March 18, 2009

The Incentive Is To Just Increase The Action.

A report from the Idaho Statesman. “Fewer homes were sold in Ada and Canyon County in February than in any February in the last 10 years, according to the latest report from the Intermountain MLS. The median price of homes sold continued to decline — down 18 percent in Canyon County and 11 percent in Ada County from February 2008, the MLS reported. The local inventory of unsold homes remains high, putting downward pressure on prices, which are near 2005 levels. Shaun Tracy, associate broker in Boise…said fear is still stifling the market — especially the fear people have of losing their jobs.”

“‘People are essentially putting their lives on hold, even though prices haven’t been this good in years,’ he said.”

“The number of homes on the market is still too high and continues to be a drag on home prices, Tracy said. Under $200,000, there is an 8-14 month supply of homes, but in the $500,000 to $700,000 market there is a 45-month supply at current absorption rates.”

From KIFI in Idaho. “According to local realtors this is the best time in more than 40 years to buy a home, even if you haven’t owned one before. Wendy Selditz, the CEO of The Greater Idaho Falls Association of Realtors, says, ‘Although our home tends to be our largest investment, I believe a home is more than just a financial investment. It is an investment for you and your family’s future. If you plan to remain in your home for a number of years and you purchase within your means, I don’t believe you can go wrong.’”

The Mail Tribune from Oregon. “Betty Taylor’s five-year search is over. The single mom began looking for a home years ago, when Jackson County real estate prices were still climbing. Midway through her search, prices began to fall and…the pieces came together for the 43-year-old state worker. She was able to buy a home with 5 acres north of Central Point for $161,000.”

“The once-staggering price tags had kept Blaine Grace on the real estate sidelines. But the 30-year-old Lithia Motors accountant recently put in a short-sale bid on a three-bedroom, 1,600-square-foot house. ‘I could have come up with a down payment before, but it would have taken years and years longer,’ Grace said.”

“‘Housing prices have dropped so much since 2006,’ Grace said. ‘This house sold for almost $100,000 more. I feel extremely bad for the people who bought at the top of the market and have lost a house. Who could have foreseen what was going to happen?’”

“Newlyweds Amy Christy and Matthew Anderson began looking for a house shortly after they married last month. She’s 21 and a mammography technician at Providence Medford Medical Center. He’s 22 and attends college. ‘We didn’t want to keep paying rent, but we didn’t think we could afford anything we liked,’ Christy said. ‘But we found out there is a lot of stuff.’”

“‘We figured out what we could afford and how big of a mortgage and then went from there,’ she said. The list of homes to visit is long, but they aren’t in any rush. ‘We don’t need to be in a house next month,’ said Christy, ’so time is on our side.’”

The Register Guard from Oregon. “Oregon’s jobless rate increased to 10.8 percent in February, the highest in 26 years and a full percentage point higher than it was in January. Construction shed 3,000 jobs last month, when historically it would gain 500. A total of 82,500 people now work in construction, close to its levels during the boom times of 1997 to 2000, but well below its peak of 104,000 during most of 2007, when the national housing bubble was at its peak.”

“‘“We’re seeing pervasive job losses, widespread across private sector industries,’ said David Cooke, an economist with the state Employment Department.”

“Weather was not to blame for the decline in construction jobs, because rain was light in the Willamette Valley for most of the month and temperatures were only slightly below normal, Cooke said. Rather, the industry was hit by the falloff in demand for new housing and commercial space.”

The Statesman Journal from Oregon. “Weyerhaeuser announced Tuesday morning that it is closing its Dallas mill, effective immediately. Workers were notified as they arrived to work at 6 a.m. ‘Demand for wood products continues to decline due to a slowdown in the housing market,’ said Tom Gideon, Weyerhaeuser’s executive VP, Forest Products. ‘Unfortunately, extraordinarily weak market conditions in the homebuilding industry require that we take decisive action’”

The Oregonian. “The state government’s chief economist couldn’t comment on Monday, the day officials announced that Oregon’s unemployment rate hit double digits for the first time since 1984. He was, after all, on unpaid furlough.”

“Tom Potiowsky’s forced silence spoke louder than words about the extreme Oregon has reached as the recession seems to permeate every crevice of life in the state. While Potiowsky walked the beach with his wife, other economists expressed shock at the 775 jobs Oregon lost on average each day in February. The one-month loss of 21,700 jobs, seasonally adjusted, was the largest since the state began keeping records in 1977.”

“Among them is 81-year-old Portlander Nadine Cunningham. The widowed great grandmother, a breast cancer and heart surgery survivor, clutched her cane as she took a TriMet lift bus to work Monday answering phones at minimum wage. Cunningham, who answers phones to supplement social security, went two years without a paycheck after heart surgery disqualified her from caring for other senior citizens. She says she almost lost her house after paying some medical bills instead of the mortgage.”

“‘I could not let my home go into foreclosure,’ said Cunningham, explaining why she went through retraining to work at Fish Emergency Service.”

“Professionals linked to the housing industry have taken it especially hard. Portland architect Magda Gerencer has sought work since being laid off in October. She and her family have cut back on travel and restaurant meals. ‘I’m looking for some administrative jobs at this point, and I’ve even looked into driving a semi,’ Gerencer said. For now, the 40-year-old mom sticks to motorcycling on her 750 cc Ducati Monster.”

The Bellingham Herald from Washington. “Whatcom County’s unemployment rate, not seasonably adjusted, was 8.1 percent in February, up from January’s revised number of 7.9 percent, according to the Washington state Employment Security Department. February’s number is up significantly over the same period last year, when the rate was 5 percent.”

“The Seattle area was hit particularly hard. Snohomish County’s rate, not seasonably adjusted, rose to 9.9 percent in February (up from 8.5 percent in January). King County rose to 8 percent, from 6.7 percent in January. The month-to-month increase in the state unemployment rate is the biggest jump since 1980, said Mary Ayala, the state’s chief economist.”

“‘This is a serious situation,’ she said.”

The Seattle Times from Washington. “Unemployment in Snohomish County reached its highest rate in 25 years, according to the state Employment Security Department. The last time the jobless rate was that high was in April 1984, when Boeing, which has a huge plant in Everett, had lost 20,000 jobs the previous four years and the region was in the midst of a recession.”

“The unemployment news underlined the deepening financial crisis in the county, where more county and some city workers may face layoffs as sales-tax and real-estate excise-tax revenues continue to plummet. ‘We’ve got a crisis of historic proportions,’ said County Councilman Brian Sullivan, finance committee chairman. ‘We need to jump on this now.’”

The Columbian from Washington. “Two longtime Clark County housing industry professionals — one on the construction side of the business, the other on the selling side — see reasons why our housing market is poised for some sort of recovery. Builder Jon Girod of Quail Homes in Vancouver said last week that his company has seen an increase in first-time home buyer activity in the $180,000 to $280,000 price range.”

“‘Prices have come down enough that our research shows about 19 percent of area households can again afford to buy a home,’ Girod said.”

“‘Home prices here increased at an average rate of 8 percent a year from 2000 to 2008,’ he said. ‘That is twice as fast as the average increase of the 10 years from 1990 to 2000. The market had to have a correction of about 25 percent to get back to the average. That’s about what we’ve had.’”

The News Tribune from Washington. “Pierce County issued 32.5 percent fewer permits to build new homes and apartments in February than it did in January. Bill Riley, president-elect of Washington Realtors, said poor weather has contributed to the low numbers so far this year.”

“Compounding that, he said, financing for builders is ‘almost nonexistent’ in Pierce County, as banks struggle under the weight of poor performing loans. Before new homes can be built, he says, the market must be cleared of its six months of excess inventory. ‘We’ve got a sustainable market here,’ Riley said. ‘People that are buying are getting really good deals, either from short sales or foreclosures, or builders that have gotten back in with cheaper land, material and labor.’”

“Gary Pedersen, president of Pierce County Master Builders Association, said that despite the rising and falling numbers, he feels the industry is beginning to stabilize. ‘There’s a little bit more of an upbeat feeling amongst the builders and contractors that the worst is kind of behind us,’ he said. ‘I think we’re past the panic.’”

“Pedersen said 300 people attended a recent grand opening of two of their model homes at Point Ruston. The attendance, which would have been a pittance in February 2008 when the housing market was at the end of its run, is a jump from what he’s seen in recent months.”

“‘Last February was the height of everything. Everyone was building at numbers we’ve never seen before,’ Pedersen said. ‘We’re still below a comfortable number in construction, but we won’t see those same numbers as before.’”

The Puget Sound Business Journal from Washington. “The Puget Sound Business Journal tracked a week’s foreclosures to see a local family’s mortgage turned into a security — how the process worked, why it was so appealing to those in the business, and how it went wrong. The research also reveals how the conversion of loans into investments limited what homeowners could do to save their homes.”

“It’s August 2008, and Charlene Binfet and her husband, Joseph, just started missing mortgage payments on their five-bedroom Auburn home. She has no idea that her loan is subprime. Or that the banker she borrowed from no longer owns the loan. She doesn’t even remember the name of the bank she borrowed from initially. The family’s second, smaller mortgage goes to a California company.”

“Joe Binfet was working as a salesman in the lumber industry. They bought their house in late 2004 when Joe was pulling in $120,000 a year. They got a loan through Pierce Commercial Bank in Tacoma, even though they had recently emerged from Chapter 7 bankruptcy, their second such filing in about 10 years. But by July 2008, the month they missed that first payment, Joe’s salary had fallen by half, and $56,000 a year wasn’t enough to cover the $3,125 monthly mortgage bill and all the other expenses of a family with three teenage sons.”

“‘You drop half your income, you don’t recover,’ Charlene said recently, looking back. ‘We held out as long as we could.’”

“In 2007, the Binfets’ loan became one of 1,926 mortgages from across the country that were packaged into a mortgage-backed security. At the height of their popularity in 2003, roughly $3 trillion worth of mortgage-backed securities were hitting markets across the world, according to the Securities Industry and Financial Markets Association. Over more than a decade, thousands of these deals were completed and sold. Their total value since 1996: more than $20 trillion — or two times the annual output of the entire U.S. economy.”

“This particular package — known as C-BASS Series 2007-CB6 — consisted entirely of subprime loans. More than half the mortgages in the pool were valued at less than $300,000. Average credit score of the borrowers: 628 on an 850 scale. Average interest rate: 8.295 percent. One carried an interest rate of 19 percent. ‘God knows how those people got into those loans,’ said said Mike Gamsky, a securities attorney at Foster Pepper PLLC law firm in Seattle, who used to work on these transactions.”

“The mortgages in CB6 came from all over the country. But Washington state, with 78 loans, supplied the third-largest number, after California and Florida. What drove demand? Lenders wanted to make mortgage loans, not for the interest payments but for the money they earned in closing costs and fees they could make from selling them to investors.”

“‘The system was set up so everybody gets a little piece of the action along the way, including the bond raters, the insurers, the assessors and mortgage lenders,’ said economist Dick Conway, co-author of the Puget Sound Economic Forecaster newsletter. ‘The incentive is to just increase the action.’”

“At the time, the greatest risk to the pool was thought to be pre-payment. That’s not exactly what happened. In late 2008, as payments pile up, Charlene Binfet gets Litton Loan on the phone.
After some negotiating, she says, the servicing company offers to lower the monthly payment by $500…The problem for the Binfets is their second loan. While Litton is willing to work with the family, Charlene says, HomeEq won’t budge. And the two companies are not working together to solve the problem.”

“By February of 2009, CB6 was faring horribly. A chunk of the mortgages — 188 — were in foreclosure, including five in Washington. About 100 more had already been through the foreclosure process and were now owned by banks, including six mortgages in Washington. What’s more, 29 percent of the loans in CB6 were now delinquent, seven times the historic national average. ‘It’s an astronomically high rate,’ Gamsky said.”

“Litton Loan…said in 2008, it modified 41,500 loans nationwide, or about a third of its portfolio that was at least 60 days delinquent. Even with modifications, about half of mortgages are delinquent again within six months, a government study showed. ‘We were watching loans that we had modified previously start to default at current rates,’ said Donna Marie Jendritza, a Litton spokeswoman.”

“But the servicer’s responsibility is to the investor, not the homeowner. In many cases, the modifications actually increase the overall debt, and reduce payments only temporarily. In CB6, the majority of loans that were modified in one recent month had their principal balances increase, even as their monthly payments and interest rates were reduced. In one case, a homeowner saw the balance increase by $62,000.”

“Even investors disagree on whether to modify. Those first in line to be paid want to keep the original loan terms, because they are still likely to see their money. Those in the riskier tranches often want a modification, so at least something will be recouped for them.”

“‘It’s tranche warfare,’ Gamsky said. Loan servicers are very reluctant to make changes that aren’t spelled out in the original documents. ‘They do not want to be sued,’ he said. ‘They are caught right in the middle.’”

“Federal agents and prosecutors are interviewing former Washington Mutual officials and combing through a staggering number of documents as they investigate whether fraud played a role in the largest bank failure in U.S. history. A grand jury has been convened, and at least four of the most experienced complex-crime prosecutors in the U.S. Attorney’s Office have been assigned to the probe, according to multiple sources.”

“Like many other lenders, WaMu was seduced by the lure of huge profits from making subprime mortgages and other risky home loans. The bank sold many bundles of securities based on such loans to other financial institutions. If it turns out that company officials misled investors or federal regulators about those securities, that could be one basis for a criminal case.”

“The lawsuit runs to nearly 500 pages and quotes more than 90 unnamed ‘confidential witnesses’ — including some identified as mid- and upper-level WaMu managers — who allege Washington Mutual lacked risk management, demanded that appraisers inflate home values to justify larger loans, and used ‘dangerously lax’underwriting standards.”

“A former senior loan coordinator at Long Beach Mortgage — a WaMu subsidiary responsible for hundreds of millions of dollars in high-risk home loans — late last year pleaded guilty to lying to a grand jury in Sacramento, Calif., and admitted accepting more than $120,000 in kickbacks for approving loans that other lending institutions wouldn’t touch.”

“John Ngo has agreed to testify against others involved, and his lawyer states in a recent filing that he is ‘cooperating with the government in an ongoing investigation and prosecution.’”

“One other sign of the gathering criminal investigation is that potential targets are hiring criminal-defense attorneys. At least one WaMu official, former President Kerry Killinger, has hired a public-relations firm. A telephone call about the criminal probe to his Palo Alto, Calif., securities attorney was returned by public-relations executive Roger Nyhus, who said that neither Killinger nor his lawyers would be talking.”

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Comment by Ben Jones
2009-03-18 10:10:06

‘the state unemployment rate is the biggest jump since 1980, said Mary Ayala, the state’s chief economist. ‘This is a serious situation,’ she said.’

‘We’ve got a crisis of historic proportions,’ said County Councilman Brian Sullivan, finance committee chairman. ‘We need to jump on this now.’

Well, the housing bubble has been rolling along for years, and these guys are surprised at the job loses? How long ago was it that the exact same thing happened in FL, AZ, NV, CA?

Again, this is a basic failure to acknowledge what has happened. So as the ‘experts’ continue to flog the dead housing horse, we waste time in getting on to solving the problem: the post housing bubble economy.

Comment by GrizzlyBear
2009-03-18 11:04:18

Using NV as an example, it doesn’t appear there is any effort to actually “solve” the employment problem. Most pols are busy trying to extract more revenue from fewer sources to address the budget shortfalls, while limiting services, all the while continuing down the same path. I guess we’ll find out if necessity is truly the mother of invention as things continue to deteriorate.

Comment by DinOR
2009-03-18 11:52:11

“while limiting services”

Oh… oh.. don’t make me laugh! How is it possible ( in OR anyway ) to have more limited services than we do now? I mean other than having an old fashioned “barn raising” effort to repair potholes?

Comment by james
2009-03-18 11:21:23

The problem I’m seeing is the capital portion of the economy may be messed up for a long long time after this.

Comment by SMF
2009-03-18 11:29:38

Ignorance at its best, indeed. Experts my a**.

Very few have acknowledged the serious problems to come in the future.

As housing prices had a bubble, so did tax revenues and State budgets.

Now that housing prices tumbled, so will tax revenues, and eventually (whether they like it or not) State and Federal budgets.

Comment by dude
2009-03-18 16:21:51

C’mon now! Just tax the rich! What is the current threshold for rich? 250K?

Comment by MacAttack
2009-03-19 09:14:32

That’s twice what our family makes. And we live well. Just so you know. Not advocating anything.

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Comment by Brent
2009-03-20 01:40:41

Watch home prices fall even faster when property taxes increase–yes go up. Owning real estate sucks. You never really own anything, and the government, can on a whim raise your property tax or place restrictions on your property reducing its value. I would not be suprised to see the federal government get in on the property tax game as away to get more bailout money.

Comment by Olympiagal
2009-03-18 12:36:25

Whooo HOOO, a PNW thread! Thanks, Ben.
Sayyyyyy….do any a you PNWers remember the good old days when it was ‘different here’?
*malicious laughter *

Hey, Ben, is that you modeling the lovely t-shirt? You’re buff. But where’d your head go? :)

HBBers, let’s discuss the HBB t-shirts, and if we’re going to get one and prance around in them. I think I’m going to get a pink one–of course–and extra big so I can wear it to sleep in. It can go with my favorite pink flannel grinning monkey-headed jammies.
BUT, and this is very important, I want Ben to take a permanent marker and draw a frog on it, and a mushroom, and most important of all, I want him to sign his name over where my bosoms will be when I put it on, and add: ‘To my best groupie, Olympiagal’. Huh huh huh?!

Rock star! :)

Comment by mikey
2009-03-18 14:40:08

… the little Clams, fat Oysters and Shamu’s entended family pod all hold their collective breath’s, in anticipation of you Olygal, Plastered in Pink, running up and down the beach all dazed and confused in a XXX Large HBB T- shirt ;)

Comment by San Diego RE Bear
2009-03-18 17:39:01

“BUT, and this is very important, I want Ben to take a permanent marker and draw a frog on it, and a mushroom, and most important of all, I want him to sign his name over where my bosoms will be when I put it on, and add: ‘To my best groupie, Olympiagal’. Huh huh huh?!”

You’ve gone from a simple product to a one-of-a-kind designer art piece. Gonna cost you a lot more than the basic tee-shirt. I think you’re going to have to keep sending him offers (in $25 increases I would think) until you hit his price.

Too bad you missed Vegas. Ben was running around the whole time writing on people and signing body parts. (Well, that’s what I heard anyway. Again, I wasn’t invited to the orgy. :D )

Comment by DennisN
2009-03-18 17:46:30

I’m confused. I thought “bosom” was inherently plural. A woman has 2 breasts but only one bosom. Or am I misunderestimating the English language once again?

Comment by San Diego RE Bear
2009-03-18 17:47:50

Those plastic surgeons can do anything these days. ;)

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Comment by snake charmer
2009-03-18 10:35:50

Phenomenal collection of articles which, as usual, were edited and juxtaposed for maximum humor.

Comment by sean
2009-03-18 10:54:19

what is your beef snake charmer?

Comment by smathis
2009-03-18 11:24:17

I have to be honest, the laughter is starting to stick in my throat about now.

This thing is so much more gargantuan than I ever thought it would be…and with further-reaching consequences.

Comment by DebtinNation
2009-03-18 10:45:13

“This particular package — known as C-BASS Series 2007-CB6 — consisted entirely of subprime loans.”

Kick his ass, Sea Bass!

Comment by GrizzlyBear
2009-03-18 10:58:48

Bad link.

Comment by DebtinNation
2009-03-18 11:05:11

Oops, sorry. In my cleverness, I messed up the link:

Comment by DinOR
2009-03-18 11:39:10

“It’s tranche warfare”

Too funny! ( Why can’t “I” come up w/ golden sh!t like that? )

Comment by polly
2009-03-18 13:27:42

I nearly had to strangle myself in my cubicle over that one too.

Comment by DennisN
2009-03-18 16:48:42

Almost as bad as being bitten by a hairy trancheula.

Comment by GrizzlyBear
2009-03-18 10:49:59

“According to local realtors this is the best time in more than 40 years to buy a home, even if you haven’t owned one before. Wendy Selditz, the CEO of The Greater Idaho Falls Association of Realtors, says.”

Nothing is more nauseating to me than hearing realtwhores uttering that it’s a great time to buy. These lying used house salespeople have been preaching it’s a great time to buy all the way up, and all the way down. Has any reporter ever asked them when it isn’t a good time to buy? Unreal.

Comment by smathis
2009-03-18 11:20:16

What’s even better is when they insist that “now is a great time to buy or sell a home!”

I mean…which is it? A great time to buy OR a great time to sell? Because those two states can’t exist simultaneously. Except in the world of the Used Housepeople.

Comment by Arizona Slim
2009-03-18 11:55:14

How can you be in two places at once when you’re really no place at all?

Comment by DennisN
2009-03-18 16:49:51

Antelope freeway, 1/64th mile…..

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Comment by Mo Money
2009-03-18 11:58:10

Really, can’t reporters just edit their spell checkers to replace the “great time to buy” with “Realtors say it’s commisson time suckers !”

Comment by Al
2009-03-18 12:11:01

“‘People are essentially putting their lives on hold, even though prices haven’t been this good in years,’ he said.”

And to top it off, now buying/owning a house is living. I have a somewhat different definition.

Comment by Natalie
2009-03-18 13:07:07

Renters are bitter creatures that lack any sort of a meaningful life. Scum when you really think about, just throwing their money down the drain. I saw one on the bus today, and spit on it. It talked back to me, so I slapped it.

Comment by SanFranciscoBayAreaGal
2009-03-18 18:40:41

That was funny Natalie. Thank you for the laugh. :)

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Comment by VaBeyatch in Virginia Beach
2009-03-18 13:34:31

I get cards in the mail from Realtors that cite the NAR lines. The most irritating was the one about renters net worth is only $4K while avg homeowner is $180K or what have you. I tried to find a source for the statistic but could not. I tried to go after the average renters insurance policy but found that the majority of renters do not carry them.

I was going to go to one of their condo sales pitches and derail it, but ended up hanging out with friends instead.I

Comment by Lesser Fool
2009-03-18 15:15:46

You… what, what, WHAT?!

Comment by reuven
2009-03-18 16:16:28

That figure can’t possibly be correct.

I’d bet if you normalize for age (compare 30-year-old renters to 30-year-old homeowners) you’ll find that, in today’s economy, renters beat owners if you realistically account for negative equity on 30%+ of recent homebuyers.

Comment by Prime_Is_Contained
2009-03-18 19:22:54

“The most irritating was the one about renters net worth is only $4K while avg homeowner is $180K or what have you.”

It will be really fun to see an updated version of that statistic when this bust is really over. I’m betting the shift will be dramatic, considering the number of nominal “homeowners” taking a bath who will have _negative_ equity as a component in their negative net-worth…

Comment by Ernst Blofeld
2009-03-18 22:47:23

I’m not so sure I trust their numbers, but this:

Is an interesting take on baby boomer wealth after the collapse of the housing bubble.

“Finally, the projections show that for both age groups, the renters within each wealth quintile in 2004 will have more wealth in 2009 than homeowners in all three scenarios. In the second and third scenarios, renters will have dramatically more wealth in 2009 than homeowners who started in the same wealth quintile. Homeownership is not everywhere and always an effective way to accumulate wealth. For those who owned a home in the last few years, the collapse of the housing bubble led to the destruction of much or all of their wealth. “

Comment by climber
2009-03-18 13:44:13

Rent now or be underwater forever.

Comment by dude
2009-03-18 16:25:06

“Wendy Selditz, the CEO of The Greater Idaho Falls Association of Realtors, says.”

Wasn’t it in IF that some guy named Daren did a mini Madoff to the tune of 50 million dollars? What do you think that’s going to do to the gross product of the area over the next couple years? I’m guessing localized depression.

Comment by DennisN
2009-03-18 17:50:37

Idaho Falls is the home city of the National Labs here. Huge amounts of federal dollars and safe secure government jobs.

Trivia question: which city in the US has the highest percentage of guys with PhDs in physics? Idaho Falls…..

Comment by DennisN
2009-03-18 17:53:12
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Comment by dude
2009-03-18 19:31:55

Yeah, my dad was one of them. I grew up there. Thing is, I don’t see the Candy Crappin’ Unicorn ™ doing a lot for nuclear subs nor power plants going forward.

And even at that, you didn’t address the issue of gross product for the area and what a 50 million hit does to it. The INEEL will only stay static at best. Take a look at median income vs. median used house price.

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Comment by DennisN
2009-03-19 16:29:23

OK I didn’t know if you knew the situation in Idaho Falls. My point is that normally in a town of 50,000 the impact of a $50M loss might hurt the town, but since Idaho Falls has a government source of employment it wouldn’t be hurt anywhere near as bad as a town dependent upon, say, farming and ranching. $50M is probably only one week’s payroll at INL. Contrast this with the impact of Tamarack’s bankruptcy on the towns in Valley county.

Comment by GrizzlyBear
2009-03-18 10:57:17

“Professionals linked to the housing industry have taken it especially hard. Portland architect Magda Gerencer has sought work since being laid off in October. She and her family have cut back on travel and restaurant meals. ‘I’m looking for some administrative jobs at this point, and I’ve even looked into driving a semi,’ Gerencer said.”

This shows just how desperate people are for work, now. An architect and mother considering long-haul trucking. Like Ben says, these politicians don’t get it. It’s about addressing the jobs issue. If we can’t transition from an economy based on building and selling overpriced houses, cars, etc., to one which is more sustainable, we’re in real trouble. Here in WA, we’ve now got close to 400,000 people on unemployment looking for work, and those are the “official” numbers. Unofficially, including those not collecting benefits, it’s probably at least 50% higher. This is much worse than is being reported.

Comment by Arizona Slim
2009-03-18 11:10:48

“‘People are essentially putting their lives on hold, even though prices haven’t been this good in years,’ he said.”

Yeah, those awful people. They have the nerve to wait for even better (read: lower) prices.

Comment by DinOR
2009-03-18 11:54:27

Arizona Slim,

Well that and it’s like the REIC can’t imagine a world where RE Riches don’t affect our every waking moment? That there’s life ‘without’ HGTV and Home Depot?

Comment by Arizona Slim
2009-03-18 12:59:21

Oh, brother. Don’t get me started on Home Cheapo. Definitely not the place to shop for:

1. Lumber. Unless you have a hankering for bowed lumber.
2. Plumbing parts. Give me a specialty supplier any day.
3. Electrical parts. See item #2.

Comment by wolfgirl
2009-03-18 13:29:09

Locally Lowe’s appears to be doing better than Home Depot. Location is not a factor since they are across the street from each other. Normally I go to Lowe’s but I did check Home Depot for blackberry bushes this year.

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Comment by awaiting wipeout
2009-03-18 14:28:55

“blackberry bushes ”
Are you into gardening? When we buy a new dig, I plan on a victory garden. I can’t wait to grow my own food.

Comment by wolfgirl
2009-03-18 15:45:22

We grow some vegetables and berries. My father kept a large garden that kept both my mother and grand mother busy canning and freezing all summer. I’m not that ambitious. But I do like having fresh veggies during the summer.

Comment by Olympiagal
2009-03-18 15:51:14

Well, I just can’t believe you actually had to buy some blackberry bushes. I’ve started to take my little blow-torch to some of the canes that keep bustin’ out of my garden boxes. Nothing else was working. And how did they get IN there? Did they freakin’ teleport?! They’re like goats!

Comment by dude
2009-03-18 16:27:09

Which toad licking experience led you to believe goats teleport?

Comment by DennisN
2009-03-18 18:16:10

Not much yet in my garden for eating, but several rosemary bushes keep the pasta dishes happy. My apricot tree should do well, in addition to the half-dozen cabernet savignon and merlot vines. I have a small plot for zuchini and suc like.

Comment by wolfgirl
2009-03-18 18:45:00

This is the only place I haven’t had wild blackberries. We are in the middle of town.

Comment by VaBeyatch in Virginia Beach
2009-03-18 13:36:04

How is a SquareD / GE / etc. breaker from Home Deport different than Lowes? I prefer Lowes, but don’t understand the electrical comment as everything they sell is made by name brand companies.

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Comment by DinOR
2009-03-18 14:02:21

“Home Cheapo” Love it!

Yeah some people talk about how they’ve been sober for 8 years or whatever, with me it’s about staying out of Home Despot. 5 years for me!

You go in for a roll of masking tape and a brush and $300 and 4 hours later..? No thanks, I’d watch people throw their life away on drugs. At least they’d have ‘fun’ on the way to re-hab.

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Comment by mikey
2009-03-18 14:20:54

Well the FB and GF must be wasting all of their money buying cars , and the lots and and the entire Dealerships !

Just saw one a week ago, then Poof… it disappeared faster than a fat lady’s Wal-mart cart charging for the Twinkie asile :)

Comment by awaiting wipeout
2009-03-18 14:38:37

I resemble that remark. Actually, I am an Oreos or Chips Ahoy gal at Wal-Mart, and still a size 2.
Oreos came on the market in 1912. They’re part of our heritage!

You know those animal cookies in the circus box, with the string. They came about in or around1896 as a Christmas Ornament. I know my cookieology.

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Comment by In Colorado
2009-03-18 15:44:57

One of the few things worth buying at walmart are their in house brand marshmallow cookies,

Comment by awaiting wipeout
2009-03-18 17:04:47

Thanks, In Colorado, for your cookie lead. I’ll try those. I love my “comfort” food 3X’s a week.

Comment by DennisN
2009-03-18 18:27:06

All I tend to buy at Wallyworld is motor oil and ammunition. Makes for some strange looks from little old ladies when I push my shopping cart up towards the checkout register…..

Comment by DinOR
2009-03-18 14:47:48


There’s a visual I could live without.

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Comment by mikey
2009-03-18 15:01:55


Comment by smathis
2009-03-18 11:22:48

I’m waiting for someone to comment on the Oregon kids who are looking to buy a house. A 21-year-old “mammography technician” (with a title like that, I’m willing to bet she doesn’t have so much as a technical school degree) and a 22-year-old college student.

How in the world do they expect one meager income to pay for them to buy a house…the down payment, the monthly mortgage, the maintenance, property taxes, homeowner’s insurance? The mind boggles.

Comment by The_Overdog
2009-03-18 11:45:50

She actually probably does have a tech school degree, and it probably pays ok (30-60k). Those back office medical positions all require you to go to tech school, which is a sort of ridiculous expense given the nature of the job.

I would say that it contributes to the extremely high cost of medical coverage, but it’s really no different than other corporations requiring the majority of their employees (even admins) to have college degrees, whether the degree is actually useful or not.

Comment by Mo Money
2009-03-18 12:09:12

I’ll take a stab at it…..

“Newlyweds Amy Christy and Matthew “Snotnose” Anderson began looking for a house shortly after they married last month instead of waiting to save up a down payment or maybe even try living together 1st to see if it works out. She’s a 21 year old Bryman Trade School graduate and a poorly paid mammography technician at Providence Medford Medical Center. He’s a 22 year old slacker and attends a real college while living off his wifes earnings. ‘We didn’t want to keep paying rent, but we didn’t think we could afford anything we liked,’ Christy said. ‘But we found out there is a lot of stuff.’” And we said “OMG !!” and I called my BFF Jill and she was “No ways!! LOL!!” and I’m like “WAY!” So we’re taking our time looking since Mom doesn’t want us out of the basement for like a month.

Comment by DebtinNation
2009-03-18 13:19:12

I’ll comment — they seem fairly responsible — actually married; he’s going to school, and she seems to have a decent job; what’s the BFD? Just because most 21 year olds these days are irresponsible doesn’t mean they all are. Remember back when people were considered old if they weren’t married w/kids in their early 20’s?

Comment by DinOR
2009-03-18 14:07:52


I agree. I have kids that age and one has a modest but pleasant home and the other is renting while hubby finishes college. I’d rather they both… had still been renting, but you can’t have everything?

What I don’t get is that this is the generation we ’should’ be getting -behind-, not slamming every chance we get. If anyone wants to throw in the towel on the boomers, I have no problem with that. But these kids were in HS when securitization started! They had no means to profit from this?

Comment by smathis
2009-03-18 17:19:12

I don’t think I was “slamming” them, persay…just pointing out that it’s unlikely, with only one 21-year-old working (and I do NOT think it’s likely she’s making 60K per year) and one 22-year-old in college (which is a huge expense) that this young couple actually has the financial wherewithal to become homeowners.

In other words, there are still plenty of folks out there with very unrealistic expectations about what it takes (in money, commitment, time, etc.) to own their own home.

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Comment by DinOR
2009-03-18 11:43:49

“He was, after all, on unpaid furlough”

Let me get this straight? Oregon’s chief economist wasn’t able to make the unemployment announcement because..?

Oye vey.

Comment by Mo Money
2009-03-18 12:00:52

Because he was being a “dick”, he’s forced to take unpaid time off just like so many others but since he’s just SO special he refuses to even make a comment unless he’s paid for it. Typical state worker.

Comment by potential buyer
2009-03-18 14:24:08

Not sure that’s accurate. I know if I take a vacation day, I am not allowed to use my BB otherwise I’m considered working, which means I get paid.
HR constantly warns about that.

Comment by awaiting wipeout
2009-03-18 11:47:53

Mammography Technicians can make $48K- and up ,depending on the region. I know of one gal who makes $60K+, after getting experience at a major university. I believe the job title comes with some pretty serious study. (Not your average tech training.) She might have started her tech school right out of high school. Although 21 yrs old, does mean it’s a newly printed certificate. Bright future.

Comment by Bill in Carolina
2009-03-18 13:37:03

I have a feeling her job includes looking at all the images, saying “no problem” to most and passing the few suspicious ones on to a radiologist.

Comment by Wickedheart
2009-03-18 20:15:23

Mammography technicians are the ones who stretch your boob out like a banana then flatten it like a pancake. The radiologist reads the results of their efforts.

Comment by spacecostflrenter
2009-03-19 17:53:02

Mammo tech is an xray tech—a 2 year degree and works under a radiologist– a medical doctor.
Techs do not do preliminary review of images. Evey single exam is evaluated by a radiologist…always. sometimes 2.

techs do not interpret images…ever. No radiologist would allow it…ever.

Comment by awaiting wipeout
2009-03-18 11:53:46

Let’s say, only 1/2 the 78M aging Baby Boomers are female (estimating low-more of us,and we live longer), and a good % get mammos, I would say that gal found a secure niche in the job market.

Comment by polly
2009-03-18 13:33:35

Which you couldn’t day about the doc who reads the films, because radiology is being outsourced to India. But the techs who deal with people are still needed.

Comment by Wickedheart
2009-03-18 20:18:09

Not a comforting thought.

Comment by milkcrate
2009-03-18 11:55:18

“The once-staggering price tags had kept Blaine Grace on the real estate sidelines. But the 30-year-old Lithia Motors accountant recently put in a short-sale bid on a three-bedroom, 1,600-square-foot house. ‘I could have come up with a down payment before, but it would have taken years and years longer,’ Grace said.”

Short sales can be like imported candy: a pretty wrapper holding God knows what stuffed with an ooze you can’t quite identify. Expired bean paste?

The article doesn’t say whether Ms. Grace consummated the sale with the seller/bank.

Short anecdote (borrowing from Slim) from the milkcrate files: I went to look at a nice home nearby that was about $130 a square foot, advertised as such, anyway. The “owners,” a quarreling husband and wife, spent over $200 a square foot. Bout 2 yrs ago. I wanted the spouse to have a look. Called to set it up. No more showings available, the agent says. The back story, it turns out, is that the wife wanted to unload the house while hubby was still attached. The sound from wedding bells had long since been stilled in the race to keep up with the Jones’. Anyway, it is still on MLS, they ain’t showing it. A handful of other short sales seem to be in suspense nearby and have been for months.
I wish no further angst on the would-be sellers; but I’m sure it will turn up on an REO list this summer.
If anyone wants to counsel me to steer clear of $130 a foot for a nicey nice home, fire way.
I’m calling a bottom, meanwhile.
For springtime. It’s over.
Next: “Unlimited sunshine,” as the NWS always puts it. Rain? What’s that?

Comment by Bill in Carolina
2009-03-18 13:42:50

We got our foreclosure for $69 a square foot. In a gated, lakeside community. Backing up to the golf course. In 2005.

Patience, grasshopper. You should be able to do even better than we did.

Comment by awaiting wipeout
2009-03-18 17:09:30

Where are you living in the Carolinas? What’s the scoop on housing, jobs, and govt chaos?
Too many Californians ruining the area yet?

Comment by In Montana
2009-03-18 14:40:03

Around here over the years I’ve noticed special one-of-a-kind dream homes being built in the woods or on the hillsides…then immediately being put up for sale. I don’t think these were spec homes. Too special! Someone’s marriage went in the crapper over it.

Comment by Milkcrate
2009-03-18 19:07:27

Rented a mule named Ranger near Glacier once, a sure-footed creature who did well on steep hills. Never fell down. Can’t say the same for wilderness couples in their chalets. Ranger is probably still there.

Comment by DebtinNation
2009-03-18 13:08:41

“This particular package consisted entirely of subprime loans. Average credit score of the borrowers: 628 on an 850 scale. Average interest rate: 8.295 percent. One carried an interest rate of 19 percent.

“At the time, the greatest risk to the pool was thought to be pre-payment. ”


Isn’t that like saying that the greatest risk from anthrax would be the long lines at the hospital? Sorry, I’m really striving for an ironic analogy here, but having a hard time with such non-sequiturs.

Comment by MacAttack
2009-03-18 15:39:13

The prepayment part was supposed to happen when RE prices kept on climbing, and the borrowers refinanced out of them into something better.

We’re 8 years into a 30-year fixed and have been paying 25% extra principal every month until the last three. A refi’d 15-year fixed is 1% lower right now, but we’re sitting tight to preserve the flexibility, plus we’re paying more principal now - if we refi’d, most all of our payment would be interest.
Am I making sense? Does that make sense to you all? I’m lazily trying to avoid plotting the amortizations… perhaps I should be less lazy.

Comment by dude
2009-03-18 16:55:13

My rule of thumb was to only refi if I gained 2%. Anything less isn’t worth the hassle.

Comment by B. Durbin
2009-03-18 18:45:33

It makes sense to me. Keep the flexibility, but pay what you can and you might as well be in a 15-year fixed. And when you’re paid off, you can look at it and say, “Yeah, we did it!”

(My parents paid off their house a few years back and now their only annoyance is the daily “reverse mortgage” calls.)

Comment by wolfgirl
2009-03-18 18:47:57

Concerning the economy, flexibility is not a bad idea.

Comment by pressboardbox
2009-03-18 13:46:35

Why does Bernanke stop at $1trillion of new bailout money? Why not just blow all pessimists away with a $200 trillion treasury purchase and throw in $500 trillion for all MBS in existence and any new ones that show up on the mafket. I mean, he can buy whatever he wants to right? Right?…

Comment by whino
2009-03-18 14:08:41

‘Why does Bernanke stop at $1trillion of new bailout money?”

What I would like to know is how does he come up with these figures? Each time they have had to go back to the drawing board and plan more helicopter drops.

Comment by ws
2009-03-18 17:29:19

Helicopter drop???

try an Air Force C5A Galaxy drop

Comment by SanFranciscoBayAreaGal
2009-03-18 18:49:01

Rode in one of those babies. They are big.

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Comment by dude
2009-03-18 16:56:46

Don’t give him any ideas. Zimbabwe anyone?

Comment by EastBayRenter
2009-03-18 15:34:58

To all my blog friends out there…

I was told yesterday when I spoke to a mortgage broker for fun that the only loans available are with 20% down and if you do not have this much you don’t get the loan. He also told me we only qualified for a little over $700k (granted it’s San Francisco) and we make over $200k without any bills. I guess the new front/back end is 33/38. Is he correct? I told him I was happy large down payments are needed! I just want to make sure he was correct in his statements. If this is true how are ANY homes selling over $500k? How many people have $100k just sitting around? All I hear are ads on the TV and radio for people who can’t pay their bills and how no one has any money. We just renewed our lease for 2 years since I don’t plan on buying anything for 2 - 3 years. What are your thoughts?

Comment by dude
2009-03-18 16:58:24

“If this is true how are ANY homes selling over $500k?”

Answer, there aren’t many.

Comment by Arizona Slim
2009-03-18 17:07:34

My thoughts:

1. You’re wise to wait.
2. Good on ya!

Comment by ws
2009-03-18 17:33:23

33/38 ratios / tax returns required / verifications of deposits /employment, 3 months house payment in reserve???

It’s deja vu from about 10 years ago. Back to the future I guess.

Comment by still not time
2009-03-18 19:30:05


Comment by dude
2009-03-18 16:09:51

“Oregon’s jobless rate increased to 10.8 percent in February…”

I’d just like to extend a laurel and hardy handshake to Oregon and welcome them to the 10 percenters club. The first one to 20% wins!

Comment by DennisN
2009-03-18 17:00:47

Under $200,000, there is an 8-14 month supply of homes, but in the $500,000 to $700,000 market there is a 45-month supply at current absorption rates.

In Ada and Canyon counties (metro Boise for non-Idahoans) a $500K-700K home is a McMansion on 4 acres. You of course can spend stupidly more (e.g. a 100 year old decrepit place in trendy north end) but you should get acreage or a view lot with 3,500 square foot house in that price range.

$200K should be decent but modest in OK parts of town. My house probably comps at around $240K. It’s decently built, 2K square feet, in a golf course/riding stables neighborhood. Thing are selling but very slowly.

Comment by DennisN
2009-03-18 17:02:34

By the way I’ll have to hunt up a nice story on Valley county, home of bankrupt Tamarack. The whole county’s economy has collapsed.

Comment by DennisN
2009-03-18 17:43:18

Here we go….

. . . Mayor Dick Carter, of Cascade, a town of 1,000 people about 20 minutes south of Tamarack… The county’s economy, he says, has slipped from recession to depression.

“There aren’t any jobs to replace the 200 at Tamarack,” Carter said. “Every week we have the food bank come up, and the length of the line at the senior center has tripled in the last six months.”

Another 400 jobs are likely to disappear . . .

A town of 1,000 people loses 200 jobs with maybe their town’s portion of 400 more. That’s pretty bad.

By the way the Statesman’s web site sucks at responsiveness.

Comment by jay
2009-03-18 19:42:43

made an offer on a house for 77k in phoenix, north phoenix older home from 1970. 1700 sq/ft. anyhow, if they accept then it will be the lowest of the zip code this year besides one other that is smaller! sold for 205k in 2005! needs work but i also get the 8k first time home buyer credit. if they counter for a higher amount, my next offer is 75k! i’m just now makeing my first offer after looking for a year and checking areas. i’m not in a rush, but i loved the layout and pool! so, i will be buying all cash to live in 3 years and maybe look to buy another house if they continue the decline and do a rental on one! most need work, all need carpet, painting. this one has a kitchen and intact drywall! the house sold in 1995 for 85k! so, i think now is time to start entering the market! if it falls, like i said i’ll go for a second one! but, it will have to be around 60k or less so i could be waiting a year or more!

Comment by freedom5
2009-03-18 22:00:19

Good luck Jay. Though, I think you will get $7700 if they accept (10% up to 9k).

Comment by freedom5
2009-03-18 22:01:33

Typo, I meant up to 8k. DOH!

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