The Misery Flows Upward In California
The San Diego Reader reports from California. “For the 12 months ended in February, bankruptcy filings in San Diego and Imperial counties are up 73 percent to 14,509, compared with the same period a year earlier, says Barry Lander, clerk of the bankruptcy court. Home foreclosures rose 133 percent in 2008 to 19,557, according to the county assessor’s office. The stunning increases in bankruptcies, foreclosures, and unlawful detainers are related. Says Richard Kipperman of La Mesa’s Corporate Management, a trustee in Chapter 7 cases, ‘In 2004, of the first 100 cases I did, 8 people owned real property. Nobody owned more than 1 property, and all 8 people said they would try to keep up their payments. Of the first 100 cases in January of 2008, fully 42 people owned real estate, and of those, 7 owned more than 1 property. And 22 people said they are just giving their property back to the bank.’”
“Radmila Fulton has been a bankruptcy attorney in the county for 27 years. ‘I have never seen it this bad,’ she says. ‘People are losing their jobs. They can’t make their debt payments.’.. She says, ‘People are walking away from their homes, but most banks aren’t taking back the keys; they want to go through the foreclosure process.’”
“Says Kipperman, ‘People lived off the equity in their homes. They used their home as an ATM card. The value would go up, they would refinance, take out money, pay off their credit cards, and take a trip to Hawaii.’”
“The misery flows through the economy and in this case is flowing upward. ‘The small business owner had been making it, but now sales are down dramatically as [customers] contract their spending. Now the small businessperson is not making the amount of money needed to make the mortgage,’ says Fulton. So her clientele is more upscale than she has seen before. ‘People have the feeling that things are not going to get better.’”
The Voice of San Diego. “Jim McConville arrived an hour late to the gathering in Vicki Jenkins’ Capistrano Beach living room. He’d come that evening in January 2008 to court partners for a massive real estate purchase. Over the next several months, McConville’s team arranged for Jenkins to obtain five mortgages.”
“Now, 74 of the 81 homes involved in the deals in Sommerset Villas and Sommerset Woods in Escondido and Westlake Ranch in San Marcos are in the first stage of foreclosure. The price for McConville’s buyers was $310,000 for two-bedroom units in Sommerset Villas last summer, for example. Since December, three similar units in the same complex have sold for less than $100,000.”
“Even more striking, McConville’s buyers were sold four 480-square-foot studios in the same complex for $265,000 each last summer, taking out loans for $212,000 on each one. ‘Property values will have to quadruple before that condo is even worth the loan amount,’ said Todd Lackner, a local real estate appraiser and mortgage fraud expert.”
“McConville’s straw buyers are already hurting. Frances Greenspan’s credit score, once the last shred of stability in her financial world, has been decimated. She’s seen the interest rate on her credit cards spike from 9 percent to 25 percent. She said she tries to stay positive, though she no longer realistically expects McConville will suddenly show up to pay off her loans. She doesn’t have a Plan B.”
“‘If I have to, I guess I’ll walk away from my home, which is all I have,’ Greenspan said. ‘I don’t know what I’d walk away with — I don’t have any family left.’”
“Vicki Jenkins told a similar story, as did Annemarie Miller-Jones, Norman Johnson, Mark Lassagne and Afsar Shamlou. ‘I guess that’s what I get for being greedy,’ Jenkins said.”
The Union Tribune. “Mark, a Northern California publisher who asked that his last name not be used…showed the Union-Tribune two HUD-1 forms. One showed no marketing fees. Another, provided by the voiceofsandiego.org reporter, showed the $180,454 fee.”
“Mark said he took out loans on four Escondido condos. Now, three of the four loans are in default, according to the San Diego County Recorder’s Office, and Mark too says he never received the $10,000 per loan he said he was promised orally. Both Greenspan and Mark acknowledge they did not have written contracts with McConville or Diamond House stipulating they would receive the fees. However, they also did not have to invest any of their own money for the purchases.”
“‘I kept calling Diamond House, and they would give me a song and dance about making the payments,’ said Mark. ‘I had pristine credit before this. Now, I can’t borrow money to help my business. It’s really the stupidest mistake in my whole life.’”
The North County. “Another wave of house foreclosures is poised to rumble through Southwest County, further disrupting an economy already trying to absorb the first wave of foreclosures and deal with a growing jobless rate. ‘We have unsustainable debt taken out during the housing bubble and it hasn’t popped yet,’ said Chris Sorensen, a Temecula-based mortgage and real estate expert retained by the county to lead a series of classes on avoiding foreclosure.”
“About 337,000 houses in Riverside County were purchased from 2004 to ‘07, before prices began to dive. Almost all of them now are worth less than their owners paid for them.”
“Sorensen says he is ’scared to death’ and ‘hopes he is wrong,’ but given the county’s other economic problems he fears an increasing number of owners of overvalued homes either will no longer be able to make payments or will ‘make a business decision over a moral one’ and abandon their houses.”
From Marketplace. “Minerva Cornelio and her husband Jonathan recently sold their home in Burbank, Calif. for $449,000 — that’s $16,000 less than they bought it for in 2004. The Cornelios have accepted that loss. They do need more room for their two young kids and soon they’ll be moving into her parents’ former home, which has more space. Still Minerva can’t help but remember when they almost sold their 1,100 square foot house a couple years ago. That’s when houses in her neighborhood were going for $600,000.”
“Cornelio: ‘And I wish — I’m kicking myself for that right now. You know, we should have done that two years ago, and we could be shopping for a bigger home right now.’”
“It’s just not happening in a lot of places anymore. Realtor Melissa Improta: ‘Sellers I think have finally realized that it’s a buyer’s market. And that there’s not a whole lot they can do about it.’”
The Ventura County Star. “A steady stream of property owners filed into the Tax Collector’s Office in the Ventura County Government Center today to pay their property taxes ahead of the midnight deadline. Property taxes are due twice a year, in December and April, and today is the last day to pay the second installment without incurring a late fee.”
“Ana Durand of Oxnard said she had been worrying all night about the deadline because, she said, she couldn’t pay the $7,000 due in property taxes and still be able to keep paying her mortgage. ‘I have no choice. I have to pay all the tax and now I won’t pay my mortgage,’ said Durand. ‘It’s been really hard and I don’t know what to do.’”
“Another property owner came from the Ojai Valley to ask if she had to pay her property taxes if she was in danger of losing her home to foreclosure. The woman told a reporter that she has been trying since January to get a loan modification and if it doesn’t happen soon, her home will go into foreclosure. The staff told her that she has to pay the taxes whether she’s going to be able to keep her home or not.”
The Marin Independent Journal. “In another sign of the economic downturn, the Redwoods retirement community in Mill Valley is reporting a handful of vacant apartments for the first time in its 37-year history. Plummeting real estate and financial markets have made it more difficult for prospective tenants to sell their homes, delaying their move into independent living units at the popular retirement center, managers said.”
“‘You need to sell your house to fund your next lifestyle change,’ said Penny Weiss, director of development. ‘What we’re finding (is) for some portion of the people who are on the wait list, either it wasn’t possible to sell their homes or the real estate values have gone down so much they don’t want to sell their homes.’”
“‘We recognize that our residents and potential residents are experiencing financial difficulties brought on by the economy,’ said Erik Flatt, executive director (at Drake Terrace Retirement Community in San Rafael.) ‘We also recognize that our potential residents are expressing similar concerns that it’s becoming more difficult to sell their properties.’”
“Nancy De Bartok, marketing director at Aegis of San Rafael, said after a summer of full occupancy and a waiting list for the 54-apartment site, she has a couple apartments available ‘for the first time in a long time.’ De Bartok said based on quarterly competitive comparisons, ‘everybody says it’s a little down from last year.’”
“‘If you talk to anybody across the board in this business, that’s what you’re going to hear,’ she said. ‘People who have never had vacancies, like the Redwoods, are now seeing an unusual turn.’”
The Press Enterprise. “A surge of home buying and the sharp decline in home construction in 2008 may have been just the medicine that Riverside and San Bernardino counties needed to stop home prices from falling, an economist says. The trend also could encourage home builders to start constructing new tracts of houses next year in the two-county region, a building consultant said.”
“The wave of foreclosures related to subprime mortgages sold during the housing bubble of the mid 2000s is over, said economist John Husing. But there could be another round of foreclosures when other categories of risky mortgages reset to higher payments starting in September, he said.”
“The inventory of new homes is declining slowly because lower priced foreclosed properties are attracting the majority of first time buyers and investors. As of February there were almost 31,000 unsold builder-owned homes, down from more than 39,000 in 2007 but still above the historic average.”
“Still, Jeff Meyers, a principal with Myers Builder Advisors, said if prices stabilize he expects that builders who moved to the sidelines last year will feel confident enough to start new projects in 2010. He said builders now can buy lots priced low enough so they can produce houses price competitive with foreclosures.”
BTW: check out the VoSD article in full. Kelly Bennett and Will Carless did a great job on it. Where ya been Kelly?
‘Jeff Meyers, a principal with Myers Builder Advisors, said if prices stabilize he expects that builders who moved to the sidelines last year will feel confident enough to start new projects in 2010. He said builders now can buy lots priced low enough so they can produce houses price competitive with foreclosures.’
Well, well, this has come up here before. And here’s the problem; prices are still high enough to provide an incentive to build, even though we all know there is too much supply. Round and round we go, and this imbalance will continue until prices are allowed to reach equilibrium.
“[I]f prices stabilize . . .”
That is a pretty big if.
IMO, price are stabilizing, but then we get into symantics. My point is that the longer it takes for prices to come down, the worse the overbuilding will get. I think a child could undertand that.
I don’t necessarily agree in totality. I think expectations may be just as important. For example, if a builder thinks that if he buys land and develops it, prices will be significantly lower by the time he sells and he could lose money as a result, he would be less likely to buy and build than if he truly thinks we are at a bottom. Some of the overbuilding now may be based on the cost benefit analysis associated with current holdings and the best way to mitigate further losses (i.e., if they have land holdings and excess resource inventory, is it better to sell incomplete projects at fire sale, or do you lose less by finishing the project). Part of the equation goes into what is “overbuilding.” At certain prices investment properties and second homes make sense, at others they don’t.
‘As of February there were almost 31,000 unsold builder-owned homes, down from more than 39,000 in 2007 but still above the historic average.’
I would say that 31k empty new houses in an area feeling a severe recession is enough. But here they are in the IE discussing a new wave of building. IMO, this is a lagging distortion caused by housing bubble prices.
Move those cows out…roll the developers in…Rawhide!
http://www.jsonline.com/business/42831692.html
“here they are in IE discussing a new wave of building”
because Americans haven’t gotten used to the idea that there might be a way to make money other than through real estate development. Like, produce something the end users WANT !?
Prices will not stabilize considering that only 30% of the foreclosures the banks have are actually on the market.
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2009/04/08/MNL516UG90.DTL&ref=patrick.net
First thought: How stupid are these people? Signing their names to documents that state that they promise to pay $337K for a condo they’ve never seen? And by 2008, the bust was well underway. At least one of them was honest about having been blinded by greed.
Second thought: That Vicki Jenkins… either she’s a tranny, or she’s had too many hits off the botox bottle. She’s got octomom’s lips and the rest of her face looks very stiff.
Yikes, she looks like one of the featured faces on http://www.awfulplasticsurgery.com Cheek implants have a way of making middle-aged women look like Madame the puppet.
I thought she was pretty scary too. At least Vicki gets it, she brought this on herself.
way to much botox and filler in lips.
At least she recognizes her part in this.
Too bad it will take yrs for her credit to improve.
Then again, so many will be at that party.
Every time I read about this kind of scam, I’m reminded of the old saw about how you can’t cheat an honest man.
Every single one of these swindle victims was looking to make a quick score without having to do any work for the money.
Duhhhhh, nobody gives away free money, except maybe the Feds. And even government giveaways have a long-term price…
Big disagree. Ok, the lips are overdone. But Vicki Jenkins is sixty frakkin’ three! Not fair to compare her to twenty three year old women. Compare her to the sixty three year old women you know who haven’t had any work done. Then you understand why she ran to the surgeon.
Second thought. Don’t knock trannies, some look great. Google ‘Caroline Cossey’, a former Bond girl. Waaaay better than any Realtor (TM). I’d date her in a heartbeat.
My mom is in her 70s, no plastic, and is much more beautiful than this creature. Older women don’t HAVE to run to the surgeon.
The Union Trib article is a must read as well. Just a hint folks - if a team of real estate experts named mCONville and SHAMlou come calling - run…run FAST.
And if you have a fishing buddy named Lasagna whack him with a dead fish. The scams and stupidity chronicled in this article is unbelievable. Our TARP/tax dollars hard at work.
Ben knew when he posted that article that we all would get a kick out of the names. McCONville? Sheesh!
“People lived off the equity in their homes. They used their home as an ATM card.”
There is a big difference between credit and cash. They used their home as a collateralized credit card, not an ATM card.
Yeah, one of my favorite posts was a Sac Bee article in 2006, I think. This guy had taken out 150k for a ‘backyard entertainment system.’ Hey Jim, if you’re reading, that would make a great followup.
I remember that article. That one really ranks up there with the squirrel feeders. Followup would probably show the foreclosed house being sold as REO for less than the guy claimed he paid for the sound system, etc.
Hey, has anyone ever followed up on the squirrel feeder’s house? Is it foreclosed yet?
One thing is for sure, if he’s still in that house he can’t afford to go anywhere other than his $150K backyard now.
<i ‘I guess that’s what I get for being greedy,’ Jenkins said.”
Really? Do you think?
Now, I do find it refreshing that this Jenkins fellow doesn’t moan about being a ‘victim’.
And the other one: “She doesn’t have a Plan B.”
RE:
From Marketplace. “Minerva Cornelio and her husband Jonathan recently sold their home in Burbank, Calif. for $449,000 — that’s $16,000 less than they bought it for in 2004. The Cornelios have accepted that loss. They do need more room for their two young kids and soon they’ll be moving into her parents’ former home, which has more space. Still Minerva can’t help but remember when they almost sold their 1,100 square foot house a couple years ago. That’s when houses in her neighborhood were going for $600,000.”
“Cornelio: ‘And I wish — I’m kicking myself for that right now. You know, we should have done that two years ago, and we could be shopping for a bigger home right now.’”
Umm no they would not be shopping for a bigger house now. They would have taken the easy money and immediately bought a bigger house which would now be very underwater and would have walked away to the parents’ house.
aGREED. Like they would have the wherewithal to not JUMP back in expecting even bigger profits. A fool and his money are soon parted. A greater fool and his money… oh wait, its not his money.
RE: “Vicki Jenkins told a similar story, as did Annemarie Miller-Jones, Norman Johnson, Mark Lassagne and Afsar Shamlou. ‘I guess that’s what I get for being greedy,’ Jenkins said.”
At least Vicki has sense enought to realize the problem instead of claiming to be a victim.
Anon, do you read the posts before you post? I ask this casually.
Jenkins is not a “fellow”. Blushing now?? -
No.
Although I could learn how to, with wise and subtle tutelage, ya smarty-pant.
Hahahahaha!
*falls off chair *
Hey, where’s my post to ‘robin’? I just laughed quite a bit when I posted it, because it was so true, and I was caught.
Anyway— subtle. I either really super approve, or else I don’t approve at all, on moral grounds.
*makes hand gesture indicating appreciating of the equivocal nature of this situation, and indicating vague curiosity about what is a ‘moral ground’.*
and indicating vague curiosity about what is a ‘moral ground’
Oh, you do not know, either!
*flounces out of the room *
Oly’s on a suger high..too many jellybeans…stand back
I was just thinking about this.
I am fairly surprised more real estate agents and mortgage brokers and associated greedsters aren’t gettin’ killed or otherwise damaged by grouchy FB’s who are, it seems lately, become more aware that they was totally snookered, that where they live isn’t ‘different here’, that home prices are falling, EVERYWHERE, and they’re surely gonna keep falling, and that buying a mortgage—or three, or five, or ten— does somehow not equal a magical ticket to riches anymore, and, worst of all, their renter and/or prudent and cautious neighbors who bought something they could afford are now laughing at them.
Or if not laughing, at least not packing up their stuff to move into their mother-in-law’s basement.
That is disillusioning and embittering stuff!
I mean, where’s the ol’ cowboy American spirit here? Vengeance and all that?
Now, I hasten to add, I am not advocating violence, I am simply wondering why so many soon-to-be-foreclosed-upon FB’s are not tracking down their RE agent and mortgage brokers. Maybe they’re too busy packing?
That bubble wrap can get tricky, I know, but still…
I am simply wondering why so many soon-to-be-foreclosed-upon FB’s are not tracking down their RE agent and mortgage brokers ??
I think they are, at least around here… Defense business is way up…
They are in the Hispanic communities. PBS “NOW” did a follow-up to a story about a Hispanic realtor who befriended and sold to lots of FBs. When the payments went up, the FB’s went back to their Realtor. Realtor could fix it, they thought, he’s a friend now, he’s like a brother to us…
Realtor, of course, couldn’t help. He suddenly went from all friend/family to all businesslike.
“Now, I hasten to add, I am not advocating violence…”
Why Heaven’s bitsy!
We wouldn’t want to do that!
OT I left you a hidden message on bits.
OT I left you a hidden message on bits.
Ooooh! I love hidden messages! I must go see!
*accidentally spits out a lollipop in excitement *
I mean, I almost went on a kill-spree* when the store didn’t have the adorable ducklings-in-ribboned-hats tattoos I had seen last time I was in there and I made a note to myself to get, because I wanted them for Easter, ’cause that’s festive.
*Luckily I was distracted by a display of darling pink stuffed bunnies holding orange felt carrots.
I didn’t get one of them, I just played with them for a bit and then left peacefully.
You must remember that the FBs were for the most part morons, or to put it another way, a majority were of below average intelligence.
Whilst I would agree that this is the type that would be most likely to off a realtwhore or two you should remember that for the con, it’s all about trust. Joe the plumber thinks Kelly Cleavage to be much to nice a woman, and so trustworthy. She would never have taken him for a ride! Besides, she also is in foreclosure. Arny Arsole to mortgage broker worked tirelessly to make it possible to buy that house. He’s on Joe’s side!
Nope, the average FB will not go postal, I could definitely foresee cases of Cleavage on Arsole crime though.
RE: I was just thinking about this.
I am fairly surprised more real estate agents and mortgage brokers and associated greedsters aren’t gettin’ killed or otherwise damaged by grouchy FB’s who are, it seems lately, become more aware that they was totally snookered
A friend of my brother; whose brother who is with Bear Stearn’s M and A Dept., complains he now has to check the back of his jacket for big, dripping, “loogies” every AM in the men’s room before he goes to his desk.
Not as bad, as a .45 caliber bullet, but then again this game is only in the 4th inning.
Personally, I think the media is keepin’ hush, hush about these kinds of stories in order not to give the unwashed masses any incentives.
Funny you talk about that..my husband is concerned about that regarding his two partners in a business. They just tried to buy my husband off the business for $2000!!(what a joke)…I assume that 1)they wanted to see if my husband was as hard up as they are and 2)They gave some BS story that they wanted to RUN the business themselves..Hubby and I believe they have a buyer but don’t want to do a split..Hubby already told them he wants his fair share and they can keep the $2000..they already tried to go behind his back and set up the business..only to find out from a attorney they could not do that..
One, decided that “having it all” was the best course of action, moved where we did and bought a overpriced Million dollar home..which is now up for sale along with the foreclosures of his other properties….and was a real estate investor/broker and is losing it all…
Number 2 partner..is a complete idiot with enough weapons in his home to attack an army..but lives far away…and is also losing it all with liens from everywhere..
Hubby who was the conservative person in the group is doing fine..however, he is concerned that Tweedle Dee and Tweedle Dum may try something stupid..
They just tried to buy my husband off the business for $2000!!(what a joke)
what’s the business, a paper route?
Number 2 partner..is a complete idiot with enough weapons in his home to attack an army..but lives far away…and is also losing it all with liens from everywhere..
may God watch over and protect you
The mortgage scam “villain” from the U-T article is named James McConville. McCONville. C’mon!
I once read a news article about some petty criminal who’s name was ‘Yorkie Lipscum’. He was apprehended stealing lollipops or some other trivial crime composed of equal parts sadness and comicalness.
I decided to forgive the fellow— although normally I’m a bit of a justice-freak— just ’cause of his name.
I mean, who’s gonna’ triumph over THAT name?! Huh huh huh?
Not poor Yorkie, evidently.
*shakes sympathetic and fluffy head sadly at the tragic plight of Yorkie *
Hey! That reminds me. I got lollipops the other day at World Market. I wonder where I put them? I must have one now.
Update:
I found my lollipops and I have one in each cheek at this time, like a chipmunk, except I can type better.
A strawberry one and a rootbeer one.
I just knew you’d all want to know.
“Both Greenspan and Mark acknowledge they did not have written contracts with McConville or Diamond House stipulating they would receive the fees. However, they also did not have to invest any of their own money for the purchases.”
It is pretty funny and somehow very poetically just to read about a scam victim named Greenspan.
Reading those stories, I have trouble with the word “victim.” They were clearly trying to screw some ppl over themselves. Stupidity, yes. Innocence, No.
Would you agree to the statement that Greenspan was a victim of her own greed and stupidity?
I can live with that.
This article defies belief, IMO.
Greenspan saw the money as a way to pay off the seemingly insurmountable debt she had built up paying for her mother’s last few months of care in an assisted living home. Three months after her mother died in November 2005, Greenspan lost her job. She hasn’t found a fulltime job since.
“It was like ‘Thank goodness!’ I can pay off a good chunk of my credit cards,” Greenspan said.
The man she was putting her faith in was rumored to be second only to Donald Trump in his real estate prowess. But he also had a criminal record.
James D. McConville had served 51 days in jail for felony grand theft and been ordered to pay $262,000 in restitution a decade earlier, according to the Alameda County District Attorney’s Office. After a fire destroyed a hotel he owned in Richmond, he had diverted insurance proceeds to himself rather than paying banks he owed money, according to the D.A.’s Office. The D.A.’s Office said the felony was reduced to a misdemeanor in 2006.
“The man she was putting her faith in was rumored to be second only to Donald Trump in his real estate prowess.”
Yet he needed inexperienced investors for his real estate ventures because banks wouldn’t touch him? They must have known it was a scheme from the start. They just didn’t understand who was actually getting screwed. Too bad.
Not sure I understand how this Escondido scam worked. Do people really sign their names to large mortgages based on a CONVERSATION with someone they meet in a friend’s living room that they will receive $5-10K out of the deal? Do people really do that sort of thing? Lord.
I work in DC, and one of our junior staffers got called to jury duty on Monday. The jury pool for the DC court system is pretty small due to a smaller population and more “ineligibles”, so the people who are called for jury duty sometimes are surprising.
The staffer told me that he and the rest of those called up were surprised when they saw no other than Alan Greenspan sitting in the jury room with them. His assistant was fielding most of the court paperwork, so he was left to make “important” phone calls and such. My staffer left for his case before Greenspan was called or dismissed, so he was unable to see what happened to the Maestro.
I know, I know, he should be on the other side of the jury box, but you know, it is the District. Things work differently here…
“Now the small businessperson is not making the amount of money needed to make the mortgage,’ says Fulton. So her clientele is more upscale than she has seen before. ‘People have the feeling that things are not going to get better.’” The reason is, people are getting laid off, watching their own business fail, not pzaying bills, going bankrupt, getting foreclosed upon, leaving the ‘hood, living in their car, or under a bridge. The old way of house-as-ATM has died a horrible death, and the old dreams have slipped away forever.
As Boston said in the song, it’s “more than a feeling” :
I looked out this morning and the sun was gone
Turned on some music to start my day
I lost myself in a familiar song
I closed my eyes and I slipped away
In the mid-1970s there were only two important groups: Bachman Turner Overdrive and Boston! I played the vinyl LPs over and over so much that I did not know much about the disco scene those years. Then came Van Halen and AC/DC!
Yeah…thank God for the Doors Bill
RE: I closed my eyes and I slipped away
Brad Delp-RIP
Gassed himself and left his expansive NH digs and his entire estate
to his ex-wife living in CA, and nothing to his 10 year live in girlfriend.
LMAO…there’s one sorry azz gold-digger whose plans went awry.
“Some of the buyers heard about the program through Craigslist.
Norman Johnson, owner of a small moving company in the Bay Area, last year stumbled upon an ad on the website that read: “Make $50,000 in 3-4 months for 10 hours of work- NO Joke.”"
It really is hard to feel sorry for people who essentially wanted something for nothing.
So I am wondering how much lower San Diego home prices will go once the fraud premium is drummed out of the market? Or will enough of the rampant fraud even ever be eliminated for a serious correction to occur?
“Just this week, federal prosecutors indicted 24 people in a mortgage fraud plot that allegedly used fake buyers and netted participants $11 million in profits.”
“So I am wondering how much lower San Diego home prices will go once the fraud premium is drummed out of the market? Or will enough of the rampant fraud even ever be eliminated for a serious correction to occur?”
Who will drum out the fraud unless the feds do it? The amount of corruption in San Diego city and county government and those that support them is astounding. I don’t think it’s a coincidence that prosecution of local corruption/fraud is mostly by the feds, not by local DA’s.
I expect the price correction will continue, but not because much of the rampant real estate fraud in this county will ever be prosecuted. If fraud had been aggressively prosecuted on the way up, there would be less on the way down because those scammers would still be in prison.
I have the same question about some mountain property in Central California that I have a watch on. Lots of Los Angelenos have bid up the prices of the houses/land in that area of the Sierra. My guess is the Alt-A and option ARM resets will affect some of the other properties of the LA types and will cause them to dump some of their vacation property.
Hi Guys:
Couple of notes:
Rick Toscano of Piggington’s will be on “These Days” on NPR this Monday morning the 13th at 9am. He will also be doing a panel discussion with Kelly Bennett and others on the 23rd at 6pm at the US Karate Building in Liberty Station. There are more details on the Piggington website.
Chris Thornberg will be speaking Tuesday morning at 8:30 in La Jolla at his “San Diego Economic Forecast Conference.” Details on this can be found at beaconecon dot com
Happy Easter all.
Thanks, SD.
Happy Easter!
San Diego real estate boosters are taking the fact that annual price declines have slowed from 39 percent YOY down to 26 pct YOY as a promising sign that a bottom is near. I advise anyone thinking about getting into the market to keep your powder dry until (1) prices declines slow down from double-digit annual rates to zero; (2) unemployment falls significantly; (3) many commentators are heard to say that real estate is the worst possible investment.
We are not there yet.
North County Times
HOUSING: Murky market shows signs of stabilization, pain
Sales still rising, but so do foreclosures as prices fall
By ZACH FOX - Staff Writer | Friday, April 10, 2009 6:08 PM PDT ∞
Homebuyers’ appetite for deeply discounted foreclosures remained voracious in March, driving up sales and offering signs to some analysts that a price bottom could be in the offing.
Sales were 41 percent higher last month than March 2008, with 684 houses sold in North San Diego County, according to the North San Diego County Association of Realtors. The median price dropped 26 percent during that time to $364,000 —- steep, for sure, but not nearly as precipitous as the 39 percent year-over-year decline in November 2008.
In Southwest Riverside County, the story has been the same, with a monthly increase in sales from the previous year for more than a year now. In Lake Elsinore, for example, there were 153 home sales last month, according to Redfin, a real estate listing site. A different real estate site, Multi-Regional Multiple Listing Service, reported 93 house sales for the month in the boom year of 2005.
“I’m seeing signs that we’re stabilizing,” said Shawn Harris, a mortgage broker in Encinitas. “I’ve had three purchase transactions this month where we have not been able to get an appraised value. We’re paying more than what the appraisal comes in at. That’s usually a sign that we’re close or have hit bottom.”
Median price = uselsss as itis too easily effected by the mix of houses.
“I’m seeing signs that we’re stabilizing,”
Kinda like when the Titanic “stabilized” on the bottom of the North Sea?
RE: Kinda like when the Titanic “stabilized” on the bottom of the North Sea?
+1
The Titanic sunk in the No. Atlantic ! I get what you mean however.
+1 for English Expression.
-1000 for Geography.
Information from the NC Times article I just posted which SD real estate boosters conveniently ignore:
However, foreclosure numbers hit a new peak in February, and March’s numbers are not expected to fall —- a stark counterbalance to any positive effect the recent sales boom might have on prices.
And the numbers are so big that they practically negate the rocketing sales. That is, between one and two houses enter foreclosure for each sold house in North County and Southwest Riverside County, according to data from ForeclosureRadar, a foreclosure listing service, and Redfin.
Further muddying the picture are spiking unemployment numbers, because lost jobs typically cause more foreclosures and fewer eligible buyers.
While North San Diego County’s overall median price has shown signs of stabilization over the past few months, the median price per square foot keeps falling, suggesting that buyers have snatched bigger homes and that prices might have more room to decline.
I alluded to this same point earlier in BB. In Palmdale there were 3-4 NODs for every sale, and NODs continue to climb since we’re getting past the false turnaround due to moratoriums.
I think the NOD numbers are just going to be staggering as we get into the summer months.
Fmae and fmac’s foreclosure moratorium also expired not long ago, so foreclosure should skyrocket shortly.
I visited a realtor today in Cambria, California. He said they had 10 sales last year and have had 35 this year so things are looking up so we must be near the bottom. I didn’t want to contradict him or I wouldn’t be able to get anything out of him. He said Cambria is made up of older people and 2nd home owners so it is well-heeled and not going to see so many foreclosures. There was one foreclosure with a peekaboo ocean view for K 399. Nothing under K500 two years ago.
Not to argue against you but I hate those stupid cutsey “peeaboo ocean view” phrases.
I hold my thumb and forefinger out at arm’s length. A quarter of an inch separates the thumb from my forefinger. If I see an ocean within that gap it’s a peekaboo view.
Pay an extra $250,000 for that “peekaboo view?” Ya Gatta Be Kidding!
I have looked in Cambria myself…I quit several years ago because of the ridicules prices and I do agree they have came down recently…I do think the Realtor is correct about 2nd home owners and retirees…Many of the commercial buildings and Restaurants are for sale…Maybe a indication on how the tourism business is doing…
There’s one home a few miles north of Cambria I’d like to own. Has great hilltop views of the ocean. Plus it has not just 1 but 3 guest cottages so you can have lots of friends over.
“If they were indeed resold to Fannie Mae or Freddie Mac or another government agency, what you have is a fraud against the public,” said William Markham, local real estate attorney. “The last thing we need are a bunch of con artists swindling the public at a time like this.”
The con artists were swindling the public long before the conveniently blind public officials finally decided to notice. Is fraud somehow less unacceptable during supposedly better times?
It was nice to hear a segment on John and Ken (KFI) about the Lincoln Park gangster that ran a fraud ring with straw buyers. Those two were a bit incredulous that the guy got away with it for so long, but it sounded like they also are starting to understand that the whole market was crooked during those years, especially Ken (accountant).
Just a few thoughts and questions because I haven’t been on here in a long time.
First, last month’s decision to change mark to market accounting where banks can essentially re-assign value to their toxic assets with what they “think” will be future value. I find it interesting and convenient that this change was made right before earning season so that banks can now report “record profits” since they can now re-value mortgages. Does this seem like Enron to anyone else?
Lastly, my Wife and I want to get the hell out of California. Its still overpriced in any of the remotely desireable areas. We have checked out Austin and Raleigh Duraham. Both very nice cities in my opinion. But… As of last week, Pulte homes bought Centex. Centex has a lot of land in both TX and NC. I am somewhat concerned that therein lies the threat of a new regional bubble in the making. Just curious about thoughts because I’ll be damned if I have to be in another bubble somewhere else. One was bad enough.
I think the “mark to fantasy” accounting change is part of a plan to use the normal winter to spring transaition to manufacture a bottom in the economy. Lie to people that we’re at the bottom, hope they go out and spend, and thus create a bottom.
In my opinion, this has near 0% chance of working. People can’t spend unless we go back to giving loans to people that can’t pay them back.
House prices will continue to fall. Job losses will continue. Consumer spending continues to fall. Profits for non-financial companies will be dismal. Bankruptcies will be skyrocketing.
I can’t speak to the Carolinas, but my company has a major office in Austin TX. 1-2 years ago, EVERYONE in the office there was buying houses. I’ve been there about 6 times over the last 2 years, and there are lots of large scale condo projects.
I think Austin is overbuilt and overpriced. Worse, they have that horrid thing that dooms many housing bubbles… They have TONS of empty land.
But, unlike many places, at least the ENTIRE economy wasn’t built on construction and HELOC money. Austin does have a substantial tech industry.
There is no doubt that this nations economy is undergoing a decedant decline brought on in general by poor regulation enforcements of debt, frauds, speculators plus investors under cutting companies.
We shall have to endure a long period of suffering and austerity before it even thinks of stabilizing, not to mention when it shows true signs of strong positive growth.
This Financial Fiasco episode in Americano history has only just begun…hold onto your hat and hang on tight.
Austin also has the Harvey Pennick Golf School. One of the best in the world.Turned out Kite, Crenshaw, Micky Wright, among others.
Centex has a lot of land in both TX and NC ??
61,000 lots…
My brother lives in a Raleigh suburb. He bought a new house last year (against my advice). Last month the builder sold (and closed) on a comparable house to his, right next door. It was priced about 20% less than what he paid (buh-bye down payment). The house had sat empty for almost a year until it sold.
I wouldn’t worry about a bubble in metro Raleigh.
J-Boy:
As always, I differ on the attractiveness of living in CA. It’s a spectacular day in the Bay Area, as you can see out your window. Given that about 9 months of the year, the weather in the Napa Valley is great, I happily pay the sunshine tax.
But I agree about MTM accounting. WTF is with Wells Fargo’s announcement of record profits for the 1 Q 09? It stinks to me. WFB has huge mortgage exposure in California (shoot, they have my mortgage). I can’t believe that their “record profits” demonstrate anything other than an accounting gimmick. Same with Citi’s relatively favorable (given the expectations) for the first two months of the quarter.
MTM seems like the biggest “heads I win, tails you lose” scam ever. During the market runup, all the builders and banks marked up to a phantasmagorical “market” value, but now are being given a pass when the market has dropped abysmally.
Anyone else?
All I can say is I am @#$%ed. Knowing m2m abolition was in the works I blithely ignored it, figuring that like previous govt plans it would fall flat and the markets would resume their downward trend after a few days. But not only was m2m milked for weeks before it actually happened (in terms of markets going up), there was another rise after it happened and now again after the WFC announcement. “Wells Fargo shocks the markets” ran the headline on Yahoo. WTF is everyone so surprised? The best was BAC running up 35% on the WFC announcement. Is this going to be like 1999 when every stock went up when any one of them announced? How much mileage can they get out of the same crap?
So, being short on Financials and CRE, and long gold and oil, I got battered from all sides and lost over a third of my portfolio value in 5 weeks. Common sense tells me to cut my losses and run, but logic tells me that the biggest 5-week bull run since 1933 (based on nothing but smoke and mirrors, mind you) cannot last. My gut is telling me to double down on my short positions on any further rise.
The problem is that the earnings season has just started. As mentioned above, if everyone ignores m2m and reports record profits nobody is going to point out the irrelevance of it but instead they’ll cheerlead the Dow to what, 9000? 10000? If that happens I will be nulled out before reality kicks in so I face a very difficult decision in the coming days and weeks. Regardless, my Apr puts are most likely going to expire worthless.
I’d like to know how my fellow shorties are playing this.
I hear you. I got &%&$ed and didn’t even get a kiss (as my Nana once said). Ugly. Once I’m broke, I’ll be “back to normal”. Staying the course.
Is this our Carlsbad Jim?
Gonzo real-estate agent mixes it up in the Southern California market
Agent and blogger Jim Klinge is the Hunter S. Thompson of real estate.
By Peter Y. Hong
Los Angeles Times
Real-estate broker Jim Klinge calls an incomplete development in Carlsbad, Calif., “Foreclosure Ranch.”
CARLSBAD, Calif. — Sometimes the truth hurts. Jim Klinge doesn’t care.
Cruising through the sunny hills of Carlsbad in a massive silver Mercedes-Benz, he looks like any other pitchman of the California dream.
But Klinge, 50, has become a notorious Internet chronicler of the real-estate crash in northern San Diego County, where he has lived and worked for decades.
Rather than downplay the greed and excess that caused the region’s travails, he revels in exposing it.
He surveys the wreckage with a pocket video camera, shooting footage of vacant, once-pricey houses turned into eyesores, voiced over with his deadpan narration. Then he posts them on his Web site, www dot bubbleinfo dot com.
They’re shaky, noisy clips full of coarse images and language.
“Would you spend a million dollars for that house?” he says in one video, showing a two-story, boxy wreck with the rushing sound of a freeway in the background.
Yes, PB. That’s our Jim.
ditech - “People are smart”
LOLOLOLOLOL.
I’m confused about one aspect of the “straw purchasers” articles above.
Straw purchasers of firearms are guilty of a serious felony. Straw purchasers of liquor for kids are guilty of (IIRC) a misdemenour in most jurisdictions. What kind of criminal punishment can be meted out to straw purchasers of real estate? Are they merely guilty of criminal fraud?
What kind of criminal statute could prevent this behavior? What level of punishment would be appropriate?
I vote for getting them drunk and putting them in Olygal’s front yard wearing a “I love to stomp frogs” T shirt.
“What level of punishment would be appropriate?”
According to our Congress and President, the “punishment” consists of generous tax breaks, cram downs, and low-interest rates; all at the expense of savers and workers.
Hank Greenberg: the link is important even if it never gets posted:
http://www.cnbc.com/id/15840232?video=1087589564&play=1
I didn’t destroy it they did
Does anyone know where McConville can receive mail? Don’t worry, nothing sinister. Have to mail him a notice. Thanks for leads.