An Elaborate Monument To The Folly Of The Boom Years
It’s Friday desk clearing time for this blogger. “Sales in the decimated housing market may finally be bottoming, but don’t expect home prices to stop dropping before mid-2010 at the earliest, analysts and economists say. Losses from the housing meltdown totaled $3.6 trillion at the end of 2008, and will likely approach $5 trillion by the time the crisis ends, predicts Lawrence Yun, chief economist with the National Association of Realtors. Nevertheless, there have been signs in recent months that the industry may be stabilizing. ‘We are at or near bottom in terms of sales,’ says Yun. ‘We are seeing strong buying activity, particularly in those boom and bust markets, where prices have declined significantly. Buyers are coming in and fighting over properties — there is multiple bidding in California and Florida.’”
“Analysts said foreclosure activity is down because lenders have foreclosed on fewer properties in recent months – either because they could not cope with the volume of distressed homes or because they were working with owners to modify the mortgages. Leslie Appleton-Young, chief economist of the California Association of Realtors, said the slowdown has led to multiple and overbid offers by investors and first-time buyers, eager for deals.”
“‘It looks like to me the low-and moderate-end of the distressed market is starting to show signs of bottoming,’ Appleton-Young said. ‘There’s just no inventory.’”
“Hank Howard, a real estate speculator who felt the market presented few opportunities during the last two years, said he is ready to jump back into the business. The El Cerrito resident is searching for single-family homes in Hillsborough or Belvedere that could be bought, rehabbed and resold within about a year.”
“‘We may not quite be at the bottom yet, but if not, we’re awfully close,’ he said.”
“The California Foreclosure Prevention Act, which took effect Monday, is expected to make lenders put more effort to keep borrowers in their homes. For Rocklin Re/Max Realtor Ed Kittle, he’s doubtful the measure will have a positive result. ‘The last time they did this, the NOD’s (Notices of Default) went way down,’ said Kittle, ‘But after the ban was over they increased dramatically.’”
“When times were good a few years ago, Mike Menas opened a second mortgage on his Roseville home to buy a second home as an investment property. When the housing market crashed, Menas was forced into bankruptcy and now lives in a rental property. ‘My second home is still in foreclosure and I bought it after the first one,’ Menas said. ‘I don’t know what the bank is waiting for.’”
“Kittle said the housing market in Rocklin and Roseville has reached bottom and home prices are stabilizing and in some cases increasing. He said the market will sort itself out. ‘We need to go through it and take our medicine and get it over instead of delaying everything,’ Kittle said.”
“A subdued and sparse group of home builders gathered at San Francisco’s Moscone Center this week for the annual PCBC show. At the peak of the housing boom in 2006, it drew 35,000 attendees. Last year there were about 19,000. This year only 14,000 people came to Moscone. Even with a smaller exhibit floor, the aisles were noticeably underpopulated. ‘It’s like a ghost town,’ said Andy Mihaylo, president of a Laguna Niguel (Orange County) firm that works in real estate financing.”
“The dismal theme extended to conference sessions with titles like ‘Crisis of Confidence,’ ‘After the Downturn,’ ‘How to Support a Development Company When There Is No Development,’ and ‘So You Can’t Flip It … Now What?’”
“At a session on the capital markets called ‘Meet the Money,’ the moderator joked: ‘This isn’t ‘Meet the Money’; this is ‘Need the Money.’”
“Drive down Federal Highway or Sunrise Boulevard in Fort Lauderdale or Okeechobee Boulevard in West Palm Beach and the ‘For Sale’ signs seem inescapable. Every lonely strip-mall storefront and empty condominium complex pleads to become someone else’s problem. Consider them the artifacts of a gilded age.”
“During the past decade, South Florida’s landscape was transformed by a real estate frenzy, part of the biggest home-price boom in American history. The only thing more stunning than the housing market’s steep climb was its precipitous fall. Of the empty homes and storefronts that dot the current landscape, high-rise condos are perhaps the most depressing. During the boom years, an endless parade of concrete towers competed for space on South Florida’s skyline, but now only a sprinkling of their windows light up at night.”
“Miami alone has produced 23,000 new condo units since 2003 and is now experiencing the worst condo meltdown of any city in the country, according to Jack McCabe, a Deerfield Beach real estate analyst. Broward and Palm Beach counties built or permitted more than 18,000 condos. ‘I think our population growth is about zero right now, and we’re not creating any jobs,’ says McCabe. ‘Who is going to live in these things?’”
“In black pants, black tie, and dark shades, he mops the sweat from his forehead as he questions every car that approaches the twin Tao Sawgrass condos in Sunrise. The guard, who says his name is Hugo, has only been on the job a month or so, but already he understands the routine.”
“Right now, most of the visitors are employees — the security guard at the front desk, the woman who sells the condos — because no one lives there. Not a single resident, in 396 units. ‘Not that I’m aware of,’ Hugo says.”
“Tao, which broke ground in January 2006, was supposed to attract wealthy new residents. The condos presold for $300,000 to $800,000, and buyers, including then-Sunrise Mayor David Feren, were wined and dined at the BankAtlantic Center. Today the complex is an elaborate monument to the folly of the boom years, when it seemed logical to sell half-a-million-dollar high-rise units on the edge of the Everglades. The whole place seems to be holding its breath, trying not to smear its makeup while it waits for a sugar daddy to arrive.”
“Oswaldo Mateus and his wife were among the first people to buy at Tao two years ago, putting down a 20 percent deposit on a $300,000 unit. Along with losing his equity, Mateus is worried that only a few people will be forced to shoulder all the maintenance fees. ‘Who’s gonna be the [homeowners] association? Thirty people?’ he says.”
“Besides, he’s not eager to be the lone resident of an empty building. ‘It’s kind of unsafe to move into a place like that,’ he says.”
“Despite his oversized ego, I’ve been a big fan of Donald Trump. So it was with some dismay as I watched him over the past few years try to carve his way through the world of condo hotels, now often advertised as ‘condotels.’ This product has been on my watch list as one of the worst real estate investments ever created for the simple reason that it is really just a financing mechanism for the developer and for all practical purposes, caveat emptor, which in today’s world means let the buyer be damned.”
“The sales pitch suggests the buyer will recoup investment costs and fees through the daily rental of the condo unit by the hotel, which, by the way, rarely ever happens.”
“It was near the height of the market when Trump jacked up the business even further with flamboyant, high-end projects in Honolulu, Chicago and Las Vegas. With the Trump name on the buildings, presales starting in 2006 and 2007 looked great. But, three years later, the closings on the presales haven’t happened, and Trump has been stalled on the highway to riches — including lawsuits with lenders on the Chicago project and reportedly turning the condotel units into straight apartment rentals in Las Vegas.”
“According to the local Las Vegas press, the Trump Tower here was 100 percent presold, but opened with less than 30 percent of sales closed. If buyers don’t close their deals, they forfeit deposits. (Think 20 percent on a $1 million unit!)”
“The number of commercial properties facing foreclosure is growing rapidly, and observers said a massive bank takeover of office and retail buildings is likely in the coming months. Since the first of the year, lenders have filed default notices against 323 properties in the valley, according to Nevada Title Co. Most of the bank takeovers have been undeveloped land — more than 90 percent by one estimate — but real estate brokerages say more lenders are starting to take possession of buildings as well.”
“‘For the first time in my 20 years in the business, clients are struggling to make mortgage payments,’ said Susan Collins, vice president of property management with Gatski Commercial. ‘Properties are going into receivership, and this is the tip of the iceberg. It is going to continue to escalate the rest of 2009. Foreclosures hit the residential market, and now it is happening to commercial. It is a whole new ballgame for everybody. We are all trying to feel our way through this. It is coming so rapidly.’”
“It’s an area with more residents than Flagstaff. And it uses the Queen Creek name for addresses, even though it’s not really in the town and has more than three times as many residents. Despite having 79,000 inhabitants, this area doesn’t have its own identity or city government. Incorporation talks aren’t new to the area, although they would be to most residents. Two incorporation efforts were pushed in 2004 and 2005. Newspaper reports from the time pegged the area at 20,000 residents.”
“The biggest question is how money would be generated. Tisha Castillo, president-elect for the San Tan Area Chamber of Commerce…has questions. ‘We don’t have any revenue. We don’t have any commercial. We are a ton of rooftops,’ Castillo said. ‘It’s scary to think how we would be able to support ourselves.’”
“Dallas-Fort Worth area home foreclosure postings are hitting new highs, with more than 6,000 properties set for sale next month. That’s a 62 percent jump from a year ago, according to Foreclosure Listing Service. This year, more than 35,000 D-FW home foreclosure filings have been recorded, a 20 percent rise from the first seven months of 2008, the listing service said.”
“‘This is the highest level of year-to-date home postings that I have seen in this foreclosure cycle, and it most likely surpasses the posting activity of the late 1980s,’ said George Roddy, president of the company that tracks foreclosures in more than a dozen Texas counties. ‘The high in ‘88 or ‘89 was averaging 2,000 a month.’”
“Experts warn that a new wave of mortgage foreclosures may be coming soon and could rival the default rates for subprime mortgages. The mortgages in question are $230 billion of option adjustable-rate mortgages, creative lending products that flourished at the height of the housing boom. Subprime mortgages caught the nation by surprise because of their short two-year resets to higher interest rates. Option ARMs reset over a longer horizon and thus are a slowly unfolding nightmare.”
“‘This one, everyone knows it’s worsening. Everyone sees it worsening,’ said Sandipan Deb, a credit analyst with Barclays Capital.”
“About half of house sales in Frederick County are foreclosures. Wayne Six, the owner of Six & Associates used several examples where a lender lost $154,500 on a property just to get it off the lender’s inventory. ‘I almost feel I have to have two prices when I appraise some homes,’ Six said, ‘one for the traditional sale and one for a foreclosure sale.’”
“Some Realtors said they have dealt with appraisers from not only outside Frederick County, but also from Pennsylvania and West Virginia. The appraisers know nothing about the county or municipalities they are working in, they said. One Realtor said an appraiser from Columbia wanted the Realtor to provide data, something the appraiser is supposed to do. Another noted that an out-of-town appraiser at a condo didn’t know how to do a floor plan.”
“Another said an appraiser from West Virginia was sent to look at a historic property in downtown Frederick , but knew nothing about the city. Another said an appraiser for a Middletown property used the opposite end of the street for price comparison, far from the house actually for sale.”
“‘Someone told me about an appraiser sent to do a Third Street house ended up using Fifth Street for his comparison,’ Six said. ‘I had one out-of-town appraiser who drove out of the office on Thomas Johnson Drive, got to the end of the street and called back asking how to get on U.S. 15.’”
“Q: Help me out here. I bought a condo in 2006. It’s way too small for me, and I didn’t really love it, but it had some things going for it. It’s in what was supposed to be an up-and-coming area, but it’s pretty industrial and commercial still and a number of the big businesses in the area have gone out of business, so there are lots of boarded-up buildings around. We just got word that one of them is being converted into almost 200 units of low-income housing — I’m not looking forward to that.”
“I thought I was making a very reasonable investment, even if my home didn’t appreciate at all. Now, all the people in my complex who overpaid, put nothing down and lied about their income are in foreclosure, and the value of my home has dropped by about 20 percent — plus the homeowners association (HOA) is going broke, so it is looking to the few responsible owners to cover all the bills. I don’t even like my place that much — it’s just all I thought I could afford.”
“I would really prefer to live somewhere where there is more shopping and more restaurants and homes but am upside down, so I can’t afford to move on unless I buy something else first and then walk away. Everyone else I know seems to be doing that. I thought I was being very smart when I bought my home, but apparently not. What did I do wrong?”
“A: Well, my dear, first off, I think you needed to get all that out. Venting is cathartic, and you have earned the right. You and I both know that you really didn’t do anything wrong. The fact that your neighbors’ poor decisions and financial habits are pulling down the value of your home is completely unfortunate and unfair, but there’s not really much you could have done to prevent it from happening — if I had the preventive for that, I would be the queen of the universe.”
“However, I do think your house-hunting strategy was, like that of most house hunters in the last decade (yours truly included), misguided. We all fell into the trap of overemphasizing the nature of our homes as investments or financial assets, rather than prioritizing their primary nature as a place to live our lives and house our families.”
“Optimism has been all but extinguished from the U.S. housing market. The number of Americans lining up for new home loans is shrinking again, according to Wednesday’s release from the Mortgage Bankers Association, and the best that can be said of homebuilding is that it has stabilized at almost 80 percent below its peak.”
“With no end in sight to falling prices, perhaps we should look on the bright side. Indeed, there are three good reasons why sliding prices are not such a bad thing. Falling house prices are usually seen as wealth destruction. But they can also be seen as wealth transfer. The next generation of homebuyers will benefit from our loss.”
“Americans may also reflect that much of their temporary housing wealth was illusory anyway. Since house prices in a given area tend to rise in tandem, the only way to cash out was to borrow against equity, or move to a cheaper area or smaller space, or die.”
“A second consolation is political. Tumbling prices have exposed the flaws in the American government’s efforts to subsidize housing.”
“The third source of solace is macroeconomic. For several years America borrowed money from abroad to make an investment that did nothing to expand its productive capacity or its ability to export.”
“An ever-growing number of U.S. homes were also vacant. Not only did houses become more numerous, they also got bigger. The average square footage of a U.S. family home expanded from 2,200 to 2,500 over the past eight years. ‘Mistaken beliefs about housing may have crowded out more productive investments,’ argues Harvard economics professor Edward Glaeser.”
“Since two-thirds of Americans own their homes, falling prices are never likely to inspire street parades…Even so, our loss is a hidden accounting gain for the next swath of homeowners. A more balanced economy and housing policy may now emerge. For more philosophically minded Americans, this is a cloud with a silver lining.”
It was an interesting week, and the HBB posters did manage to behave themselves while I was off working. It remains to be seen if this surge in foreclosures will last or not, but I’ll do my best to keep the lights on. FYI, if all goes as planned, next weekend will bring a guest blogger for the HBB for a bit. Someone who posts here often. Since we’ve never done this here, suggestions about what direction to go, etc, are welcomed. My thanks to those who support this blog. Please check back this weekend.
An awful lot of the discussion in the ‘bitch bucket’ goes nowhere. How about discussing (A) history of the HB since the dot.com bust and/or (B) what’s going on with the impending collapse of commercial real estate? It would appear to me that the most aggressive (i.e. most leveraged) RE investors went commercial.
Well, people like to bitch, what can I say. But thanks for the suggestion. I really do want to hear any and all ideas for the guest blogger.
We have constantly argued, mostly against the fact, that RE is local. Now that it has truly, beyond all argument, been shoved into our consciousness, can we finally get unbiased on-the-ground reports from the field?
Much Love, BTW -
Do you have nonviolent suggestions for changing the status quo which don’t involve bitching? Because I am all ears. My personal experience with the American political process is that those who know how to bitch effectively get results, and those who don’t get ignored, but perhaps you have a better way?
change = money. the more money you got the more change you get.
How do I find out which bank owned this house?
13288 Michael Rainford Cir
Garden Grove, CA 92843
There is something fishy going on. The listing agent won’t accept any bid on the house saying there is already a buyer… this has been going on for 6 months, yet the price keeps on dropping.
Check your local Recorder of Deeds office (or equivilent). Some areas have it all online, but many don’t. Good luck talking to a bank directly when there is a broker involved. By most accounts, the REO departments are swamped.
Also, speak to that agent’s broker personally. Satisfaction is a long shot, but its possible she is keeping the deal for a friendly investor. FWIW, her ethics code requires her to present ALL offers. You could get your own buyers agent to submit an offer, and insist on proof of submission. Bottom line: how much heartache is it worth to do a deal that the other party doesn’t seem to want done? There are many other fish in the sea…
“Some Realtors said they have dealt with appraisers from not only outside Frederick County, but also from Pennsylvania and West Virginia. The appraisers know nothing about the county or municipalities they are working in, they said. One Realtor said an appraiser from Columbia wanted the Realtor to provide data, something the appraiser is supposed to do. Another noted that an out-of-town appraiser at a condo didn’t know how to do a floor plan.”
Be prepare for a lot more REIC ranting, squealing and whining as these “hit-MY-numbers” RE agents and lenders are forced to release their DEATHGRIPS on the places where appraisers short-hairs once grew.
This appraiser obviously doesn’t know that “it’s different here”.
Sounds like the agent wants the house.
Happened to my father 40 or 50 years ago. Worthless fuc@s!
Church friend of the family, no less. Praise the Lord!
That reminds me meant to contact Bank of America. There was a Countrywide foreclosure here on Capitol Hill listed for about 2 days at $400K. About $100 - $150K under market I would guess. Sold right away Agent wound not take back-up offer. Did not want the house at that price but told agent I could be a cash buyer and was interested in forclosures, never heard from him. Think it was an inside deal.
it’s listed as a shortsale at $515,000. Per public records it’s not lender owned yet.
Looks like current lender is Professional Mtg Inc out of City of Industry. Also looks like there’s a second with Wamu (now Chase).
Also looks like it’s been transferred back and forth a few times between husband and wife.
Selling agent is required to present your offer. Get your own agent or a lawyer to do so if you can’t seem to get it done.
Ben, Good to hear your business is doing well!
I for one am interested in the next stage of commercial real estate. I read a report (perhaps it was posted on HBB) that said some areas were looking into converting shopping malls into live-work arrangements. Can’t believe that is resurfacing. We had a mall in our town try that three years ago and it went over like a lead balloon.
Well, commercial was in a bubble too, I just didn’t have time to cover it. And the LV commercial defaults are partly residential land owned by developers. It’s all related.
If it goes like the Texas bust, it won’t be converted, just sit there.
Thanks for the input.
Ben:
I would like to ask what’s next? What real jobs are going to be created that wont require going into debt for 4 more years of schooling and getting some advanced degrees, just to get in the front door.
What’s next is a good idea. I have been thinking about that one for a long time. This guest blogger is a writer, so we can do just about anything.
Education is the only investment that cannot be taken from you.
Well, it can be taken from you if you lose your job, are out of your field for a long time, and aren’t able to keep up with the latest because you can’t afford additional schooling that your former employer would have paid for. Education can also be taken from you by disease, a stroke, or just bad luck.
Before getting a degree. ” We can’t hire you because you don’t have a degree.”
After getting degree. ” We can’t hire you because you don’t have the type of experience we are looking for.”
Or “You’re overqualified.” “We don’t like to hire people with your degree.”
Regarding what’s next for job growth…
We spent a lot of time this year researching towns we’d like to buy in. Since we have children, schools are obviously a priority.
When looking at high schools, we also thoroughly investigated the quality of the regional technical high schools.
We both have traditional bachelor’s degrees. My husband’s has paid for itself over time, mine has not.
W/B Ben,
How about the topic of “Steering” in this FIRE mess.
I know Wisconsin is fly-over compared to the two coasts but it’s easy to see the Games played in some smaller towns.
RE agents/brokers steer victims in attempts for full brokerage fees in everything from their chosen appraisers, banks/lenders and recommended “inspectors”.
Some of these RE Brokers have own “in-house” or front named Title Companies with local lawyers hidden under major Title Corps using an umbrella coverage, while in effect getting kickbacks from the Big Fellas that really insure them.
Just a thought about the possible Chains of Fraud or Abuses in the REIC.
‘We are seeing strong buying activity, particularly in those boom and bust markets, where prices have declined significantly. Buyers are coming in and fighting over properties — there is multiple bidding in California and Florida.’
I am sure this has nothing whatever to do with banks holding shadow inventory off the market.
“‘It looks like to me the low-and moderate-end of the distressed market is starting to show signs of bottoming,’ Appleton-Young said. ‘There’s just no inventory.’”
Is the appearance of collusion among banks to hold inventory off the market coincidental (tacit collusion), or is there a coordinated but unannounced ongoing effort to manipulate the market and shaft consumers? Perhaps the newfangled Obama consumer watchdog agency could tackle this question.
Lawrence Yun and Leslie Appleton-Young all in one set of news briefs. How charming.
“Optimism has been all but extinguished from the U.S. housing market.”
This doesn’t sit well with reports of bidding wars in CA and FL, does it?
LOL
Except for the brief slowdown in the latter half of 2007 through early 2008, I never saw the optimism being extinguished.
As early as February 2008, I was reporting a hefty increase in buyer/looker traffic and more activity.
It is ruthless out there, and anyone who claims this is a dead market is a liar.
I’m not buying a thing any hack says especially Yun.
We haven’t even considered (MSM that is) what the effects will be as city after city, state after state begin to shut down.
not to mention a few other minor details:
Credit cards are defaulting in spades
Commercial vacancies increasing in spades
Cali / Oregon unemployment in double digits.
Oakland openly talks of bankrupcy
Next round of residential loans stepping into the ring
Mortgage rates up a point since March
Calif shut-down clock is running
New home builders have sucked up latest knifecatchers with 10k credit (Calif)
And somehow this equates to recession over Q3 ‘09, we’re nearing the bottom, Cramer says bottom is here, Banks are well-capitalized….
Somebody help me reconcile these opposing sentiments
cereal,
Oakland!? Seriously? Wow.
I’ve begun working on my own list of Who’s Least At Fault and it goes something like this:
1. Homeowners that own outright
2. Long time homeowners that have built substantial unmolested equity
3. Homeowners that have taken nominal equity out for needed repairs ( not “upgrades”, repairs )
4. Those that took equity out for “nice to have” improvements
5. Those that pilfered equity and not a DIME found it’s way back into the home
6. Those that bought a home solely for the purpose of stripping equity
7. Those that LIED on their loan app. to engage in equity stripping
8. Those that LIED -multiple- times!
( you get the idea )
0.5 RENTERS
Big V,
+1 on your 0.5!
I know I have spoken to you guys about the guy we know who has 5 mil in loans..well he is either foreclosing or short selling…the short sell is for 60% of what he paid for the McMansion…turns out they ran and bought a foreclosure in the same community just a different part…bought it in the wife’s name(who doesn’t work..and the note is a jumbo..YES THE BANKS GAVE THEM A LOAN!!)…so not only are they helping to screw their neighbors with the depressed housing..but I am sure there was mortgage fraud to get the loan(one of the spouses is in the business)…
This just shows you that this whole saga is far far from done..
Ann, I think you’re saying they bought the 2nd house before the 1st house foreclosed. Regardless, there’s lots of reports about other B’s doing just this.
How is this not fraud?
You know, the criminal kind…
What amazes me is that they took out 500K of equity several years ago when they bought the first house..hope they 1099 then from the short sale! They can’t do deficiency judgement since second home is in othe spouses name…
May I remind everybody that one cause of the bubble was rampant speculation on housing on the belief that you could sell it in the future for a much higher price.
This speculation HAS NOT ENDED.
You can read the stories about all those investors snapping up those cheap, foreclosed homes. And in those stories it often states how they will sell when the market ‘recovers’.
So…if massive speculation caused such problems…how can having massive speculation solve it now?
Huh?
SMF,
It keeps getting better.
The common theme in the neighborhoods where “deals” are being had is the knfecatcher says if we’re not bottom, we’re near it.
To which I respond what exactly prevents that $112,000 cash-flow positive Queen Creek “deal” from being a $72,000 cash-flow positive deal in February 2010?
or $45,000?
I know, I know!
The house sounds like a deal…till you see it and the area it is located.
And when you have too many landlords, do you know what will happen to rents?
Ummm, let me guess. The rents go down.
Real estate goes down? You free market commie!
FYI, I’m watching rents plummet where we’re renting. Down 20% to 25% over 18 months (for a home). Tons of un-rented apartments closer to the beach (South bay, Los Angeles). The inbalance in price to rent has improved… a little, but my oh my… interesting times ahead.
Got Popcorn?
Neil
You are telling me…
My sister and her husband live in LA.
They had a house and a condo prior to purchasing a new one when they got married.
He called ‘bottom’ in the LA market in 2007…
And they kept their prior homes as rentals…
(Can you figure out where this is headed?)
Their tenants are moving out…
Divorce court and Bankruptcy Court?
“This speculation HAS NOT ENDED.”
100% absolutely agree! Perhaps the only difference being that speculation that had been fueled by greed is now also being fueled by desperation. A very dangerous mix.
I’d say the speculation might even be more common now than during the bubble.
TONS of “investors” out there “snapping up” inventory.
This is going to get interesting.
See the article in this week’s Newsweek about this very issue. See the dumb-ass landlord whining while he’s screwing his renters for their $300+ something per month rent in Pocatello, Idaho as a long-distance, “nice investment deal” landlord while not even making the piece-of-junk duplex he paid $ 62,750 habitable. I hope the housing inspector gets on him big-time. The article is called ” The Accidental Slumlord” and he evidently bought the place as a landlording adventure in order to write a book. It’s embarassing. The author/slumlord is Daniel McGinn, and it’s on p. 48 of 6-22-09 issue of Newsweek, which I’m about to cancel our subscription to because now it should be called OpinionWeek after it’s “big” makeover. Whine, whine, whine, writes the landlord, while he also burbles on about “spongy floors”, one of the tenants who does minor upkeep on the duplex for no recompense (and the owner even says that he hopes the humble S.S. disabled vet keeps on doing the maintenance for free ), and discusses bugs running around in the corners. He should be ashamed of himself. We’re landlords, and we keep what little property we rent out in tiptop shape.
http://www.newsweek.com/id/201838
This is SUCH BS!!!! California goes and passes another moratorium for another 90 days, so banks are holding back inventory, and now they get another delay. The multiple bids are just smoke and mirrors designed to lure in big fat fools! GRRRRRR!!!!
How does she still have her job????
They still have their fingers in the dike here, professor.
Only bidding wars I personally know of are for crap homes.
Good shot, by the way.
You obviously touched a nerve.
Hey, I aim to please and titillate
Or with the fact that ppl are just asking way below market. BFD.
“Since two-thirds of Americans own their homes, falling prices are never likely to inspire street parades…”
How about street riots?
And the end of that paragraph:
“For more philosophically minded Americans, this is a cloud with a silver lining.”
…you don’t have to be a philosopher to be among the 100 million Americans who do NOT own a house.
Every cloud has a silver lining - even a mushroom shaped one.
Maybe the NK nukes will clear all that excess housing in dying cities.
Nukes are neutral on real estate. Country properties go way up but city properties go way down.
Of course after the nuke hits there aren’t any properties; however you also lose a big slice of the population.
So, its kind fo neutral.
I’m expecting NIKE missle sites on Palos Verdes and Mt Disapointment again.
Great Idea PB
A parade…that’s IT!
This 4th of July, every small town in America needs a contigent of their local “FB & GF Brigade” marching by between Great Uncle Joe on the WWII jeep with the machine gun and the clowns. They could all wear those big noses with glasses and mustaches and play little kazoos.( Said same Great Uncle Joe could be bribed to take the clowns out as well, while on his “Special Mission”, for a few extra rations of Hot Cocoa and some Matlock re-run TV privileges.)
The RE agents, lenders and the local tax officials could scatter last weeks used lotto tickets, re-fi’s and candy, so everyone else with fresh blood ducks down, while old Joe does his “Lock n’ Load, Rock n’ Roll” thingie.
We renters could smile, wave little US Flags and pretend to be totally loyal and patriotic to the Passing of the Great American Dream.
“Losses from the housing meltdown totaled $3.6 trillion at the end of 2008, and will likely approach $5 trillion by the time the crisis ends, predicts Lawrence Yun, chief economist with the National Association of Realtors.”
Hey, $5 trillion was my back of the envelope estimate from a few years ago. I guess those with more detailed data and sophisticated models eventually reached the same conclusion.
Note: I assumed a deflation of the bubble, NOT an overshoot on the downside.
Very good call, WT. Can you tell me when to sell my August 7500 put on the Dow?
That sort of high finance is beyond me.
But I did sell a small amount of money I had in stocks last week. I think S&P 500 at 600 sounds about right to me, but who knows how long it will take to get there?
Pretty soon, AZ. I’d do it now, but it’s your money.
Sorry, AZ Lender. I misread your post. You should hold on to it for a while. At least a month, K?
Sorry to all for the repost and I will not post it again. I would like to have some more comments/thoughts if anyone is so inclined …
My father in law asked me the following and I thought this would be an ideal place for comments before I work on a response to him. I would appreciate any of your comments or how you would respond (in as few words as possible to answer thoroughly - he is a retired software engineer for Boeing on the shuttle program). Thanks.
“As always, I would like to know the exact mechanism by which the Fed functions. I would like to be able to see what the Fed does to have an impact on the economy; not just in general terms, but how they actually do it.
Also, Kevin suggested that the Fed creates money. I am uncomfortable with this concept. Banks in a sense create money because of the way lending works (they start with $100, lend out $90; when that $90 is deposited they lend out another $81; and so on). In that sense the Fed may be creating money, but I don’t think they actually conjure money out of thin air.
There is also the issue of profits. I can accept that the Fed makes interest off the money it lends. I don’t see them making money in other ways.”
Uh, actually, yeah, they do. Bernanke printed $2 trillion dollars just last fall, apart from all the Treasury spending, to “liquify” credit markets. The Fed has the same authority and ability to print money as the Treasury.
The Federal Reserve does not create money, y’all. The Treasury Department does that (on order of Congress). The FR is like a sponge that can soak up money and then squeeze it out if it wants to. I think Wikipedia can clarify it for you.
“Right now, most of the visitors are employees — the security guard at the front desk, the woman who sells the condos — because no one lives there. Not a single resident, in 396 units. ‘Not that I’m aware of,’ Hugo says.”…
…“Oswaldo Mateus and his wife were among the first people to buy at Tao two years ago, putting down a 20 percent deposit on a $300,000 unit. Along with losing his equity, Mateus is worried that only a few people will be forced to shoulder all the maintenance fees. ‘Who’s gonna be the [homeowners] association? Thirty people?’ he says.”
Oswaldo Mateus? I’ve been instructed to bring you this double-portion of Hubris Pie. Compliments of that gentleman over there at the bar, sipping his Schadenfreude and grinning.
Does hubris pie use the same ingredients as cow pie?
It actually sounds like a great place to live. Your own pool, workout center. Your own security guard. I bet no one would complain if you skateboarded in the hall ways either.
Is anyone else tracking the prime parts of West LA? Pacific Palisades, Brentwood, the better parts of Santa Monica?
I’m curious if anyone has any reports on the state of things over there…
I don’t track Boardwalk and Park Place but I do watch MarVista, Culver, Palms, Playa and now DTLA. The low end condo market has been taking the biggest beating.
I see condo listings in 90094 (Playa) sold in ‘05 in the 500’s short-selling in the 2’s. Same in the new Marina Towers. Also a lot of DTLA condos sold at the peak now short selling at 1/2 original price.
In Culver/Palms there are a half dozen just-completed luxury townhouse projects that have ZERO sold units. I suppose these are awaiting inevitable bankrupcy.
And the typical 1+1 70’s built condo in Culver City is running 220 - 260, down from 320 - 360 at the bubble top.
Hope that helps
Great info, thanks!
“but don’t expect home prices to stop dropping before mid-2010 at the earliest”
This reminds me of an old Dr. Seuss couplet:
The storm starts when the drops start dropping;
When the drops stop dropping, the storm starts stopping.
(Hey, it’s Friday.)
Whenever I see an article about “breaking ground” on an unmarketable project, I think of Dr Seuss:
“Dig a hole five furlongs deep,
Down to where the nightsnakes creep.
Mix and mold the magic mud.
Malber, Balber, Tiddur, Tudd.”
“Mateus is worried that only a few people will be forced to shoulder all the maintenance fees.”
But you own! Congratulations!
Here’s a quick-and-dirty video checking out new construction in Billings, MT last weekend (on bike, of course):
Spring Construction Update
We still haven’t gone bust, but I have seen a few houses going for 10-15% the price of two years ago.
Love seeing your vids TiU!
I don’t know much about Billings, but is there an ‘old town’ part?
There seems like a crazy amount of subdivisions there, all newish - just wondered if the amount of building correlates to the people who want to live in them.
Thanks! There is a nice, historic downtown. And plenty of nice older neighborhoods within a mile or two.
But people have been “snapping up” houses in the far-flung subdivisions these last few years. That said, “far-flung” is relative, and most of those subdivisions are still an easy 20-minute drive to your workplace.
Why would you buy a house on a tiny lot way out of town? Who knows? But people have been doing it.
Tango is back!
How are Bozeman, Flathead, Missoula doing? From what I can tell, the Gallatin Valley and Big Sky have pretty much shut down… hardly even any updates on Realty times anymore.
Here’s a good Bozeman article with a real head-scratcher of a headline:
As prices fall, housing market picks up
Sales are down, so the “housing market picks up” headline is just based on Realtor BS about new buyers. Surprise! More people buy houses in the spring!
And old familiar tale comes to Bozeman:
Hey, how can that be? Someone’s moving out of Bozeman? I thought everyone wanted to live there. And once you rent your house and move to Florida, be sure to ask your new neighbors how the “waiting for a year” thing will work out.
Big Sky and Flathead have to be really bad, but who knows? Nobody seems to be reporting on them.
Big Ski is dead. In the last six month only four homes were sold in Madison county. Most of Big Sky, Moonlight Basin, and the Yellowstone Club are in Madison County. The last two that were sold were for $200,000 or less.
There are a lot of construction workers leaving Bozeman, the common place to go seems to be Wyoming, oil feild you know.
Also there two banks sitting on al ot of non-performing loans. One is Bank Of Bozeman, this the I warned about over a year ago. The other is American Bank which has a lot exposure at Big Sky.
Welcome back, Tango! And if you’re ever down Tucson way again, let’s get together.
Oh, excuse me, everyone. That invitation applies to all HBB-ers. If you come through here, we’ll have an HBB get-together at one of Tucson’s fine eating and drinking establishments.
As a point of interest, my brother in law the Realtor in the Folsom/Sacramento area is taking advantage of the current crop of “bottom fishers” by selling his own house and renting. He has come to the conclusion that while he may be able to eke out a living selling houses to the yearly crop of idiots he wants to preserve what equity he has left in his home until he can pay for a house cash a few years down the road. When a Realtor concludes owning has no advantages you know things are continuing to get worse.
Sacramento here. Your brother’s attitude seems to be in contrast with that of Ed Kittle in the Placer Herald article above.
Kittle said the housing market in Rocklin and Roseville has reached bottom and home prices are stabilizing and in some cases increasing..
Places like Folsom and Roseville are one big plant closure away from hard times. Rancho Cordova is a town just west of Folsom and got creamed years ago when Areojet pulled out and the base closed. Never recovered.
My friend at the Intel Folsom campus said things are not looking good. They outsource every job they can to India or China.
What would happen to Folsom or Roseville if Intel or HP close their plants?
“when Aerojet pulled out”
Huh? I have a friend who’s still working there… in fact, he had to pull out of a play we were in because of his workload.
Not that I dispute your essential thesis.
“He has come to the conclusion that … he may be able to eke out a living selling houses to the yearly crop of idiots”
Thanks for that inside look.
We’re further up the hill near Auburn. Community scuttlebutt says REAs really hurting around here: agents leaving the business, or or leaving big offices/brokers to hunker down with smaller independent operations in a attempt to survive. We’ve even heard of REAs leasing out their primary residences and moving into rentals or failed flips to cut costs.
And they’re all learning to deal with short sales, in a hurry.
Well, guys, it’s great reading this blog and all the conversations. Today I join the rank of the homeowners for the first time. Since we’re being kicked out of our rental we decided to find us a “distressed property” and recoup our down payment with the 8k tax credit.
Zillow says our new house is worth 200k, and it originally listed at 215k last summer. They took our offer of 121k, and we close this afternoon. We are tied to Portland and glad to be here for the rest of our lives, so it’s a mortgage instead of rent, and no landlord to kick us out for no reason (he needs the house for a foreclosed relative - ha!).
Wish us luck or just mock and jeer, I appreciate the collective wisdom!
Thanks!
“Zillow says our new house is worth 200k”
Not any more, you just set the new price.
Doesn’t Zillow show their estimates regardless of selling prices? (Though I know they do show the sale prices too)
Yup
I was looking at the zillow chart for the house two doors down from mine. EVERY sales price in the last 5 years was lower than the Zillow price, and they don’t have the foreclosure auction from last month*, which is SIGNIFICANTLY lower that the Zestimate.
*which isn’t listed in the State property database, it may not have closed.
My point is, you didn’t just get $80K of free equity.
50% off in the Portland area is about right. What is the equivalent rent?
It’s break even on a monthly payment. A 4BR house in SE usually rents from 900 to 1300. Our pymnt is inches under 1k, so it’s a wash. It seems to meet the 120xrent equation.
OK, being rushed off by the wife to the signing!
Congratulations, Portland Dad!
It must be nice to finally buy your own home. Sounds like you did well for yourselves.
Enjoy!
PortlandDad,
Well, at least “I” hear you! The wife & I ( empty-nesters ) had been through a succession of flaky and desperate landlords since the start of 2004.
I mean REAL flakes. Your presence there was simply to fulfill their min. time requirement to “establish that it ‘could’ be rented” and therefore entice the NEXT Greater Fool to pay him a premium! ( Even though the LL was basically subsidizing your rent! )
As I’ve said many times, bubble-sitting ain’t easy! How ironic you were “evicted” to make room for a foreclosed relative? LOL! Good luck and it could be worse? You could live in Salem!
Best of luck with your new digs! If your content with your purchase then who cares what anyone else thinks.
I mock thee. OK, that is done.
But realistically, someone with a lease in place does not need to worry about being “kicked out for no reason.” Even in the “Underwater Borrower State” (sometimes referred to as the “Grand Canyon State”) where I live, a few hours of research on the county recorder’s website was sufficient to avoid renting from an amateur, speculator, or deadbeat.
Got a question for you, Russ. I’m down here in Baja Arizona, Pima County, to be exact.
I’m finding that our county assessor’s website is rather limited in terms of what it reveals about properties. I mean, I want to know about those serial refinancers we love to bash so hard here.
Pima County Recorder looks like it’s the place to go. Does your county offer a subscription service to its county recorder website? Pima County does. I’m tempted to suspend my usual frugality and pop for a subscription.
“Got a question for you, Russ. I’m down here in Baja Arizona, Pima County, to be exact.
I’m finding that our county assessor’s website is rather limited in terms of what it reveals about properties. I mean, I want to know about those serial refinancers we love to bash so hard here”
I was using the Maricopa County site, which is extensive and somewhat user-friendly, including free original images of documents in .pdf and alternate formats. There are paid subscription services from private companies that analyze the data, but those are not necessary to investigate serial refinancers, trustee sale notices, etc. Usually, I start with the assessor to find the name(s) associated with a house, and then head to the recorded documents portion of the recorder’s site to pull up any liens, other activity under the name(s).
I have also used the Pinal County site and found the same type of information in a slightly different layout. I would be surprised if Pima County offered less than Pinal, but I will visit it right now.
OK, Pima Co. does have an “advanced search” function on the assessor portion to search by property address. I will not link to it because too many links tend to delay comments on HBB.
But, you are right, Pima Co. does require a subscription for access to the recorded document images. It looks like that now costs $100 for 6 months/ 200 images. Additional increments of 200 images for $45. That really is surprising. Maricopa County is so much larger that you could understand a difference, but Pima being outshined by Pinal is kind of shameful.
I would say that it would probably be worth $100 to satisfy your curiosity.
“Images are available through docket 13579 page 4497.
Recording date: June 15, 2009.
Images are only available in our office or on-line with a subscription.
Original documents are ready for pick-up or mailed within a few days of the images being made available.
Dockets prior to 8004 (April 1, 1987) are only available on microfilm or microfiche and must be researched in our office at 115 North Church Ave, Tucson, AZ.”
AnonyRuss,
They-are-ALL-amatuers!
My, ahem, “research” found a kindly old gentlemen that had lived in town since WWII, owned the local newspaper since the 60’s and was the founder of our local bank.
He turned out to be a flake. The Boom busted, he flew into a leverage induced panic and left own for a month after his bank went bust too. And you think doing a quick query is somehow going to preclude all of this from happening? Appreciate the suggestion though…
“AnonyRuss,
They-are-ALL-amatuers!
My, ahem, “research” found a kindly old gentlemen that had lived in town since WWII, owned the local newspaper since the 60’s and was the founder of our local bank.”
There are definitely no guarantees. But you just improve your odds dramatically. In my situation, I was specifically trying to avoid owning a metro Phoenix house for a few years (3.5, so far) and renting with little chance of chaos. So, I looked at houses for rent that had been unrented/vacant for a couple of months. Then I went to the recorded docs and eliminated any house where the owner overpaid or over refinanced (one cash-out refinance was sufficient to fall into this last category). The first one that I offered to rent from (at a reduced rate from asking/previous rent) was owned by someone who owned four houses in Maricopa County, owed zero on one, paid for the others with conventional loans eight to twelve years earlier and never re-financed. I never made it to the second house on my list because my offer was accepted.
My system would not have told me if he was a serial refinancer in another state, but it seems to me that his Arizona borrowing behavior would probably be similar to his borrowing behavior elsewhere.
You say Zillow says the house is worth 200K, but what was the house listed for? Was it a short sale? Bank-owned?
Thanks for the extra details.
Original listing was 215k, last July. Successive price drops down to 135k, and they accepted our offer of 121k. Previous owners paid 179k in 2005.
Thanks for the interest!
oh, and it was a short sale.
Congrats, Portland Dad. There is something to be said for having charge of the roof over your head, as well as being charged FOR it by the mortgage company. Best wishes.
No mocking; we just did something similar. The whole idea is to have housing return to sensible buying and if the money and situation work for you, great!
how do I find out which bank own this house?
13288 Michael Rainford Cir
Garden Grove, CA 92843
Thanks.
Google “Bank Owned Properties”
Information on 13288 Michael Rainford Circle, GG.
It sold for $569,000 on 04/30/04
It tranferred again on 08/02/04 for $739,000 (nice Profit)
According to the county no NOD filed on the property
Appears to be 2 seconds from Wa Mu on the property
Curently listed for $515,000 subject to a short sale
how do I find out which bank own this house:
13288 Michael Rainford Cir
Garden Grove, CA 92843
Thanks
That story about commercial foreclosures in LV had a real doozy of a photo caption.
This vacant office building at the northwest corner of Rainbow Boulevard and Interstate 215 was constructed by Plise Development. Foreclosure proceedings began with now shut down First National Bank of Nevada.
So the First Nat. Bank of NV couldn’t foreclose on the property because they in turn went belly up?
LOL
DennisN,
Cross-defaults are a b!tch huh? Get ready for more!
A new, 90-day state moratorium on foreclosures went into effect this week to give homeowners more time to avoid losing their homes.
But because the California Foreclosure Prevention Act exempts lenders from the moratorium if they submit modification programs for review, few owners are expected to benefit from the law, government officials and industry leaders said.
As of yesterday, 39 institutions, which handle most lending activity in the state, had won 30-day exemptions from the moratorium while their plans are being reviewed. Seven of those, including Bank of America, had obtained approval for their plans and received permanent exemptions.
“My view is if we can even help one family avoid foreclosure, it’s a win,” said Assemblyman Ted Lieu, D-Torrance, who sponsored the law. “The goal of this bill is not to put in a moratorium as much as it is to get banks to run loan modification programs to keep people in their homes long-term.”
The new moratorium would extend to six months the time between the notice of default and the foreclosure sale, which is double the current time, officials said. Eligible loan modification programs must offer favorable terms for principal residences bought from 2003 through 2008.
Since the beginning of last year, about 200,000 loan modifications have taken place in the state, said Department of Corporations spokesman Mark Leyes. Over that same period, more than 304,000 homes have been foreclosed on, according to MDA DataQuick.
Even with loan modifications, many homes still are foreclosed because two-thirds of approved changes have not made monthly payments more affordable, said Paul Leonard, state director of the Center for Responsible Lending.
*****************************************************************************************
As expected, the big lenders have already been exempted from the new moratorium, here’s the list:
http://www.corp.ca.gov/FSD/CFP/pdf/ExemptList.pdf
Ted’s prediction of this new law helping one family will be about right.
Seven of those, including Bank of America, had obtained approval for their plans and received permanent exemptions.
Which means Countrywide’s old loans will be foreclosed upon. Did Chase (Wamu) have their plans accepted? Wells Fargo? If all three are exempt, then the flood gates can open.
Got Popcorn?
Neil
The flood gates will not open. That would involve price discovery on the part of the banks and they can’t handle this with their perilous capital situation.
This is going to slow roll for a decade.
There will be a bottom and we will scrape along it for a long time. I can’t see things burning out until at least 9 months after the last of the option arm resets. That puts us firmly into 2012.
Even my guess at the bottom time frame was wildly early. I believe you had 09 and I had 011. The time frame is slipping because of the banks more than any other moratorium.
Hope the job situation is improving. We are good with work for a little while to the budget crunch begins in earnest.
“Ted’s prediction of this new law helping one family will be about right”.
LOL! Yea, but it’s a ‘win’ that dingle-berry doesn’t give a rats azz he just wants to sound ‘caring.’
What I wants ta know is, when is CA going under? I mean, the state has been supposedly teetering on the brink of collapse for a while now, but it seems to keep chugging along. I dunno, maybe it was just a bunch of fear mongering.
Nile Monitor Lizards taking over Cape Coral!
“The lizards’ weapons include: sharp, snake-like teeth, long, muscular tails they use as whips, and claws that look like the sinister pendants of voodoo necklaces. They can run up to 18 miles per hour on land and swim under water for an hour at a time.”
http://www.tampabay.com/news/environment/wildlife/article1011745.ece
The one in the picture recently qualified for a $300K FHA mortgage.
“The one in the picture recently qualified for a $300K FHA mortgage.”
Let’s nickname him Jeff.
The article says crocs keep the lizards in check back on the Nile. Won’t native gators do the same thing in Florida?
Or would the gators extend “professional curtesty” to the lizards, sort of like realtors and lawyers?
News from Los Angeles:
Unemployment has reached new highs 11.4%
yoy sales prices rose .8%
Please focus on those two facts and please explain that to me.
11.4% unemployment and real estate prices are going up!
I guess the market is working, thanks to the compassionate help of the the Government, $8,000 tax credit, 141 day moratoriums to stall foreclosure, Banks not needing to put inventory on market because of tarp funds and Gov. purchase of “toxic assets”, and the Federal Reserve printing money to force interest rates lower.
Take all the actions listed above and it explaines why sale prices are rising at the same time unemployment is sky rocketing and income is going south. Please take it from me, judging from the number of adult males one sees on the street during working hours the unemplyment leverls are getting very visable!
This whole down turn is getting very weird. I thought once the bubble popped I would finally be able to buy, but the government, is doing every thing possible to force prices back up. They say you can’t fight city hall, and I guess you can’t fight the Fed. Gov.
Prices rising with foreclosures at all time highs and unemployment at record levels!!!
I think I need a therapist!
great comment,i feel every word you wrote…we waited to buy, and then they changed all the rules.
Ditto.
The solution is not stricter oversight, but rather a credible threat to allow “Too Big” to fail.
* The Wall Street Journal
* JUNE 19, 2009
Fed’s Next Job: Figuring Out Just Who Is Too Big
Only a Handful of Firms May Be Tapped for Strictest Oversight
By DAMIAN PALETTA and PAUL GLADER
WASHINGTON — Who will be the most regulated of them all?
Under the Obama administration’s proposed regulatory revamp, certain companies would be set aside for special scrutiny if they are seen as large and interconnected enough that their failure would send a shudder through the economy.
The plan would require these companies, even if they aren’t banks, to face much stricter oversight from the Federal Reserve. The central bank could examine everything from the company’s domestic parent to its smallest foreign subsidiary.
Treasury Secretary Timothy Geithner, above, on Capitol Hill Thursday. Certain companies tapped to receive special scrutiny from the Federal Reserve will be designated as ‘Tier 1 financial holding companies.’
Officially designated “Tier 1 financial holding companies,” they could be banks, insurers or almost any other large market player. Government officials believe most potential candidates already would be under Fed scrutiny because they are so-called bank-holding companies, such as Citigroup Inc. or Bank of America Corp.
It is possible only a handful of others might qualify. Candidates, according to analysts and some industry officials in Washington, include GE Capital, the financing arm of General Electric Co., and some large insurers. Big money managers such as Pacific Investment Management Co., or Pimco, and BlackRock Inc. mightn’t qualify because they aren’t as leveraged as commercial or investment banks.
In deciding whether to bring a company under such oversight, the Fed would be able to assess the impact of the company’s failure on the broader economy, its size, use of debt and dependence on short-term funding, and whether it is a critical source of credit for households, businesses, and state and local governments. The Fed also would be able to consider any “other relevant factors,” the proposal states.
Treasury Secretary Timothy Geithner said at a Wednesday news briefing that he had an idea how many companies fell into this group but wouldn’t provide a number. Asked if he believed hedge funds might qualify, he said “no.” National Economic Council Director Lawrence Summers quickly countered that it was too early to tell, because the government hadn’t analyzed enough information on the country’s largest hedge funds.
“I don’t think we have all the information that would be necessary to judge the situation of all the institutions that trade,” Mr. Summers said. (”I accept the amendment,” Mr. Geithner said in response.)
…
Given the bankruptcy of Lehman Brothers Holdings Inc. and near-collapse of American International Group Inc., Obama administration officials believe it is now necessary to bring the country’s largest, most interconnected businesses under a microscope so the government understands their risks.
While companies appeared leery of the prospect, some lawmakers worried about the opposite: that companies might benefit from being on this list by being able to borrow money less expensively than rivals.
“Tell me why that isn’t a big, flashing neon sign, ‘Too Big To Fail?’ ” Sen. David Vitter (R., La.) asked Mr. Geithner at a Senate hearing Thursday.
Mr. Geithner said the administration’s plan would require these companies to hold more capital and would require them to give the government a “credible” plan for their dissolution, should it ever occur. The administration also is asking Congress for authority to establish a system to prevent an uncontrolled collapse of such companies.
Part of the Fed’s new jurisdiction would direct it to come up with rules that would guide the identification of candidates for this list. It would have the power to review the books of a potentially large universe of companies in making that determination.
“Buyers are coming in and fighting over properties — there is multiple bidding in California and Florida.’”
You just can’t resist attempting to whip it into a frenzy again can you Yun. Your stream of lies, obfuscation and false sense of urgency will be your legacy.
As with David Pinocchio Lereah, I couldn’t help but wrapping my hands around your scrawny little neck given the chance.
There aren’t bidding wars. There is a 4/2 in Pinellas originally listed at $269k that I (over the phone with the busted flipper) offered $150k a while back… still on the market, asking $200k.
I might toss $100k out there and see what happens.
“I might toss $100k out there and see what happens.”
Buyers can follow the market down too! Who knew?
Prospective buyers can spark their own reverse bidding wars through a policy of serial low ball offers. I am not sure whether it is legal to make multiple simultaneous low ball offers, but in case it is, I strongly advocate this approach.
What we see in the MSM these days are the shills like Fun-Yun and LAY who are there to tout the SUPPLY side of the equation. They represent the SUPPLY side only. They want people to jump on a bandwagon and sign up for one of the millions of rapidly depreciating used houses their masters have in inventory.
Much like Liz Sonders from Schwab who was touting the stock market this week. Her boss-man has plenty of stock for you to buy.
Hurry, don’t want to miss the bottom!
The big guys with tons of supply want to unload as much as they can as quickly as possible. Unemployment is spreading like cancer and there is no way to service the debt racked up from years ago. The equity market is being propped up to enable a gigantic distribution of overpriced junk straight to the amateurs and little guys. The Government and MSM glibly try to gloss over the realities of the crumbling economy.
As Biden said this week, “Every one guessed wrong…”
Guess he never read this blog.
This is the kind of thing that could keep me in Florida:
http://tinyurl.com/nw9fhq
That might be a interesting topic: how has the bubble changed your plans — if at all. We originally came to FL with an open mind, then thought no way, but now that reasonable housing is coming on line, I dunno…
“Losses from the housing meltdown totaled $3.6 trillion at the end of 2008, and will likely approach $5 trillion by the time the crisis ends, predicts Lawrence Yun, chief economist with the National Association of Realtors.”
FYI, $5 trillion = $5,000 billion. To my recollection, Ben Bernanke said that ’subprime will be contained’ to $200 billion. $5,000 billion is 25 times as much. Was Bernanke’s remark meant to refer specifically to subprime, or was he just off by a factor of 25 or so in his preliminary damage estimate for the impact of the housing bust. For anyone who cares, under the hypothesis that $5,000 billion is a good estimate of the final damage tally, putting the forecast error into percentage terms yields a percentage error of
(5000/200-1)*100 = 2400%.
Hopefully the Fed’s forecasting skills will improve if they are appointed Uebermensch regulator.
This story instantly brought to mind Hitlary’s early success as a commodities trader.
Wall Street Journal
* REVIEW & OUTLOOK
* JUNE 20, 2009
Dodd’s Irish Luck
The Senator Sure Knows How to Pick an Investment.
Irish property prices have plummeted since 2002. But a “cottage” in County Galway owned by Connecticut Senator Chris Dodd has tripled in value during the same period, according to a financial disclosure form filed by the Senator this month.
There are two possible explanations for this remarkable turn of fortune. Maybe Mr. Dodd is luckier than a leprechaun. Or could it be that he paid well below the market price when he bought out a co-owner in 2002 and had undervalued the property accordingly? If it’s the latter, then Mr. Dodd received a “gift,” in IRS parlance, and should have declared it on his financial disclosure form that year. He did not. Oh, and by the way, the seller at that low, low price has been the business partner of a man for whom Mr. Dodd lobbied to receive a Presidential pardon.
It’s also been nearly a year since a former loan officer at Countrywide Financial charged that the mortgage lender had classified Mr. Dodd as a “very important person” (a.k.a., a “friend of Angelo” Mozilo, Countrywide’s then-CEO). As such, Robert Feinberg said, Mr. Dodd received — and knew he’d received — preferential rates and fees on two mortgages he and his wife refinanced in 2003. As a power on the Senate Banking Committee, he also knew this was a conflict of interest. This was the era when Countrywide originated and then sold to Fannie Mae high volumes of subprime loans.
The SEC charged Mr. Mozilo with fraud and insider trading earlier this month, and the Los Angeles Times reported in May that there is an FBI investigation which “includes a probe of [Countrywide's] role in an influence-peddling scandal involving” Mr. Dodd. The Senate Ethics Committee won’t comment on its own investigation of almost a year.
A possible suggestion for your guest blogger, Ben:
Is there a way we can collectively do something to change the way the govt is dealing with the housing mess? Can we form a group or lobby so that our voices can be heard?
Essentially, can we finally convince the PTB that affordable housing — via lower prices — is the only way we can reduce our debt loads so that we can heal our economy. Maybe we can convince the PTB that flipping houses really isn’t **productive** work, and perhaps we ought to direct our energies and money toward more productive and beneficial uses.
I hate to say it, but what goes up must come down will do up again because we live in America. We are optimistic and we like our stuff. Prices will bottom out in 2010 and spike again by 2017. Mark my words.
There was a time all I wanted was to own a house in California.
The house prices were just outrageous but they were finally coming down after the bubble burst, but even the prices was stalling. As time has past, and with the situation of the State, I don’t want to live in California anymore. The future looks very bleak unless they change the leaderhship direction of the state, which seems impossible. California is like a sinking ship and the lawmakers’ only focus is taxing the people more. Ever thought of cutting programs ? IF the state has no money, social problems need to be cut and dumped. Increasing taxes is NOT the solution, it will only drive the people that can pay taxes out of the state and thus you will have an even smaller taxpayer base. I hear and see many people that have lost their jobs moving out of state — somewhere there is no income tax to begin with. Many young professional couples with small children moving for better futures. Hey, seniors and illegals can’t pay the taxes alone ?? Trim the fat out of Sacramento, smaller govt and lastly, the truth is and no lawmaker has the guts to say it, California is an example of a state that has allowed illegal immigration to invade and destroy. California can no long afford illegal immigration, period. Yes, that is the truth and no one wants to say it. Everyone knows it, especially the dumb lawmakers. Thus, the next best thing is that taxpayers will protest and then they will move out of state. The housing problem will continue unless sellers become realistic in thier asking price — sell at the best reasonable price and get out of the state.
Housing prices in the Hillsbough, Menlow Park and Woodside are down on average 35% to 40% on homes from the 2006 peak to actual home closing sales today! The problem is banks are not making loans over $1M.
One reent rport said they will likely be off 50% before the bottom is made. This is terrible for those making payments on homes that have lost more than 25% of value since their purchase.