Giving It Back
It’s Friday desk clearing time for this blogger. “Some Des Moines-area homeowners feel stuck in their homes — they can’t sell and they can’t rent out either. Doug and Marissa Kennedy of Ankeny want to buy a home larger than their 1,100-square-foot townhouse. They tried to sell but couldn’t find a buyer, and new restrictions prevent them from carrying two mortgages to get into the landlord business. ‘We don’t even have a Plan B anymore,’ Doug Kennedy said.”
“C.P. Morgan Homes announced Thursday it will halt all operations today, after 26 years in the business. Some families are concerned that promises made by the company won’t be kept. Patricia Conry said she and her family moved to a C.P. Morgan community in Camby two years ago from California. She said a huge part of their decision to settle in Northfield at Heartland Crossing involved promises of a pool and a park, which were never built.”
“Without the promised amenities, the house isn’t nearly the value they thought it was, she said. ‘We paid all this money for a house, and now we’re not going to get the things (that were promised),’ Conry said.”
“The Lafayette housing market is bucking the national trend of slumping home sales and depreciation in value. ‘Someone who buys a house here, they think they are going to get that gradual appreciation over a period of time,’ said Broker Duke Long.”
“As for Andrew Conner, he has his eye on a home south of town. He said he is closer than ever to fulfilling his dream of home ownership. ‘I just wanted something that was my own. I’ve been paying rent for four years and it hasn’t been going to anything and I can actually call this my own,’ Conner said.”
“In January, Marco Island saw the biggest drop in the median price for single-family resales in the state. The median price fell to $200,000 for homes sold in January, according to the Florida Association of Realtors. That was down 62 percent from a year ago, when the median price was $529,500.”
“Fort Myers-Cape Coral came in second in the state for its single-family home price drop in January. The median price fell to $94,900, down from $234,000 a year ago — a 59 percent decline. ‘Approximately 80 percent of the Lee County market in 2008 was a distressed sale,’ said Brett Ellis, partner with The Ellis Team at RE/MAX Realty Group in Fort Myers. ‘They are good deals. They are well below replacement cost.’”
“In January home buyers in the Albuquerque metro area could choose from among 5,309 homes and 616 townhomes on the market. That translated into nine homes for every buyer out there looking. ‘Most every buyer, unless they realize this house they absolutely have to have, then they’re going to come in and lowball the house,’ said George Lowes, president of the Realtors Association of New Mexico. And right now price is the driving factor, he said.”
“Northwest Austin homeowners may want to wait before putting their homes up for sale — if economic forecasts are correct, a housing shortage could drive prices up in the next few years. ‘My fear is that national developers may have overreacted, and Austin may be penalized in the form of lower home starts, which eventually can create an artificial shortage,’ said Angelos Angelou, principal executive officer for AngelouEconomics.”
“Realtors and economists agree that now is still not the time to sell, and it probably will not be for another 18 months. ‘You haven’t lost any equity if you haven’t sold your house,’ said Mark Sprague, Austin partner for Residential Strategies. ‘It’s like a stock. You have to wait for that equity to come back.’”
“Helen Edwards, president and chief operating officer for Coldwell Banker United, Realtors-Austin region, said home buyers are looking for higher-quality homes, but not necessarily larger homes. ‘We’re past the point of bigger is better. Buyers are more concerned with quality of construction and energy efficiency,’ Edwards said. ‘People are not looking for McMansions anymore.’”
“While nuts-and-bolts details are unclear about how President Barack Obama’s unprecedented $275 billion foreclosure rescue plan will work, the immediate benefit of the proposal may be a sense that a bottom to the housing crisis has been reached. ‘We need to stop the free fall and right the ship,’ said Patricia Harpin, a veteran broker in Stratham. ‘In the last year, homebuyers I’ve talked to have been paralyzed out there. I think the biggest thing we need to do is to install confidence,’ said Harpin, who works in southern Maine and New Hampshire. ‘Even if it’s something you’re not facing today, you hear about it. We need to continue to reinforce the positive because it’s a great time to buy a home.’”
“What’s not known yet is what lenders will take part, what homeowners need to do or even how the process will work. Obama announced his plan Wednesday in Arizona, a state drowning in record foreclosures.”
“Most struggling Arizona borrowers are too far upside-down on loans to qualify for refinancing at a reduced loan amount under the program, local real-estate professionals said after learning about provisions discussed by Housing Secretary Shaun Donovan before Congress on Thursday.”
“‘In Arizona, Florida, California and Nevada, most borrowers are underwater by more than 50 percent,’ said Mateo Garcia, president of Mateo Mortgage Funding in Tempe. ‘I just think Washington is seriously naive to what is going on in the streets on a daily basis.’”
“Bob Wasieko, of Phoenix-based Security Mortgage Corp., said that the $75 billion allocated toward preventing foreclosures is ‘a drop in the bucket’ given the total value of distressed home loans in the United States. Letha Martin’s concern is that the promise of federal assistance will discourage homeowners in Arizona from taking the steps necessary to improve their financial situation on their own. ‘Too many people are placing too much stock in the degree of impact the stimulus plan is, in fact, going to have,’ said Martin, vice president of Valley loan modification firm the Platinum Group. ‘This pie-in-the-sky attitude may lull people into a false sense of security.’”
“‘A house that was worth $300,000 may now only be worth $150,000 to $180,000 or less,’ said Bob Bemis, CEO of the Arizona Regional MLS. ‘Even if the bank modifies the loan, extending the term to 40 years and dropping the interest rate to under 5 percent, the homeowner will still never be able to sell the house for what is needed to repay the total debt.’”
“No one has a bigger stake in the Obama administration’s housing rescue plan than Las Vegas. Dennis Smith, president of Home Builders Research, said he doesn’t think there is a magic wand to solve the foreclosure crisis because it is so broad and deep.”
“‘I think any kind of action that we can get out of the government to assist in the foreclosure problem is a positive and it is appears like they are trying to take as much as they can and throw it against it the wall and see what sticks,’ Smith said. ‘And that is not bad … But when you have 50 percent of homes in Las Vegas underwater, that is a scary thought. To suggest that a person is not going to walk away from that loan because he can go in and refinance and save 150 to 200 bucks a month — I don’t see that happening. He is going to walk away like everybody up and down the street did.’”
“California is offering a big carrot to people who buy brand-new homes in coming weeks: a $10,000 state tax credit for new-home buyers who close escrow starting Sunday. Jed Kolko, a research fellow at the Public Policy Institute of California in San Francisco, said the tax credit is a mixed blessing.”
“‘It’s designed to boost the construction industry, which it’s likely to do,’ he said. ‘But it ultimately encourages more new-home constructions, which is most likely to happen where there is more available land and less regulation - the areas where we have oversupply already.’ Moreover, the credit could sap demand for existing homes, making it even harder for people who need to sell their homes to do so, he said.”
“‘While the tax credit may marginally help slow the decline in housing prices, it could encourage people who otherwise would not be able to afford a home to buy one,’ he said. ‘As we all know, sometimes that works out and sometimes it doesn’t.’”
“South Bay home prices plunged in January to a level not seen for nearly five years. The median price of an area home was $477,500 last month, according to the California Association of Realtors. The local decline was less severe than the countywide figure, a stunning 35.5 percent drop to $300,000.”
“‘You know something is going on when you start getting two, three, four times the listings than sales,’ said Realtor Adolph James, who specializes in the beach cities. ‘For the last five, six, eight years, the average number of listings available in that area was eight to 12. As we speak, I think we’re pushing 40. Yeah, it’s tough.’”
“Another sign of the housing market’s tough times was evident on the Palos Verdes Peninsula, which was not cited individually in the CAR report because the entire area failed to generate at least 30 home sales in January. It was the first time The Hill was left off the CAR list since February 2006.”
“James said he expects to see a bottom to the housing market within the next two years. ‘It wouldn’t be a surprise if it’s mid to late next year, but it’s not going to be ‘09,’ James said. ‘The bottom line is that real estate moves 3 percent a year, and we had years where it moved up 13, 14, 15 percent. And we’re giving it back now.’”
“The epicenter of this earthquake was in California. But the true epicenter can be located with greater precision at the headquarters of World Savings, the nation’s second-largest savings and loan, founded and led by Herb and Marion Sandler. The type of mortgage sold by the bucketful were known as Option ARMs.”
“A whistleblower, Paul Bishop…had warned the top management at World Savings that loans were being aggressively promoted and made to people with little or no regard for their ability to afford them. The term ‘Enron’ was waved about like a red flag but to no avail.”
“Will levers be pulled to help the Sandlers avoid further scrutiny? Will Attorney General Eric Holder, not immune in the past to allowing political factors influence his decision-making, send a message to the U.S. attorney in San Francisco to focus on other issues than the Sanders? One more question: Why has House Speaker Nancy Pelosi not looked in her own backyard for the people partly responsible for our nation’s problems?”
“On Jan. 29, President Obama called the bonuses paid to Wall Street employees ’shameful.’ The current financial debacle is a result of the housing mortgage collapse. The mortgage collapse is the result of ’shameful’ government policies which promoted loans to unqualified buyers.”
“Most ’shameful’ of all is the ’shamelessness’ of politicians who keep feeding taxpayers their garbage while maintaining a sincere demeanor.”
“Alan Greenspan should emulate Donald Rumsfeld. When you err badly as a policy maker and do enormous harm to the nation, hunker down and keep your mouth shut rather than demean yourself with lame excuses. That is what Greenspan does in the CNBC documentary ‘House of Cards’ that aired recently.”
“The Federal Reserve under Alan Greenspan failed badly in the last half of his nearly two-decade tenure. It failed in the most basic function of any central bank - regulating the money supply so as to maintain a stable price level. And it failed as a financial market regulator. These two failures - to prudently manage the money supply and to regulate the banking sector - are key causes of the global financial crisis and growing recession.”
“That is not to say the Fed is the only culprit. Many other factors played a part, including large persistent federal budget deficits financed by borrowing abroad, decades of ill-reasoned policies to foster homeownership, a somnolent Securities and Exchange Commission, a fragmented financial regulatory system, irresponsible management of financial institutions and a society that turned a blind eye to folly because times seemed good.”
“In CNBC’s documentary, Greenspan once again argues that the Fed had little to do with the bubble or the current recession. These, he implies, are random events of the kind that occur for no reason every century or so. Moreover, he argues, there is nothing the Fed could have done to limit the growth of the bubble, save raise interest rates so violently that the economy would fall into a recession with unemployment of 10 percent.”
“This is malarkey. Yes, by 2006, there was no longer an easy way to climb down from a perilous perch. But with the money-supply growth at twice the rate of output year after year and with the Fed’s interest-rate target holding at one-fourth or less of its long-term averages, quarter after quarter, it insults the public’s intelligence to argue the Fed and its chairman bear no fault.”
“No Fed official was as conscious of his public image as Greenspan, once basking in the fawning title of ‘maestro.’ If he persists in making statements like his recent ones, the image that he’ll be left with will be far less flattering.”
Another great week! I’ll be out in foreclosures all day, but I’ll be online as well. My thanks to those who support this blog. Please check back this weekend.
Thank you Ben for another great week of the HBB. Be careful out there.
Ok, you can stop drooling on your keyboard now.
As a matter of fact, you should bring a JT with you as a weapon. And a camera.
Oooh, keep an eye out for good stuff. The husband of one of my friends stopped being a builder and is now a remodeler but mostly he’s a foreclosure guy, who shuts down the house and gets the junk out. Last week he found a brand new rifle, tidily packed inside a nice leather case.
AND a month ago he got ME a whole bunch of house paints in utterly super gaudy eye-boggling colors! Gathered from various garages and sheds of foreclosed properties. Bright pink, neon reds, turquoise…man, I was very pleased.
I told him I was now glad I had permitted her to remain married to him, and that I hereby removed his name from the ‘Cootie List’.
He seemed pleased to hear it.
Super-gaudy eye-boggling colors are good for kid play structures.
Unless you really want a gaudy color in your house and don’t care what other people think. My mom just painted the fireplace wall watermelon pink. My sisters are appalled. I think their reaction is hilarious.
My mom just painted the fireplace wall watermelon pink.
Sweet!
I love eccentric color choices. Makes life a little more fun.
I told him I was now glad I had permitted her to remain married to him, and that I hereby removed his name from the ‘Cootie List’.
I reckon I wouldn’t want to be on your Cootie List (or anyone’s, for that matter).
It’s a fine thing you’ve done, a fine thing.
‘It’s a fine thing you’ve done, a fine thing.’
Yeah, I’m generous that way, it’s a spiritual thingie I do.
But now I realize I did not specify the reason for my excitements. See, I just thought you all KNEW already, ’cause I jabbered about it in the past, that I make stuff from pallets and wood bits that I find here and there, I make benches and tables and chairs, and I need colors to paint strawberries and parrots and poppies on them. What’s a bench in the forest without a parrot and a strawberry on it? A stupid bench, that’s what! Jeeze, man, duh!
But I would certainly NOT paint the walls of my house a bright pink. Laws, no. That would make me throw up, even more. Like Pepto-Bismol.
The interior of our house has orange walls, pink walls, bright blue walls, yellow walls, green walls, red walls and sand color walls. Not a landlord white wall in sight. I love all the colors we have in this house.
“California is offering a big carrot to people who buy brand-new homes in coming weeks: a $10,000 state tax credit for new-home buyers who close escrow starting Sunday.”
Considering they’re giving IOU’s instead of tax refunds these days, I wonder how many people will really jump at this…
It’s pretty amazing to me that a state with a gaping hole in its budget can come up with this much money to funnel into the hands of a special interest group (homebuilder constituency).
gaping hole in its budget ??
Just wait…Just wait and see how big that hole gets….Its going to finally brake the back of Cali..Terrible mismanagement of this State…
This is the state that keeps telling me I still owe them a few thousand bucks in taxes at the end of every year, right? The same state that takes it out of my paycheck every other week, charges me a penalty if I don’t pay at least 90% of it up front, and then offers to give me an IOU if they owe me anything come April? That state? IS THAT THE STATE YOU’RE TALKING ABOUT?
IS THAT THE STATE YOU’RE TALKING ABOUT?
I like your anger…
It would be nice if more people got angry. In Boston, we had about 30 people protest Gov. Patrick’s proposed gas tax outside of the State House. Yes. 30 people. In a state of 6.5 million, only 30 people thought it was worth their while to show their dissaproval of the state raising taxes, again.
Granted I was working, so I wasn’t present… instead my co-workers got to hear me rant and rave at the morons who voted down the repeal of the state income tax and just roll over as the Gov. forces us into paying the highest state gas tax in the nation.
I’ve wondered why there seem to be so few people on the blog from the northeast. It’s nice to hear from you once in awhile. I was starting to think there was no one left up there.
I’ve wondered why there seem to be so few people on the blog from the northeast. It’s nice to hear from you once in awhile. I was starting to think there was no one left up there.
The reason there are so few from the northeast is because the we didn’t have a bubble here. You should know that. It’s only those irresponsible slobs down in FL and CA. /sarcasm
Nah, it’s just that northeasterners lurk. I’ve been lurking for years. I love this blog–Thanks much, Ben.
I’m from RI, but to be honest the reason I dont post much is that there are so few articles that Ben posts in our area. Most of it is CA, FL and NV.
The State of California’s IOU’s have a specific purpose.
Arnold would rather OWE you the money rather than CHEAT you out of it
Yep…That be the State…
“In CNBC’s documentary, Greenspan once again argues that the Fed had little to do with the bubble or the current recession. These, he implies, are random events of the kind that occur for no reason every century or so. Moreover, he argues, there is nothing the Fed could have done to limit the growth of the bubble, save raise interest rates so violently that the economy would fall into a recession with unemployment of 10 percent.”
The Fed never accepts culpability for anything that goes wrong. The fact that we are in a recession with unemployment approaching 10 percent and record asset price declines to boot is obviously due to purely random factors which nobody could have foreseen.
If everything is so ‘random’ then why do we need a FED Reserve System?
Remember when TIME MAG was calling him the “Maestro”????
Why? Because he could tweak the rates and raise and lower bank reserves, and enter the market to buy up assets to control business cycles……….blah, blah, blah……….
I ALWAYS said he was an IDIOT. Which he is.
His 1% lending rates are the cause of ALLLLLLLLLLLLLL of these problems. Cheap money leads to “irrational exuberance”.
But he was too STUPID to see that. He thought he had discovered some new form of Alchemy to get something from nothing.
An age-old dream of fools like him.
Well it looks like ole Ben has the same IQ as Alan baby.
I’ll never forget Greenspan, circa ‘05, dismissing growing rumblings that the “housing boom” was in fact a “housing bubble” with the ridiculous statement (not absolutely verbatim, but very close), “There is no national housing bubble. There are, in certain areas of the nation, signs of some FROTH.”
No bubbles…just a little froth.
Certainly lots of foaming at the mouth in the years since then…
smathis,
Itulip addressed the “in certain areas of the nation” by responding:
“You mean like on BOTH coasts where 80% of our population resides?”
Great response, but it’s not even as if it was confined to the coasts. Look at Detroit (no wait…don’t. It isn’t very pretty).
You can buy 2 houses for the price of an Aveo in Detroit!
Please don’t include us Detroiters in your talk of housing bubbles. At least we have an excuse for our city - an 80 year old housing bubble in the 20’s that left us with thousands of brick McMansions that are now falling apart. But all those brand new subdivisions in California, Florida (etc. and etc.) that are now suburban ghettoes…that’s just creepy.
There is some amazing residential architecture in Detroit. Sweet, classic lines.
Froth, foaming, contractions…yikes…mikey pokes it with a sharp pointy stick.
Yup…the ecomomy is DEAD
At least the dot-com companies, the original cause for Greenspan’s irrational exuberance complaint, were attempting to create something of value. The original etailers are mostly now gone but the web based market is still going strong. Most of the losers were companies like pets.com who didn’t realize that shipping costs on a cheap 40 lb bag of dog food ruined their business model. Webvan failed but their assets and portions of their business model were taken over by Safeway and Albertsons.
Etailers know now that profit follows items of higher value/lower shipping cost: books, stereo gear, auto and appliance spare parts.
Used home sellers don’t add anything to the overall strength of the economy.
DennisN,
Thanks for pointing that out. However ridiculous it ended, at least there was ’some’ there there.
Housing? I… think we’ve figured out how to nail 2 two-by-four’s together? Where’d all that enthusiasm come from?
In housing the excitement came from the instant riches. Just like the excitement from the idea of instant riches on mail order furniture and pet food.
Too much modeling and not enough common sense. Yes, projecting short term linear models on non-linear space can work. Until they don’t. And the models are always great scapegoats. It is so much better to blame a model than a person.
New economists place too much emphasis upon easily distorted and meaningless numbers instead of looking at the base aspects of life. I’ll just name a few.
1. Many humans will lie if they think they can get away with it.
2. Many humans will lie if they think it will not hurt anyone they know.
3. Many humans almost always want something for nothing.
4. Many humans almost always will believe they have gotten the better end of a deal even if they have not
5. Many humans almost never know when they have had too much of a good thing.
6. Many humans are social creatures that prefer to be with a group than against it.
Now looking at just a small subset of behaviors for a subset of humanity at large it can be argued that human actions are random. But given the proper conditions, human actions are certainly not unpredictable. Greeny, the grand obfuscator, likes to play with the language don’t ya know!
Success has a thousand fathers, failure is an orphan.
-some wise dude
Wise, indeed.
PB,
My thoughts exactly. Btw we’re @ 9.9% unemployment here in OR already…
Even had this ‘boom’ lasted for decades and lifted virtually -every- American out of poverty, into home ownership and f/t solid employment, would what we’re facing NOW still even be worth it?
California is expected to hit double digit unemployment today.
( Since we’ve regular ref’s to Apocalypse Now? )
“What I really had, was the desire to confront him”
In the wake of our local bank failure: http://www.silverfallsbank.com our neighbor, founder, former board member and Landlord has been “holed up” in his condo across the creek from us! NO signs of life.
My guess is that he’s hiding out from some -very- disgruntled investors at his soon to be repo’d place in SoCal. Usually he goes there during the holidays and only for a few days. I just want to ask him if thought that what the rest of us are going through was worth him being able to play the bigshot for less than 6 years?
I wanted a mission….they brought it up to me like room service.
, he implies, are random events of the kind that occur for no reason every century or so.
You mean this kind of thing happened in the 1800’s and the 1700’s and the 1600’s, overbuilding, heated up economies, too many Opt Arm loans to the peons, the settlers?
I didn’t see overbuilding/liar loans in my history books.
desertdweller,
Me neither? To his credit, David Faber looked a little *incredulous at AG’s statement. Actually he delivered the line with a certain sense of finality about it as if to say; “And I’m not discussing it any further!”
Willard: Someday this war’s gonna end. That’d be just fine with the boys on the boat. They weren’t looking for anything more than a way home. Trouble is, I’d been back there, and I knew that it just didn’t exist anymore
You bet this sort of thing happened in the 1800’s, 1700’s, and 1600’s. Ever hear of tulip mania? Tulip bulbs were bid up to astronomical heights in Holland and then the market collapsed. The British South Seas Company shares were golden, everyone invested and then the crash happened. These types of things have been happening for centuries, just different stuff, but the same effect.
I love the smell of chinese drywall in the morning….
‘To his credit, David Faber looked a little *incredulous at AG’s statement.’
Well, yeah, that’s all nice and all. But instead of ‘a little incredulous’ glances and stuff, I’d like to see him reach over and administer a brisk bi*tch slapping to Ol’ Wobblechins. He wouldn’t even have to scream at the old guy, or quote ‘Atlas Shrugged’. Nothing excessively harsh. Just a good slappin’ would do it.
Then he could sit back down and resume his wise questions, if he wanted. THAT’S some credit accrual, to my mind.
“Ol’ Wobblechins’” Got me laughing out loud…thanks Olygal.
Good point, though. Just looking incredulous means nothing…call the punk out, get some real discussion going on the air, rather than just being a freakin’ PR outlet…
Wobblechins…..lol….
Calculate unemployment the way any rational or reasonable person would, or the way it was calculated as late as the 1980’s, and it is over 20% in CA today.
( The change from 1980 to today, is that in order to make the number look smaller, all those who have been unable to find work after 12 months are simply no longer counted as unemployed. They are only considered “discouraged” job seekers, not unemployed.
It seems to me that people who have been out of work for over a year are not only unemployed, but conveniently forgotten, under the calculation method used today.
Good call.
LA Times Business
California unemployment rate reaches 10.1%
With more than 1 in 10 workers unemployed in January, the state registers its highest jobless rate since June 1983, not far below the record of 11%.
By Marc Lifsher
11:14 AM PST, February 27, 2009
Reporting from Sacramento — More than 1 in 10 California workers were unemployed in January, the largest percentage in nearly 26 years, the state reported today.
The 10.1% jobless rate is the highest since June 1983 and not far below the 11% record set in November 1982 at the worst point of a severe recession, according to the governor’s office. Job losses escalated in January, with the state’s unemployment rate jumping by 1.4 percentage points from a revised 8.7% for December.
and not far below the 11% record set in November 1982 ??
And we are going to blow through that number in a couple of months…Question is; Where does it stop ??
“Even had this ‘boom’ lasted for decades and lifted virtually -every- American out of poverty, into home ownership and f/t solid employment, would what we’re facing NOW still even be worth it?”
There were solid, broad-based income and employment gains with the tech bubble, not so with the housing bubble. There’s nothing about this housing bubble that will justify the global misery that’s unfolding. There were plenty of people that were harmed during the bubble. There’ll be few that go unharmed during the deepening global depression that’s resulted from the bursting of the housing bubble. So, hell no, it wasn’t worth it.
SDGreg,
That’s been my suspicion for some time. While I ‘can’ cite instances where older investors nearing retirement “discovered daytrading” I think for the most part folks in their 50’s+ were in the “Vangard Primecap” ( or whatever? )
Younger folks were working for tech and telecom co’s and getting a much better foothold in the work force than those of us getting out of school in the late 70’s/early 80’s. Workplace benefits hadn’t begun eroding yet AND… housing was still fairly affordable!?
I even find myself losing the distinction between this current meltdown and the -last- bubble? I also find myself assigning a LOT of the current misery to the tech bubble as well. There IS no comparison.
The entire bubble could have been killed before it ever started by simply requiring income verification. Income needed to qualify the full adjusted payment, not just the teaser or option payment. Greenspan had the responsibility, clout and authority to make this happen.
Man, he is so wrong.
Here’s an excellent article by Henry Blodget, on general wall street boom-and-bust problems, culpability of the housing bubble, and human nature in general.
Big talk from a man that is banned for life from the securities industry.
The things that pass for “industries” these days….
I would wear it as a badge of honor if I was banned from the Securities Industy.
I could say I was not a crook!
“No one knew the market would crash, even the analysts who predicted that it would.”
Is that really true? Bubbles don’t slowly deflate. They burst. The only question is when. Given that the rise in prices was completely disconnected from wages, there was no other possible outcome other than a crash.
“Second, bubbles and their aftermaths aren’t all bad: the tech and Internet bubble, for example, helped fund the development of a global medium that will eventually be as central to society as electricity. Likewise, the latest bust will almost certainly lead to a smaller, poorer financial industry, meaning that many talented workers will go instead into other careers—that’s probably a healthy rebalancing for the economy as a whole.”
Is lots of poorly located, poorly constructed housing really going to be of long term benefit? Were those financial industry workers really that talented? Do we want them working their “magic” with other sectors of the economy? It seems their main contribution was greed. Does that really form the basis for a sustainable economy in the future?
“Wall Street swindled us” - Henry is a former swindler.
““experts” gave us bad advice” - Henry positioned himself as an expert on internet stocks and pumped and dumped.
“egregious behavior” - Henry was the posterchild of egregious behavior during the dot bomb bubble.
He is still a thieving a$$hole, no matter how many redeeming articles he writes.
You have a choice. Raise rates so violently than unemployment reaches 10% for 6 months, or hold rates down so relentlessly that unemployment reaches 20% over a period of 3-4 years. What do you do?
Big V,
I can’t agree fast enough. Even at that, nothing needed have been “violent” necessarily. “Prudent”… maybe?
Its too late to do anything effective by raising rates. Credit is contracting, money supply is contracting, velocity of money is already down.
Money is cheap, i.e. rates are low but you can’t borrow any.
The joys of deflation are at hand. Enjoy the agony and dispair.
Please by all means keep up your campaign to raise tariffs. I should have ample cash to ride the disaster out.
Then there’s nothing to be lost by raising rates either, right?
Raising rates would help me…because the Fed funds rate is so low, I’m burning through my savings quite quickly while unemployed. If we had somewhat reasonable (Still “historically low”) interest rates, I could be making at least half my living expenses in interest. Instead, well….
“The Fed never accepts culpability for anything that goes wrong.”
I’d bet money that nothing went wrong in Greenspan’s personal wealth portfolio; likely didn’t lose a single Shekel.
No doubt. Just as the Clintons pulled all their money from the stock market during Hilary’s prez bid (moral hazard, or some other trite excuse), Cheney had his entire portfolio invested overseas, and Bush had just bought a huge piece of land in S. America next to Rev. Moon. Like rats from a sinking ship!
“Jed Kolko, a research fellow at the Public Policy Institute of California in San Francisco”
Classic. Another over-thinker with nice, long explanations. Combo for president!
Too much supply, pricey go downy.
“‘In Arizona, Florida, California and Nevada, most borrowers are underwater by more than 50 percent,’ said Mateo Garcia, president of Mateo Mortgage Funding in Tempe. ‘I just think Washington is seriously naive to what is going on in the streets on a daily basis.’”
Maybe Washington knows exactly what it’s doing. They get the adulation of the press for “doing something” but don’t have to cough up the budget in a useless attempt to bring the dead back to life. It may be cynical but good politics to have a plan that looks good on paper but only helps out a tiny fraction of the FB community.
I’m torn between the bad idea of salvaging non-viable businesses and mortgages and the good idea of rebuilding long-neglected infrastructure and providing jobs to people who are suffering because they can’t find a job (but want to work).
Bailouts are evil, a public works program not so much…
“They tried to sell but couldn’t find a buyer, and new restrictions prevent them from carrying two mortgages to get into the landlord business.”
New restrictions, like… you have to be able to pay back the loan? You need to have an income? You need to be able to make a down payment? Those kind of “new restrictions”?
I love how they make it sound like these people have been wronged because they can’t load up on debt.
Actually it’s just an enforcement of the old term in most mortgages that the house be “owner occupied”. During the boom most people lied about this on the mortgage application if they were specuvestors.
“I see dead people”
UM try living in 1/2 that space… a New Yorker can….Condense your stuff, get bed risers put lots of seasonal stuff under the bed.
Think HIGH buy very tall shelving units to the ceiling…make shelves under the kitchen and bathroom sinks
Get an expandable kitchen table. I could come up with more ideas…plus if that is their unit in the picture, they have a garage….store canned foods in there…you have plenty of room for a kid.
—————————————–
Doug and Marissa Kennedy of Ankeny want to buy a home larger than their 1,100-square-foot townhouse
“Think HIGH buy very tall shelving units to the ceiling”
I wouldn’t be surprised if the ceilings were all on eight feet tall. There’s only so much “tall” you can do with that.
OTOH, townhouses typically have garages. A lack of one is our current problem in terms of storage. It sucks when you can’t own a bike because there’s nowhere to store it out of the weather.
Seriously, for people who have no real interests or hobbies other than watching American Idol (and that’s about 99% of the population), this 1,100 sq-ft townhouse is more than sufficient.
My Mom used to live in the Des Moines area so I’m fairly familiar with it. Why in the hell would they ever need to build townhouses out there is beyond me. There’s so much friggin’ room everyone in a townhouse could have easily been placed in a 26×30 Cape Cod like I live in and they’d still be plenty of room for farming. I don’t get that sh!t, townhouses out in the farms. You see that sh!t down in Middletown DE now too. Makes no friggin’ sense at all other than a builder found a way to fool people into thinking they’re living in the country while offering them only easy to build highly profitable crap-boxes to live in a a price point 33% percent above what they can actually afford (ie. carrot on a stick), when it really should only cost about $42,000 instead of $110,000 for the privelege of livng on top of your neighbors on a former cornfield surrounded by active cornfields. Insane.
‘You haven’t lost any equity if you haven’t sold your house’ Nor could you gain equity until you sold. We shouldn’t be bailing out banks that told them to tap that “equity”.
equity = unrealized gains
‘It’s like a stock. You have to wait for that equity to come back’
In stocks you don’t keep the losers and wait indefinitely for them to come back. Otherwise you end up with a portfolio of all losers. Instead you get sell, get over the loss, and use the capital to buy more of the winners.
Ask any Nortel investor. After Nortel collapsed from $820 per share to $30 per share everyone hung on for the equity to come back. Eight years later now $0.10 per share. Waiting kills you!! (prices normalized)
Same applies to a home. Sell the thing, take the loss, and move on to a better life. If the neighborhood sucks it is not getting better next year. Don’t waste two precious years of your life trying to sell P.O.S. house for unreasonable capital gain.
………But that wasn’t what i was going to comment about.
I concerned article number one. TRAPPED in a house.
Even though I have been very prudent financially, I am trapped, too.
My house is paid-off. I have been wanting to move for 8 years.
For the first 2, i saved more money for a higher down payment, to keep expenses low. Then rates went to zero and the feeding frenzy started.
I saved $1000 per month, while I saw prices here in the Bay Area rising $2000 per month. I was losing $1000 per month for every $1000 I saved.
How was this possible, i wondered? I started shopping.
Multiple bids on properties, above listing price, bid-wars, there’s a “shortage of housing” Realtors claim, prices escalating 20-30% per year. It was nuts.
I waited for the turn-around. It’s here. I have the cash to buy. My job is marginal. If I buy, I may have 2 houses, but no money. Can I sell this house? Probably not in this market, even at a very low price. So I thought I would try EXCHANGING houses. Tax Free. No Broker. I take yours, you take mine. Local exchange.
I started looking. Guess what? Everyone thinks their house is 2005-2006 valued. Some of the listings are ridiculous. They have “equity” but still owe a bunch, so I will need to come up with the difference kind of a deal.
It’s tough to find a seller that isn’t living in dream-land about the “value” of their house. It’s just another consequence of the HOUSING BUBBLE.
We need a lot more foreclosures.
I guess I’ll sit here another couple of years until I can buy a house that is supported by local incomes and the job market is stable.
This whole episode has depressed me. Excessive Leverage has destroyed the business cycle and made simple transactions very difficult.
Thank you, Republican Leaders for showing fiscal restraint. Now you are gone and we get more of the Same from the Democrats, times 2., or 3, or who knows………the numbers and programs change every single day. HOPE.
Change. Hope and Change. A new day. A day of Reckoning. Slogans. Campaigning………….and the thievery continues.
A Heart of Darkness?
Diogenes, you are fine. You are not the one crawling on the razor’s edge. Undeserved sacrifice is not your conquest. You are not in the jungle naked. Nor are you the savior for the untouched and untouchable. You are fine. That is all you need to know.
Seriously, PEACE OUT.
Just moved to Bay area 6 months ago. Prices are dropping pretty quickly but they are still so ridiculous that it’s unlikely buying will be better than renting any time soon. Buying a comparable place would involve a mortgage about twice the rent payment, plus typing up down payment money in a depreciating place. So, there’s really no incentive here at all for us first-time buyers.
I’ve learned to rent only from landlords who bought their property long before the boom, they aren’t as desperate!
I also live in the Bay Area and I just forwarded a tax assessment letter to my landlord - so of course they will be happy to have their taxes lowered because they have so much skin in the game anyway, they can take the loss in value (I’m assuming).
Hang in there, downward pricing is building momentum. No stopping this freight train!
Nice post, try a little more practice using the ENTER key.
Geez diogenes, I’m floored. Republican leaders showed fiscal restraint? What planet are you living on? Restraint? The biggest run up of the budget deficit in history and they showed restraint? Who was president when the budget was last balanced? I sure would hate to see Republican excess.
Sarcasm, steve.
“‘A house that was worth $300,000 may now only be worth $150,000 to $180,000 or less,’ said Bob Bemis, CEO of the Arizona Regional MLS. ‘Even if the bank modifies the loan, extending the term to 40 years and dropping the interest rate to under 5 percent, the homeowner will still never be able to sell the house for what is needed to repay the total debt.’”
Bingo!…I have been advising friends in Florida in the same situation to take the hit, like a bad divorce, and just walk away…it simply makes no economic sense to keep paying the note if you bought at peak, and prices in Florida are expected to continue to drop for another 2 years!
No one has a crystal ball to know where life is going to take you in 40 years or even where this country will be in 2 years! They can default,do a DLF, and in two years come back and buy their house same house back for pennies on the dollar!
Ann,
I believe it was Ex-GSfixer that said “The reason some divorces are ‘that’ expensive… is because, they’re WORTH it!” ( so I can’t argue there? ) My problem is that the solution you propose only further de-stabilizes neighborhoods and in fact entire communities.
I say, make ‘em ‘live’ w/ that less than ideal marriage by forcing them into a cram-down first! It’s justice in more ways than one. The employment situation they couldn’t be bothered w/ now actually ‘does’ become their problem in that by working 3 substandard under-employment jobs, they CAN make the payments!
There is no way to make ‘em live with the mortgatge. In AZ, and many other states, debt from home purchase is total non-recourse.
It is the deadbeats that have ALL the power to decide to pay back the debt or not. Many are choosing “not”.
I know you want it to be in the power of someone else to “make ‘em” but the contract prevents that.
And it’s in the power of the bank to decide whether to make the loan or not. I just don’t get why it has to be my job to pay it all back.
You are right Darrell, but the killer is that second mortgages ARE generally recourse loans. They can make you pay.
That may be difficult when there are no jobs.
potential buyer,
More fitting still!
Notice I ‘did’ say “by working 3 substandard under-employment jobs”! I just thought it was appropriate b/c a solid majority of those folks that bought in places that had scant employment to begin with ( but BOOMING prices ) deserve everything they get!
But Darrell isn’t wrong.
One other thought — because of the enormity of the problem, I’ll be curious as to what will happen when and if the buyers who walked attempted to buy again in a year or two.
I’ll be willing to bet that as long as your FICO shows ‘limited’ defaults — eg. foreclosure, those loans are going to be made available. Someone has to buy in those ghost towns.
Not so sure about that. We moved to NZ in 2004, filed change of address with everyone, including UW Physicians in Seattle. Turned out that I owed $126 on some bill that didn’t get to us before we split. NZ (at the time) didn’t have a zipcode after the address. UW COULDN’T send a bill without the zip (NZ zips are 4 digits). So the didn’t send it to NZ. They also didn’t send it to our old address in Seattle where it would have been forwarded to my brother and would have eventually arrived in NZ. It, of course, never got paid since I never saw it and it went for collection. And got entered on my credit report as a collection. I discovered this in 2007 when I was in the States and just happened to look up my credit report. Could I get this changed from collection? No way. It was my fault that UW required a zip code but I didn’t have one. To add insult to injury, one of our credit cards had a similar problem. I had phoned them and asked if we should cancel the card, as we were moving overseas. Nope, no need to do that. I gave them our new address in NZ which they wrote down as (I will not give the real address) 17756 35th Ave, Shoreline, Auckland NZ, Wa 98155. The person taking the call didn’t know that New Zealand was not in America. Needless to say, no bills arrived at this address; they were returned to sender and the account became a no-pay. I filed a protest and to the CC companies credit they agreed it was BS, I paid the $75 owed and they cleaned up my record. But the point is that you can be really fuc_ed even though you do everything right. The collection is still on my record (although I paid the full amount) and is dragging my FICO down. This hurts, as we are back in the US of A. So a major default will really hurt.
Steve, did you move back to the US from NZ? If so, what brought you back?
Yeah, moved back in December ‘07. I was changing careers, went back to university in NZ (I have both passports), did a four year Wine Science degree and am now a winemaker instead of an engineer. Came back because of work. There just weren’t opportunities in NZ at the level I wanted to work. It was pretty strange being such an old guy back in school. Graduated top of the class and helped quite a few others get through the program.
I just read about using HIPPA to remove medical bills from your credit report. I’ll try and post the link, but you can Google fico medical bills and it’s the third link. The page is ficoforums dot myfico dot com.
Don’t know if it will work, but it’s worth a shot.
Ann,
As I was arguing in the bits bucket, middle class people just simply can’t withstand a few 100K (leveraged, so with interest) hit to their financial situation, the bad decision in 2005 will become something that colors their finances for the REST of the lives. IMHO, that’s not the spirit of this country, that’s why we don’t have debtors prisons, and why most of these people should, from a financial perspective, walk away and buy again in a few years.
I have much anger for the moron borrowers that got us into this situation; however, I don’t think that they deserve to suffer for their stupidity for the rest of their lives. Fact is, there are lots of good people who are just financially unsophisticated that got wrapped up in this mess; I don’t think that they deserve a lifetime sentence to pay back the bank, the party who SHOULD HAVE KNOWN BETTER!
Now, those that committed fraud? Send them to jail, that’s a criminal matter, not a civil one.
So, what about us? Do WE deserve to suffer for THEIR stupdity for the rest of our lives? A loss has been realized, and now the game is pass the buck. Sorry Ann, but no one has ever covered for me before. I’m kinda pissed that I’m now being expected to cover for the people who couldn’t compete with me, yet thought the deserved more. People should pay for who they are in the way they live their lives.
Cannot agree more BIG V. No one has covered for me either.
Seems most of the time I transact with the banks or especially the government they just take take take and then make me wait only to finally show their incompetence. Why should we allow these institutions to solve the problem they catalyzed and could argue created?
At this point, I think we have to accept that the economy and government is collapsing and a year from now this subject will be a moot point. So many people are facing foreclosure, the banks are failing, governments around the world are failing…does it really matter that someone took a a mortgage they couldn’t afford? It’s not like the housing bubble created the financial mess we are in. It’s merely a part of it.
It’s not that I do not believe their should not be responsible for their own behavior, but blaming homeowners for the failure of the economy is not fair. Most people reading this have in some way benefited from the housing boom. The housing bubble was the original stimulus package. Unfortunately, as a country the US wasted the capital. Instead of investing the newly minted money in science, manufacturing, or some industry that is essential and could grow the local economy, people took trips to golf resorts and luxury spas while clothed in designer clothing made by slaves or prisoners They created a useless service economy.
Many of the examples listed in these posts are extreme. It’s sometimes fun to mock the stupidity of someone making $29,000 a year with a $300K mortgage, or the asinine words emitted from Alan Greenspan’s oral cavity. But if you can blame homeowners for the collapse of the economy, should you not then have zero sympathy for a hotel worker who lost his job? He should have known that the economy was essentially a false economy and his job was solely dependent FBs and HILOCs? He should have thought about that when he applied for the job! Same for massage therapists, tennis pros, beauticians, mall employees…the list goes on and on. Too bad for taking a job without a future, right?
Many of these people paid taxes and redistributed their income into the local economy, providing many readers of this site with employment opportunities they would not have without the bubble. I am not defending the bubble. I fully expected it to pop earlier than it did (never underestimate the ability of a government to print money and other countries to buy worthless debt) and we would have a much healthier economy today if we had dealt with this problem in 2001. (Or maybe it would have just delayed the inevitable collapse for a few more years?) I think we have to accept what has happened and move forward. Five million new homeless people will do nothing for this country, nor will three million bank owned homes or 300 million debt laden Americans. It’s time to start over. It might not be fair, but it is a healthier solution for society than any other alternative. It’s not like these over-extended people aren’t suffering from their poor decisions/bad health/bad luck. Can you imagine the stress? They made dumb decisions and they are suffering.
I don’t want to pay more in taxes. Most people don’t . Most people won’t. Does it matter anymore if the government prints ten trillion more dollars? No. It’s going to collapse soon. You have the option in April to make your full payment or withhold some of it. I know many people who believe the government is going to collapse in the summer, so they re not paying their taxes this year. A lot of people. If you don’t want to pay for anyone’s bailout, don’t pay your taxes.
You have a choice. It just depends on whether you are willing to stand up to your principles.
I’m going to repost this. Very interesting point of view.
http://seekingalpha.com/article/122749-the-truth-about-mortgages
I’m just as pissed as the next person about all the FBs who participated in this bubble, but the sooner they walk away and the banks take the houses back and dispose of them, the better.
I’m sick of all the Who Shot John business. Yep, most FBs don’t deserve any help and I sure don’t want to pay for their mistakes, but might as well face facts. It is what it is. Let’s figure out how to work around it.
“the homeowner will still never be able to sell the house for what is needed to repay the total debt.”
Hey BOB, this stimulus plan is “supposedly” to keep people IN their homes. Who said anything about selling? Now it’s the responsibility of the taxpayers to make it easier for people to sell? BullS**t. If the government makes it possible for them to stay there with a 200-year loan, and they don’t want it, well they can leave.
RE: South Florida.
We sold our condo a year after the local market peaked, for about 20% less than we would’ve gotten at the peak. A few days after we closed, an identical condo across the street closed…for 22% more than we’d (gratefully) sold our place for. We kind of kicked ourselves a bit, wondering whether, if we’d held out, waited for another buyer, etc., we could’ve gotten as much as the other sellers did.
Just today I saw the condo that sold for more than ours is for sale. The asking price? 55% less than what we’d sold our place for. And (get this) only 12% more than the place sold for when it was built…in 1984.
I knew it was a bubble. I knew the bubble would pop and prices would plummet. I had NO IDEA of how absolutely huge it would all be when things hit the fan. No idea.
Congradulations on getting out with your skin. Your example of the bubble buyer is extreme, but very common in South Florida.
Las Vegas is the example of where Florida is going. Condos are now trading for less than 1987 prices and it was pretty flat 1984 to 1987 there… Not much less, but there is certainly more downside.
Got Popcorn?
Neil
Since it’s South Florida, that 22% higher condo was probably cash out at closing mortgage fraud. The buyer gave the seller more than it was worth, got a 100% mortgage for that, got a kickback from the seller, and then never made a payment.
In my neighborhood people were up in arms because a couple of houses in a neighborhood nearby, which is not as nice, sold for more than the houses in my neighborhood. Guess what, within a few months they were both foreclosed on. Mortgage fraud.
“Fort Myers-Cape Coral came in second in the state for its single-family home price drop in January. The median price fell to $94,900, down from $234,000 a year ago — a 59 percent decline.”
I remember reading about how this could never happen. Guess what? It did…and it’s not getting better.
BPO on home I currently have a bid on in Cape Coral is at 27 cents on the dollar from peek. Foreclosures under 100k moving pretty rapidly off the market. With some 30,000 more foreclosures to come in Lee County if this one doesn’t work out will wait for next to come along.
It’s the same way here in Palm Beach County. The stuff that’s livable under $100K moves quickly. The $100K to $150K is staying on the market surprisingly long. It does not bode well for the future when we get even more foreclosures. 2009 is going to be a big year for ARM resets.
What is meant by “moves quickly”? Who is buying these homes? Investors?
I keep harping on it, but with “ownership” at historical highs, I don’t understand all this new demand for houses.
A lot of investors and a lot of first time buyers who are quick to jump the gun on these. FHA loves these often clueless first time buyers.
I noticed that “junk” home prices seemed to be very sticky. In the past most of these homes could be bought cheap and people you build sweat equity. I think your right about who is buying investors that think they can cash flow and dumb first time buyers.
To some extent both groups can probably actually afford the homes which is new but both will still be upside down on the mortgage within a few years. The first time buyer with 3% down probably can’t ever afford to bring money to the table like 10k or so if prices dropped another 13%. Nationally we probably will see and additional 20%. Next now many of these people will become unemployed for extended periods of time and be forced to move. The new landords infestors will get burned several ways they will be underwater and rents are falling esp since many of these places need serious repairs.
I suspect many of the infestors are playing games also getting FHA loans or at least not paying 30% down and many work for a living and can lose their jobs. So we can expect a significant number of people in both groups to be forced to flip the house.
Overall even though this low end buying is increasing the transaction rate right now I believe we will still see a lot of churn from these transactions given their nature. In the past these would have been considered very high risk home buyers esp in a recession. I think soon we will see that for every FHA loan made another one enters into default and similar stats for infestors.
No significant net removal of housing from the market.
Go slow there Walt. The median condo Ft Meyers/Cape Coral is now selling for only 36 cents on the dollar from its peak in early 2006. (128,800 in January 08 versus 353,900 in Febuary 2006). I don’t follow houses there, but a real bargan will have to be better than the median. I think prices still have a long way to go in that market and suspect houses will fall even further than condos once the maintenance cost differences become clear.
Ben,
Thank you for the DailyBreeze link. I would have missed it today (my daughter woke up early so it was playtime instead of daddy’s news reading time).
“Another sign of the housing market’s tough times was evident on the Palos Verdes Peninsula, which was not cited individually in the CAR report because the entire area failed to generate at least 30 home sales in January. It was the first time The Hill was left off the CAR list since February 2006.”
As of yesterday, the PV Peninsula had 313 homes on the market (sum of Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, and Palos Verdes Estates). That is our first choice market. Yes, its mostly a retirement community now with great schools.
Every downturn ‘its different here’ and every downturn the poseurs are foreclosed on. Yea… its different this time. Go onto propertyshark.com and sign up (with a ’spam ready’ e-mail address). You’ll get to look at 5 homes free per day (sales history and loans). Its a rare day when I do not find *at least* $200,000 of MEW. Actually, amoung five homes, I typically find $400k to $800k of ‘equity liberation’ in the south bay homes (less in PV, tons in Redondo and Torrance). Yikes!
From Ben’s article: One reason for the drop in sales may be the hesitation of banks to give so-called jumbo mortgages, or relatively large loans
Ugh. Why don’t they say it like it is. They have returned to traditional down payments and allowed DTI. My entire life I’ve listened to what the rules were on PV jumbo loans and what we’re seeing now is what I’ve heard about for decades. I’m providing no stats… just years of people complaining how much they had to save up to ‘upgrade.’
Note: If we cannot afford PV, we’ll buy in Torrance or Redondo. But we will not be buying in 2009.
Got Popcorn?
Neil
Glad to hear you’re waiting, Neil. You and the etta will be much happier.
Oh, we’ll wait. I’m willing to buy before the bottom, but we’re not close to the bottom.
313 homes on the market. 12 sold in January. Twelve! Per the LA times, 9 ’single family’ and 3 ‘condos’ (includes townhomes in PV). Of the 313, 200+ are single family.
So we’re talking over 20 months of inventory.
For that area, my ‘best estimate’ is that mortgage resets and recasts play no role before March. The local rumor mill is that two of the banks will start putting quite a few REO’s onto the market end of this month to first half of next month. Ok, I’m not seeing that inventory yet. But boy has WAMU been stuck with a bunch of ‘jingle keys’ in a supposidly bulletproof area. (It is mostly retirees who bought their homes in the 1970’s.)
We’ve seen $20k to $50k/month of price drops in the type of homes we would like to buy. I expect a slower rate of drop March-August; then I expect a blood letting. Of course if jumbo’s do not free up soon, the downside will be greater.
Got Popcorn?
Neil
‘I just wanted something that was my own. I’ve been paying rent for four years and it hasn’t been going to anything and I can actually call this my own,’ Conner said.”
This reminded me of those ads you see in the astronomy magazines, advertising ‘Own Your Very Own Star!’ You guys know the ones?
The pitch is, there are zillions of stars just hanging around unclaimed, so to speak, ‘un-named and uncatalogued’ by professional astronomers, so you send in 30 bucks or whatever and you gots your very own celestial body! A claim is dutifully filed and registered and just all sorts of important official stuff takes place.
It can be YOUR star! Yes! Yours! You can call it “Tom Bobbin-Noggin’s Land of Smartness’ if you wanna! You can call it ‘The Home of Pretty Pink Magical Ponies’ if you wanna, and you can get goin’ building a big shiny spaceship to fly to it! Because it’s ‘yours’! Awesome, huh?
They send you back the coordinates of Your Very Own Star, and it even gots a little gold seal on it and calligraphy, for proof that it really for truly is your star…
Pretty funny.
This guy is like that.
Funny you should mention that. The whole International Star Registry thing is a scam!
Damn another bubble popped.
or should I say gone nova.
Somebody is buying stars ?
That’s proof that we have too many certifiable SpaceCadets on this planet
Even as a scam, I’d rather “own” a tar than a house that’s rapidly losing value.
International Star Registry at http://tinyurl.com/ckvp9r
http://www.kreative.net/seascape/star/
Oh, I was wrong about the low price. You can ‘Name Your Own Star’ for between 54 and 150 bucks or so.
Now, I used to think this was harmless silliness, a pursuit for the stupider sort of amateur astronomers or easily duped grandmas, and then I read an article by some astronomers, real guys in an observatory somewhere, about some people who came to see them. They were parents, grieving over the premature death of their child. They had ‘bought’ their kid a star, named it after the child, and they wanted to see it, and just look at the star through a real telescope, kind of a memorial.
And the astronomers were looking at each other in consternation, going ‘Ummm…..’ while they’re thinking, are we gonna tell these poor people that they paid a bunch of bucks for a piece of paper? There ain’t no ‘officially named’ star ‘owned’ by them. Say to them, ‘So sorry, poor sad people—it’s a cheap pretend’ ? They couldn’t do it, so one of them solemnly took the useless paper and studied it and moved the telescope around and announced, ‘There it is. Your star.’. And the parents looked at it and went away happy.
Well, so maybe they went away happy, but I think it STINKS.
Oh, I forgot to add that I used to stare at the sky, both with my wee green eyeballs and with a telescope. I spent a fair amount of time peering into a metal and glass apparatus and trying not to breathe moistly into it and get it all foggy, and also making long tedious notes, all of which I have now lost, or else used to start a campfire somewhere or other.
But this was in Utarr, where I growed up, and they’s plenty of sky there. Maybe even too much sky. A great big huge expanse of night sky, with bright gleams punched through it, so you can just flop down and stare at them for forever.
However, since then I moved to here, Olympia, and we still have a sky, laws yes, only it’s full of clouds. A very different sort of sky.
Why, the other day I got home way, way late and got out of my car and then stood still and listened and then quietly crept along into the forest in order to hear the spring peepers (frogs), which are coming out from the good mud now, and then I became aware that I was being observed. I peered around alertly, like Natty Bumpo…this was not a lurking Bigfoot or my lonely neighbor this time, no, no….and then I looked up and yikes! A buncha stars was staring right down at me! Not a cloud to be seen! I squealed and fled for my porch, while batting my hands around my head in consternation, as if shooing away rabids bats that was gettin’ me.
Obviously I need to look at stars more. Or else enjoy fewer pharmaceutical products.
Enjoy, please DON’T decrease those meds Olygal. The drugs will help make those “rabid bats” go away.
Even with them, you are one scary person
J/k
“……promises of a pool and park, which were never built.”
Verbal promises are worth the air they are written on. And when it comes to homebuilders and developers, written promises aren’t worth much more.
My motto: “Put up, or shut up.”
promises of a pool and park, which were never built ??
This does not happen in Cali….Both the State DRE (when it relates to the commons of a tract) and the local municipalities (as it relates to public improvements) require bonding for these improvements prior to issuance of a any permits including even a grading permit….
And there is never any collusion between builders and local municipalities.
I thought that those pools and such were actually not actually owned by the HOAs, but a separate corporation and rented by the HOAs?
not actually owned by the HOAs, but a separate corporation and rented by the HOAs?
No…The HOA owns all the common ground including pools etc., in a undivided interest based on the number of units in the tract…The HOA is a non-profit corporation with a President, secretary, board of directors etc., that basically manages the complex in accordance with the CC&R’s and By-Laws…
“‘A house that was worth $300,000 may now only be worth $150,000 to $180,000 or less,’ said Bob Bemis, CEO of the Arizona Regional MLS. ‘Even if the bank modifies the loan, extending the term to 40 years and dropping the interest rate to under 5 percent, the homeowner will still never be able to sell the house for what is needed to repay the total debt.’”
So, Bob, were you urging caution at all in 2005 ? Even if you were not “CEO of the Arizona MLS” at the time, you were likely involved in selling real estate. Just wondering.
HousingWire dot com
Continued Delinquencies Kick Off 2009: Equifax
By KELLY CURRAN
February 27, 2009 12:05 PM CST
Delinquent mortgages are continuing to pile up according to a new report released Friday by Equifax Inc., which showed the number of mortgage holders who were 30-days-past due in January was up 50 percent from last January. Projections indicate, according to the report, that 30-day mortgage delinquencies, which have continued to increase, will result in even more 60- and 90-day delinquencies.
To add to the economic woes, home equity line of credit 30-day delinquency rates saw an accelerated month-over-month increase, Equifax said, rising 3.39 percent from December to January — the largest jump in 10 years.
“The rapid increase in unemployment in the fourth quarter of last year may have led to many of the economic ills that the data shows were even more pronounced in January,” said Dann Adams, president of Equifax’s U.S. Consumer Information Systems.
Short sale. Built in early 80’s, acre+,5/5
only see prop stats from 2003. quit claim,then…
03 $838k
something in 04
05 970k
05- $100,000.
06- $310k
08- $130,000.
Wants high 9’s but will accept all offers.
‘You haven’t lost any equity if you haven’t sold your house,’ said Mark Sprague, Austin partner for Residential Strategies. ‘It’s like a stock. You have to wait for that equity to come back.’
Like which stock? JDSU?
Apparently Mark Sprague doesn’t actually understand what the word “equity” means. Hint: it doesn’t mean “cash”.
‘It’s like
a stockan ex-girlfriend. You have to wait for thatequity jiggle to come back.’crap
“The median price fell to $94,900, down from $234,000…….”
“Every minute I stay in this room I get weaker, and every minute Charlie squats in the bush, he gets stronger……Each time I looked around, the walls moved in a little tighter……”
room=house
Charlie=deflation
“Apocalypse Now……US Economy Edition”
The horror, the horror….
Saw something on my drive out to lunch today that illustrated how much times and perceptions change.
A “loser”, circa 1967: A guy with a new Corvette, living in a rented trailer.
“Winner”, circa 2009: A guy with a 1967 Corvette, living in a rented trailer.
Or:
“Winner, circa 2009: A guy who owns #1 Action Comic, living in a rented trailer.”
Well dang everyone needs to run out and buy their house in CA since the bottom is possibly in:
California’s home sales surge as prices plunge:
http://tinyurl.com/b2tht4
Our godmother just offered to loan us money to buy a house - I assume around $600K - 850K.
She bought a few houses in the last years for her children and her friend under her name. Fortunately she could afford seven figure losses. Now she is offering to loan us the full amount and put the house in our name. The offer is very nice but I have no desire to try to buy at the bottom or before. Once I see prices fall to a fundamental level where rental income, wages and wealth factors converge then I will considering “buying”
I really would love to have a place that we could make our own but not at today’s prices.
As long as the evidence suggests prices declining at double digit annual rates, I am on the sidelines…
Just got back from the Santa Monica Pier Tea Party, it was huge, people are really mad. I think the protests are going to spread.
Were they drinking the tea from a cup with the pinkie up
Is this in reference to “Rick S’s” tea party from CNBC? If so, please relay anything you heard while you were there!
Look up American Tea Party.com, started by Rick Santelli’s rant. There were hundreds of people there, really angry. T-shirts and handmade signs said things like End the Fed, Legalize Capitalism, Stop Obama’s Bailouts and Taxes, I Pay My Own Mortgage, Honk if You Want to Pay My Mortgage. They had a guy with a bull horn or microphone and several speakers, and a comedian. The crowd was very riled up, lots of cheering and booing. A couple people were dressed like early American settlers. They had a big bag of tea and each protester at the end through a bunch into the water and faced the video camera and said something for the record, such as No Taxation with Representation, I Was Smart I Rented, etc. The guy with the microphone kept shouting Are you listening President Obama? Are you listening Governor Schwarzenneger? Everyone was cheering, really riled up. Channel 4 news was there, there were lots of cameras and videos though I’m not sure how many were reporters versus just bloggers or for personal use. The organizers were only expecting 5 to a dozen attendees, so we were all really surprised at the turnout.
Yep, it was inspired by Rick Santelli’s rant. But the protests were wider than just anti-bailout, it was also against this onslaught of socialism, taxes, abuse of the middle classes, power grabbing by the Fed, etc. One lady told me she felt like we’ve had a coup de tat.
( Uh… we have! )
Thanks for sharing this.
I almost signed up for this Tea Party. I did not look closely, thought it was coming up in July. I’m glad it was a hit!
Grumblings at work against Obama and the pork barrel spending, even from the guy who voted for sKerry in 2004. He did not vote for the Messiah in 2008 though. Worried about his 401k future, to be confiscated by the Theftocraps.
Is this messiah thing going to end at some point? That phrase struck me as being funny - “He did not vote for the Messiah”. If you read the gospels, no voting was actually involved with the original messiah.
Or course, with the original guy, it was his friends who considered him to be something special and his adversaries who called him a bum. Now, with President Obama, his adversaries are the calling him the Messiah. I have a bad feeling that they intend the story to end in the same way, with a crucifixion.
I voted for him, but I don’t detect any holiness.
Well, there are plenty of people out there willing to do the nailing.
Is this messiah thing going to end at some point?
I certainly hope it will end. I’m only passing along his status as Messiah from the MSM. When the MSM turns against him he will no longer be the Messiah.
hey lainvestorgirl please share some details of the event! I’m interested to hear how it was organized or promoted, and what kind of things went on during the event.
Darnit I just did a long post and it didn’t go through. Anyway, sorry if this is repetitive, but: there was a big crowd, hundreds of people. The organizers were only expecting 5 to about a dozen people, so I could tell they were surprised and I was too about the turnout.
One guy with a microphone was speaking, the crowd was really riled up, angry, lots of handmade signs saying things like I Pay My Own Mortgage, Stop Obama’s Bailouts and Taxes, Honk If You Want to Pay My Mortgage, etc. Lots of cheering, booing etc.
At the end each person grabbed a handful of tea and threw it in the water, and faced the camera and gave a comment such as: I Was Smart I Rented, No Taxation without Representation, Etc.
A few people showed up dressed as early American settlers.
Lots of End the Fed, Gold is Money sentiment.
Wonder if we’ll see this tea party covered in the MSM?
Speaking of Rick Santelli-inspiration . . .
http://www.politico.com/news/stories/0209/19206.html
They also had several speakers, a comedian, a former army guy, a Republican, and a lawyer/libertarian type. They kept haranguing against the bailouts, the higher taxes, the expanding socialism. The crowd was really angry, lots of cheering and booing against taxes, bailouts and big government. The leader kept shouting “Are you listening President Obama?”, “Are you listening Governor Schwarzenneger?” Channel 4 was there but as of yet I don’t think they are covering the event (no big shock there). Lots of cameras and videos were taken, but I don’t know how many were media versus how many were for personal use.
Anyway, the event was surprisingly successful and seemed to really touch a nerve of the angry silent majority, if you can you guys should definitely attend and/or support the Tea Party movement.
I saw some folks here in Ft. Worth. doing the tea party protest. They had signs, and some wore pig outfits and generally looked like a bunch of bubbas having a tail gate party. The crowd was about 150, 100% white, 95% guys and 5% gals. From the looks of their clothes and the cars and trucks in the parking lot I would be surprised if any of these people make enough money to be affected by any tax increases. It doesn’t really matter to them anyway, they just want to protest the change that’s coming. Poor saps, the rich dudes made off with all the wealth and they want to blame socialism.
I’m hoping Obama really does raise taxes on the super rich, lowers the cost of medical care, raises education benefits, cuts weapon systems and really put the clamps on the finance regulations. At the very least I hope this is the death of the Reagan era and the conservative movement for the next 30 years. I take heart that almost all the young people support Obama and it’s THEIR future and not ours.
I’m probably going to benefit from Obammy’s tax cuts (at least in theory) but you don’t have to be rich to be against rewarding stupidity, greed, and incompetence, and punishing diligence and enterprise.
Not silent, not a majority … very loud, and in the minority.
I think if polled, a majority of Americans truly oppose loaning money to Chrysler. However, a majority still see themselves as profiting off RE in some way or at least needing prices to come back up. While the idea of bailing out specuvestors does tick people off, it seems like most would like the gov’t to do “something” to goose RE prices.
Those with money who rented were and are in the minority. Most people are sheep. We’ll survive by continuing to be smarter than them. Expecting them to come on our side when it doesn’t benefit them? Now that’s dumb.
I am but a shock in succession, past its crest, screaming toward its solitary trauma.
I am but a glass, futilely reflecting in heedless grace, spurned and hot.
I am but a lie or worse, releasing its tendrils and blowing my kiss in mockery of wanting’s tricked embrace.
For dude,
Saw you were looking for this yesterday.
http://www.gold-eagle.com/editorials_01/seymour062001.html
Chart of Pompous Prognosticators
Thank you MissGredenko.
Hello? Ben, my posts are getting lost and I am trying to relay info from the tea party, please help!
“In anticipation of an economic recovery, most people who have lost their jobs in a small city will move to a larger city, and Austin will be one of those cities that will actually gain people because the understanding is that if things are to pick up, they will pick up here first,” Angelou said. “So in a way we’re kind of blessed that we have a housing market that has a lot of challenges, but nowhere near what those challenges might be elsewhere. And this market will very quickly recover.”
Great. So even in a recession, Austin will keep growing like (cancer) crazy, because people who lose their jobs will come here.
But instead of buying those $200,000 - 250,000 tract houses in NW Austin, they should buy one of the $850,000 central Austin McMansions (urban infill tract house) or one of the $ million+ downtown highrise condos.
After all, near in you can walk or ride your bike to the park, trail, clubs, restaurants, all the fun places. And the people who come here after they lose their jobs will have plenty of time to enjoy themselves, so why should they stick themselves in the NW suburbs?
It’s always a great day to be a realtwhore!
“In CNBC’s documentary, Greenspan once again argues that the Fed had little to do with the bubble or the current recession. These, he implies, are random events of the kind that occur for no reason every century or so. Moreover, he argues, there is nothing the Fed could have done to limit the growth of the bubble, save raise interest rates so violently that the economy would fall into a recession with unemployment of 10 percent.”
If the Fed cannot do anything about the problem, then why have a FED? He admits his job is to do nothing!
“Moreover, he argues, there is nothing the Fed could have done to limit the growth of the bubble, save raise interest rates so violently that the economy would fall into a recession with unemployment of 10 percent.”
“…employment of 10 percent.”
We should be so fortunate.
Greenspan should done a Volker when he had the chance. Better to suffer through a liquidity crisis than a solvency crisis.
I give up, only one out of five posts went through
lainvestorgirl,
Just go to http://www.michellemalkin.com
She’s got all the coverage from San Diego to “Smurf Blue” Portland, OR ( Wow! Shocking ) and from coast to coast!
God love you for going.
“California is offering a big carrot to people who buy brand-new homes in coming weeks: a $10,000 state tax credit for new-home buyers who close escrow starting Sunday.”
A joshua tree is bigger than a carrot.
FBI saw mortgage fraud early.
… Two retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control, but made the decision not to give back to the FBI the agents it needed to address the problem.
The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop it.
“It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,” said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002
http://seattlepi.nwsource.com/national/397690_fbiweb28.html
I believe you. But this news does not take the Messiah off the spot and out of the blame realm. He’s pushing for much more spending than Shrub and mostly pork barrel and paying off favorites. He’s pushing for high taxes too.
This article doesn’t understand the purpose of the FBI. The FBI exists to fight federal crimes, not state crimes. And mortgage fraud is a state law issue. It’s perfectly appropriate that the FBI spent its resources on fighting terrorism - a federal issue if there ever was one - and not on investigating state law mortgage fraud.
the sun rises in the east