The Biggest Bubble Of All Bubbles
It’s Friday desk clearing time for this blogger. “This city in Oregon’s scenic high desert once had one of the nation’s hottest economies. Resort developers, bankers, construction workers and luxury car dealers rushed for a piece of the action. In Deschutes, many high-end homes were built on speculation during better times but not sold. In Bend, local officials are dealing with what the bust left: once-pricey lots left vacant, overbuilt and unsold subdivisions, jobless construction workers. Land values have fallen by more than half, housing prices and office rents by maybe 30 percent. On some residential streets where buyers once rushed to submit bids above the asking price for new homes, nearly as many are for sale as not. Some are foreclosures.”
“Michael Hollern, chairman of the region’s largest developer, said the Bend boom coincided with the one in the Sun Belt. The building boom began gradually in the 1960s and took off seriously a few years ago. ‘We thought we were different, special, with real jobs and real people. It turns out we weren’t that different. And we realized prices were out of touch with reality. Now we need to work off our excesses,’ he said.”
“San Joaquin County’s rate of foreclosure notices - at 5.6 percent, or roughly one filing for every 18 properties in the county - is third highest in California. It’s behind only drought-stricken Merced County at 6.9 percent and Riverside County at 6 percent, where the real estate collapse has triggered massive, ongoing layoffs. ‘That will have to come down 90 percent before we’re in any kind of normal situation,’ said Jeff Michael, director of the Business Forecasting Center at University of the Pacific, of the foreclosure rate.”
“‘Arguably, we had the biggest bubble of all the bubbles, and we were certainly the area first to hit the very high foreclosure rates. The other places are catching up to where we’re at,’ Michael said of San Joaquin County.”
“The number of Utah households in danger of losing their homes almost doubled in the first half of the year as more people lost their jobs and were struggling or unable to pay their monthly mortgage bills. On a state-by-state basis, Utah had the nation’s fifth-highest rate of filings in the January-through-June period, according to RealtyTrac Inc. Filings in the state soared 87.65 percent during the six-month period.”
“‘It’s getting worse,’ said Tara Rollins, executive director of the Utah Housing Coalition. ‘We saw it in two different ways, one, when mortgages were readjusting we saw a wave. Then all of a sudden people started losing their jobs, and that was another wave.’”
“The number of foreclosures in Frederick County may have dropped in June, but that doesn’t mean the housing crisis is over. ‘The subprime mess is on its way out. Now we are starting to see the unemployment impact,’ said Stephen ‘Buzz’ Mackintosh of Mackintosh Inc. Realtors.”
“It is no longer the creative loans faltering, Mackintosh said, but consumers who had been paying their mortgages on time now faced with losing their house. ‘Fifty-six percent of foreclosures are now on fixed-rate mortgages,’ Mackintosh said. ‘That is the effect of people losing their jobs.’”
“Construction jobs account for only about 10 percent of Lee County’s work force in 2009, the lowest figure in the past decade. The loss of construction jobs and the subsequent loss of jobs related to construction - Realtors, mortgage brokers, even furniture sales associates - has driven Lee County’s unemployment as high as 12.4 percent in May.”
“Robert Towns Jr. of Fort Myers, said he worked in construction for more than 20 years before losing his job installing tile about 18 months ago. He worked for a retail store, but is now unemployed again. ‘We were busy for seven or eight years, working seven days a week or as much as we wanted,’ Towns said. ‘And then it just stopped.’”
“Bay Area home prices rose month-over-month for the third straight time as sales reached their highest level in three years in June, fueling hopes that the limping real estate market is slowly beginning to heal. Whether the nascent recovery gathers strength or sputters in the months ahead will depend on the broader economy, the job market and foreclosure levels, economists say.”
“Meanwhile, California’s unemployment rate leaped to 11.5 percent in May as employers cut 68,900 jobs, according to the state’s Employment Development Department. Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange, said home prices could bottom out by the end of the year, but an actual rebound won’t occur until companies feel confident enough to begin hiring again, a mood unlikely to prevail before mid-2010 at the earliest. ”
“‘What trumps all these variables is jobs,’ he said.”
“Home sales in Santa Clara County jumped to their highest level in three years last month. But the market still has a long way to go to recover the ground it has lost in this recession. At the housing bubble’s peak, in July 2007, the county’s median price was $805,500. In June 2008, it was still $670,000, but it bottomed out at $420,000 in January.”
“Rick Weinberg, spokesman for Auction.com in Irvine, which handles foreclosure sales, said ‘the pipeline is still packed. The foreclosures are trickling out slowly, but by the time October comes they’ll be gushing.’”
“‘The housing market is not operating independently of the overall economy,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘It really depends on whether this economy slips back into a deeper recession or we get more momentum.’”
“‘There was an over correction on the way down, just like there was when prices were going up,’ said Craig Lewis, president of Prudential California Realty. ‘We’ve hit the bottom. I don’t think prices will move up rapidly, but they’ll rise slow and steady now. There are plenty of buyers at these prices, but not enough homes.’”
“But there’s a long way to go before most current homeowners will be happy. The median price paid for a Stanislaus home was $396,000 in December 2005. Virtually every home purchased in the last eight years is worth less now that it was then.”
“The number of homes sold in the Victor Valley has doubled from a year ago and the inventory has fallen by half, according to June housing figures. The reason is simple: a glut of foreclosures. Ninety percent of homes sold in June were bank owned, according to Victor Valley MLS data prepared by Larry Trombley with Century 21 Rose Realty.”
“‘What’s having an impact on the market right now and reducing the number of foreclosed homes for sale is the California moratorium on foreclosures,’ Trombley said.”
“The good news: The Portland-area housing market didn’t get worse in June. The rest of the news: It didn’t get much better. ‘There’s likely an enormous amount of hidden inventory in the market,’ said Tim Duy, a University of Oregon economist. ‘The market is so relatively weak to what people’s expectations are.’”
“Many of those potential sellers are waiting to list their homes until they think they’ll get a higher price, according to real estate brokers. Once the sellers plant their ‘For Sale’ sign, the supply will expand again and could put pressure on prices to fall again.”
“For evidence of a ’shadow inventory,’ Duy points to the slower than normal growth in listings this summer. The real estate market is cyclical, with slow winter months followed by spring thaw and a hot summer. During that cycle, the number of homes listed typically expands steadily from January to July. In 2008, listings grew from January to June by 28 percent. In 2007, it was 40 percent, and in 2006, 52 percent. This year, the rise is just 3 percent.”
“Clark County’s supply of new and preowned homes for sale dropped dramatically last month, as more houses sold and fewer properties came on the market. ‘A lot of people who have been sitting on the fence are starting to come out,’ said Paula Standfill, a sales agent in Vancouver.”
“Other buyers are rushing to make purchases before the tax credit deadline of Nov. 30, said Tracie DeMars, an agent with Re/Max Equity Group Inc. ‘People realize there’s only a few more months left, so it’s now or never. When the federal government gives you $8,000 to buy a home, that goes a long way,’ DeMars said. ‘They have to close by Nov. 30 or they’re not going to get it.’”
“Rising home sales aren’t the only contributing factor to Clark County’s shrinking inventory of homes listed for sale, said Sue Pauley, a Realtor with Windermere Real Estate/Stellar Group and treasurer of the Washington Realtors Association. Pauley said some homeowners have canceled their for-sale listings, especially sellers of higher-priced houses $400,000 and up that were purchased at the peak of the market. The upper-end homes now appear to be languishing.”
“‘Some people have taken homes off the market if they’re going to take too big of a loss because of the competition with short sales, foreclosures and REOs (real estate owned, or bank-owned properties),’ Pauley said.”
“Chico Real Estate expert Debbie Brodie says locally it is all about supply and demand. ‘We’re seeing a definite pick-up in the market. A year ago we had 371 houses on the market in Chico, at this time we have 279,’ said Brodie.”
“Brodie believes past decreases in home values, coupled with the new influx of stimulus money, is making it easier for new home buyers to get into the market. ‘If they can get the $8,000 fed tax credit, and they can also get a Chico City subsidy possibly, it makes it so families can afford their first home.’”
“Woodland trimmed some of its builder fees earlier this year. Talks continue now between home building industry representatives and development department officials in Sacramento County and the cities of Lincoln, Rancho Cordova and Folsom. The cuts in Woodland and Elk Grove followed negotiations with builders who say fees once raised to boomtime highs no longer reflect the new reality of land values. Talks continue now between home building industry representatives and development department officials in Sacramento County and the cities of Lincoln, Rancho Cordova and Folsom. The cuts in Woodland and Elk Grove followed negotiations with builders who say fees once raised to boomtime highs no longer reflect the new reality of land values.”
“Capital-area real estate agents say they’re seeing more parents bailing children out of real estate investments that have put them ‘under water.’ Agents say it’s increasingly common to see parents buy their children another house similar to the one they bought at the height of the market or too early as the market cooled.”
“In many of these cases, the house has lost up to $200,000 in value. So the parents’ rescue mission moves their children into another house where lower payments are aligned with today’s lower values. Then the children do the best they can to unload the old house. That causes less damage to their credit than walking away.”
“If society just followed the advice of its grandparents, there wouldn’t be an ongoing crisis with foreclosures that helped trigger the nation’s economic woes, according to the author of a new book. Shari Olefson, a Tampa, Fla., attorney…says simply blaming Wall Street, government regulations or predatory lenders — all who share culpability — is just shifting responsibility away from those who bought the homes.”
“Attitudes are changing during this crisis, but not always in a good way, Olefson says. There are people who can afford their homes who are walking away or talking about walking away because they are so far underwater, she says. ‘With those attitudes right now, I don’t know what the result will be in the next five to 10 years,’ Olefson says. ‘We are heading farther down the path of a lack of personal (responsibility).’”
“Greed is a big factor, of course, especially on Wall Street because many assumed that prices would keep going up and that mortgage money would be available, Olefson says.”
“Olefson says she knows people who earn more than $500,000 a year who are talking about walking away from a $2 million home because its value has dropped so sharply. They are angry because they look at their neighbors defaulting on their homes and driving down the property values in the neighborhood, she says. A lot of people made flawed decisions, she says. But despite all that, it comes down to homebuyers, Olefson says.”
“‘None of this could have happened without our participation,’ Olefson says.”
“Bidding wars are returning to South Florida’s housing market, as investors and first-time buyers compete for homes and condominiums listed at $200,000 or less. The race for properties is reminiscent of the boom years from 2000 to 2005, when multiple offers on all types of dwellings helped push prices to record highs.”
“Investor Greg Bales bought a three-bedroom home in Lauderdale Lakes three months ago for $65,000 — $1,900 less than what it sold for in 1985. Bales beefed up the curb appeal with a new paint job, trees and other landscaping. Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system. He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price. He selected a bid from a first-time buyer for $145,000, and the deal is expected to be complete next month.”
“‘We would have had a bunch more offers, but my real estate agent told the people it really wasn’t worth their time if they weren’t submitting a full-price offer,’ Bales said.”
“Meanwhile, some real estate agents are creating ‘drama pricing’ — listing properties for far less than the market value to attract bidders and drive up the eventual selling price. ‘It’s like ‘Ta-da’ said Douglas Rill, an agent for in West Palm Beach. ‘It creates so much of a buzz that it results in a bidding war.’”
“Tony Thomas is looking for a home in the $200,000 range in central Palm Beach County. He made three offers, only to be told each time that another buyer out-bid him. His agent, Liz Golub, told him to ‘run like a bunny’ to make strong offers as soon as properties come on the market. The strategy paid off recently when the owner of a home near Lantana accepted his offer. But because it’s a short sale, the bank must approve the deal, and that could take months.”
“‘It’s frustrating,’ Thomas said. ‘I have not seen the benefits of this buyer’s market right now.’”
“They just keep piling up. Despite heavy government intervention and moratoriums aimed at stemming the flow of faltering home loans, forclosures continue to ramp up. On Thursday, RealtyTrac Inc. reported that the foreclosure crisis affected more than 1.5 million homes in the first six months of the year.”
“Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, said most of the transactions her office handles are bank-owned properties or short sales. And Rodriguez figures there are plenty more in the pipeline. ‘They’ve been on hold and now we have another 90-day (state-imposed) moratorium,’ she said. ‘But that’s up on Sept. 1. We’ve only hit bottom now because there is a lack of inventory until the next wave of foreclosures hits … and that’s coming.’”
‘Steve Johnson, director of the Southern California office office of Metrostudy, agreed that more misery is on the way. ‘I think we’re presently preparing for a second wave that will be coming into the Southern California marketplace,’ he said. ‘It’s being caused by continual job losses throughout the state and a continued weakening of the economy by people falling behind on their payments.’”
“Sen. Christopher Dodd., D-Conn., chairman of the Senate Banking Committee, called the overall lack of progress by the government ‘disgraceful.’ He noted that borrowers are facing long delays as they try to get help. ‘We’re being asked every day by our constituents and others: What’s going on?’ Dodd said at a committee hearing.”
“Close-in Dallas-area neighborhoods that had dodged the worst of the housing recession are now getting clobbered. Park Cities home sales plunged 37 percent in the first half of 2009. In North Dallas, sales were down 19 percent from the same period last year, and median prices are off 17 percent.”
“Real-estate agents blame the in-town slowdown on a number of factors. ‘It seems that the overall Dallas market was immune to the housing downturn for a while,’ said Barry Hoffer, an agent with Ebby Halliday Realtors. ‘Now the softening market has finally caught up with us.’”
“The sagging economy and consumer confidence are the top obstacles, said Veteran Dallas appraiser D.W. Skelton. ‘It’s buyers sitting on the fence that is the biggest problem,’ he said. ‘No one is going to start buying new homes when the job numbers continue to drop.’”
“Skelton thinks the bottom of the market is still at least a year away. ‘I’m still telling my clients to sell now and not risk further loss in value.’”
It’s been a busy driving week for me. Just in the past few days I have been in Arizona, Utah, Nevada and California dealing with foreclosures. I’ve been watching you guys via wireless card, and my thanks for the help on moderation. But, back to the blogstone now. We’ll have our guest blogger as well. My thanks to those who support this site. Please check back this weekend.
Ben, you should have stopped in and visited my mommy there in Utarr! She’d a captured you and stuffed you full of food. And then she’d have read you a story from the Book of Mormon in a voice throbbing with devotion and righteousness, which is a drawback, but you could simply ignore that part while you kept eating. That’s what I do.
Although she and my sister were HERE visiting me until Tuesday the 14th…well, then, you could have stopped in and visited the goats and the horses. You could have thrown a shoe or a shovel at Shorty the Hairy Midget Jerk* and told him that was from me.
How about you tell us some observations, Ben! When she was here my mom had some dramatic tales about rising unemployment in the small town I grew up in, kids moving back in with parents, laid-off office workers applying to a cook’s position in a restaurant on main street, things like that.
Is that what you saw in your travels?
*Shorty’s a mustang. He’s a dreadful, conniving, wicked creature. BFF with Sat*an, I’m sure of it.
For some reason I’m liking Shorty.
What?! You don’t even KNOW Shorty! But he is evil! Pure evil in a hair-sack with hooves!
Jeeze, man, didn’t you see me type in ‘BFF with SATAN’?!
Pay attention, Underwater Big-Chimney-Guy!
Ok, I don’t know Shorty and he is “BFF w/Satan” as you say. Gotta take your word for it.
Well, Utah has a housing bubble. And some pretty dramatic landscape; rocks and stuff. But two things I must report. 1. People there almost all drive the speed limit and 2. Mormon music is the crappiest stuff I ever heard.
“2. Mormon music is the crappiest stuff I ever heard.”
Well, whilepasssing thru Zion…Mr. Cole was trying to learn how to play the drum beat to Neil Young’s “Living with War” …but at 98 degrees, I have to admit…the windows were rolled up.
PS,
Jeep makes as good an auto air condition as Hyundai!
Interesting contrast:
To my recollection, whether due to God’s deferential judgment or other reasons, the Utah market survived the early-1990s housing bust relatively unscathed compared to nearby California. My hunch actually is that rather than divine intervention, this was due to the absence of a big runup in Utah prices before the early 1990s followed by waves of Californians cashing in their home equity gains and moving inland to cheaper locales as the California economy tanked.
With CA housing values off by over 40 percent, plus a bubble runup in Utah that more than doubled prices (e.g., inlaws’ place high above the Great Salt Lake went from $318K at purchase to over $800K at the bubble peak), there doesn’t seem to be much chance of a repeat performance this time.
Although the Mormon Tabernacle Choir recordings of standards can be quite good. I have one recorded with the Philadelphia Orchestra.
There’s a Christmas music recording that is outstanding. But, of course, that’s ’cause Baby Jeebus and Joe Smith the Profit was lending a hand as invisible choir members…
No, really, it’s beautiful. I’ll go find it in my shelves and tell you the name.
Geez Ben, where do you go for a vacation…Serbia?
My landlord has not paid the mortgage on the rental unit that I live in. It seems he lost his job several months ago. What should I do? The loan was made five years ago from WaMu. Should I keep paying rent?
Thanks!
I would discuss with him that, in light of the circumstances, it is now more appropriate for you to pay in arrears rather than in advance and reach a new agreement. However, he technically doesn’t have to agree unless he is breach under your contractual agreement or state law. If he is not in breach, your failure to pay certainly would be a breach, entitling him various contractual and state remedies.
What state are you in? Do you know how many months he missed? Find out through your state’s Recorder of Deeds (or equivilent) if there is a lis pendens on the property. Read your lease again - there may be a clause about him not permitting the property to go into foreclosure. Armed with this info, talk to him. He may let you stay there rent free until the bank takes it back. If he asks for rent, start looking for another place ASAP.
I just saw a book on display today in my library about renters rights. See if your library has any similar books, as laws may vary state-to-state.
How about putting your rent into an escrow account? Don’t know the details on how to go about this, but it will show you are acting in good faith while protecting your and your family’s own interests.
Dude:
Judges don’t like people who don’t pay the rent. His problems are not yours, YET.
Are the utilities in YOUR name? If not most states will allow you to pay the utilities and deduct it from the rent.
Keep a close eye on the mail for any notices. Also you could go to the local court house and see if you can put your rent in escrow in case anyone tries to evict you.
You could see if he can let you use the security to pay the next months rent since he spent it already, and get a signed notarized statement that the lease is canceled say in 2 months so you have some cash to move out.
DO NOT do anything verbally, he might screw you and go to court saying you vacated the property and will sue you for back rent….then what?
“DO NOT do anything verbally, he might screw you and go to court saying you vacated the property and will sue you for back rent….then what?”
It’s possible to come up with a hypothetical scenario for anything, but in this case, if the guy is indeed in default, he’s essentially stealing money from the bank and from the renter. And he knows it.
And he will have the balls to go and sue the renter in court to get the back rent?? Give me a break.
cramer;
You don’t live in NYC…I’ve seen worse
OOPS forgot how about the LL stealing the appliances and fixtures and blaming the tenant who abandoned the property……that’s a good start.
Remember the landlord still has a signed valid lease…..and when the tenant doesn’t show in court ….wellllllll
If he’s seriously delinquent (90+) I would stop paying immediately. Keep the money somewhere handy, like separate savings account. Basically, what’s the landlord going to do? Take you to the court to get that rent?
As far as I see it he lost any legal right to the property until he’s current on his mortgage again. What are they odds of his getting current again?
The most likely outcome - you’ll live there for free until the bank comes to evict you. Which may take many months, it seems based on some reports. And in some states they have to give an advanced notice to renters. So you could get up to a year of rent-free housing.
And don’t give that saved renter’s money to the bank! Bank has no claim on it. Only the landlord, theoretically, can try to get it out of you by threatening to go to the court, but I see the odds of that negligible. Or, you’d give it to him if he’s current again. I see no reason to be
..what’s the landlord going to do? Take you to the court to get that rent?
Probably more like fill out a standard form, mail it along with a minimal processing fee. Sometime thereafter someone’s credit report gets “modified”.
you know the drill..
Throw out anything you haven’t used in years.. pack things you don’t often use in boxes… label them. Sell or donate whatever you don’t really want to drag behind you and can live without..
In a all seriousness, just be prepared for the LL’s jumping ship without a moment’s notice.. and then wait.
Check with a tenants’ rights attorney. They might work for low or no cost, depending on your situation, and they would be best qualified to help you.
We just had a friend go through this (and the resulting short sale, where the new buyer agreed to leave the existing lease in place).
Good luck!
You should check for basic information on tenants and foreclosure at http://nlchp.org/content/pubs/Without_Just_Cause1.pdf
They have basic information for all states on foreclosure procedure and its impact on tenants. However, all tenants are now protected by federal legislation that requires 90-days notice to vacate after a foreclosure. See http://tenantsforeclosure.blogspot.com/2009/05/new-federal-legislation-on-tenants-in.html
As for paying the rent, the landlord may or may not demand payment. If he does, you have to pay the rent. But many landlords have effectively abandoned the property, and you might get away with not paying. There’s no harm in trying, but if you receive a notice to pay rent or quit, you’d then have to pay the rent.
And in your next rental agreement, demand two provisions–the first to insure that, in the event you have a lease, any default on the mortgage on the part of the landlord voids the lease at the tenant’s option, so that you could move if you wanted, and a provision that, in the event of landlord default, allows you to recover your deposit by withholding rent.
“It’s now or never.”
If the expiration of incentives, at a time when the broader economic picture has darkened (e.g., unemployment rates are up significantly), cannot be expected to drive prices down, why in the hell were they ever offered in the first place? People are walking and talking in mindless circles without end.
“…People are walking and talking in mindless circles without end.”
Astute:
Adj. 1. astute - marked by practical hardheaded intelligence; “a smart businessman”; “an astute tenant always reads the small print in a lease”; “he was too shrewd to go along with them on a road that could lead only to their overthrow”
shrewd, sharp
smart - showing mental alertness and calculation and resourcefulness
Ben,
Your summary here has driven me to pour a stiff one in order not to loose control. Stupidity still abounds. I’d scream but the neighbors would probably call the cops.
“..I’d scream but the neighbors would probably call the cops.”
When they arrive (the cops) …tell’em you just found out what your neighbors paid for their house in 2006 and that the postal carrier left their property tax bill in your mail box, which you “accidentally” opened “by mistake” within the last 2 minutes…”
…Don’t taze me bro…
“It is no longer the creative loans faltering, Mackintosh said, but consumers who had been paying their mortgages on time now faced with losing their house. ‘Fifty-six percent of foreclosures are now on fixed-rate mortgages,’ Mackintosh said. ‘That is the effect of people losing their jobs.’”
That leaves ‘only’ forty-four percent of foreclosures to ‘creative’ loans (e.g. pick-a-pay).
Mr. Bear, you forgot to add: (”interlacing my fingers with a anticipatory smile of glee!”
I think “creative” is a smaller subset of variable. Why, however, someone would choose the variable option when interest rates were at a historical low is a mystery to me. The only real reasons to do so I can think of is that you expected rates to fall and stay below 5%, couldn’t afford any other option, or expected to move soon. I either do not have such beliefs or would not buy under such circumstances.
The option arms were underwritten based on the lowest payment option.
This allowed people who couldn’t even afford to pay interest only get into a house. This is why the coming resets are going to be the next leg down.
Bingo!
Just drove through your neighborhood via 215 on Wednesday.
Seemed a busy area. I waved HI, did you ‘feel’ my wave, cosmically?
“‘There was an over correction on the way down, just like there was when prices were going up,’ said Craig Lewis, president of Prudential California Realty. ‘We’ve hit the bottom. I don’t think prices will move up rapidly, but they’ll rise slow and steady now. There are plenty of buyers at these prices, but not enough homes.’”
How much BS can there be in a sentence? ’cause this one takes the cake.
The bottom is still nowhere in sight, and I doubt 2011 will be the real bottom. (Recall that a lot of these new investors are assuming that homes will go up in price soon, and when they give up the TRUE bottom will be at hand)
Prices only seem to move up rapidly, but here in Sacramento I have finally seen the sights of the high end collapsing, which of course drives the median up as well. (BTW, in-laws beautiful home has lost $400K in value since 2006)
But not enough homes…LOL…you jest…
The problem is TOO MANY HOMES!!!
“Rick Weinberg, spokesman for Auction.com in Irvine, which handles foreclosure sales, said ‘the pipeline is still packed. The foreclosures are trickling out slowly, but by the time October comes they’ll be gushing.’”
Will October finally be capitulation time? And will denial end when the market finally capitulates?
“…Will October finally be capitulation time?”
Oh, and when do families move? …the one’s who would be buying $$$$$$$$$ said… McMansion PC correct stucco-ed 4 bedroom, 3 bathroom houses with tulips in full bloom?
I suspect the uptick in median sales price has to do with the mix of houses being sold–spring/summer is probably selling more family houses, fall/winter more investment houses.
I suspect the big capitulation will be next spring. Ten percent unemployment for a few months by then, mortgage resets will be peaking, and plenty of foreclosure inventory.
‘Steve Johnson, director of the Southern California office office of Metrostudy, agreed that more misery is on the way. ‘I think we’re presently preparing for a second wave that will be coming into the Southern California marketplace,’ he said. ‘It’s being caused by continual job losses throughout the state and a continued weakening of the economy by people falling behind on their payments.’”
These serial foreclosure moratoriums are likely to result in a case of impacted bowels for the CA real estate market. The aftermath will not be pretty.
Oly Gal: “You could have thrown a shoe or a shovel at Shorty the Hairy Midget Jerk* and told him that was from me”.
But Oly, just think, when you go back to home to visit, you get to throw “Shorty the Hairy Midget Jerk’s” Poo Poo Too!!!
What I like about you is that you always have such good ideas.
Not being one of those sleezy people, but I what I like about you Oly Gal, is just about everything. (Take it as a compliment from the Gang.
P.S. Oly, how do you spell complement?
You spell it: ‘gauge’.
HAhahahaah!
“…The sagging economy”
When I envision “sagging” I just see balls & tits and over-loaded tomato plants, maybe that’s just me…
Nope, I get that vision too!
‘cept the tomato plants didn’t produce any sagging.
How about those gigantic sunflower heads…does that work?
“Oh, and when do families move?”
This is going to make things quite interesting here in Cally as school districts are not going to be assured of their enrollments. I’m sure some districts will end up closing or idling some schools while others may be forced to move in trailers or do more busing.
BTW: it will be interesting with the budgets out here to see how long this busing thing will last.
“BTW: it will be interesting with the budgets out here to see how long this busing thing will last”
So, just how does the state of California deal with “legally educating” children when they “live” in this part of the “Golden State”? Or, must the California “soil location” require proximity to a urban school facility? Shall we “legally” impose laws “equally” on all peoples of the “Golden State”?
http://en.wikipedia.org/wiki/Goffs,_California
“‘We saw it in two different ways, one, when mortgages were readjusting we saw a wave. Then all of a sudden people started losing their jobs, and that was another wave.’”
And when people finally realize that continuing to pay the mortgage on their deeply-underwater house is a lose-lose proposition, then you will see a tsunami-sized wave.
‘It’s being caused by continual job losses throughout the state and a continued weakening of the economy by people falling behind on their payments.’
Followed by the next wave of resets, followed by…
This must be the part of the bust where the positive feedback loop really takes shape.
‘…But that’s up on Sept. 1. We’ve only hit bottom now because there is a lack of inventory until the next wave of foreclosures hits … and that’s coming.’”
Geez, Mr. Cole was really on to something when he pronounced that he’d not seen any “Coming Soon” signs lately…
I can only speak for Denver, but something doesn’t seem right to me. There is talk of an uptick, yet I follow certain neighborhoods and properties very closely and I am still seeing downward movement on a month-over-month basis. Are others seeing the same thing in other areas (e.g., talk of bounce that doesn’t match what they are seeing on the ground). I get it as far as overall mean statistics go because a higher percentage of larger family homes selling in the late Spring and Summer months, but I thought Case Shiller and indexes adjusted for this.
“…I can only speak for Denver…”
Bro, I can tell ya… If I was to choose between Denver & L.A…. for anything “housing related” … Denver is hands down the winner…& that includes the mid-point…”Lost Wages, NV”…
I agree. My sis bought a spacious penthouse-level condo near the Governor’s Mansion a year or so back. After visiting her, I decided she was fine, as I see little downside risk to buying a condo with a mountain view in a great neighborhood for under $200K. For the same money, just down the street from us you could snap up a small ground level
apartmentcondo conversion with granite countertops and faux stone exteriors but no view.Tim, suspecting that there has to be more correction in the mile high area. I know of several friends whose children have moved back.
This “area is different” otherwise…
There are areas around Denver which are clearly overbuilt. I am thinking of the McMansion corridor between Denver and ‘The Springs’ — anyone with sufficiently good vision to be issued a drivers license can see a real estate crash in progress from the freeway, due to massive overbuilding of outlying tract homes by the Wall Street-funded hopebuilders.
“…(e.g., talk of bounce that doesn’t match what they are seeing on the ground)…”
Many of us have been over this several times recently, but to reiterate, what we see around San Diego is an upward shift in the quality of homes selling translated into an increase in the median purchase price, which belies the (likely) ongoing decrease in the quality-adjusted price per square foot in San Diego home prices.
Why do I suspect this?
1. High and increasing local unemployment.
2. Unmitigated local foreclosure crisis (keeping the foreclosure homes off the market amounts to just kicking the can down the road).
3. Alt-A and prime option ARM (AKA pick-a-pay) mortgage resets in desirable coastal areas.
4. Despite the umpteenth foreclosure moratorium, there is (curiously) lots of foreclosure inventory in desirable areas.
For instance (counting the listings on Foreclosuretown dot com):
La Jolla (92037) 418(!) homes
Poway (92064) 207 homes
Rancho Bernardo (92127) 237 homes
Carmel Valley (92130) 281 homes
Rancho Santa Fe (92067) 196 homes
Total (partial) listing of foreclosure homes for an incomplete list of desirable San Diego locales = 418 + 207 + 237 + 281 + 196 = 1,339.
(Note that this number most likely represents a very conservative lower bound on the actual number of foreclosure homes for all of San Diego County either currently on or soon to enter the market.)
Of course, the above most likely represents an undercount, due to the distortionary effect of foreclosure moratoriums coupled with banks holding out hope to unload REO after prices come back (a hope which I sadly believe to be misplaced).
Any questions?
While I agree that the market mix may have shifted a bit, I’m seeing homes being priced **and sold** at or ABOVE “peak” prices (2005-ish).
We are seriously scratching our heads about this, but have been actively monitoring the market in certain zips for years — both on the computer and many, many days spent driving and walking around different neighborhoods, checking out open houses and talking up local residents. Right now, the market is VERY active. I have not yet figured out what is moving it, but it’s instructive to know it’s also happening in other areas of the country.
Artificially low rates? “Free” money from the state and federal governments? Drug money? Investment pools with leveraged money (possibly govt money???? — oh, the conspiracies!)? Fear of inflation? More “bubble-sitters” with money from previous sales than any of us had anticipated? Rich foreigners?
What is moving the market this time? I’m trying desperately to discover what is setting the market on fire once again.
“Investor Greg Bales bought a three-bedroom home in Lauderdale Lakes three months ago for $65,000 — $1,900 less than what it sold for in 1985. Bales beefed up the curb appeal with a new paint job, trees and other landscaping. Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system. He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price. He selected a bid from a first-time buyer for $145,000, and the deal is expected to be complete next month.”
Ummm, Greg, just a quick calculation here. I doubt that your “improvements” add up to much more than $20,000. If that. So what’s the value that you added that more than doubled the price of this casa?
I didn’t see anything that said that you’ve re-wired or re-plumbed the place. Nor did I see any note of a new HVAC system. It’s likely that a house of this one’s vintage could benefit from such an update.
Exactly! And what do you think a house purchased 3 months ago for $65,000, with no more than $20,000 in upgrades is going to appraise for. Methinks this is NOT going to close next month……
They are somhow managing to appraise for the flipper price here in San Diego. I’m seeing a number of successful flips, unfortunately.
Well I give the guy some credit.. he had a plan and a schedule and followed them.. he took on a whole lot of risk, and busted butt for months. And the deal isn’t even closed yet.
With his overbidding ‘first time buyer’ he might end up taking back a second… assuming he can afford to do that. I’m sure he wants back whatever his out of pocket costs were, asap. Even if $20K is close, it aint chicken feed.
As to those costs, if he had contractors do the work it might easily have cost him $40K or $60K.. Kitchens aren’t cheap. He probably did most of it himself… blood and sweat equity.
That’s one tough way to make a living, imo. While you’re working on overlapping projects constantly, you won’t always be so lucky. And if just one house turns into a disaster it could put you out of business.
Well, if one buys a share for $20 and sells it later for $40 - what “improvements” are there? If those offers are real, it looks like he made a really good purchase and deserves his profit..
I am relieved to learn the road to recovery is not a “Five-year Plan.”
Summers Says U.S. ‘Close to a Level Path’ to Recovery (Update1)
By Timothy R. Homan and Alison Sider
July 17 (Bloomberg) — The U.S. economy shows early signs of emerging from the recession as $787 billion in stimulus lays a foundation for a sustained recovery, said Lawrence Summers, director of the White House’s National Economic Council.
“While employment continues to contract, the available indicators suggest that GDP is on close to a level path with prospects for positive growth to commence during this year,” he said in a speech today in Washington. “Confidence and hope are returning as a program of rebuilding the economy moves forward.”
Summers joined a chorus of Obama administration officials who have tried in recent weeks to counter calls for another round of fiscal stimulus. The former Treasury secretary and Harvard University president said the government is committed to keeping stimulus in place no longer than necessary to revive the economy.
In his speech, Summers predicted unemployment in the U.S. would likely keep rising in coming months, and he didn’t explicitly address the prospect of a second federal effort to stimulate economic growth. He cited an administration study that projected only 10 percent of the job impact from the current stimulus would occur in 2009.
Summers also declined to comment on Federal Reserve policy and he downplayed the near-term threat of inflation. He said the Obama administration would support measures that enhance the “transparency” of the Fed and oppose any effort in Congress to restrict the central bank’s independence.
Job Losses
In his review of the economy, Summers said the spread of joblessness “is obviously a major area of concern.”
“But contrary to a significant amount of commentary, this does not provide a basis for concluding that the Recovery Act is falling short of its goals,” he said. Given lags in spending and hiring, “the peak impact of the stimulus on jobs was expected to be achieved at the end of 2010.”
Jared Bernstein, Vice President Joe Biden’s chief economic adviser, yesterday said, “It’s a good thing that this recovery act is a two-year plan,” adding that this “is not a recession that’s going to be solved in weeks or months.”
…
“adding that this “is not a recession that’s going to be solved in weeks or months.”
Well Mr. Bear, throw back a beer, there’s common ground to be found…
How long should one expect eight years of wanton destruction under W to take to unwind? One lifetime? Two? A century?
I agree. Problem is the current path being attempted only makes things worse.
How many Small Business’s will go under due to Nationalized Health care. My estimate 15%, but hey I’m an optimist.
We had our consultant in this week. He is really a good guy. We have become good friends over the past few years during his monthly (now quarterly) visits. I began preaching to him back in 2005 when I found religion and the HBB. At that time I was just a cute source of entertainment around the office. Yes, I can be cute when I want to be. As you know the word “choir boy” has been attached to me a few times, even at my advanced age. How many people just banged their heads falling off their chairs?
As time passed I went from being the court jester to Nostradamus. I became that frightening guy that was saying things that were so scary, and so true, that spines tingled when I walked into the room. It got so bad last fall that our consultant told me that his wife wasn’t going to let him visit us any more. She said he was too depressed when he came home. My tales were really affecting him. Of course it was me, not reality, that was the cause of the depression. It’s not my fault they got their butts kicked on real estate and in the stock market. I don’t control the weather.
Like so many people he really wants to believe that we are turning a corner. Of course I keep telling him that anything that looks like a green shoot is just a weed that has poked through the concrete due to all of the fertilizer (ahem) that the government and Fed has poured all over creation. But their business has been doing okay lately, he said, and the real estate market near one of his houses is still doing well. That is a second home mecca that eventually will get destroyed.
Along came reality to kick out his stool (make of that what you will). He found out the other day that they laid off 9 people. It was like lightning from the sky. He figured that their company must not be doing as well as he thought. All of his worries seemed to come rushing back. Something tells me a lot of the “optimists” are about to have similar moments that kick them in the head. Another shot to their confidence is going to play hell on these people. It will be ugly.
Along came reality to kick out his stool (make of that what you will).
More fertilizer?
“Something tells me a lot of the “optimists” are about to have similar moments that kick them in the head. ”
2009 looked very different in 2005.
Correction:
Along came reality and he sqeezed out a stool. He found out the other day that they laid off 9 people and then lightning shot out his ass.
Is that a poem?
I mean, I like it, if it is.
How about turning it into a Haiku:
Along came reality
He squeezed out a stool
Layoff 9 and lightning from rear
“There was an over correction on the way down, just like there was when prices were going up,’ said Craig Lewis, president of Prudential California Realty. ‘We’ve hit the bottom. I don’t think prices will move up rapidly, but they’ll rise slow and steady now. There are plenty of buyers at these prices, but not enough homes.’”
Prices have hit bottom once again. Home prices will rise. Plenty of buyers and NOT ENOUGH HOMES!!! Oh NO! What are we going to do? I better buy several before I get priced out forever.
Seriously, what are the qualifications one must have to become the president of Prudential California Realty? Does this clown honestly expect that anybody takes him seriously?
We just cannot seem to keep realtors down, such is the value of salesmanship to our culture. My blood pressure spiked after I read the bit about “drama pricing.” And really, it should be obvious, to realtors and everyone else, what will happen once the federal tax credit expires — prices will fall by $8,000.
“Investor Greg Bales bought a three-bedroom home in Lauderdale Lakes three months ago for $65,000 — $1,900 less than what it sold for in 1985. Bales beefed up the curb appeal with a new paint job, trees and other landscaping. Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system. He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price. He selected a bid from a first-time buyer for $145,000, and the deal is expected to be complete next month.”
Yeah, don’t count yer chickens until they’re hatched, Greggy-Boy. I’ll be willing to bet the doesn’t complete.
Feh. $145,000 in Lauderdale Lakes. What a joke. Of course, it’s a first time buyer.
Hey Palmy, DO count your Chickies before they empty your bank account, right huh?
“…the Anderson Center for Economic Research at Chapman University in Orange,”
“‘What trumps all these variables is jobs,’ he said.”
O.K., just so all you HBB’ers understand…let’s look at who previously offered “support to this University”:
Country-Wide
Ameriquest
New Century
Now let’s update the near by Angles Stadium:
1. Der wienerschnitzel
2. (new..replaced Big O tire) …Jet Blue
3.Corona Beer
4. Life water
Draw your own conclusions…
4. Life water
Draw your own conclusions…
Isn’t that after you drnk the Corona beers and enjoy the wienerschnitzel?
Well, they are “officially” the “LA Angels” …what better way to distinguish yourself from those dreaded “LA Dodger Dogs” then use a national brand name…
Not. They are the Callyfornia Angels.
Hwy: I am not the sharpest tool in the shed to begin, but, how come I don’t understand anything in that post?
“cause you ain’t drinkin’ what I’m drinkin’ is my first response…
Dang it Ate-UP let me clarify my current position:
The National medium income = ?
The National asking price for my glorious piece of stucco is = ?
It’s basically all down hill from here on out… but that’s just MHO!
OK Hwy thanks! I got it a little better now! Course, I started drinking my beer too.
Well it’s certainly turned into a 4th day for me, myself & I :
Nobody Has All the Answers
While L. Rust Hills is remarkably right about many things, he also recognizes the limits of useful advice. So rather than call an essay “How to Stop Smoking and Drinking,” he called it “ How to Cut Down on Smoking and Drinking Quite So Much.” I excerpt it here. It appears in the section “ How to Do Some Particular Things Particularly”—not, we note, in “ How to Be Good.”
I had one hell of a system once for cutting down on drinking so much. I was sharing a big summer house with a lot of city people, and I came to realize I’d been getting bombed every night. I was there all the time; the others would come up just weekends, or on their vacations. Anyway, I devised this incredibly clever system: the idea was I’d plan ahead just exactly what I would do drinking-wise for each and every day of a four-day cycle. On what became knows as A First Day, I wouldn’t drink at all—nothing, not a single drink. This was to prove I wasn’t an alcoholic and could do without it. On the next day, A Second Day, I would have one drink before dinner and one drink after dinner—that’s all, no more, no matter how often they told me I was a no-fun person. This was to prove I could drink abstemiously, if that isn’t a contradiction in terms. On A Third Day, I’d allow myself to drink what I called “moderately.” This was to prove I could drink moderately. And on A Fourth Day, it was all-out, anything goes as much as I wanted. This was to prove I was still a fun person. Then it would be A First Day again. And so on.
Well, the system really did sort of work for awhile, but there were difficulties with it, as I guess you must have imagined there would be. On a First Day, after A Fourth Day debauch, is of course just when you need a drink most, at least one drink, if not just one drink before dinner then at least one drink just before bed. On A First Day I’d be irascible all day and go to bed early and not be able to sleep. A Second Day was all right, nothing to get excited about, but the way sensible people live regularly, I guess. A Third Day was always a problem, because my idea of “moderately” kept changing as the evening wore on. A Fourth Day, of course, was just the normal disaster.
One of the main problems of the system was the four-day cycle when everyone else was more or less on a seven-day week. I can’t for the life of me now remember how I decided on four days or why on earth I didn’t change when I saw it wasn’t working. If my Fourth Day were to come say on the other’s Tuesday, there wouldn’t be anyone to drink with me; it was awful having A Fourth Day go to waste like that. Then others couldn’t keep track of what day mine was. They’d prolong the cocktail hour unconscionably on A Second Day that happened to be their Friday night. Or I’d be moderately having a couple of drinks on A Third Day, maybe weaving a little as I told a long-winded story, maybe making myself one more at the same time, and I’d overhear one of the householders ask another, “Say, is this A Fourth Day, or what?”
Toward the end, I began switching my days around to accommodate, like a good householder, so my good days would coincide with their good days. Thus on A Second Day Saturday night, I’d decide during cocktails to have my Second Day tomorrow and my Third Day today; then later in the evening I’d decide to make today my Fourth Day and have my Third Day tomorrow and have my Second Day after that. But things tended to get confused, and of course the First And Second Days got kind of lost, and pretty soon every day was A Fourth Day again. It’s really hard to organize systems when you’re sharing with others.
LMAO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Good Night All
Love it, Hwy!
“Inside, he installed laminate floors, granite countertops, new kitchen appliances and an alarm system. He put the home back on the market July 10 for $139,900 and fielded 10 offers, three for more than the asking price. ”
Argh! Install granite countertops and sell for more than double the price a couple months later? That and the two-year plus foreclosure moratoriums and it doesn’t look like this will ever end.
Granite countertops make me think of chrome spinners on cars - a way to show other people you are stupid and wasteful.
Got to give him credit for making some money. But I agree all that stuff is nonsense. Hell, I’d eat off of/out of Oly’s mustang’s bucket, seriously, if i was hungry/humble enough.
Hell, I ate a can of original Strongheart on a bet in law school, didn’t taste bad, and didn’t bother me at all.
Woof, Scratch…
P.S. His name is “Shorty the Hairy Midget Jerk”, you know.
Hell, I’d eat off of/out of Oly’s mustang’s bucket, seriously, if i was hungry/humble enough.
Heck, I’d do it for fun. Tastes like dry oatmeal with horse-spit in it. What’s the fun in that?
Actually, it IS pretty fun. I once tried to eat Shorty, come to think of it, but he got away.
Those spinners are extremely popular in the Southwest. The spinner-outfitted vehicles also tend to have those boom-boom sound systems that proclaim, “I’m an idiot and I’m making myself deaf!”
Ben,
The Shari Olefsen story has a bum link to it.
Also: is the HBB Photo Gallery dead? I sent in a photo today and later noticed that there’s only one old entry in it.
IIRC, the Photo Gallery went on hiatus last year.
Here it is. http://www.lasvegassun.com/news/2009/jul/17/homebuyers-figure-meltdown/
Ain’t that the TRUTH…i pay all my bills on line but I have $350 sitting next to me in a drawer and used only $20 since last week.
————————————————————————
That is a danger because the further people get away from touching money, the more difficult it is to curb spending, she says.
“Michael Hollern, chairman of the region’s largest developer, said the Bend boom coincided with the one in the Sun Belt. The building boom began gradually in the 1960s and took off seriously a few years ago. ‘We thought we were different, special, with real jobs and real people. It turns out we weren’t that different. And we realized prices were out of touch with reality. Now we need to work off our excesses,’ he said.”
One interpretation: The overlap of ongoing westward migration with the aging of baby boomers created an ongoing building boom from 1960-2005, with a rising price trend to support it. Where do we go from here, given that baby boomers are reaching retirement age at an increasing rate, and that the recent stock market and housing market crashes have dealt them a devastating negative wealth effect?
“…the aging of baby boomers created an ongoing building boom from 1960-2005″
When was it “required” that …x2 incomes… where “required” for completing necessary bank paperwork for “qualifying” for the purchase of a “home” …ALL ACROSS AMERICA! ?
I’m just wacked I tell ya…
To bolster my theory, I cite Japan, which has the same aging baby boomer problem as the US, only worse…
“‘The housing market is not operating independently of the overall economy,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘It really depends on whether this economy slips back into a deeper recession or we get more momentum.’”
Why is it that I “fully” understand Leslie Appleton-Young concern with terms like “deeper” & “momentum”?
Lucy: “Charlie Brown, your such a blockhead!”
“Marty Rodriguez, owner of Century 21 Marty Rodriguez in Glendora, said most of the transactions her office handles are bank-owned properties or short sales. And Rodriguez figures there are plenty more in the pipeline. ‘They’ve been on hold and now we have another 90-day (state-imposed) moratorium,’ she said. ‘But that’s up on Sept. 1. We’ve only hit bottom now because there is a lack of inventory until the next wave of foreclosures hits … and that’s coming.’”
Marty sold my house in 2005. She referred me to a reporter for the San Gabriel Valley Tribune about my take on the market but I refused since I had not sold yet. She’s more honest than most realtors.
The All Knowing, All Seeing, All Transcending…
Mr. Filter,
once again, thru me to Pluto.
I have a date with a lady, so have to get ready, but this is anecdotal (sp) and important I think b/4 I go…
I have lived in a metro-town outside of St. Louis, (Edwardsville, Il) for two years since moving back from Florida.
Bachelor, and have been ordering hot wings, pizza, from IMO’s, a pretty cool place up here, for two years, every Friday, delivery.
The wait was always 45- to an hour on Fridays. Now, it is consistently 15-20 minutes, everytime.
A tiny lil’ canary… a scary canary.
SIU-E grad here. I have very fond memories of my life there — it is close enough to a big metro area so you don’t feel isolated out in the forlorn back country, but far enough away to cultivate small town neighborliness. Interestingly enough, we stayed in Munich two weeks ago with a friend from that period of my life.
Regarding your ’scary canary’, that is nothing compared to San Diego’s restaurant scene. Three years ago, the Friday wait was 45 minutes +; now there is no waiting, and restaurants are typically 1/2 empty.
Caught ya b/4 left Prof Bear!! Me too!
I was 81, Philosophy major and Statistics minor. Forget everything I learned in both!
What year, what major?
Wasn’t it a beautiful campus?
I’ll read tomorrow when I get up! That is cool.
We just missed each other, as I was there from 1982-1986 (mathematics, music). You must have known one of the most delightful personas I have ever met in my life, Dr Nick Pendergrass. He was one of the truest southern gentlemen I have ever met. Tragically, he was killed in an auto accident within a couple of years of his retirement.
I also have always been a philosopher at heart, though I could not afford to pursue the discipline professionally. I was quite close to SIU-E philosophers Sangki Kim, Ed Lawrence, Kristin Kaminsky and Robert Gray. Do you know these people? How about (Professor) Carl Jagels?
Do you know this fellow? (One of a small handful of professionally successful musicians I have known personally in my life…and an ace statistician to boot!)
Comment by Professor Bear
2009-07-17 17:11:34
Regarding your ’scary canary’, that is nothing compared to San Diego’s restaurant scene. Three years ago, the Friday wait was 45 minutes +; now there is no waiting, and restaurants are typically 1/2 empty.
———————-
We were seeing that in NCC also during the fall/winter of ‘08. Beginning about February of this year, things have picked back up.
Last Sunday, we went to a (large) Mexican restaurant for dinner and it was absolutely packed!!! We’ve seen this same trend in many different restaurants and businesses over the past year.
Again, not sure what to make of it. Initially, I thought it might be that nobody is paying their mortgages anymore.
The wait was always 45- to an hour on Fridays. Now, it is consistently 15-20 minutes, everytime.
Could be that they recognize you as a regular customer and bump you to the front of the delivery queue..
How well do you tip?
Could be, but they always say their not busy, and “it will probably be earlier”…
I tip 20% because their kids, and I love kids, or their older people trying, and I love them too.
I’m out of this addicting place!!
RIP Walter Cronkite………..
that’s sad.. gone at the tender age of 29.. only the good die young.
oops.. 92 .. my bad
“Housing prices are going down all over America. And that’s the way it is, Friday, July 17th, 2009.”
And I bet he would have said that on the air, too — that’s why they called him “the most trusted man in America.” Today’s cowardly cabal of journalistic deceivers could benefit by studying Uncle Walt’s model of professional integrity.
My dj partner (rosemary) worked as his office manager for 3 years.
Walter Cronkite and Staff at CBS
We are deeply grateful for the contributions of Walter Cronkite of CBS News, who graciously agreed to record some of our audio files. ( They came out wonderfully, of course. When we got the tapes, we just had to play all the tracks immediately, and leap about in glee.) Mr. Cronkite is a former student of UT Austin who has been very helpful to UT in many ways over the years. Several members of Mr. Cronkite’s staff also helped enormously in this collaboration.
Mr. Cronkite’s staff was very helpful to us. Marleen Adler, Tara Mattson, and Rosemary Cantali were our direct contacts, and Ziggy Pelzer worked as studio sound engineer with Mr. Cronkite when he recorded our scripts.
Another humongous bubble has popped:
The economics profession’s reputation. First the profession by and large missed the world’s biggest asset price bubble on record while it inflated right under their noses. And now they have resorted to lying and denying economic reality during the aftermath, preferring instead to dwell in a make believe land of green shoots.
It is time to burn your copies of Samuelson’s Principles book, and I suggest for good measure, you throw a copy of Bernanke’s book on the pyre too if you have one handy. Perhaps these text books will prove useful for heating the room, now that the chair legs have all been consumed in the fire.
Leaders
Economics
What went wrong with economics
Jul 16th 2009
From The Economist print edition
And how the discipline should change to avoid the mistakes of the past
Illustration by Jon Berkerly
OF ALL the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. A few years ago, the dismal science was being acclaimed as a way of explaining ever more forms of human behaviour, from drug-dealing to sumo-wrestling. Wall Street ransacked the best universities for game theorists and options modellers. And on the public stage, economists were seen as far more trustworthy than politicians. John McCain joked that Alan Greenspan, then chairman of the Federal Reserve, was so indispensable that if he died, the president should “prop him up and put a pair of dark glasses on him.”
In the wake of the biggest economic calamity in 80 years that reputation has taken a beating. In the public mind an arrogant profession has been humbled. Though economists are still at the centre of the policy debate—think of Ben Bernanke or Larry Summers in America or Mervyn King in Britain—their pronouncements are viewed with more scepticism than before. The profession itself is suffering from guilt and rancour. In a recent lecture, Paul Krugman, winner of the Nobel prize in economics in 2008, argued that much of the past 30 years of macroeconomics was “spectacularly useless at best, and positively harmful at worst.” Barry Eichengreen, a prominent American economic historian, says the crisis has “cast into doubt much of what we thought we knew about economics.”
…
Rational fools
These important caveats, however, should not obscure the fact that two central parts of the discipline—macroeconomics and financial economics—are now, rightly, being severely re-examined. There are three main critiques: that macro and financial economists helped cause the crisis, that they failed to spot it, and that they have no idea how to fix it.
The first charge is half right. Macroeconomists, especially within central banks, were too fixated on taming inflation and too cavalier about asset bubbles. Financial economists, meanwhile, formalised theories of the efficiency of markets, fuelling the notion that markets would regulate themselves and financial innovation was always beneficial. Wall Street’s most esoteric instruments were built on these ideas.
…
Blindsided and divided
The charge that most economists failed to see the crisis coming also has merit. To be sure, some warned of trouble. The likes of Robert Shiller of Yale, Nouriel Roubini of New York University and the team at the Bank for International Settlements are now famous for their prescience. But most were blindsided. And even worrywarts who felt something was amiss had no idea of how bad the consequences would be.
…
Can’t say that about the worrywarts who posted prophetic predictions of doom and gloom right here on this blog. I ran out of hand lotion long ago, but that never stopped me from worrying — not for an instant!
BwaHaHaHaHAHAHAHAHAHHAHAHAAHAHAAA!!!!
I don’t know if the economists were fully aware of the extent of faulty lending and fraud during the housing boom . Did the economists assume that Wall Street and the loan underwriters wouldn’t make loans in which the parties didn’t really qualify ? I know that when i found out that liar loans and toxic adjustable product was the way they were putting people into homes ,while hit the mark appraisals were the name of the game ,I knew that a epic crash would take place .
During the boom everyone walked around like zombies repeating the talking points of the REIC ,and every other ad pushed loan products or real estate related products . Remember that articles were even published that claimed that if you didn’t buy real estate you had a commitment problem . When you think back on how big the campaign was to get people to buy real estate or get some sort of credit to buy shit ,one has to conclude that this went beyond your normal marketing of products . Debt and leverage and fake inflated real estate prices to fuel a economy instead of real wages ? What ?
The newly elected Senator from Minnesota could have written this book about economists in top policy posts:
Lies (And the Lying Liars Who Tell Them): A Fair and Balanced Look at the Right”
Does anyone believe that the 8k credit will end? Would that be the first time in history that a govt. program ended?
The 8 thousand will end and they will increase it to 15k.
Yep. Unfortunately, you are very likely right, Wiz.
BTW, how have you been? We missed you for a while there. Hope you’ve been able to find peace with what’s happened this past year. We’re always here for you!
“Sen. Christopher Dodd., D-Conn., chairman of the Senate Banking Committee, called the overall lack of progress by the government ‘disgraceful.’ He noted that borrowers are facing long delays as they try to get help. ‘We’re being asked every day by our constituents and others: What’s going on?’ Dodd said at a committee hearing.”
Correction Senator… you and your pal Frank are disgraceful… resign now and save whatever is left of your name..
Bank statements and prior years taxes are a requirement to obtaining any loan. Over inflating income by three times is an impossibility unless the homeowner also lied to the IRS and paid more in prior years taxes. That’s a far fetch scam to pay more in taxes to go out and buy an over qualified home.
Stated and no doc. loans doesn’t cut it for an excuse. Again they had the bank statements and taxes to work with. Lying about debt is one thing but inflating income is another. No one put a gun to thier heads forcing the loans to go through. I little off the subject but just pissed to learn my income was over inflated. Yes you can call financially and mathmatically stupid. That’s why I went to a financial lender in the first place.
Regarding the Dallas Park Cities area it’s definitely hit a brick wall. I’ve been watching the market closely for over 2 years now. I’ve been thinking of moving back to that area and watching house prices fall.
It’s funny listening to the national media saying how prices in Dallas are immune. In University Park and Highland Park sales are dead and prices are falling like crazy!
Expensive properties are just sitting on the market for over 400+ days and the owners aren’t bright enough to lower the prices. Hey, let the clueless owners pay the high property taxes until they sell.
Look at new projects like “4608 Abbott Avenue” in Highland Park. Almost none of the units have sold and they are still asking a fortune for them and they aren’t even homes…just condos.
Do a search on realtor.com for 4608 Abbott Avenue in University Park, TX 75205 and you’ll see all of the units just sitting there.
Look at lower price (for the area) properties like
http://www.realtor.com/realestateandhomes-detail/4524-Emerson-Unit-5_University-Park_TX_75205_1098612156 just sitting on the market for 452+ days with no hope of being sold and there are several units in that development also.
Look at http://www.realtor.com/realestateandhomes-detail/3427-Granada-Avenue_University-Park_TX_75205_1098748742 on the market 455+ days. Just sitting there and the builder isn’t bright enough to lower the price. They are still in la la land thinking they will sell it for those prices.
Oh in the last example I listed….note the owner/builder is paying over $15,000 a year in property taxes until he sells it.
http://www.dallascad.org/AcctDetailRes.aspx?ID=602165000410A0000
There are many many other examples in the Park Cities. Too many for me to list. All just sitting on the market and the funny thing is the realtors all are trying to act like this is the bargain of a lifetime! Ha, ha.
There is plenty more room to fall. With the situation of the jumbo loans people are having a hard time getting loans. The true prices are much much lower.
For those too lazy to do a search….
http://www.realtor.com/realestateandhomes-detail/4608-Abbott-Avenue-Unit-110_Highland-Park_TX_75205_1102987739
This project has been finished for a while and almost all of the units are empty. Granted it’s a great area but these are just townhouses!
I feel sorry for the very few bagholders that already bought here before prices started to fall. No way they will get these sold at these prices.
WOW only $5460 a month with $100K down….how cheap can you get????
OOPs forgot the taxes insurance and those pesky utility bills
Just an update for you Bubble Bursted lovers.
After posting above on the dismal fate of 4608 Abbott Avenue in Highland Park, TX 75205, the realtor removed it from realtor.com so people wouldn’t see the properties sitting on the market for hundreds and hundreds of days.
But take a look at the realtor’s website and you’ll see most of them are STILL sitting on the market.
http://www.alliebethallman.com/perl/mlss.pl?c=aba&page=1&p=0&StreetAdd=4608+Abbott&ListPrice=All&CustomArea=All+Areas&Beds=All&Baths=All
No one wants to buy these overpriced “junk”.
Perhaps the most comical thing is reading old articles from November 2007 that give a good sense of the crazy thinking and out of whack to reality thinking!!!!
They are trying to say these $1 million places are for “young professionals in their early to mid 20’s”
Read it!
http://www.peoplenewspapers.com/ME2/Audiences/dirmod.asp?sid=&nm=&type=Publishing&mod=Publications%3A%3AArticle&mid=&AudID=da7d68f24889442d98449d08560d8327&tier=4&id=771E72700DF5436080CF5DBB7AF80C8E
Prices of Highland Gates townhomes, expected to be completed in fall 2008, start at $850,000 for a 2,418-square-foot floor plan called the Bouvier, and go up to $1.04 million for the upgraded version of a 3,236-square-foot plan called the Giradon.
The four modernist townhomes at Cragmont Avenue south of Highland Gates are in a similar range. One of the E.G. Hamilton-designed homes, a 3,600-square-foot, three-story unit, is listed at $1.25 million. The other three are already sold.
Many future residents will be empty-nesters from Dallas who have discretionary income and want to downsize, though some are young professionals in their mid-20s, said Diane Cheatham, owner of Urban Edge Developers, which built the townhomes at Cragmont Avenue.
“I think people are just changing the way they live,” Cheatham said. “They travel more, they’re active, and it’s a lot of work and expense to take care of a big lawn. Some people just prefer the easier lifestyle of a townhouse.”
Barnett estimates half of Highland Gates residents will be “move-down buyers — 25 percent we see as young couples who can’t afford to buy anything else in Highland Park, and 25 percent will be young professionals.”
For many of the younger residents, Highland Gates offers a somewhat less expensive way to live in the Park Cities, where the average home costs more than $1 million.
“The idea is that it’s very affordable for Highland Park; if you look at the entry level … this is it,” Barnett said. “Relative to what’s around us, it’s actually pretty affordable.”
_________
Meanwhile look at these properties STILL sitting on the market for 500+ days with no interest at all.
http://www.realtor.com/realestateandhomes-detail/3427-Granada-Avenue_University-Park_TX_75205_1098748742