Homeowners Stuck In ‘Investment Hell’
MarketWatch has this update on the homebuilders. “UBS cut its earnings projections for home builders Monday, with several companies reducing their home-delivery targets as the steam continues to come out of the U.S. housing market. ‘The long-anticipated housing slowdown appears to be finally upon us,’ wrote analyst Margaret Whelan, citing new-home sales down 21% from their July high, while new-mortgage applications are off 23% from their peak in June.”
“Whelan’s long-standing expectation was a ’soft-landing’ scenario. ‘Of late, however, the more rapid rate of decline in demand, down 21% in eight months, has led us to rethink our thesis for the near term,’ she said. ‘Given tough comparisons and a proliferation in for sale listings in some of the hotter markets, demand has fallen more quickly than we expected.’”
And a reader sent in this example of a homebuilder taking care of business in Antelope Valley. “Gang problems, open drug sales and threats from rowdy neighbors aren’t part of the lifestyle residents anticipated when they purchased large new homes in west Lancaster. The residents say the company sold many homes in the neighborhood to investors, who rented them out to problem tenants or left them vacant, with tall weeds filling the yard.”
“It was clearly not what the home buyers paying premium prices expected. ‘We bought what was billed as a family-friendly subdivision, and that is not what they delivered,’ Christopher Yaussy said. ‘They have stuck homeowners into investment hell.’”
“Not long after moving in last spring, problems began, things one wouldn’t expect in a move-up neighborhood where homes originally sold for between $325,000 and $360,000, and now go for $100,000 more than that.”
“A D.R. Horton development company sales manager said the company has the right to sell their homes ‘to whoever we want.’ ‘It’s not the builder’s job to keep things safe,’ said Jim Blake, a VP of sales and marketing. ‘We sell homes. We sell them to legitimate buyers. A builder can’t keep Lancaster safe.’”
“In the company’s Desert Sunsets tract, where homes range from 2,000 to 3,000 square feet, neighbors relate accounts of groups of young men milling around in the street, not moving aside for passing vehicles, instead making obscene gestures and slapping the vehicles.”
“What is most aggravating to the Yaussys is that they were directed to sign owner-occupancy contracts promising they would live in the home as their principal residence for one year or pay a penalty of 10% of the base purchase price. Using real estate records, the Yaussys estimate that more than 40% of the homes in their neighborhood were sold to buyers who had no plans of living in the tract.”
“Six months after the homes were ready for occupants, many still sat empty, with knee-high weeds, dead lawns and lack of window coverings giving away their vacant status. One resident said when he was considering a purchase, he specifically asked sales agents if the company sold to investors and was assured that only owners would occupy the homes. Other residents say they were asked if they wanted to buy an extra home as an investment.”
“In recent months, Yaussy said, a number of the homes have been put up for sale, including homes that were occupied by problematic tenants.”
Thanks to the readers who sent in these links.
I know of this exburg. It was always a boom-bust area.
It remains a bad area that’s gone badder.
To be “bad” is a good thing, provided you are a gang member
Or Michael Jackson.
“Who’s Bad!”
I hear the worst of the gangs is the Hell’s Accountants. They’re a bunch of balding, bespectacled, middle-aged Moped riders who go around gang-auditing people. Chilling….
in da hizza!
Gang problems, open drug sales and threats from rowdy neighbors aren’t part of the lifestyle residents anticipated when they purchased large new homes in west Lancaster. The residents say the company sold many homes in the neighborhood to investors, who rented them out to problem tenants or left them vacant, with tall weeds filling the yard.”
Um, hasn’t this pretty much described Palmdale/Lancaster since the last bust in the early 1990s? Houses got so cheap that welfare recipients were moving up there to buy rather than renting in Los Angeles. Such is the fate of any undesirably located exurban housing built during a deranged housing boom.
Oh no here we go again. This area was on its ASS in the early 90’s. Homes were left empy and the EXACT same scenario played out. However, this time I think it will be much worse there.
I built a park in that area around 93’ and I remember getting a change order to replace the wood chips in the playground with resilient pour-in-place surfacing. The reason being the park staff was unable to completely pick out the Budweiser glass from the woodchips. But they were able to sweep the broken glass from the rubber surface every morning with
Just imagine living in a neighborhood surrounded by McMansion-sized crack houses. Investment hell indeed!
“In the company’s Desert Sunsets tract, where homes range from 2,000 to 3,000 square feet, neighbors relate accounts of groups of young men milling around in the street, not moving aside for passing vehicles, instead making obscene gestures and slapping the vehicles.”
Sorry…need to catch my breath…laughing too hard…
Sounds like a great place to bring up a family.
Don’t buyers do any demographic research now a days?
Obviously not. I’m sure many just ask the RE agent….as if they are non-biased. Yeah, right.
BayQT~
I doubt many RE Agents could gloss over a gang problem, that’s pretty hard to miss especially if you had spent much time checking the area where you were going to spend a half a million.
Yes, some agents are knuckleheads but come on when does the buyer become responsible for pulling his head out his ass.
It is against the law to steer! Realtors cannot say sh*t about a neighborhood - all they can legally say is “check the crime statistics”
Where in my comment did you interpret it as steering. If your standing outside a propective property and you see a group of people standing around in gang colors drinking and pissing on the curve what could you possibly say how could you possibly gloss over that. How could the agent be possibly be blamed for that. In fact if the agent see’s something like that it would be in his best interest to provide the crime statistics for the buyer along with full disclosure in the tranfer disclosure statement to protect his ass.
Don’t know where your from but those indications here mean that you may be in a friggin bad neighborhood and might want to adjust your selection of neighborhoods.
It sounds like they bought pre-construction…until the houses were ready, there were no gangs.
Where in my comment did you interpret it as steering. If your standing outside a propective property and you see a group of people standing around in gang colors drinking and pissing on the curve what could you possibly say how could you possibly gloss over that. How could the agent be possibly be blamed for that.
It turns out that it is illegal to encourage racial segregation, apparently trumping the right to freedom of association. The majority of ‘groups of young men wearing gang colors and pisssing on curbs’ are not White. Any realtor who directs a buyer away by saying ‘Look out for those Mexicans’ will have a problem.
It also works the other way, as CraigsList is learning. You can’t advertise that you only want a certain race to buy or rent, although some old home owner association-style laws still restrict ownership to Whites.
We have restrictions in Pismo that say ‘No owners of Portuguese descent’.
foreclose_me,
providing crime statistics is legal and has nothing to do with segregation. The same goes for the quality of schools.
Suzanne researched this.
LOL, This is becoming the inside joke on this blog. Kinda like the “Al Gore invented the internet” and similar stuff.
There have been others before.
Like the dreaded we can’t a bubble here in Flagstaff we are “land-locked”.
Subsequently, every place that was denying a bubble was “x-locked”.
xx-locked => yy for everyone! => Suzanne researched this
nope… anything to just get into this can’t lose, it always goes up market! Some people are just dumb. They will spend more time researching which digital camera to buy, almost get a divorce over which dead dinosaur guzzling SUV to buy, but slam, bam, kerplunk they buy a house with their eyes closed and their heads firmly planted up their butts… acting like getting a mortgage is like playing the lottery. You don’t have to pay back the lottery. But a mortgage… chit… many of these people buying these mcmansions won’t even make enough in 30 years to pay off their mortgage albatross.
Amen Athena. Fox News tells us “the consumer is doing just wonderful”. “Keep spending” says Larry Kudlow because “the economy is doing superbly”.
Yes it is. We are the only nation in the world where we actually contribute to our GDP using the biggest Ponzi Scheme in history- our economy is powered by flipping houses to each other.
when prices only go up, its called gentrification. When prices go down it’s hell. I can’t wait until the transplanted folks wake and realize they are living in Harlem or The South Bronx or Bed Sty should i go on
Putting this into proper context, many of these FBs got into these homes at the height of bubble mania (i.e., ‘buy now of forever be locked out’, ‘prices only go up’, etc.). Many bought sight unseen, believing the RE industry hype of never-ending double-digit gains. I say: Let these FB’s who didn’t do their homework rot in gangland. …and don’t forget the kevlar vests.
I say: Let these FB’s who didn’t do their homework rot in gangland. …and don’t forget the kevlar vests.
I was saying last year that the crash will be the end of White flight, and the beginning of White fight. It appears the gas prices will help, as well as things like the Nebraska legislature voting to segregate the Omaha school district.
‘Bout fking time, before this country implodes.
I am amazed how, despite the rather steady drumbeat of bad news for the HB industry, the share prices of the major Wall Street players remain in a trading range. Fundamentals do not support this fact, which leads me to believe that it is not sustainable. (Anything which cannot go on forever will stop… H. Stein).
Damned those buybacks..
The money for the buybacks will be shut off at some point.. and then over the cliff
Hopefully we are about to break out of the range to the downside. It seems like every time my HB puts are doing well and on the brink of doing really well, some news hits the markets that causes them to rally; e.g., last week we had the bad permit number in the morning, but the HBs rallied strongly later that day on the FOMC minutes.
Look at the monthly chart of the big HBs — we have a lot of downside yet to go.
From the article:
1) “We bought what was billed as a family-friendly subdivision, and that is not what they delivered,”
2) “some residents spray-painted their house numbers on the curb in black and red, colors of a notorious Los Angeles-based street gang”
3) “Jesse Vizcarra has witnessed drug sales completed on several occasions, and watched people smoke dope in their front yards or in their cars in the middle of summer with the windows up”
4) “Another neighbor, who asked for anonymity, said he was told he was a “marked man” by his neighbors, who claimed to be members of the Bloods street gang.”
5) “one neighbor let his trash pile up outside for months, while others kept shopping carts outside their homes, staged dog fights on the sidewalk and urinated outside.”
6) “Within a month (of moving in), a neighbor came over and asked me for Zigzags,” said the man, referring to papers used to roll cigarettes, or joints. He asked if I wanted coke or speed - this was at 11:45 at night.”
Gee, sounds like paradise. What? I can get into this exclusive neighborhood for only $450,000. I know where I want to retire. The Antelope Valley is about to meltdown. This was “REPO-CITY” in the 1990’s and this time it will be ground zero for the L.A. County. We already have 16% of the “section 8″ rentals with only 3% of the County’s population. I am so glad I’m out of here! This place will be like Chernobyl. Shield your eyes, don’t look directly into the blast. Let’em Burn!!
you got that right, baby! drop a bomb on those retards!
you got that right, baby! drop a bomb on those retards!
I hope you mean the illegal aliens, and not your fellow citizens.
Damn that was funny. 11:45 @ night. For Sale sign would have went up next day
What these idiots don’t understand is that all these things tat they say about the development will have to be disclosed when selling the property.
However, they may just end up letting the house go, or they may not care, or they may not know-however, the print in the paper can be cused against them.
F.B.’s indeed-I do not know if to feel sorry for laugh at these people.
Why isn’t the HOA on this?
I don’t know maybe they value body parts and life. In reality there probably is no HOA in these developments
Mad Max Beyond Thunderdome.
Can you say ‘meth labs for rent’.
Woohoo! Meth labs for everyone!
meth labs, thats kingmans largest employer. speed use is so rampard here that some employers newspaper adds say that we dont drug test new employees. just so they can fill thease $5.15 per hour jobs .
This article is a perfect example of why you should 1. do some research before you buy and 2. never stretch to buy a home in a shitty area because its “the only thing you could afford.” I’d rather rent in a safe neighborhood than bury myself in debt to own a home in a gang infested neighborhood, and then be stuck with that home when prices go down and it becomes unsellable.
I have one rule that I like to stick by when I buy a primary residence for myself. Its called the “walking distance rule”–the people most likely to cause you problems, rob you, or break into your home live within walking distance of your home. So, whenever I look for a new home, I always scout out the neighborhoods surrounding it within walking distance.
I’ve seen this in my town too. Major homebuilders putting up new housing tracks in ghetto areas. Its interesting to see…beautiful new homes surrounded by a sea of run down crack houses and trailer parks. I imagine the neighbors must enjoy going through these new neighborhoods and breaking into these homes.
Major homebuilders putting up new housing tracks in ghetto areas. Its interesting to see…beautiful new homes surrounded by a sea of run down crack houses and trailer parks.
You have the “walking distance rule”; they only go by the “how-much-will-it-make-me rule”. It doesn’t seem to matter what’s in the surrounding areas. The responsibility is left with the prospective buyers to do a recon.
One of the things I do when considering a property is to visit in the evening when everyone is home in the neighborhood. Another way to get a good feel of the area.
BayQT~
Affordability no doubt plays a large part in the decision to buy a house in a less safe area but I think another dynamic at play here is the possibility for gentrification.
Some homebuyers optimistically believe or at least hope that if more decent families move into the area and infuse money into it that it will transform it into a better place to live.
I think that’s what’s behind the downtown LA condos that have started to come on the market. Problem is, who wants to go first
Actually, surprisingly those condo’s in downtown are moving kind of briskly. Don’t know if they are suffering from the downturned market as of yet but quite a few people have latched on to that. I was down there the other night looking at a commercial property and you had quite a few non-homeless people out there walking their dogs and such. So quite a few have went first. That’s a situation that’s really baffling too me. I don’t quite understand it. There’s no way in hell I would buy a condo down there
“So quite a few have went first. That’s a situation that’s really baffling too me. I don’t quite understand it. There’s no way in hell I would buy a condo down there”…
A significant number of those downtown condo buyers are transplants from regions where it is very common to live in downtown areas and condos/co-ops. IMO, the downtown LA trend will suffer the same fate as the rest of this frenzied market–over building and not enough people interested in the high-rise tenenment-style environment to continue the buying and reselling to each other at a “profit”. Right now owning a Downtown LA loft, condo, or co-op, is THE new class-distinction (go figure). Several top-ranking public and private sector CEO’s have moved downtown–and made a point of publicly announcing it. So called wealthy individuals are moving out of exclusive Valley neighborhoods to downtown “penthouses”. If your MD practice is in the Wilshire/Beverly Hills area and your home is in the very nice section of Encino, please explain to me why would you move to downtown L.A., and still have to suffer the commute through the Wilshire corridor…It just does not make sense!!!…
dtla - you can watch homeless guys peeing on your car from your balcony.
“Major homebuilders putting up new housing tracks in ghetto areas.”
We’ve just seen the most ridiculous epitomy of that in Vancouver - the “W”, a formerly abandoned building on the East Side of Vancouver (crack town, heroin central, you name it.) and now an “experiment in income diversity” was just sold out in a single day to a plethora of young people who undoubtedly will only be able to afford the pre-sell deposit and not the 300k+ mortgage payments. We’ve been discussing it over at the van housing blog… When will it end?
Just a nit pick - it’s the “Downtown East Side” which is literally the east side of downtown. The “East Side” is the entire eastern side of the city and is mostly middle class.
“W” stands for Woodwards - an abandoned department store. It’s the final insanity in Vancouver.
Sorry, I’m a Victoria guy.
To the guy from Washington state who doesn’t know where Vancouver, BC, is… WTF!!! Talk about the American stereotype in full effect. (Canada? Igloos and Polar Bears?)
Yeah seriously, Canada is Washington’s Canada…
(While, of course, Oregon is California’s Canada…)
where is the van housing blog?
Ben has a link on the right side of this page. “Vancouver Housing Market Blog.”
Wher abouts is this place. I was born and raised in Vancouver,Wash. Graduated from Old Ft. Vancouver High School.
Me thinks he was talking about the other Vancouver (about 300 miles north of you). Please do you best to preserve the secret of Vancouver Washington, as I’d like to retire there someday and would preferr it remain quite affordable. : )
thats kingman. we have butler area and even worse we have birdland. right in the middle of that getto is a slew of new home tracts with a block wall around the new homes.like the block is going to protect anybody.any one who buys there is nuts.
“Whelan’s long-standing expectation was a ’soft-landing’ scenario.
What part of soft landing does not imply reduced prices? Most plane flights end up in a “soft landing” after descending for an hour or so from 35K feet. I believe soft - landing should be re-interpreted to indicate house prices will return to normal (30 year chart). In many areas that are 50% over that chart, those areas will head in for a softlanding at 50% under current over-valuation.
In the case described above, neglect by investors will further erode prices.
LOL… also planes plan to land. It is part of the whole flight thing….
Yes, a takoff always commits one to a landing of some kind.
I believe RE is in for a very hard one or a crash landing.
right… and commercial airline pilots have extensive training requirements and are skilled experts in flying their aircraft.
Our current affair is in the hands of amateur pilots, many who have never flown IN a plane like this, let alone been the pilot of this kind of plane. What you get when you have an unskilled pilot is most likely a big fat crash and burn. When you have skilled talent at the controls it takes a whole series of accidents for a plane to fall out of the sky. But…. our experts at the helm of our economy allowed for just such a series of accidents. mopping up the dot.bom with bottoming out interest rates. Greenspan encouraging the use of ARM loans- regardless of whether or not he meant it for the masses… the lenders took his remarks as they wanted… and bottomed out their lending standards. We now have national lenders with fog a mirror standards, the line between prime and sub-prime borrower has lost all meaning, prices ballooned to unsustainable levels in response to new consumers in the housing market, building mushroomed seemingly overnight- and prices continue to rise, now interest rates are starting to rise, though lending standards still are lending to anyone with a pulse…. Our expert have turned over the flight to those most unqualified for it…. uh- oh…. look out below.
The airplane is flying right into a huge thunderstorm with a student pilot at the controls. Fasten your safety belts..
“According to this dial, we’re loosing altitude”said Hardy
“Just pull back farther on that lever, it seems like that makes the plane go higher,”replied Laurel
“STALL WARNING!STALL WARNING!” interjected the flight management system.
Go to full thrust! …Then a red light flashes: LOW FUEL WARNING!
“‘We bought what was billed as a family-friendly subdivision, and that is not what they delivered,’ Christopher Yaussy said. ‘They have stuck homeowners into investment hell.’”
Bzzzzzt! Wrong answer. By overpaying for a cardboard box in the middle of a desert with historically volatile prices, long commutes and few redeeming qualities, YOU stuck YOURSELF in investment hell, genius.
ok, so the company tells them one thing, yet the opposite is true. am I missing something? come on.
this is funny. my friend just asked me for a job, because the guy is paying three mortgages. he bought two houses in phoenix arizona 4 months ago and has been working nonstop to flip them but the price in phoenix has crashed. he is unwilling to reduce the price because the margin is already razor thin. he will stand to lose a couple of hundred thousands by selling out now. poor guy. i just hired a new worker already.
Poor Guy ? WTF ?
It was evident way more than 4 months ago that the game was over in Phoenix just by inventories being posted here. Did he not do any DD at all ? Wasn’t it kind of hard to avoid seeing all those for sale signs ? And he’s going to hang on because he won’t make enough ? Some people should not be allowed to handle money.
The house next to mine finally sold about a month ago after the price was reduced 30K. I think it was bought by flippers because no one has moved in and I see the same two vehicles parked in front while they work on the house and yard. Any one who buys in Phoenix with the idea they are going to flip the properties is about 18 months late.
Some people should not be allowed to handle money.
The ancient principle of “A fool and his money are soon parted.” takes care of that automatically.
These same fools are allowed to vote also…and their vote counts just as much as yours. That point has always bothered me…no minimum equivalency test in order to cast your vote.
Darwin was right.
Maybe a seller can provide two Uzi’s, a case of pepper spray at closing and a one year membership at a Karate school. The builders won’t be able to match this offer.
Funny…
‘They have stuck homeowners into investment hell.’”
God, I love this kind of talk!! Tell me more, please, I’m begging you!
When exactly did a home become an investment? A home is supposed to be a place you enjoy living in while fixing your housing expenses as you pay down the principal and act as a hedge against inflation.
Props to Rainman, but I’m stealing his idea:
Bubblefucius say: Weed growing in Lancaster neighborhood not only choke houseflippers’ yard, but also choke houseflippers’ profits. Bubblefucius also say weed very welcome by some Lancaster tenants but not type that like granite countertops and hardwood floors.
Sorry guys/gals, this is all I can muster. We need Rainman back.
“investors, who rented them out to problem tenants”
when almost anyone can get a 100% LTV loan, who’s left to rent to? The cream of the crap. A business plan dependent on the average renter now has investors fighting over renters, lowering rents, desperately moving someone, anyone in to try to stem negative cash flow. It can only get worse. And if there’s a recession, much much worse.
Can you picture what the problem tenants did to the inside of these crapboxes? They will spend much more than any rent they received to repair this turd for resale.
Meth lab houses are nearly impossible to clean up. Usually it’s cheaper to just demo ‘em.
Meth labs for everyone!
Mmmm.. Meth….
I can see Joe Preppy Flipper-Landlord showing up in his Dockers and Sperry Topsiders thinking he’s going to evict Tyrone the Crack Gang enforcer, whose girlfriend signed Flipper Boy’s lease. This is going to get richer and richer!
Too funny, Sammy!
Crack McMansions for everyone!
genuine LOL
there is a crack in the bubble
nice.
How about “crackmansion”?
The CrackMansions at Compton Pointe?
Ha!
This same scenario will probably play out in the Central Valley in the not so desirable areas.
Too much capital into a not that great investment vehicle will result in big losses.
Too much capital into a not that great investment vehicle will result in big losses
Did you read that on a fortune cookie?
This same scenario will probably play out in the Central Valley in the not so desirable areas.
Too much capital into a not that great investment vehicle (poorly located RE) will result in big losses.
My cousin bought a house out in Moreno Valley during the last boom-bust cycle. I stopped by her home a few years after her purchase when I was on my way to Palm Springs vacationing. Every single house was vacant. Every single house either had broken windows or boarded up windows. I felt bad for her living in such a crappy area. She actually said things had gotten much better since all the disgusting previous homeowners were evicted.
Fast Forward, She still lives in the same house. Property values went up so she took out a HELOC and bought a house in Lake Havasu. Too Funny!
God bless her greedy ass!
Funny thing about the Antelope Valley. From what I can remember, it was mostly “desert rats” (libertarian-type, keep-to-yourself, desert dwellers) and aerospace engineers who lived in the AV before the last bubble (late 80s). As people from downtown LA discovered the AV (during the bubble when all the new developments were going in), they moved there to “get away from the problems of LA.” Unfortunately, the problems of LA were riding in the back seats of their cars on the way out to the desert.
IMHO, it was the last bubble that actually turned the AV into gang hell. Another reason I won’t buy into a new development, especially during a bubble. No seasoned homeowners. You never know what’s going to happen to the ‘hood when the SHTF.
They *are* the problem of LA
“Unfortunately, the problems of LA were riding in the back seats of their cars on the way out to the desert” — absolutely the truth. This happened to several suburbs in Dallas. The families moved away from the “crime” of Dallas. Of course, the crime was in the back seat of the cars.
Exactly, I had a friend who had to move because of the “crime” in her neighborhood. Her old neighborhood was very much improved when she left.
IMO, the most outrageous and disgusting statement in the article is this:
“In addition, Blake [the VP of sales & marketing for DR Horton] said the unhappy residents should watch what they say about the neighbors they accuse of lowering the quality of life.
“You have to be careful not to slander the people as undesirables. … There are protected classes, and they’re on the edge of infringing on someone else’s rights here.’”
Let the executives and sales staff of the HB companies live in these ghettos, then. The attitude of this Blake character is amazing.
WTF is a protected class? Is that like some kind of endangered species?
No he’s speaking of blacks and hispanics. But if he says blacks and hispanics then he’ll get walloped by the press. That area is always on the verge of a race war. It’s funny stuff really
It has to be doubly galling for the retards who bought in this Suburbistan, to realize their tax dollars are paying for the Section 8 welfare predators who are destroying their property values as well as quality of life.
On the positive note, perhaps nightly gunfire outside your house would bring a family closer together….
You know when you put a visual on that statement Sammy it’s funny as all hell. Would make a perfect SNL skit.
LOL. I’ll write the opening lines:
Wife (shaking head): I…I don’t understand. Suzanne researched this. She said it was special.”
Husband (tightening grip on Mossberg pump-action shotgun): “‘We can do this,’ you said, just like that lying, demented R/E harpy of yours.” (Shakes head in disgust). “She didn’t tell us we’d be home-schooling since the public schools are a trashy nightmare. By the way, I need to let the dog out to go pee — can you lay down covering fire?”
NICE!!
You need to stop now, please. My fits of laughter are scaring the chinchilla - and stress gives him diarrhea.
“It has to be doubly galling for the retards who bought in this Suburbistan, to realize their tax dollars are paying for the Section 8 welfare predators who are destroying their property values as well as quality of life.”
Hey, this is LBJ’s great society. Keep your powder dry!
and the irish.
don’t forget the irish
You guys sound like a bunch of supremacists. Makes me ashamed to be participating.
Yes. Its scientific name is thugus amongus.
LOL…got tea on the computer screen with that one. That is the best!
“thugus amongus”
Does that have a latin derivation?
What a great name for a suburb.
O’boy…..thank god this bubble situation is not serious.
What is that hissing sound I hear………
“You have to be careful not to slander the people as undesirables. … There are protected classes, and they’re on the edge of infringing on someone else’s rights here.’”
Wow, ain’t that America? God forbid that we call undesireables “undesireables.” We might infringe on their right to rob, steal, deal drugs, threaten, intimidate, and harrass the decent people in their midst, and turn the schools, neighborhoods, and communities they inhabit [courtesy of my taxes] into trash-strewn wastelands and free-fire zones. We don’t want to offend anyone’s sensitivities, or Jessie ‘Jus’ Me’ Jackson will fly in to stage his “no-justice/no peace” extortion act. So by all means, don’t call a spade a spade.
Exactly!
Screw this guy Blake. He is a second rate turd, and self absorbed little rat!
the area in lancaster they are talking about is actually the best part of av.i have owned 3 homes their and the established areas are very nice not an unkempt lawn in most hoods.alot of very large expensive homes in west lancaster the 3 to 5000 sq ft type on an acre of land.most lawyers doctors professionals have homes in the west side.however there are some older hoods mixed in and when a new subdivision comes in there is always a shakeout of people in a few years.i had propert there bought in mid 90s that went up 500% so there is tremendous downside to the prices there.gas at 3.20 a gallon will crush those who bought at grossly inflated prices and im sure alot of arms.the av is forclosure city wait 2 years those 400k homes will be 200k or less.
yeah, 200k and the seller throws in an uzzi and 1000 rounds of ammo.
Sheesh, people never cease to amaze me you would have to have been sleeping up under a rock for the past 10 yrs not too know that Palmdale / Lancaster is an absolute cesspool. There have been numerous articles in the written and visual media to attest to that. You actually had to be in a coma not to notice all the vacant and boarded up commercial properties in the area. Then you want to sue everybody because you made a bad decision. Where is the accountability. But wait we need more info the process needs to be transparent more regulation of the industry. Yea right, While your regulating the industry how about regulating the absolute stupidity of the Tweedle Dums of the world unbelievable.
At 450k+ if you didn’t take the time to figure out whether or not there was a gang problem in the neighborhood. Which in my mind is pretty hard to miss. Then you deserve everything that comes with the deflating of this bubble in areas like that.
People have pointed out that the bubble can be seen as a desire by folks to hang on to their middle class dreams. This implies an escape from the realities of city life in desegregated America. Try looking at some of the marketing materials for these developments. Nine times out of ten, they are not selling diversity.
So it only follows that when buyers come back to reality, they aren’t happy with the ‘broken promise’ of the developer, who was supposedly going to let them buy their way into pre-1960s America.
A **very** important topic which U.S. citizens obviously are not allowed to address. I guess we’re supposed to believe that what’s been going on is working out just fine.
We can’t fix the problem until we’re allowed to admit there’s a problem…but we can’t do that. We’re just supposed to paint on a happy face, and chant the mantra of the politically correct, for fear of …well, you know…being called names. Whistling past the graveyard, IMHO.
I’m not selling unless I get my price. I can hold out.
I guess they will wait longer to hear good news…
This I found interesting off of another blog.
Two psychologists told subjects that they were being tested for a dangerous enzyme deficiency. Subjects placed a drop of saliva on a test strip and waited to see if it turned green. Some subjects were told that the strip would turn green if they had the deficiency, and others were told that the strip would turn green if they did not. In fact, the strip was just an ordinary piece of paper that never changed color.
So how long did subjects stare at the strip before accepting its conclusion? Those who were hoping to see the strip turn green waited a lot longer than those who were hoping not to. Good news may travel slowly, but people are willing to wait for it to arrive.
Interesting how it might relate to sellers waiting for good news.
Great story, Tom
“One resident said when he was considering a purchase, he specifically asked sales agents if the company sold to investors and was assured that only owners would occupy the homes.”
What’s a little misrepresentation between friends? I guess not everyone assumes that when a salesman opens their mouth, a lie pops out.
Ahhhhh Palmdale, I remember it so well! Back in 1991, I actually helped my brother in law repair his 2 bedroom condo after renting it out for almost 8 months (he got tired of the daily commute from Palmdale to Culver City - 80 miles one way). We ended up putting in about $ 5k in upgrades because the place was trashed so badly (kitchen had to be completely replaced along with all the carpeting). His tenants allowed the pets to defecate on the floors and the “kids” punched a few holes into the drywall. The joys of being a landlord.
“Gang problems, open drug sales and threats from rowdy neighbors aren’t part of the lifestyle residents anticipated when they purchased large new homes in west Lancaster.
A properly developed appraisal report prepared by a credible appraiser HIRED BY THE BUYER and NOT CHOSEN BY A RACKETEERING mortgage broker, would have alerted the purchaser of the noted neighborhood conditions.
However, all autonomy has been removed from the appraisal process over the last 4 years.
Say anything negative in an appraisal report which could affect an L/O’s deal and you’re immediately “black-balled” from receiving any more work from that mortgage entity.
Damn right-investor hell…FB’s never stood a chance-not that they’d have listened to what was reported anyway.
I have seen appraisals that mention that also have seen lenders that still lend when seeing the graffiti and gang members in front of houses. Funny stuff actually.
As a matter of fact I have been told by a lender if he doesn’t see graffitti on the property in certain areas he looks at the appraisal and the buyer with suspect. He automatically assumes fraud.
I have contacted two RE agents in the past month. Both let me knew that there was an appraisal saying the property is worth the asking price. Have never run across this in many years of RE. Smells pretty fishy.
It depends on the scenario, your question should have been under what circumstances was the property appraised was it for a HELOC refi that was given to them by the seller or was it from a failed purchase where the buyer didn’t qualify. Neither should raise suspiscion. As hot as the market has been and all the refinancing going on I’m sure there are plenty of recent appraisals to be had. Nothing to be concerned with really. But I wouldn’t allow them to be used in any purchase I was considering. Informational purposes only.
What type of neighborhood can one expect when the new buyers have no downpayment, adjustable rate mortgage or interest only mortgage? Anybody can qualify and therefore anybody can live in the neighborhood.
Wouldn’t know if that would be an appropiate gauge considering you can get no down-payment loans up to 2.5 million
“Given tough comparisons and a proliferation in for sale listings in some of the hotter markets, demand has fallen more quickly than we expected.”
So she is an analyst for UBS? How do I get that sweet job. We’ve known for the last couple of years that these prices could not be sustained and that the way things were going, the RE market was going to take a massive dump. Yet, this analyst acts surprised by the recent numbers. These analysts, economists, etc. are either completely lying through their teeth, or like many of the most recent buyers, they have their heads firmly planted up their rears.
‘We bought what was billed as a family-friendly subdivision, and that is not what they delivered,’ Christopher Yaussy said. ‘They have stuck homeowners into investment hell.’”
You’d have to have a heart of stone not to laugh at this fool.
‘Given tough comparisons and a proliferation in for sale listings in some of the hotter markets, demand has fallen more quickly than we expected.’”
Tough comparisons? You’ve got to be kidding. The only comparison is cost to rent vs cost to own and how many people can afford to buy at current prices.
I loved that article. We need more like it in the national news to point out how stupid the general house buying public is. BTW, this is just another example why you wouldn’t buy quickly when the bubble pops!
Don’t miss this part:
‘Not long after moving in last spring, problems began, things one wouldn’t expect in a move-up neighborhood where homes originally sold for between $325,000 and $360,000, and now go for $100,000 more than that.’
Do you suppose the median will be falling there?
Doesn’t sound like a place you want to leave your “investment” sitting vacant. Of course, living there might be an even worse idea.
Maybe we can do a socio-economic study or mathmatical model of the correlation between the ratio of crime-scene tape, measured in feet, and the accelerating decline of the median home price.
It’s common practice there to steal a/c units and everthing else that is not bolted to the ground. Most developers out there try to sell them before they finish them. Because if they don’t they are stripped
‘Not long after moving in last spring, problems began, things one wouldn’t expect in a move-up neighborhood where homes originally sold for between $325,000 and $360,000, and now go for $100,000 more than that.’ and that Ben is why this AFFORDABLE HOUSING stuff is a piece of crap. You can’t take the GHETTO out of people just by putting them into higher priced homes. What you’ve done is to put them in a home that they can’t afford on an income that they don’t have and with little to no education….now other then sell drugs, hang around in the streets, etc what else are they going to do….more of that liberal DO-GOODER governmental pap to make part of the masses feel good for investing nothing but the idea.
I think the article is suggesting that the gang members are renting these houses from flippers. That would be a first; blood and crip flippers!
Rentals: there’s your affordable housing, for most areas.
Funny — a new bottom-feeder term: Crippers.
Most of the home rentals here go for around $1500 to $2000. Your gang members and welfare folks are still in the apartments. Trust me, they can’t afford to rent them, and neither can I. I would rent a house if I could, but I’m in an apartment complex where they do accept Section 8 tenants. I don’t consider myself poor, but this is the best living situation I can afford now. And to give the apartment complex credit, they’ve kept it clean here, and I haven’t had problems with my neighbors. Lancaster tends to get a bad rap… but really, it’s no different than East L.A., Bakersfield, Van Nuys or Fullerton. They lack in commercial centers, but it’s because they lost out to Palmdale-but even that’s changing.
“more of that liberal DO-GOODER governmental pap to make part of the masses feel good for investing nothing but the idea”
Beep! Beep! Partisan straw man alert! $5 fine!
So who failed to provide the education that would get those people jobs? Prolly the conservative base who didn’t want to pay the tax $$$ for half decent schools. (take that!)
Ben, I think self-respecting gang members everywhere would take great umbrage to being mentioned in the same sentence as flippers.
I remember looking at homes in the Sacramento area last year, and I was not from there. I had been temporarily assinged for a month for work. I found one housing development online, got the directions, and proceeded to drive to the place with a friend. We had to drive through South Sacramento to get to this place which was built IN THE MIDDLE of gang central and delipadated homes!! They even had the nerve to show the development on this enlarged aerial photograph in the middle of all this craziness. The salesperson kept waving her hand over the development emphasizing this and that but my friend and I kept looking at the part of the photo that had the hellish neighborhood surrounding it.
The homes were beautiful, but I did not see the Wall of China surrounding this development and so I thought to myself, “These people are INSANE!! What would I tell my friends if they came to visit? Don’t look the people in the eyes and drive real fast till you get to our development??? Oh, and the key phrase during that pitch was, “This area is in a pocket.” A pocket. Uh-huh.
In “a” pocket, or “THE Pocket”?
The latter is a well-established area that is fairly nice but is, unfortunately, in one of the worst flood plains in the city— estimated 18 feet underwater in the worst-case scenario of a levee break on the Sacramento River.
And no, they don’t talk about floods in Sacramento. Luckily, *I* know how to read both disaster and contour maps.
My husband thought I was crazy for specifying no drains in front of houses (we are still renters.) It’s very simple— the drains are at the low point of the street…
I rented in a cheap, postwar 4plex in Laurel MD. Four blocks away was a little open air drug market, (more of an convenience store, for those too lazy to drive downtown) MY big worry was that the police would try to crackdown on them and that they’d simply move four blocks over to our neighborhood.
Dear Abby,
I wanted to write you about a terrible family tragedy. You see, my husband had a sex change and ran off with a cowboy. My High School-age daughter was voted most likely to conceive and still can’t read at 17. My son graduated from an Ivy League school and became a house flipper in the Antelope Valley.
My question is, what can we do about my son? He has brought so much shame and disgrace to our family.
Signed,
Appalled Mom in the AV
Dear Appalled Mom,
There’s no way to sugar-coat my shock and disgust at your flipper son’s chosen pasttime or his abominable greed and stupidity. Really, all you can do is say, ‘He’s dead to me now.’ Just be happy the rest of the family turned out OK.
Sorrowfully,
Abby
Sammy,
Have you ever heard the saying: “Quit while your ahead.”
Seems like Mr Yaussey could do his “decent” neighbors a favor.
I’m sure the local sherriff would look the other way if a clandestine sniper were to clean up the neighborhood. You spray paint the houses: bullet in the head. Grass too tall: bullet in the head. Milling around after curfew: bullet in the head. Accost your neighbors: bullet in the head. A HOA with some teeth!
Heck, for 5k, you could hire the ‘undesirables’ to be the HOA enforcers!
Now that’s giving back to your community.
I must say, I LOVE Lancaster/Palmdale. Much of the riff-raff that was keeping the value of my rentals down got dumped there. Enough said.
This brings to mind the old real estate adage location - location - location. I used this philosophy to buy a couple homes and never looked back. Of course 20 years from now it could be a different story.
I see many subdivisions in the Phoenix area having this potential too.
We spent some time looking at homes in the Phoenix area this past week. We went to an area called Maricopa about 20 miles south of Phoenix where the homes start a little less. I wish I had my camera. It seemed that every 3rd or 4th home was for sale. These homes were unkept. Weeds were growing in the front yards and there were at 2 or 3 cars in the front yard (many junkers). Many homes just had a token few plants for landscape. Every block had at least one sign in the front yard “for rent or lease”. These subdivisions were all brand new with beautiful entrances and community parks.
In Maricopa we went to visit Pulte, Engle and Fulton homes to look at their models. The models were nice and they started around $300k. The sales reps were more eager to talk with us this time, compared with last summer. One representative had just sold to a very large (10-12 people) hispanic speaking family. The representative was practically skipping around as he showed them their decorating choices.
Everywhere we looked, homes were for sale in the greater Phoenix area. They are still ridicuously high. Most of these home prices need to be at least halved before we would consider purchasing them. We were the only people the real estate agent had seen all day at many of the open houses. One agent told us that she is shocked at how slow things are now, “a great time to buy as the inventories are high”.
I cannot get over how very average to down right horrible these resale homes were like inside. We went through one home (3,000 sq. ft, virtually no yard) in South Tempe. It needed some work and the back yard was just a pool. You literally took two steps into the back yard and there was this beat up pool (no grass, no trees and no room for a barbeque and table). It was a death trap for our three small children. They were asking $625!!! Two blocks north was a 2,100 sq. ft. ranch priced at $364k. I don’t understand how these people price their homes.
Check the crime stats.. Gotta love rising crime and crime rates….
Looks like fun for the I-Got-Mine crowd!
After 25 years of their benefitting from savage social Darwinism, the chickens are coming home to roost. Right next door.
And this is their future in Mr. Rogers’ Post-Bubble Neighborhood. Can you say weeds? Can you say meth?
Knew that you could.
I work as a planner in Lancaster, and I have piles of subdivision applications on my desk. We have over 7,000 approved tentative lots that have yet to be built on. There will be an over-supply, and there will be many unhappy land investors and flippers. Actually, they are already unhappy as they often call and ask us to process their application more quickly — before they’re unable to make a profit! Just reporting from the front lines. Oh–and gang activity is a problem anywhere in L.A. County, not just Lancaster.