Ahem!
oh and by the way Floridians your taxes are going up
As the state budget is cut because of revenue shortfalls, Republican leaders are breaking with tradition to discuss ways to raise taxes and close loopholes.
http://www.miamiherald.com/news/florida/story/860436.html
intangible prop. tax is going to suck for me…
maybe they think so too, and will raise taxes on ciggies and pot again (please, not beer, that’s not fair *g*)
oh wait, you say weed is illegal in Florida? who told you that?
Huh. Hadn’t noticed.
Now there’s a thought. Legalising pot may go a long way to fixing that deficit………….:-)
“Republican leaders are breaking with tradition”
Yeah, right - some tradition. They left out the promise of small government part - reduction of government expenditures.
What say we start with the disbanding of the Florida National Guard? We have Mighty FEMA now, so the Feds can take the money from elsewhere to help us in natural disasters. Wonder if anyone has any facts about how much of the National Guard expense in FL was spent, each year since Bush invaded Iraq, on matters of immediate concern to Florida (hurricanes, fires, similar) versus matters concerning Bush (Iraq, Afghanistan and other overseas interventions?
The National Guard was created to be the Governor’s Army and was intended for use inside the state and along its borders. As with anything involving government, it has been bastardized beyond recognition. Read last week about a kid being buried after buying it on his sixth combat deployment - that’s criminal, IMO.
“Republican leaders are breaking with tradition”
Today’s “Republicans” broke with tradition, and principle, and core values, years ago. Their “leadership” has been so co-opted and corrupted by the neo-cons and K-Street influence peddlers that they are in essence a zombie party for the corporate cartels. And yet, most of the GOP voters are too intellectually lazy and dishonest to acknowledge that sad fact.
‘We are back to the 1950s, so to speak, when people wanted a home for shelter, not for an investment.’”
I’m facing a dilemma with my wife. Right now we rent but she wants to buy a house in the spring time when our lease expires. We are in an area that is still outrageously priced although its slowly on its way down. The software company that I work for is on it’s last leg of financing and is facing a pretty bleak ‘09. Although I’ve tried to enlighten her to the dangers ahead, she has been vicitimized by the years of propaganda about RE as an investment.
Honestly, I’d rather be out of work than shackled with a huge mortgage on something that is inevitably going to be underwater. I’m actually hoping that I’m unemployed by the springtime and unable to qualify for debt slavery financing. So whenever I see the stock market correcting or read about layoffs, I’m hopeful that it will hit home soon in a big way. I see the Great Depression 2 as a way of knocking people to their senses, bringing them back to reality after years of insanity.
Don’t do it.
I don’t know where you live, but if it is anything like Maryland, prices are still WAY TOO HIGH. Combine that with vanishing jobs and you have a recipe for disaster. She may not be happy, but she also wouldn’t be happy if you ended up out of work and stuck with a huge mortgage around your neck.
Best of luck to you.
Pondering The Mess,
Not… that I don’t agree w/ your logic, it makes perfect sense, but the “I might be laid off any day” defense doesn’t cut it w/ spouses. They reason, “Well, yeah, you ‘could’ get laid off, OR… we could hit the lottery or…”
So it just sounds altogether to mealy mouthed to them. It sounds like you’re afraid to make a commitment.
Try… “You know that advancement they’ve been talking about for me? Well if THAT comes through, we should be looking at a bigger house in a nicer neighborhood!” Then when they ask just say “No word on that YET!”
Got a fairly decent bonus one year at my former job (well, decent for my line of work……was a few thousand bucks).
Didn’t bother mentioning it to the (now ex-) wife. The rumors of a department shutdown were wafting thru the air, figured a rainy day fund was in order. Managed to keep it under wraps for several months.
(Ex-)Wife subsequently found out I had some cash stashed. She responded by going out and buying ANOTHER EFFIN’ HORSE, which I found out about when the monthly stable bill doubled.
Why are divorces expensive? Because sometimes they are worth it.
Ask your wife if she wants to be the one quoted in the paper saying, “No-one could have foreseen the massive job losses, rent decreases, bond market blowout, earnings collapse, bankrupcies, and stock market cratering of 2009. I feel like a victim here.”
Stupid is as stupid does. (Don’t tell her that!)
Tell her buying a house is fine as long as the mortage and your other living expenses can be fully covered by only one of you working. The chances of one of you getting laid off in the next year is 50%
Rob,
It is understandable for her to have the urge to nest. Maybe you can’t reason that emotion away, but you can balance it and do some bargaining. Tell her that you want a house too, but that the thought of a mortgage in an economic meltdown scares you out of your freakin wits. If you did get a house, she’d have trouble sleeping with all the whimpering and crying you’d be doing in the middle of the night.
Negotiate a timeframe a couple of years out to reevaluate.
Strike a deal with her - agree that the next rental will be your last, and that after another two years, you’ll happily start looking to buy.
The bitter pill of renting may be easier to swallow if she knows that this will be the last time she has to do it. Suggest looking for a rental in or near the neighbourhood you want to buy in, and call it ‘research’.
I’m doing much the same thing with The Husband: he thinks that sub-$900K prices in Santa Monica is time to buy. I’m willing to rent there for a year or two to check out the area. So far, it seems to have worked with him…
Oh, and get HGTV taken off your basic cable
That channel is simply an Enabler.
Just watched a couple of ‘My house is worth WHAT?” 2009 editions over the weekend - the Koolaide is rich and tasty, still.
“That channel is simply an Enabler”
LOL! Yes it certainly is. I know they were uglier than 3 barrels of sh!t but the old 10′ Sat. dishes allowed you to order ala carte` and get just the channels you wanted. Maybe if you tip the cable guy..?
Just block that channel with the TV remote.
?
You can DO that! Oh… I’ve very specifically asked the cable companies over the years to give me “buffet” style programming and they’ve always refused.
I finally found out why. They explained that a great many of the “special interest” channels would simply not make it if that were an option so they -have- to roll them into packages. I’ll give that a try GS! Wish we could help with the horse, they’re just poor creatures and I hate to see them become a pawn.
Perhaps tell her that you will look at any and all houses that you guys can afford on just her salary? What we do in our house is plan for household expenses that can be covered by the person who makes the least amount of money in our house. If the worst happens and one of us has to work at starbucks, we will be ok. If the best happens and we incur no need to live on the lowest paid person’s income- we have $ in the bank. Keeps us sane and keeps the peace.
What works great with my wife is figuring our maximum budget for housing, then look at what we can afford to rent and what we can afford to buy. We can only afford to buy a tiny house with bad schools but can rent a mansion in a gated community
with great schools. We are presently in that mansion, and I refuse to move any where that is not an improvement on what we have.
Been doing this for 20 years
doug/athena,
Don’t get me wrong, I think there very definitely was a time when “borrowing all the money they would lend you and buying as much house as you could get your hands on!” made sense.
Unfortunately for the folks that bought in the last few years, that time was 1994.
The wife and I didn’t mind so much and did rather well on our first (2) homes. We didn’t mind all the extra work ( after work ) as we were a lot younger and it was actually fun! We were coming out of some pretty… profound doldrums in the Oregon economy and frankly, since there wasn’t any over-time, raises or advancement, well what the HELL else are you going to do!?
But it was different then. Projects were paid out-of-pocket on a pay-as–you-go kind of model. It can be fun when you have nowhere to go but up and there’s no pressure like when you’re trying to do some short-term flip!
I did just that recently. We rent, but I hear from time to time “I don’t want to rent forever”. I point out that if we had bought when she wanted 2 years ago, not only would we be in a house and losing sleep on it, we’d have been stuck there and not able to follow her career to (gasp) Florida.
It stil comes up as a topic from time to time. To calm her down I show her the houses we can afford alone on her salary, I show her snippets from this blog, that does the trick for now.
We talk about 2009-2010 as potential buying time. I have no desire to buy until the bargain I am getting is just too good to resist.
Find an excuse to spend time with a couple facing foreclosure. THAT might serve to put some fear into your wife.
Or in some other way, put her in contact with people who are getting JT enemas right now.
Two years ago, my wife thought I was a tightwad and borderline crazy (and trying to ruin her life) for wanting to cut back expenses, rent, and move out of equities.
Now she thinks I’m a freaking genius.
She actually beat back my suggestion we pay a little more and move into a nicer place. She’s addicted to moving thousands into savings every month. Instead of fantasizing about a vegetable garden she’s questioning why she would want to be tied down to an alligator that’s losing value (even if we pay cash, which we intend to). Victory!
” I’m actually hoping that I’m unemployed by the springtime and unable to qualify for debt slavery financing.”
Be careful what you wish for.
Why not just tell your wife NO.
You should withhold sex until she agrees with you.
Or you could grow a pair. Either one.
When we were on the UPside of this monster I can see putting the Fear Of God into your spouse or even withholding ahem, “affections” but I don’t think it’s nearly as effective on the down low if ya’ get what I mean?
She/he is probably hearing about all kinds of “Forclosure Seminars” and “Prices are at 2003 levels” and a lot of other stuff. I agree it’s time to remain vigilant where family finances are concerned, but that doesn’t mean it’s any easier.
Foreclosures?
“You should withhold sex until she agrees with you.”
I don’t think that works with chicks.
Reminds me of the joke…..
Sex therapist is giving a lecture……..asks the crowd:
“How many of you have sex at least once a week? ”
Some hands go up.
“How many have sex once a month?”
A bunch of hands go up.
“How many of you only have sex once a year?”
Guy in the back jumps up, waving his hands wildly, big grin on his face.
Therapist asks, “Why are you so happy, if you only get sex once a year??”
“Because, TONIGHT’S THE NIGHT!!!!!!!!”
Just say NO!!!!!
“Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise. ‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
Yeah… all of the big named domestic terrorist BOMB makers refuse to take the credit for THIS BLAST.
NRA, Wall Street and Gov’t are all singing …”I know nuting, nuting”
Mean old Slim went to a community meeting last night. The featured speaker was Mike Hein, the city manager for our fair city of Tucson.
Like many other cities, Tucson’s municipal budget ain’t lookin’ too good. Seems that this nasty little recession is really taking a bite outta revenues.
At one point, Mr. Hein said that no one saw this recession coming.
Thinking of all my homies down in the HBB ‘hood, I said, “Yes, they did! A lot of people saw this coming.”
A guy behind me piped up and said that he saw the effects of the recession in his business last year. And I added that it first started knocking on my business door back in 2006.
Mr. Hein didn’t have anything to say in response.
C’mon Slim, you know the game. You’re supposed to tow the line and agree so nobody looks stupid. We’re part of the great human herd, and if our great leaders couldn’t see it coming then nobody could have. When you hear lines like what that guy spouted, just stand up and proudly say, “Moooooo!” You will be heartily welcomed into the fold.
Sgt. Shultz….sweet…….
‘We are back to the 1950s, so to speak, when people wanted a home for shelter, not for an investment.’
And that, IMHO, is a good thing.
It has been proven at least twice in the past few years that turning any neccessity such as shelter or energy, into a speculative market full of crooks, gamblers, and idiots is a sure-fire way to destroy an economy.
Now, if we could just get housing price to income ratios across the nation back down to 1950 levels, we’d be in better shape.
OT, but has anyone else noticed that in the last few days, NPR has been broadcasting nothing but 24/7 Obama-worship? I’m starting to regret voting for the guy (not that I had a choice; I would have voted for RP in a heartbeat, had he been on the ballot).
I got tired of all the yackety-yack on NPR. My radio is now glued to KXCI, Tucson’s community radio station.
Yea this Obama worship stuff really creeps me out. I was born with a reverse compass, when all the sheep are going east I am going west. He seems like a fine fellow, I will wait and see what he does.
I, too, am astounded by the fascination that the public has for the Obama family. I think it’s a combination of factors…. I don’t think we’ve had such celebrity in a president since JFK, and perhaps not even then.
I think this will wear off. Grown adults don’t act like children for that long.
But yes, it’s astounding. Even the jaded media has yet to castigate itself for their nonstop coverage (a sure sign of fatigue).
Do consider that with so many bad things going on, obsessing over Michelle’s dress or Malia’s lunch menu is a kind of escapism. 1930’s Hollywood, 2010’s the White House? Stranger things have happened.
Kennedy’s “Camalot”, redux……
The Democrats seem especially suseptible to this kind of “turn back the clock” crap.
Are you of the body?
Welcome friend.
Landru
Agreed. The daily news is so depressing, this is just a form of escapism.
I believe that some MSM news source noted yesterday that BO was photographed working in the oval office coatless, in just a white shirt and tie.
I should imagine that would be grounds for Impeachment for the bush republican types and bumper stickers to that effect are probably rolling off the presses as I type
Everybody is in Obama worship mode. You would think nobody in the country voted for McCane. It will die down soon … If it doesn’t he is screwed. Given the hype level, he could do an excellent job and still be considered a disappointment.
I don’t worship The Messiah, and didn’t vote for him (wrote in Ron Paul), but thank God we’ve finally turned the page on the running debacle that was the Bush Administration, and started a new page. It’s easy to be cynical and look for reasons to turn hostile toward Obama, but I say let’s try to give him the benefit of the doubt until he gives us legitimate reasons not to. I for one respect the man’s intelligence, and think he’s far close to “statesman” than the smirking chimp and his organ grinder Cheney could ever hope to be. And though our resident athiests will scoff, in my family we include Obama in our prayers every night, hoping that God will grant his wisdom, safety, wellness, and good judgement in these troubled times.
It’s all a reaction formation to the Bush years. I’ve been more excited about Bush leaving than Obama finally taking office, and it’s hard not to be a little Obama-ed out.
I used to think I would have voted for Ron Paul, but once I learned that his platform included turning this into a ‘Christian’ nation “as the founding fathers intended”, I stopped drinking that particular brand of Koolaid. Because of his religious views, the man can’t be taken seriously as a libertarian, and as a republican had no influence within his own party.
A president who has no support in Congress (as opposed to bipartisan support) would make a poor leader because the bad blood would spread to other issues outside of the economy. Millard Fillmore and Andrew Johnson were great examples of that.
Most of the Founding Fathers were Deists. The modern-day equivalents are the Unitarians.
I agree, but that’s not what Ron Paul says…
“Most of the Founding Fathers were Deists.”
That is not the conclusion from what I can gather from internet sources, including Wikipedia. The Wik entry had this to say specifically “Several of the Founding Fathers considered themselves to be deists or held beliefs very similar to that of deists”.
I’m not a Deist or whatever but I do know that if the FEDS and the States were to TAX the Churches and all the Sunday Morning Sky Pilots like they taxed the HOUSES and Joe6pk, most of the American Religion Racket would be over in one Hell of a HURRY
I was going to make some other gleeful post, but I just had a thought:
if EVERYONE, including churches, colleges, and GOVERNMENT had to pay property taxes…
they might not be so ridiculous…
heck, I’d be satisfied if private uni’s had to pay prop taxes. (remember the harvard land grab? don’t tell me their **** doesn’t stink)
why must private households bear the brunt of RE dislocations? local gov’t in the current config has an incentive to allow crazy development and price runups because they reap the gains and pay none of the consequences (until a new admin comes in).
Mikey,
Boy, are you right. Religion is a BUSINESS and should be taxed. I am not a big fan of organized religion, but subscripe to a moral lifestyle.
Who describes moral???
Well, considering that there are 19 Major religions with approx 10,000 various religious sub-divisons throughout the world, with NO GUARRANTEE who if anybody is correct, SOMEBODY is a great big Tax Fraud and running a SCAM around here
awaiting wipeout,
You misquote me. I never said religion was a “business”.
I said religion was a RACKET, kind of like housing and most wars. The FIX is in and it is profitable …for the “right people”
The Feds do pay property taxes in a lot of cities. They are not really taxes per se, but monies sent to local governments to compensate for having the land taken off of the tax rolls.
This was instituted during WWII.
One more reason that communities hate it when military bases close.
Be careful what you wish for in taxing religion. If you think they have power now, wait and see what happens when they start paying taxes. I would call this cutting off your nose to spite your face.
I used to think I would have voted for Ron Paul, but once I learned that his platform included turning this into a ‘Christian’ nation “as the founding fathers intended”
Bullsh*t. You’re either badly misinformed, or deliberately trying to smear Ron Paul. He never said anything of the sort. I’m very familiar with what Ron Paul stands for, and frog-marching this nation into a theocracy is absolutely not part of his platform.
http://www.lewrockwell.com/paul/paul148.html
“The notion of a rigid separation between church and state has no basis in either the text of the Constitution or the writings of our Founding Fathers.”
“The Founding Fathers envisioned a robustly Christian yet religiously tolerant America, with churches serving as vital institutions that would eclipse the state in importance.”
It must be your local station; it’s less so here.
agree: mine was playing classical by 2:30 Tues afternoon…
Wed Jan 21, 2009 4:36pm EST
..President Barack Obama’s inauguration generated an unprecedented 35,000 stories in the world’s major newspapers, television and radio broadcasts over the past day — about 35 times more than the last presidential swearing-in..
[snip]
By comparison, the last U.S. presidential inauguration, of George W. Bush in January 2005, resulted in about 1,000 stories in major media worldwide, Paul JJ Payack, president of Global Language Monitor said.
http://www.reuters.com/article/newsOne/idUSTRE50K6E320090121?sp=true
Opps.. i skipped the money quote.
..Payack said that according to his group’s monitoring, the Obama campaign and election story had generated 717,000 citations in print, television and radio across the world in 2008 and 254 million mentions on the Internet and in Web blogs.
That surpassed media interest generated by Hurricane Katrina in 2005, the global financial meltdown in 2008, the Iraq War in 2003 and the September 11 attacks (!!?!?!) on New York and Washington, Payack said.
it’s an obamanation!
When they have a story about President Obama on my local news, they always show a picture of him in the corner of the screen with just his head in profile and a powerful and forthright gaze. It kind of reminds of good ol’ Il Duce. Now that guy knew how to strike a profile!
I would have voted for RP in a heartbeat, had he been on the ballot.
He would have been on the ballot if you simply wrote in his name. Does your state allow write-ins?
“So the marketplace has died.”
The marketplace has not died, it has just outpriced what people can afford and the buyers are not willing to take the risk that prices will rebound to the bubble years prices. Sellers must price their properties to what the local incomes can afford or be stuck with a property that will not sell!
It is just that simple, but greed is still clouding the better judgement of many sellers who are stuck with properties they paid to much for when they purchased the property.
“Think of it as going to your favorite department store and seeing something you have always wanted on the discount rack and it’s 75 percent off,’ said Cape Coral Association of Realtors President Paula Hellenbrand.”
What a crock of BS!
If a property was inflated by 100% or more and it is now 75% off that 100%, you are still upside down by 25% or more as the property still remains overvalued. Buyers need to understand basic math and not fall for the hype put out by these realtors.
Your heart is in the right place, but your math is a bit off…
$100 + 100%($100) = $200
$200 - 75%($200) = $50
Not trying to be a pain, just accurate.
me too..
..If a property was inflated by 100% or more and it is now 75% off that 100%…
“That” 100%… meaning the “inflated-by-100%”.
So it’s 100 + 100 = 200
200 - (75% of that 100) = X
200 - 75 = $125
You’re not upside down yet..
One of the biggest problems with this whole issue is that both Democrats and Republicans seem to view a house price correction as a problem.
“‘Looking ahead, we continue to look at suggestions that throw money at the problem rather than getting to the root cause of the problem. In fact, with the best of intentions, I think people are struggling to meet the symptoms of a serious illness rather than treat the illness. The illness, as the Senator from Washington referred to, is the collapse of the U.S. housing market which began in the last quarter of 2007.’”
Anyone who thinks that the problem is collapsing house prices–and not massive mortgage fraud, improperly rated securities, and banks taking on too much risk–is not prepared to handle this situation.
It seems like the only difference between Democrats and Republicans is that Democrats want to shower money on homedebtors, and Republicans want to give it to the banks.
‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
Good Morning. I am indeed a “No one”, and yes, I agree with the above statement. I saw this coming in 2005, and joined the HBB in 2006.
I first heard warning of a housing bubble back in March ‘02. It came from one of the two University of Arizona economists who present a big public forecast event twice a year. I’ve since had the opportunity to thank him for his warning.
And I joined the HBB in 2006.
Hi, I’m NoOne. And I saw it coming.
No, I am Sparticus.
I am Sparticus.
I Am SPARTICUS…….
You’re all wrong:
I am the Spartacus spelled correctly.
drats!
I heard on NPR that Trump Casinos is going into BK for the fourth time in 17 years. Since the law has changed somewhat, I wonder if his serial bankruptcy game is up (I honestly don’t know).
His game won’t be up until banks stop lending him money.. and considering his powers of salesmanship it’ll never happen, imo.
How does a casino go bankrupt…. sheesh
Maybe they just rolled the dice…too often
This came out in the local newspaper… The kewl aide has lots of life in it…
http://www.thesunchronicle.com/articles/2009/01/22/news/4283121.txt
“When mortgage rates fell below 5 percent last month, broker Jeff Perdue’s phone lines lighted up as dozens of people tried to join the latest refinance boom. When the ringing stopped, only five were approved. The rest had good credit, good income and ‘decent equity’ in their homes, but that wasn’t enough, said Perdue, owner of Orlando Home Mortgage.”
“‘The value of their homes killed the deal,’ he said. ‘I had to call them and tell them, ‘I’m sorry. If your house had been worth what it was when you bought it, this would have been a piece of cake. Now the numbers don’t make sense for you.’”
I wonder how large the pool of qualified potential buyers is. If you are underwater, can’t sell your house, and can’t get financing, you can’t hope to buy another house. Seems like the only ones able to buy homes are specuvestors and renters who can come up with a sizeable downpayment.
“The rest had good credit, good income and ‘decent equity’ in their homes, but that wasn’t enough, said Perdue”
I don’t comprehend this statement. Someone is lying here.
Plus he’s saying the numbers no longer make sense for him. So for them to refinance into a lower payment doesn’t make sense?
“Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise. ‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
Correction: Those who saw it coming were derided as tinfoil hat wearing nut jobs by those who were blindsided.
People like Nouriel Roubini are still derided as nutjobs by the folks in power.
I think the whole financial infrastructure in this country is Peter-principled.
+1
thank you, Harvard Business School
“thank you, Harvard Business School”
And U. Chicago Law School.
I call a bottom to this financial and banking disaster when… the likes of the “late”, great banker, Neil Bush with a handful of “Magic Beans”, appears to have more credibility than a RealtyWhore with a Deal and a Steal for you.
Sheesh….America really knows how to pick them
These ****’s deserve to have Japanese tentacle monsters invade their every orifice… okay, that’s too kind (the tentacles are wet and lubricated, for one thing), I mean JT’s.
I went to the opening of an AmSouth branch (changed its name to Regions w/in the year). The bank officer LIED TO MY FACE. (I was asking about ATM cards; they were pushing debit.) I also was next to a bank officer trying to convince a woman in her 30’s to buy a house. “How would you like to buy for less than you’re spending on rent?” I had a hard time seeing how that was possible, but said nothing–wish I’d had more HBB. (I used to spend more time on iTulip, Housing Panic, and the Cali bubble sites than here and I didn’t know what I know now about subprime loans–however, I did know that houses in G’ville cost more than renting ’cause I’m not stupid!) Because I would have gotten all up her face if I had know she was pushing a teaser ARM. At the time it sounded hinky but I didn’t know all the details so it was like the Scientologists with their “stress tests”–I just stayed away.
Bottom line, these people are GRADE A “FANCY” SCUM! I hope they go down HARD! They deserve it for all the households they invited to ruin.
Add one more to the “sometimes people get exactly what they deserve” file!
I wish I remember what book it was that I read (when I went on a reading spree about personal finance–prolly in 2006) where the author stated that he didn’t think a house was an investment–it was a roof over your head. The dumbos on Yahoo! Finance at the time were going on and on about how your house is your biggest investment, nay, your ‘road to wealth’ and I was feeling kind of depressed because I knew about 20% down payments (what a chump I was!) and couldn’t afford one, I mean, other than a literal shack without proper wiring, insulation, or even walls at right angles. (running water added in the 1960’s)
I was shaping my financial goals at the time (for the first time, really, after a revelatory lecture by a finance professor who revealed that savings is what you net at the end of the year, not what you still have from previous years… whoa), and it really helped to see that a house could be a money sink, just like a car. No shame in renting affordably and piling up cash to invest.
The book wasn’t that old, but it was an equities guy and the advice was kind of old school. A house is a roof over your head. Don’t overpay beyond what you need for that purpose. Wow.
Yes, from a simple roof over your head to a prison without bars, it IS truly amazing what the creative little boys and girls from NAR, their friends and a few years can bring to you America
“to a prison without bars”
McMansions = new age debtor’s prisons
New homes get smaller
Say goodbye to McMansions, Americans are buying ‘right-sized’ homes
By Amy Hoak, MarketWatch
Last update: 7:38 p.m. EST Jan. 22, 2009
LAS VEGAS (MarketWatch) — These days, a bigger home isn’t always a better one: Recent research suggests that homes being built today are getting smaller.
The average size of homes started in the third quarter of 2008 was 2,438 square feet, down from 2,629 square feet in the second quarter, according to the U.S. Census Bureau. Similarly, the median size of homes started in the third quarter was 2,090, down from 2,291. The statistics confirm what the housing industry has suspected for a while.
“We’ve been hearing for a long time ‘Why is the home size not declining?’” said Gopal Ahluwalia, vice president of economic research for the National Association of Home Builders. He spoke about the trend at the International Builders’ Show, held in Las Vegas this week. Anecdotally, he had heard smaller homes were being built as housing prices tumbled and the economy began to weaken. Still, “we never had data to back it up,” he said.
As the herd turns, so goes housing.
Financial Times
Housing market unlikely to pick up this year
By Chris Giles
Published: January 1 2009 22:01 | Last updated: January 1 2009 22:01
More than six in 10 economists believe 2009 will be a year in which to avoid buying property, with prices falling into 2010.
This still leaves a significant minority who think that prices will be close to their nadir towards the end of this year as the recession and credit constraints ease.
Economists are divided on whether falling prices will depress the economy further or are a symptom of more general weakness.
But a majority think the poor state of the housing market will add to the wider gloom in 2009, not least because housing construction, durable goods sales and services related to housing transactions are such a large part of the economy.
The overriding feeling among the panel is that house prices are still too high compared with incomes and credit conditions. John Calverley of Standard Chartered says: “The key thing is that a 50 per cent decline in prices only takes many values back to where they should be. It does not make them cheap.”
Jonathan Loynes of Capital Economics says: “The experience of previous housing downturns suggests that, even after prices stop falling, it could be some time before they start to rise again at any meaningful rate.”
Many, such as Andrew Oswald of Warwick University, believe the market should be reaching a bottom towards the end of the year. But Prof Oswald is cautious: “As I called the house-price crash too early, I am particularly conscious of the difficulty of predicting the turn of the herd.”
EDITOR’S CHOICE
Recovery forecast ‘too optimistic’ - Jan-01
Survey of economists: Full responses - Jan-01
Economists warn of doom and gloom - Jan-01
Darling wins backing for his tax cuts - Jan-01
Credit and confidence threaten recovery - Jan-01
Samuel Brittan: The problem with all this economic doom and gloom - Jan-01
P.S. I believe this article is in regard to the UK housing market. It is different here in the USA, of course…
from housing doom site
We’ve poked fun at the “statistics” used by the National Association of Realtors (NAR) in the past, but the NAR has hit new lows in a recent survey that they have sent out to agents. [Many thanks to M for forwarding this!]
How is this for a leading question?
In your area, what are your expectations for home prices over the next year?
a) Rise 0-5%
b) Rise 5-10%
c) Rise 10-20%
d) Rise > 20%
e) may fall some what
In your area, what are your expectations for home prices over the next year?
a) Rise 0-5%
b) Rise 5-10%
c) Rise 10-20%
d) Rise > 20%
e) may fall some what
Priceless! Good find!
f) Fall off the cliff into the abyss
NO PMI FOR FLORIDA CONDOS…
This is from the 1/12/09 “Business Weekly” section of the Sarasota Herald Tribune. The article is “Condos Bear brunt of slump,” by Aaron Kessler:
“…But unless you can come up with a 20 percent downpayment, you had better bring some cash. [sic]
“ Why? The credit market. In particular, recently there has been almost a complete drying up of mortgage insurance for condo purchases in Florida.
“Leslie Swart, with Blue Skye lending, said no mortgage insurance companies will write policies any more for Florida condos above 80 percent of the value. She said the trend started about six months ago, and has since spread across the entire state.”
(Kessler) “…So if mortgage insurers draw the line at 80 percent of a property’s value, then it is almost akin to them severing their traditional role.”
Couple this with a more than 50% reduction reduction in active mortgage brokers operating in Florida in just one year.
Goodbye, Gainesville condo market! Anybody with $24000 is not going to put it on a 15-30 yo, student-party-infested, cramped, dilapidated Gainesville condo (that sold for $30K before the bubble).
Some bottom callers may have reached the point where history is likely to prove them right. It is difficult to imagine a market dropping off a cliff from a 50-year low.
Housing still sliding
But economists say mid-2009 will be the trough
By Steve Kerch, MarketWatch
Last update: 3:45 p.m. EST Jan. 20, 2009
LAS VEGAS (MarketWatch) — Housing will not look much better at the end of this year than it does now, but “we do expect ‘09 will be the bottom,” the chief economist for the National Association of Home Builders said Tuesday.
David Crowe, speaking at the International Builders Show here, said housing starts are expected to fall nearly another 30% in 2009 and new-home sales will drop 14%. But he said he expects the trough of the market to occur sometime in the middle of the year.
“We should come out of 2009 on an upswing. It won’t be strong, and we will still have home-price declines throughout the year, but it will be an upswing,” he said.
Good luck w/ that prediction Kreskin. Yeah, show me some of the emperical data you analyzed to back up that claim - oh, I forgot, it doesn’t exist - it’s merely a hunch, gut-feeling, etc.
When I received multiple sales calls from that Tampa Trump project a long time ago, I realized that project would never get sold. When a curious caller is treated like a hot prospect, the sales office had to be desperate.
“Even nationally renowned figures like former Federal Reserve Chairman Alan Greenspan and former Treasury Secretary Robert Rubin were taken by surprise. ‘No one saw this coming,’ agreed Kathy Valente, another Saunders agent.”
LOL maybe no one was willing to speak skeptically if they held a leadership role, but there were plenty of skeptics on HBB.
The illness, as the Senator from Washington referred to, is the collapse of the U.S. housing market which began in the last quarter of 2007.’”
Wrong, you imbecile. That’s like saying “The trees waving are making the wind blow.” The clueless senator is confusing cause and effect. The collapse of the US housing market is just the most obvious of many consequences of building “prosperity,” or the illusion of it rather, on unlimited and reckless use of credit. The whole system became a rotten, jerry-rigged edifice built on foundations of sand, and now it’s crashing down under it’s own weight. And all the Kings Horses and All the King’s men, won’t put Humpty Dumpty together again.
If any of you voted for this retard, please leave town under cover of darkness.
“‘They don’t want to even make an offer on the 80 percent of people’s houses in this country who are making their payments, aren’t in default, aren’t in foreclosure, but might need to sell. So the marketplace has died.’”
Cry me a river, Senator. The marketplace hasn’t died. The thing that’s dead as a doornail is the runaway greed and speculative excesses that got so out of control the past few years. Only millions of greedheads and delusional home-moaners are still in denial on that score.
Why on earth WOULDN’T I, a rare creditworthy and cash-rich buyer, want the best possible deal for my hard-earned money? Why am I going to pay some fool’s 2006 wish price, when there’s such a huge downside risk in the market right now?
Imagine how depressed this greedhead seller would be if she realized that those nine “buyers” are knife-catchers, and that eve with the deep discounts they’re demanding, many of them will be carrion by the time this finishes playing out.
This is off topic but I have a question. I have noticed that their are a lot of broker types looking for stressed sellers to do a lease option to purchase. Most of the time they are looking for a client. They also are very pushy about signing forms. What is this? Is there a type of scam going on out there? Does anyone have any ideas or news about this? Thanks and I look forward to a reply.
Unconventional financing is Scam City. Hire an RE attorney.
It drives the smart money insane to hear people say over and over again that “nobody saw this crash coming”. We and dozens of other investor groups, money managers such a Peter Schiff and economist such a Shiller not only saw the crash and bubble burst coming we were screaming from the roof tops that is was coming but were ridiculed by the same morons who say “nobody saw this coming”
The Smart Money