Bits Bucket For August 23, 2009
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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Good morning hbb from Bristol, England!
Here are some photos from my temporary home across the pond, for the next 6 months :
http://www.flickr.com/photos/31545736@N05/3761359322/
http://www.flickr.com/photos/31545736@N05/3759520796/
http://www.flickr.com/photos/31545736@N05/3758719017/
http://www.flickr.com/photos/31545736@N05/3759503464/
Nice! I especially like the photo of the young lady holding the beer, flickring her middle finger. Sorry — I’m weird like that…
Good morning. A little late with the bits bucket. See, sometimes one hits the publish button and it just doesn’t happen. This is why I should always check that it went through.
So what was for breakfast, that stuffed stomach thing? I guess you’re probably on supper by now.
It’s 3:42pm here. For breakfast, we had homemade egg bagel sandwiches ( minus the haggus / black pudding
).
The big adventure of the day was venturing out to Costco (yes - much to our surprise we found out they have Costco here). It was rather empty, especially by American standards. One of the deli guys had sushi out to taste test - touted as ‘authentic Japenese Sushi’. He kept giving me rolls to taste test as he explained the wonders of wasabi. I didn’t tell him I was from Los Angeles, I just let him give me his spiel - sushi is pretty rare is England, as you can imagine (no pun intended).
The town is nice, people are friendly, and the pubs are unbelievable. You guys would love the beer, here. Especially you, Ben.
I posted some panaoramic photos I took for you guys, but I think that they’re stuck in the filter.
What does everyone think of this chart, btw :
http://www.chrismartenson.com/blog/crisis-explained-one-chart-debt-gdp/11570
Never heard of this ChrisMartenson…Is this a informative link ??
I found it on the Bogleheads forum. I read that everyday, as well - along with this blog.
The Bogleheads have been blind-sided by this whole ‘crisis’, btw. It’s funny to see the delay of knowledge and reaction between different groups. We have been talking about all these issues forever. The Bogleheads did not even start digesting any of this until Oct. ‘08. So, there are various posts that attempt to explain the debt situation, etc. But, none are as thorough as what I’ve learned from the past 5 years on this blog.
You guys should be proud.
The chart seems to contridict something I just read in WSJ or NY. They said debt to GPD is or will soon be 70% and at it’s highest was 105% during WWII.
sorry for bad typing. contridict = contradict and it’s = its
That chart is exactly why we’re in the mess we’re in…and it looks like it will only get worse for some time, with they way they are “solving” our problems.
Hope you are enjoying the U.K.!
Yeah, I’ve always wanted to check out the euro beer scene. Especially the real ale thing in England and the Belgian breweries. I hear that in Germany they sometimes have hefe with breakfast! Now that’s living. I’ve never had beer with breakfast, but it sounds very civilized.
Keep us up on what you are doing there WILA. We’ll have to meet up in Pasadena again someday and burn the town down.
Sounds like a plan!
Or, maybe an Arizona road trip is in order, when I get back. I’ve always wanted to go to Sedona. Isn’t that at or near where you are, Ben?
Ben — Go for the Czech Republic if you can manage it. This is the only country I have ever visited where the price of a draft beer at a restaurant is the same as the price for a soda
. It is also one of the most beautiful places I have ever visited.
“It is also one of the most beautiful places I have ever visited.”
The Czech Republic also has some of the prettiest ladies too - if you like ‘em busty, but sadly it appears they all smoke cigarettes too.
Czech Republic does have good beer. THere’s a region called Pilsen (spelling ?) the orgin of Pilsner beer. Harris Teeter here in Wash, DC has a good selection of beer and great Czech beer from Pilsen.
I love Pilsner Urquell. I can drink 10 of those in a sitting. Maybe Prague will be our next vacation destination.
Since Oly doesn’t appear to be up yet, I’ll say it- Beer for breakfast- Hooray!! Hefe and Cheerios- the breakfast of champions!!!
I hear that in Germany they sometimes have hefe with breakfast! And right after breakfast, the smart men and women of Deutsche Bank buy US mortgage debt.
Sorry, lame attempt at getting this OT
“THere’s a region called Pilsen (spelling ?) the orgin of Pilsner beer.”
That reminds me of a funny story about a lawsuit between a certain US brewery back in my home town and the town in the Czech Republic which brews the (original) beer called ‘Budweiser.’ It is a marketing lie to call (the real) Budweiser ‘a fine Pilsner beer’ as it is not brewed in Pilsen.
Perhaps it is needless to say, but the average Czech beer tastes much better than the swill produced by the afore-referenced brewery in my home town (which, BTW, is no longer really even an American beer, as it is owned by a foreign company).
I’ve never had beer with breakfast, but it sounds very civilized.
Oh, it IS, Ben! It really, really is!
*hiccup *
I love Pilsner Urquell too. I don’t drink beer often and I’m certainly no connoisseur. But I still remember the first time I tasted Pilsner Urquell - awesome! The perfect beer, the distillation of the pure essence of beerness… Everything I had ever enjoyed in a beer or wanted from a beer.
While I enjoyed visiting the Czech Republic, I think I enjoyed the beer more in Bavaria.
Since Oly doesn’t appear to be up yet, I’ll say it- Beer for breakfast- Hooray!! Hefe and Cheerios- the breakfast of champions!!!
Matter of fact, I was eating and drinking breakfast, so there, Mr. Sassy.
Hefe and Cheerios- the breakfast of champions!!!
You must be some sort of genious!
I spent a summer in Oxford 20+ years ago and it seemed like you couldn’t even get a “beer” there. It was all stout, ale, bitters, etc. So I settled for ale.
Sounds like a plan!
Or, maybe an Arizona road trip is in order, after I get back. We’ve been wanting to go to Sedona for quite some time. Looks like it’s only 24 miles from you.
Consider it done - this winter I’m coming to visit, drinks are on me.
I’m back home in Flagstaff after a whirl-wind 7 day trip working on foreclosures out west. (For those of you in AZ, Mohave County has more empty, defaulted houses than you can shake a stick at. If Bullhead City or Lake Havasu is your thing, there will be bargains in your future.)
BTW, it can get cold in Flag starting around December. I’m planning on picking up snowboarding this winter, so maybe we can hit the Snowbowl and then kick-back downtown. I’d like to show you my adopted hometown.
Nice - I’m down for whatever. Each winter, I say that I’m gonna go skiing / snowboarding, but have never made it.
Maybe this will be the perfect excuse to make it happen.
If someone didn’t warn me that the first day snowboarding would be the worst day of my life, I would have quit after day 1.
Thank God I didn’t because day 2 I could actually see some fun in the horizon
After day 3, there was no going back to skiing. Boarding is soooo much more fun, IMO.
The REIC lobbyists have a full-court press on politicians whose campaigns they fund to extend and possibly even increase the $8K “first-time home buyer” tax credit . I am thinking anyone who is sufficiently patient might end up getting even more than $8K from Uncle Sam when they finally get around to joining the Ownership Society as a “first-time home buyer.”
To counter the specious argument served up by REIC economists, I offer an even more specious one (I always like to fight FIRE with FIRE
):
It would be even more beneficial from a stimulus standpoint for the gubmint to just hand all American households $8K in helicopter-dropped money with no strings attached. I am sure most Americans can think of more useful ways to blow $8K besides throwing it into the bottomless money pit of unaffordable housing. Why unfairly target the money on new home buyers, when we could all be made individually- and collectively-better off with universal stimulus?
I stand by my stopped-clock prediction that Cash-4-Shacks will be extended, and possibly even expanded.
Nation’s Housing
$8,000 tax credit for first-time buyers set to expire Nov. 30
By KENNETH HARNEY
2:00 a.m. August 23, 2009
WASHINGTON, D.C. — It’s one of the biggest unknowns bugging would-be buyers of houses and condos this summer: Will Congress let the $8,000 nonrepayable tax credit for first-time purchasers expire as scheduled 14 weeks from now?
Or will the credit get a second life and be extended for another six to 12 months, taking pressure off buyers, realty agents and settlement companies?
…
This year, the two biggest housing trade groups — the 1.2 million-member National Association of Realtors and the National Association of Home Builders — are spending the month mounting unusually intense grass-roots lobbying campaigns to make the case for extending the credit, and maybe even expanding it.
The effort is targeted first at the districts of members of the two tax-writing committees — House Ways and Means and Senate Finance — but is expected to cover most other members as well, according to officials of the two groups.
Delegations of home builders and realty brokers already have begun descending on district offices, delivering what Jerry Howard, president and CEO of the builders association, calls “the hard economic facts” — the numbers of houses sold in each congressman’s district that are attributable to the tax credit; the economic ripple effects on local businesses, manufacturers and service industries; new jobs and income; plus the additional tax revenues that all this activity will help produce for local governments.
On a national basis, according to economists at the National Association of Realtors, anywhere from 300,000 to 350,000 additional sales of houses will be stimulated this year by the credit. Each home sale generates approximately $63,000 in downstream “ripple effects” elsewhere in the economy, they say — sales of furnishings, appliances, lawn mowers, landscaping, renovation materials, plus moving expenses.
If you accept the numbers — and some analysts consider them a stretch — this means the housing credit provides a powerful, immediate stimulus bang for the buck. Failure to extend what may be one of the most effective pieces of the Obama administration’s 2009 stimulus legislation would cost jobs, economic growth and tax revenues, the housing groups argue.
There are some early signs Congress may be getting the message. Bills already are pending in both houses to extend the credit for another year.
Senate Majority Leader Harry M. Reid, D-Nev., whose state has been among the worst hit by the housing bust, reportedly now favors an extension of the credit. He was quoted to that effect by the Las Vegas Sun on Aug. 5, adding, “It’s something we can get done.”
Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee and in a tight race for re-election next year, is co-sponsoring a bill with Georgia Republican Johnny Isakson that would raise the credit amount to a maximum of $15,000. Meanwhile, both the Realtors and the builders are pushing not only for extension of the credit, but for broadening it to cover all home purchases in 2010.
But can any of this happen before the Nov. 30 deadline? The key complicating factor here is Congress’ heavy load of higher-profile, pressing issues that will get attention before anything else in September and October: health care reform, climate change and energy, financial system regulatory reform and a new Consumer Financial Protection Agency, among others. On top of that, a tax credit extension would cost billions in lost revenues — a big negative when the federal budget deficit is already wallowing in record red-ink territory.
In the end, however, given the political economics of the housing credit, the odds favor some sort of extension, probably later rather than sooner. Don’t bank on a bigger credit, however, or broadening the concept to cover all purchasers next year.
Stories like this are helping me to really hate this country. Thanks, prof.
Any time. But please don’t take it out on your liver, as we enjoy your posts, and don’t want you to let the demon rum slow you down
You have problem with Corporate Communist Capitalism©®™, comrade?
FACIST not communist. This is the bidding of big business.
Fascism is when the govt controls the corporations, not when the corporations control gov’t. I know…. at this point it may seem like a fine point, but there are still a lot of non-government owned corps out there lobbying for their interest….
They will wait until the very end to extend. The REIC doesn’t even want the extension to be assured at this point. That way they can milk the “Buy Now! Sale ends soon!” schtick for all it’s worth, as they are very clearly doing.
Meanwhile, the number of foreclosures continues to increase…
Note the faux sense of suspense being created in the article that you cite. They’ll push it through in an instant when the time comes.
Spoke to a mortgage lender yesterday They said today is the time to buy.
Best Quote:
“Home prices and interest rates are expected to go up in the coming months”
Buy now before money gets more expensive … monthly payments get higher … you afford less of an abstract mortgage amount, … and, uhhhhhhhhh….. housing gets cheaper.
In the Austin American Statesman yesterday, some local UHS said something like: “I never dreamed that we would see interest rates this low. They’re only going to go up. Now is the time to buy.”
The AAS was on sale for over a year, but they recently took it off the market because nobody wanted to buy it. Does that prove that it is worthless?
Not true. There were buyers, but Cox didn’t want to sell it for what was offered.
You’re right.
Cox thought it was worth more. Edward, do you have an idea of what the numbers were - what ballpark the offers were in, what Cox might have expected for it, what are comp values of recent mid-size city newspaper sales?
I don’t, but I’m curious. I just heard that they had pulled it off the market after a year.
Don’t know the numbers, but heard the offers were quite low. Cox did end up selling the Waco paper and some other smaller ones in North Carolina and Colorado and Texas, I think.
I think that just leaves them with the biggest in the chain in Austin, Atlanta and West Palm beach. There are probably some others that I can’t think of at the moment, too.
“They will wait until the very end to extend.”
The advantage of this strategy is the additional ‘free’ psychological stimulus which comes about when sheeple are ’surprised’ by the ‘unexpected’ extension of Cash-4-Shacks.
I’m betting on another 12 months, with the option to extend after that, and it will be $10,000 — applicable to all buyers.
Kenneth Harney use to write for an online reic newspaper online. He’s on my list of real estate wolves.
He’s on my list of real estate shills masquerading as journalists.
Kenneth Harney’s paycheck is likely related to the REIC, so like Tom Ridge he has to be a “Team Player.” Recall De Niro in the Untouchables regarding Team Players:
http://www.youtube.com/watch?v=Zc9zF8G2Pvc
“Gag me with a spoon”
The government’s new shtick is to put things on sale, and give the difference to the seller. Cars, houses - what’s next? Whatever industry is willing to pay sufficient “facilitation payments” to the politicians I think.
Prof, your possibility of just giving individuals or households a lump sum might not be far off, provided the money is spent on certain favored industries.
Crum. I’m all-cash and one of the two banks that hold my money is now on the Treasury watch list - they received a stop-that-crap order, which I presume means they are too far into sputtering CRE loans. So if I pull the funds and move them to a “safe” (read: too big to fail bailed-out) bank, my interest income goes from 2% to 0%. It seems that the only goal these days is to lose less than the next guy - that it’s impossible to actually make money unless one is willing to gamble. Makes my effective rent more expensive.
Ah, yes, the price of Cheap Money……..
Goldman Sachs takes multi-billion dollar bonuses gambling with taxpayer funds, looses money, and still gets to live like they made a king-sized profit. They borrow at ZERO and lend to us at 18% or more, the charge massive fees for whatever they can conjure up, and still can’t make any money because too, too many deal were BAD, i.e., the borrower is never going to cover their bets.
IN the meantime, we all suffer lack of “growth” in our investments and savings, as the Bankster Group lives luxuriously with FED dollars.
Is something wrong here? Who is running Amerika?
I am in the same boat. I am with ING and shopping for a new place, if I can get a deal.
That’s not fun at all. I’m keeping our extra cash at home now. We use a small local bank that seems to be in good health. I hope that lasts, but I’m not counting on it.
Cougar’s alternative was to choose to move _toward_ the soon-to-fail institutions. With full FDIC backing, I believe he/she locked in 5% CDs (was it at WAMU?) as they desperately sought liquidity. So far, that strategy seems to have worked out ok…
I trust FDIC too. Hard to say if that trust is misplaced.
I got a WAMU 5% 13 month CD last fall, and also got another bank to match that 5% CD rate when I threatened to withdraw my $100K from them and open a WAMU CD with it. Somehow telling a bank you want to yank your money out from them may make them negotiate.
If FDIC fails anywhere, it fails everywhere. What bank wouldn’t have a run if the FDIC were unable to cover deposits at any failed bank?
We did the 5% 13-month CD with WAMU right before they failed…and I fully expected them to fail, so kept the total well under the FDIC limits.
It is one of the few decent accounts we have, and sadly, it will expire next month.
Check Bankrate dot com for possible places to park cash.
Personally, I like well run credit unions.
Also consider laddering CDs. Say, take $100,000 and divide it up equally between 1 - 5 year CDs. Each year you’ll get $20,000 plus interest to either put into another CD or elsewhere.
Best way to capture best current and future interest rates.
Real estate dirty bomb is ticking: - I like it.
http://www.ajc.com/business/real-estate-dirty-bomb-115983.html
Ah, yes … the next act of terrorism - the RE dirty bomb. The WMD all of us knew was real.
“The dirty bomb of commercial real estate hasn’t detonated yet, though many of us expected it by now.”
Add to that the ‘IEDs’ of prime- and Alt-A ARM resets and you can expect a whole lot of detonation in the next few years…
Commericial “retail” real estate is entering a phase the likes of which I have never seen before including 1982 & 1991…The failure of many large retail sites have unloaded a massive amount of underutilized land in area’s that in the past were considered “Bullet Proof”…Even the bottom fishing deep pockets are afraid to jump in…The saying of the day right now is;
“I would rather miss an opportunity then lose Capital”…
amen - i’m stealing that as my motto. Thanks.
” I would rather laugh with the sinners than die with the saints “. ~B. Bernanke …or maybe B Joel (toss-up on who said it first).
This is certainly true in Modesto, CA. In the Southwest corner of town, a very poor area on the edge of city limits, entire strip malls are now closed up — not a single tenant. Pit bull terriers at large and drunken young men roaming the streets like zombies with their pants nearly falling off and shower slippers for shoes. I have friends there who are in bunker mode, and they know this mess isn’t going to clear up for at least eight to ten years.
rms, a very sad image, powerfully expressed.
That, like some images in the Time article on Vegas, reminds me of Terry Gilliam or William Gibson settings … unwelcome in real world life.
Are those conditions somehow unusual for Modesto?
Unusual for sw motown, umm, no. To get a complete picture you have to include the stench of rotting carcasses from the tallow works wafting in the air, alternating in the fall with the odor of fermenting rotting grapes from the Gallo wine crush. Unlike other parts of the country there are growth industries - methamphetamine manufacturing and sales, not to mention the high rank motown’s achieved in auto thefts and gang warfare, but I digress.
I suspect the Fed sees it your way. This would explain why they just extended and beefed up one of their four-letter low-interest loan programs in an attempt to ‘contain’ the evolving commercial real estate situation:
Fed triples support of commercial lending
August 22nd, 2009, 12:00 pm
posted by Mathew Padilla
The latest from National Mortgage News:
“The Federal Reserve accepted $2.3 billion in investor requests for financing to purchase legacy commercial mortgage-backed securities at the second TALF subscription, up from $669 million at the first subscription in July. The Fed’s Term Asset-Backed Securities Loan Facility also provides financing for newly issued CMBS but there were no takers at the Thursday (Aug. 24) subscription. It is understood that several real estate investment trusts are gearing up to sell CMBS and may participate in the September TALF subscription. At the urging of commercial real estate interests, the Federal Reserve Board recently extended the CMBS TALF program until March 31 for legacy bonds and June 30 for newly issued bonds. The TALF program was due to expire at year-end.”
“I would rather miss an opportunity then lose Capital”
That is one way to express the deflationary psychology which the Fed utterly dreads. A large flock of vultures watching and waiting on the sidelines for real estate prices to revert to levels where they rationally pencil out as investments is antithetical to the irrational exuberance they cultivate as a means of keeping the economy on artificial life support.
Another good reason for a Congressional audit of the Fed:
It would be useful to know whether they deliberately promulgate economic propaganda to foster irrational exuberance, in order to encourage individuals to make stupid investment decisions. By contrast, it is entirely possible that they themselves are caught up in the group think of irrational exuberance, which leads them to provide misleading guidance to households and firms.
The bigger question here is whether and why the Fed should be working so hard to exert top-down guidance on firm and household decisions, as a free market works much better when decisions are independent and decentralized (as anyone who closely watched the collapse of the former Soviet Union can surely attest). A more recent memory is that of Alan Greenspan encouraging households to tap into the home equity ATM, and the evidence seems pretty clear at the moment on the very unfortunate consequences.
prof:
By contrast, it is entirely possible that they themselves are caught up in the group think of irrational exuberance, which leads them to provide misleading guidance to households and firms
I think it is that one, not that I am trying to cut anyone any slack.
“I think it is that one, not that I am trying to cut anyone any slack.”
If so, all the more reason for them to stay on task with conducting monetary policy, and to avoid free-lancing as personal financial advisers. Come to think of it, the collapsing credit credit bubble burned the personal finances of both Bernanke and (former NY Fed president) Geithner. So much for their reputations as know-it-all masters of the universe.
Have you read the history of the First Bank of The United States and the Second Bank of the United States? (Wiki)
This ain’t the PTB first rodeo.
Top leaders always believe they know best, deep down. Sometimes they can keep it secret, but sometimes not. It’s a personality trait one needs to lead large organizations.
“Access to power must be confined to those not in love with it.” - Plato
“I would rather miss an opportunity then lose Capital”…
Sounds like the worst-case scenario…LOL
I wonder if banks will be as slow to foreclose on commercial RE as they are on residential.
I expect behind-the-scene government interventions will be used to slow the pace of commercial foreclosures; i.e., the same as for residential.
Here is some bad news and some good news for would-be San Diego home buyers:
-The bad news is that the ’shortage’ of homes anywhere near what a reasonable person would consider ‘affordable’ has dried up, presumably thanks to the ’success’ of Cash-4-Shacks.
- The good news is that there is absolutely no shortage whatever of homes priced in the $1m+ price range. Contrary to the writer’s assertion, a slump in the high-end that results in lower prices for homes in La Jolla and Rancho Santa Fe will have the beneficial effect of making low-end homes more affordable. And once Cash-4-Shacks ends, the temporary inventory shortage may also pass, especially as the huge shadow inventory of homes at or near foreclosure eventually starts to come on to the market as REO offered at FIRE sale prices.
I also have to question Adibi’s assertion about rising home prices in 2010, given that the aforementioned shadow inventory is likely to increase due to a rising CA unemployment rate which is already at the highest level on record and set to pass the 12 percent level. Where does he think the demand will come from to drive home prices higher? Fundamentals suggest demand will stay in the dumpster, while supply will only increase as weak hands let go of loans they can’t afford, or just walk away from underwater loans they would rather not keep paying.
And then there is the prime- and Alt-A ARM reset tsunami which will be in full crest during 2010, and which will really stimulate supply at the high end of the price/quality distribution.
Perhaps Adibi has insider knowledge of some new government stimulus program on the way which has not yet been publicly announced?
Economists’ optimism for end of slump not catching
By Dean Calbreath
Union-Tribune Staff Writer
2:00 a.m. August 23, 2009
…
Many economists say the first sign of recovery will be when real estate prices stop falling. Since real estate got us into this mess, they say, so real estate will have to lead us out. Adibi, among others, believes recent sales trends show that much of the housing market already has hit bottom.
In San Diego County, home sales and prices have been rising for three months. In July, 3,809 units were sold, up 11 percent from a year ago. The number of homes for sale is dropping.
California now has a 2.8-month supply of homes selling below $300,000, compared with a 9.2-month supply a year ago. The supply of homes between $300,000 and $750,000 has dropped from nearly seven months last year to less than four months today. Cox said San Diego County could soon be seeing shortages of homes priced at $400,000 or below, as buyers slowly return to the market.
Median home prices remain far below historic norms. Adibi said a median-income California family would need 18 percent of its income to pay a 30-year mortgage on a median-priced home — the lowest percentage on record. In comparison, 45 percent of the family’s income would have been needed at the housing market’s peak.
Adibi said the housing downturn may have ended, at least for low- or mid-range homes. He forecasts that in 2010, California home prices will rise for the first time in four years, although only by an anemic 0.8 percent.
There are still hurdles on the path to full recovery.
Even if the slump has ended in moderately priced neighborhoods, it’s only starting to be felt in places such as Rancho Santa Fe, Del Mar and La Jolla. There’s currently an 11-month supply of $1 million-plus homes on the market, compared with a nine-month supply a year ago.
In addition, the weak job market is still putting downward pressure on home prices. Workers who have lost their jobs or had salary cutbacks are having a tough time paying their mortgages, which could trigger a new wave of foreclosures. And people unsure whether they’ll have a job from one day to the next aren’t out looking for new houses right now.
“Have prices hit bottom?” asked John Walsh, president of San Diego-based MDA DataQuick, which tracks real estate prices. “While some data continue to hint at that, it remains an especially risky call to make given the uncertainty over the magnitude of future job losses and foreclosures. There’s still quite a bit of distress out there and plenty of unknowns with regard to how lenders and borrowers will choose to proceed.”
…
I am feeling motivated today to conduct my periodic comparison of for-sale inventory on the MLS (ZipRealty dot com) versus one of the foreclosure listing web sites (ForeclosureTown dot com) for various North County San Diego zip codes. I counted single family homes plus condos for the MLS case, and all listings for ForeclosureTown dot com (don’t have filter capabilities, but I am assuming almost all are SFR + condos).
I am also assuming the listings in these two information sources are mutually exclusive, but don’t have the time or inclination to verify this. Take my Total column with a grain of salt, as it could either represent an overcount, due to overlaps or expired listings, or an undercount, due to incomplete coverage of shadow (non-MLS) inventory.
So here goes (sorry about the lack of formatting):
Area ZipCode MLS Foreclosuretown Total
La Jolla 92037 467 418 885
Rancho Santa Fe 92067 301 196 497
Carmel Valley 92130 243 281 524
Rancho Penasquitos 92129 51 163 214
Poway 92064 115 207 322
Rancho Bernardo East 92128 137 330 467
Rancho Bernardo West 92127 168 237 405
Overall listing stats for these Zip Codes:
MLS = 1482
ForeclosureTown = 1832
Total = 3314
ForeclosureTown listings as a share of the total =
(1832/3314)*100 = 55 percent.
Of course, given the foreclosure moratorium currently in effect, the ForeclosureTown listing figures should be viewed as undercounts of the true shadow inventory. Things may get much more interesting when they lift the moratorium. I look forward to renewing my counts at that point in time.
I am wondering about all the home “owners” who have not paid their mortgages for many months (some for years!), and have yet to receive a NOD. It appears that the “shadow inventory” statistics might be understated if the number of non-paying, pre-NOD pool is growing.
Any thoughts?
81 yr neighbor who has owned in this gated area for 14 yrs says today…”things are so stagnant here, nothings selling”. Then tells me that the” this condo/that condo…sold for $90k, that one for $150k and that one too for $150k” I have been here for 4yrs and ask her, what yr was that, 1994 she says. Well duh. I mention, until they are that same price again, I like so many will not buy.
The prices are around 300k=not selling 2/2 to 429k 3/2 not selling. HOA is $490.
Yep, seems like people still haven’t put together that the median wages of $38k will not support a market of 10X income.
She and quite a few other
(Indian Wells/Rancho Mirage/
PGA West, etc)
gay/straight retirees pay cash.
They are so far out of the loop
and clueless to what is
happening around
them and in the total US.
When you do not have to worry
about money, if you can
take a vacation, dine out every day,
pay the utilities,
kids are grown, some
folks don’t have a clear view of
what they were directly or
indirectly participating.
“Yep, seems like people still haven’t put together that the median wages of $38k will not support a market of 10X income.”
A news piece the other day put $400k/yr in the top 1% of income earners. So using the 2.5-times income rule for housing would suggest that the housing market in San Diego, CA is only for the the top 1% of income earners, an exclusive club!
What will force the US government to remove its price supports?
NAHB, NAR, Megabank, MegaInsurance - all are well represented in Washington, both in person and in “facilitation payments”.
How will the end game play out?
Just as one can now buy tulips for $10 a dozen, some day home prices will decline to affordable levels. All involved parties are well aware of this.
There are only two ways to get there..
One is that govt support will succeed in it’’s effort to regulate and slow the descent all the way to the bottom of the hill. The slower the speed, the safer and the least traumatic the ride will be..
The other way is the govt will somehow fail in that effort.. the brakes fail, and the bus takes a shortcut over the edge of the cliff.
I see no reason why govt would willingly give up it’s campaign before we reach the bottom. Nor, since we are all passengers on the bus, do i understand why anyone would encourage them to step back and let gravity take over.
My wife noticed that the Sunday San Diego Union-Tribune has once again started showing all details of the DataQuick home sales price statistics, now that Dough-4-Dumps has stimulated a debt cat bounce in home prices and sales.
Shocking
I love how the LA times always includes random MLS sponsored stats each week that are selectively chosen with a careful timeline, and scale to give the most positive spin possible.
Makes me want to vomit.
PUMP! PUMP! PUMP!
This is going to be relatively short lived and within a year the downward trend will be well under way again. I would be very surprised if the down trend was not bumpy with some ups along the way. This is all artificial, based on keeping foreclosures from reaching the general public.
Actually, the government-sponsored real estate free-market-distorting manipulation works on both the demand side* as well as the supply side** of the equilibrium condition.
* $8K first-time homebuyer tax credit, taxpayer guarantees of FHA and other agency debt, Fed MBS purchases to ‘contain’ mortgage lending rates, increase within the past year of the GSE conforming (aka “affordable housing”
) loan limit to $729K, etc., etc., etc.
** Foreclosure moratoriums, Save-Our-Home mortgage rescue programs to keep owners of unaffordable homes from walking away, constant hints from on high that price support measures and economic stimulus will soon stop home prices from falling (this both reduces walkaway incentives for households as well as the incentives for lenders to unload REO inventory in fire sales before prices drop even lower)…
Yep. Those of us who are simply looking for affordable homes (via low prices, not gimmicky mortgages/artificially low rates) are being hit from all sides.
It’s not easy being a housing bear right now, and the spousal unit is getting all jumpy. I was told just tonight that “we are going to buy a house by this winter.”
Can’t blame him, as he’s been waiting in a rental for over five years now.
I posted this earlier in yesterday’s story line, but didn’t write it until this morning, so i thought i would repost.
This is a short tale of real-tv lives from Florida. Personal experiences from Bubble-land.
I went sailing yesterday with owner of the waterfront home where i keep my sailboat near St. Petersburg, florida. during the trip i was surprised to learn that the house may be going into foreclosure anytime and i would probably need to find a new place for my boat.
the circumstances are complex, as this person recently lost their mate, and their job, so it’s not just a simple case of over-extension.
However, the couple did “re-fi” during the boom to invest in other properties. the residence is underwater so to speak, regardless of the circumstances, and paying on the debt looks foolish. the best solution is to live there until the bank moves them out.
the house has been theirs for more than 20 years, so it’s not like they could not have managed to keep the residence had the “re-fi” scenario not been used.
This person has a friend nearby who has been living under a looming foreclosure for nearly 2 years, making NO mortgage payments. so we can see the banks are in no hurry to lay claim to a depleted asset. i have heard of similar stories for expensive beachfront properties in the vicinity.
But, whenever the house is lost (or pending loss)…maintenance and upkeep become very low priorities. The upkeep and maintenance and taxes came up in conversation as another reason to leave this property in favor of a much smaller, less expensive and less burdened residence.
It will probably be another year before the place gets apprehended by the bank and sold off. At least, I am hopeful, as i need to find a new docking facility nearby, but i expect any repairs that are needed will be put put off for the new owners, in favor of keeping more money on hand for personal expenses.
Multiply this scenario by several hundred thousand people here in Florida and you get an idea of why properties are looking more dismal.
And remember, a bunch more re-sets are coming next year for those people that did the cash-out refi thingy, spending today in hopes of making more tomorrow.
“a bunch more re-sets are coming next year for those people that did the cash-out refi thingy, spending today in hopes of making more tomorrow.”
I suspect my next door neighbor was living large thanks to cash re-fi. He bought cheaply, and the prices had sky-rocketed ever since.
He lost his job a few years ago, but that didn’t stop him from expensively renovating his coop (tear out everything, start from scratch, new floors, walls, top of the line appliances, designer cabinets and furniture).
He’s still out of work. His dad works for cash, that could help with some, but not all expenses. It will be very insteresting to see what happens when the re-fi well runs dry.
Nychk, I know this is a little off-topic, but I wanted to thank you for your post a few days ago about the desperate lives of many Russian women after the collapse of the Soviet Union. I saw a horrific documentary about it and it was quite a reality check for me. It’s easy for us to be smug about the plight of people, especially women, in other countries.
I’m afraid there’ll be less and less to be smug about in the future.
Jobs are leaving, debt burden is already too much, with increased global competition for very limited world resources the cost of living will keep increasing worldwide… There’s not a lot of upside for American middle class.
On the bright side, when the going gets tough, the tough get going. It was true in Russia, it will be true here. The smug ones with a false sense of overblown entitlement will lose. But for those flexible and nimble, adversity and distress turn into great opportunities for personal progress.
Yeah, you’re right NYchk, the Russians really got going and pulled themselves out of the mess they got themselves in.
IIRC, you yourself claimed that Russians were BETTER OFF than Americans until the evil Americans came in and corrupted you guys, convincing you to do things our way and causing a terrible decline in life quality that is not Russia’s fault.
Pointing the finger and wallowing in your failures (while simultaneosly living in the USA) is not very mature.
BTW, how’s that Moscow condo of yours doing? Do you still believe that Moscow real estate is the best investment one can make?
“you yourself claimed that Russians were BETTER OFF ”
Huh?
Big V, I think you would benefit tremendously from a Reading Comprehension class. (The blog would be better for it too, LOL.) You’d also do well from introduction to some basic manners. A little bit more polish, a tiny bit more logic (PLEASE!), would be a vast improvement… One can only dream.
“how’s that Moscow condo”
I don’t own a “Moscow condo”. I own free and clear two average apartments with next to 0 carrying costs (maintenance & property tax under $50/month). They are doing fantastic, thanks for asking. Tenant’s still paying on time, rents are comparable to NYC rents.
I guess they don’t make scientists like they used to… Why is the simple equation of “rental income - 0 costs = good property to have” so difficult to understand?
Sorry hun, but I have excellent comprehension and an excellent memory, so I know who’s an asshat and who’s not on this blog.
Not only were you touting Moscow real estate as the *best*investment*ever, but you also claimed to be a leggy, blue-eyed blonde. Turns out you’re a pudgy, blue-eyed, brunette.
Rule #1 concerning manners is not to lie. If you do, then people won’t like you. I believe there’s another rule that says you should not move to the US from Russia and then proceed to tell everyone how superior Russia is and how the US is bound to end up in the freaking toilet unless it learns how to act more like Russia. That’s just dumb. Furthermore, your critical thinking skills could use a brush-up. You are second only to JoeyinCalif with your absurd manner of thinking.
Comment by NYchk
2009-08-18 20:31:21
… In fact, it wasn’t until after the collapse of Soviet Union and great reforms under the guidance of progressive American idealists and moralists such as yourself that Russian women found out they should NOT be treated equal.
P.S. Getting back to catalogues (you luv those, don’t ya?), how do you explain American strip-clubs? Legal prostitution in some states? Attaching (selling) yourself to a husband for economic reasons instead of love? And most importantly, no equal pay for equal work? Before preaching, look in the mirror and weep.
“were you touting Moscow real estate as the *best*investment*ever”
“the US is bound to end up in the freaking toilet unless it learns how to act more like Russia”
Reading. Comrehension. Look into it, seriously. And also into “how to behave in polite society” class. Your life, and life of everyone around you, will improve so much. Baby steps, honey, baby steps. It’s not that hard.
From the forum (http://forum.thehousingbubbleblog.com/index.php?topic=220.15)
NYchk
Newbie
Posts: 14
Re: Russia - Moscow
« Reply #15 on: October 07, 2008, 05:22:44 PM »
——————————————————————————–
Quote from: Big V on October 06, 2008, 10:06:33 AM
Are you saying that all the money in Russia is concentrated just in that one city
BINGO! Traditionally, going back to Soviet Union days, the wealth of the nation concentrated in that one golden city.
Moscow even used to be a “closed to outsiders” city, meaning, unless you were born in Moscow or exceptionally well connected, you could never move in. It was practically impossible to permanently live in Moscow, unless you were a native “moskvich” (a moscovite).
Nowdays the very first thing any newly well-off provincial Russian guy or gal does is buy an apartment in Moscow. (For reasons of capital preservation explained at length above, and because Moscow is THE city in Russia.)
I own and rent out property in Moscow, so I’m intimately familiar with that market, rental costs, incomes, and many unique risks. Property rights are my biggest risk. “They” (the government, LOL) may always decide I don’t NEED property in Russia unless I choose to live there.
Can Moscow real estate crash? Of course it can. But so can dollars become worseless, gold confiscated, etc., etc….Meanwhile, there’s almost NO TAX on real estate in Moscow, and NEGLIGBLE maintenence and operating expenses, and you can always rent it out at least to keep yourself from going hungry. It’s a real cash-earning asset (”real” as opposed to pieces of paper, including dollars in the bank, that so often became worthless in Russia’s recent history.)
Look, I’m a firm believer in the world-wide housing bubble… I’ll be surprised if prices do NOT fall somewhat in response to the current crisis. But when I compare Moscow prices with New York prices (same or higher) and Moscow monthy tax & maintenance costs (basically 0) to New York costs (sky high), keeping a real asset with 0 cost of carry becomes a no brainer, especially in these times of uncertainty and higher risk.
Quote from: Big V link
Can you link me to a site that publishes real data on incomes, mortgages, and house prices in Russia? My husband speaks Russian, so we can interpret it.
Best site for info on Moscow RE prices and market analysis: http://www.irn.ru/price/
By the way, Russian “realtors” in contrast to their US colleagues are forecasting that the market may fall since it rose too far too fast, and especially in connection with the current crisis. They’ve been pretty accurate forecasting last summer’s lull and slight decrease, and then new increases. I find their openness about the state of the market very refreshing.
Quote from: Big V on October 06, 2008, 10:06:33 AM
I also want to point at that, as evidenced by the advertising on this thread, Russia has been literally selling its women to people in the United States for quite some time now.
Gosh, you don’t say. As a blue-eyed long-legged Russian woman, I guess I should quit my job on Wall Street (which actually may happen sooner rather than later, LOL, with the way this train wreck is going, *snort*), and look for greener pastures as a mail-order-bride. A cheerful thought.
From the forum (http://forum.thehousingbubbleblog.com/index.php?topic=220.15):
NYchk
Newbie
Posts: 14
Re: Russia - Moscow
« Reply #15 on: October 07, 2008, 05:22:44 PM »
——————————————————————————–
Quote from: Big V on October 06, 2008, 10:06:33 AM
Are you saying that all the money in Russia is concentrated just in that one city
BINGO! Traditionally, going back to Soviet Union days, the wealth of the nation concentrated in that one golden city.
Moscow even used to be a “closed to outsiders” city, meaning, unless you were born in Moscow or exceptionally well connected, you could never move in. It was practically impossible to permanently live in Moscow, unless you were a native “moskvich” (a moscovite).
Nowdays the very first thing any newly well-off provincial Russian guy or gal does is buy an apartment in Moscow. (For reasons of capital preservation explained at length above, and because Moscow is THE city in Russia.)
I own and rent out property in Moscow, so I’m intimately familiar with that market, rental costs, incomes, and many unique risks. Property rights are my biggest risk. “They” (the government, LOL) may always decide I don’t NEED property in Russia unless I choose to live there.
Can Moscow real estate crash? Of course it can. But so can dollars become worseless, gold confiscated, etc., etc….Meanwhile, there’s almost NO TAX on real estate in Moscow, and NEGLIGBLE maintenence and operating expenses, and you can always rent it out at least to keep yourself from going hungry. It’s a real cash-earning asset (”real” as opposed to pieces of paper, including dollars in the bank, that so often became worthless in Russia’s recent history.)
Look, I’m a firm believer in the world-wide housing bubble… I’ll be surprised if prices do NOT fall somewhat in response to the current crisis. But when I compare Moscow prices with New York prices (same or higher) and Moscow monthy tax & maintenance costs (basically 0) to New York costs (sky high), keeping a real asset with 0 cost of carry becomes a no brainer, especially in these times of uncertainty and higher risk.
Quote from: Big V link
Can you link me to a site that publishes real data on incomes, mortgages, and house prices in Russia? My husband speaks Russian, so we can interpret it.
Best site for info on Moscow RE prices and market analysis: http://www.irn.ru/price/
By the way, Russian “realtors” in contrast to their US colleagues are forecasting that the market may fall since it rose too far too fast, and especially in connection with the current crisis. They’ve been pretty accurate forecasting last summer’s lull and slight decrease, and then new increases. I find their openness about the state of the market very refreshing.
Quote from: Big V on October 06, 2008, 10:06:33 AM
I also want to point at that, as evidenced by the advertising on this thread, Russia has been literally selling its women to people in the United States for quite some time now.
Gosh, you don’t say. As a blue-eyed long-legged Russian woman, I guess I should quit my job on Wall Street (which actually may happen sooner rather than later, LOL, with the way this train wreck is going, *snort*), and look for greener pastures as a mail-order-bride. A cheerful thought.
Ooh burn NYchk. Caught in a few lies, there? Where’s your LOL now?
NYchk,
Please keep posting. If you don’t like what someone is saying you can scroll on past them.
You have some great posts.
Thanks
Big V, why don’t you apply your “excellent” comprehension skills and re-read my posts again? “Property rights are the biggest risk”, “Moscow prices can crater”, “recent prosperity is based on oil” - oh, yes, you caught me, I was really pushing everyone to invest in Moscow RE.
However, for a so-called “scientist”, I’m really amazed at you not getting why zero carrying costs would be a very attractive property for real estate.
And you may not know anything apart from your small corner of the world, but why is it so hard to believe that in a country where currency and bank crises happened with sad regularity, the cash rich part of population preferred to buy an apartment to money in the bank? Even *I* prefer to keep my old apartments there as a diversification hedge, and I’m really in the cross-hairs of any possible future property seizure as an American… You just don’t get rid of 0 carrying costs property unless you have a much better opportunity presenting itself.
Big V, I’m sorry, but you’re a tunnel vision moron, who not only has no clue about the world outside of your tiny little corner, but refuses to learn. The world is big, and you’re not the center of it. No one owes you anything. If you’re unhappy with where you are right now in your life, get off your butt and start fighting for a better place, instead of wasting your time attacking other posters.
P.S. I’m 5.6, grey-blue eyes, and I still work on Wall Street (knock on wood). I used to have ash blond, dark blond, almost black, brown, strawberry, and even carrot red hair at some point - also very short, very long, sometimes straight, sometimes wavy, LOL. I go from size 4 to size 14 and back, and at each stage I’m happy with myself. I’m also a feminist, which you are not, despite your bizarre attacks of “anti-feminist posters” (what a joke, LOL). You’re a waste of space fake blond shrill American bimbo, with zero intellect or manners, and too much overblown sense of entitlement. Cheers!
You don’t own a Moscow condo, huh?
Hm.
No brainer, huh?
Uh-huh.
How’s your principal doing (on the Moscow condo that you don’t own)?
Ladies, please. I only meant to say that, based on the documentary I saw on PBS, many Russian women who were formerly cared for by the state, maybe not well, but at least had a gig and a roof over their heads and food, found themselves worse than destitute when the system collapsed, with few if any options to feed their families. And found themselves at the mercy of human traffickers in Eastern Europe, even in the US.
Now, what would happen to many American women if all of a sudden they couldn’t find ANY work? Yes, it can happen here. And just like the Russian ladies who found themselves underneath heavy-breathing Turks and such in a world turned upside down for them, I wouldn’t like to see American women trafficked to South America if the world turned upside down here.
What in the world are you talking about? We’re all equal, men and women. i know this because that is what has been preached by media networks and government schools for the past 50 years are so.
they have the same chances as men. they can just do like the men do.
Equality. That’s what it’s all about!
Here. Hear. for the social engineers who tell us all how the world is supposed to be except for the predilections of us bigots and homophobes.
Nychick has posted some great posts lately, including interesting articles. But I missed this one, so yeah, nychick, how about re-posting.
I often enjoy a spell of wrath and outrage on an otherwise peaceful Sunday.
How is it that an immigrant speaks perfect English? As a linguist, I find this fact HIGHLY suspect. Russian does not have articles, (a, an the), so this poster did NOT grow up in Moscow, unless..
“You are second only to JoeyinCalif with your absurd manner of thinking.”
(un)thinking like that is akin to that of the developmentally disabled. I’m not yet convinced nychik is that imbecilic.
Lender,
I’ve met NYchk, and she is Russian — although a Russian with exceptional English skills.
Most Russian women have drunkards for husbands.
oooh ooh cat fight……. something to brighten up a lousy day for me…just spent $500 on a new muffler tail pipes etc….rusted out….that hurt
thanks NYchk and Big V…….
I was gonna say the same thing.
Always glad to oblige.
Well, count me in as one of the more disappointed posters.
There is no reason for the nastiness. FWIW, I’ve never seen anything to indicate NYchk lied. People can have a difference of opinion without getting personally offensive.
Just my 2 cents…
For all you survivalists who think any city core will be like Beirut while your suburb will be lily-WASP and low crime, read this and maybe you will change your mind.
http://realestate.msn.com/article.aspx?cp-documentid=21179977>1=35000
BILA,
Nice link, but I read a strong REIC undertone -
“those suburban homes and yards you all used to want, well, they aren’t in style any more. Hip, “urban” living is in style now. Saturday at the lake or river is passe - now the thing is to spend it downtown drinking coffee, browsing boutiques and galleries, and standing in line to buy a cupcake. Condos, lofts, “urban” townhomes, oh yeah baby.” All it lacked was a quote from Richard Florida about following the creatives.
There’s a lot of that going around. We used to get mad at the car ads (here in Texas), because they were all showing pickups and SUVs tearing round through the mud, out in the country. They were selling vehicles by promoting reckless destruction of land. They don’t anymore. Now all those trucks and SUVs in the ads are driving through the shiny glass canyons of Texas cities. They are selling the vision of “urban” living in addition to vehicles.
I do feel under seige. Perhaps I should change my screen name to raving paranoiac.
LOL. Good point about being cautious!
However the world is running out of cheap oil while millions of new drivers are added to the roads in China and India every year. Most of the products you use are oil-based products.
To get to/from the suburbs at $5 per gallon will be painful. Urban core residents will use light rail or foot to do their everyday things (work, eat, workout, visit a doctor, socialize with friends). Just like Manhattanites are doing now.
BILA,
I take your point about the energy issue. I am an urban core resident myself, neighborhood just south of downtown, south of the river in Austin. I like not having to drive much or far, for the most part.
I would like to see the problems of suburbs and transportation and energy addressed by improving transportation and secondly improving the suburbs with more lively public spaces and more independent businesses.
I would like to see a better public transit system. I think it would be great if suburbanites around here had access to park-and-ride light rail and express buses and van pools to get back and forth.
It would also be great to have inter-city bus service with some satellite stations. I would take the bus to San Antonio more often than I go there now by car, if the bus made a stop just about anywhere south of the Greyhound station. I would enjoy going to Dallas or Houston once in a while for a museum exhibit or a concert, if I could do so by bus or train. (Buses are fine - we just need a system of a few in-city stops with express between, like the coaches in England.)
I am just fed up with RE and COA p1mping of “urban” VMU ad infinitum. A town, neighborhoods, amenities, and experiences that I (and countless others) have enjoyed are being commodified and fetishized as places of character are replaced by soul-less fake “districts” assigned fake names and perfectly nice things to do like walk to Zilker park or ride your bike downtown become a mantra for condo advertising.
Oh my. I had better go fill the bird feeders and bird baths and check my garden before I cry or explode.
We’re getting that here in Houston. A lot of “town centers” are being built.
What everyone forgets is the crowding. Not everyone is ready to trade space for convenience. And how convenient is it anyway is everyone is doing it?
I’ve lived in urban, near urban and suburban areas. They all have trade off pros and cons. But the older I get, the more I need space and the less I can stand crowds.
Then there’s the inner city taxes both overt and hidden…
And how convenient is it anyway is everyone is doing it?
NYC. subways. Everyone uses them. Best, fastest way around.
I agree completely with HIpZilker. I would love to have a great train from the desert to the beaches, downtown LA, or the GETTY and so forth. Aint happening unless you gas up and start driving.
Gas is OVER $3.00 again and rising every day.
Why in the frigging f are the prices going up?
Please give the lesson again about ’supply and demand’.
I thought in this case if the demand isn’t there the
price goes down. Not seeing that many drivers.
It sure isn’t the least bit crowded even during ‘rush hour’.
I paid 2.30 yesterday.
Bill,
If there was any justice in life, Section 8 riff-raff would only be settled in homes next to voters of a liberal persuasion. Let the chickens come home to roost in their backyard, not mine.
It’s already happening.
Section 8 are not ALL riff raff.
Truly, some are senior citizens who don’t have any money to speak of.
A guy I know who has serious health conditions. He doesn’t mistreat his rental.
Oh for pete’s sake. Not all section 8 are riff-raff. Not in my backyard. NIMBY. Be careful Sammy you’re starting to second like an elitist snob.
True, but their friends and / or relatives are riff raff and they bring them into the neighborhoods. My folks’ neighborhood turned into section 8 overnight.
F-14 (hispanic gang) fight on our front lawn outside my bedroom window, one guy across the street got his face shot off, several stabbings (two of them independent events on the same night), drug dealing and of course their beautiful cRAP “music” blaring out at all hours.
Do me a favor and move yourself into a section 8 neighborhood if you think they are wonderful people.
There’s a strong effort underway to gentrify cities.
It’s gonna enrich someone.
Hey guys,
I am looking at this house in Northern N.C.
Notice the price drops since ‘08. Next house I buy, I plan on growing old in with the DW….I might offer 20% lower if it’s still on the block when I get back…This will give you some idea what I am wanting when I retire…I trust you guys opinions..
http://www.trulia.com/property/1073653109-1123-Bray-Rd-Walnut-Cove-NC-27
I gotta go, but I will be checking back on your responses…
Looks fine and peaceful, but see my link above about suburbs. The article in the link mentions N.C!
I’ll take urban. Take my home base of Maricopa Counth (Arizona): Phoenix downtown and Tempe along the “lake” and near the light rail system will do better in the next leg of the real estate bust. But outlying areas such as Queen Creek, Maricopa, Casa Grande, Buckeye, Tonopah, and Apache Junction will turn to slums.
Graffiti setting in is when you got slums. This happened to Palmdale, CA after the last bubble and it hasn’t shaken off the section 8 types that moved in.
Casa Grande was slums in 66 that I was aware. As a preteen, I had never seen such um decrepitude.
Pretty, but looks like a lot of upkeep.
Pretty but much more work than I would want now. But I would
have like it several years ago.
does it come with the donkeys?
Unless you’re already familiar with the property and its plat, recommend you check who owns what around it and confirm whether there are any easements across any of “your” property other than for utilities - also that you don’t require an easement to get to the main road. Presumably you know why the entire 25 acres are not included and are happy with that and whatever risk there is about what can be done with the outparcel later on.
Very good advice, Chip.
stepn2me,
Beautiful home! It does look like a lot of work, though?
Sure puts into perspective how little we get for our money in So Cal.
“while your suburb will be lily-WASP and low crime”
Unlikely. Look for example at the recent law suit settlement and agreement to sprinkle more Section 8 housing among affluent communities in Westchester county.
I agree. Graffiti came to my neighborhood in Ridgecrest, CA in the 1990s during the last real estate crash. Now (oddly) the Ridgecrest real estate prices are holding onto their bubble levels at the peak. The reason is that the military base at China Lake is expanding in the latest Base Realignment and Closure.
Bakersfield and Los Angeles bussed in section 8 from their communities to Ridgecrest in the 1990s. It did not sit well with the long time residents, of course.
I grew up in Westchester County and loved it at the time, when it was mostly middle and upper middle class, with a sprinkling of behind-the-stone walls quiet money upper class, before the tsunami of investment banking and hedge fund posers moved in. It was great for kids, at least I remember it that way. A few years ago I cruised my old stomping grounds and it broke my heart. Just not what it used to be.
But, it wasn’t like all of Westchester was affluent, far from it. There have been poverty-line neighborhoods in New Rochelle, Portchester, Pelham, Mamaroneck, Mount Vernon, etc. since I wuz a pup. And I’m not talking about small pockets, either. I would imagine these areas have not exactly gentrified, either. So I don’t get it. Sounds like more social engineering to me.
This is not the norm. The norm is to put Sect 8 into as an isolated area as you can find.
That’s only partially correct. The more complete answer would be that Sect. 8 goes to those areas - urban or rural - where no one has “clout”.
Edge you nailed it.
“The more complete answer would be that Sect. 8 goes to those areas - urban or rural - where no one has “clout”.
The norm is to put Sect 8 into as an isolated area as you can find.
And there you have the outlying areas such as “Palmcaster” and Ridgecrest getting the social rejects from Los Angeles and Bakersfield. You guys got it right. Those areas have relatively fewer voters and taxpayers. Certainly far fewer wealthy people to influence the zoning laws and what have you.
As for sammy above, it’s a dream that the social regressives (who lie and call themselves “progressives”) will get their just deserts and have their beloved section 8 types move in.
They send their kids to private lily-white schools, then to Harvard, where they can weep about the downtrodden.
People who grow up in Russia simply do not speak English as well as you do.
Not true. See my post above WRT having met NYchk — and she is Russian.
Sure does have a terrific mastery of English, though!
And that was a very rude assertion to make, Lender. Doubting someone’s background because their language skills are too good? How do you know she didn’t grow up in a bi-lingual household? I know a family whose children speak THREE languages flawlessly, because they were smart enough to speak them all on a consistent basis.
Come on—we can do better than this.
This looks like a fascinating read. My family members are kicking me off the computer at the moment, so I will put it out here for later consumption (and for anyone else who wants a take on the toxic finance problem).
The Financial Times
How toxic finance created an unstable world
By Wolfgang Münchau
Published: August 23 2009 18:46 | Last updated: August 23 2009 18:46
Two years on, what do we know about the global financial crisis? We still lack a conclusive theory, but we know a lot more than we did in August 2007. We know, for example, that simple monocausal explanations are at best insufficient and most likely paranoid and lazy. If you still blame Alan Greenspan, former chairman of the Federal Reserve, or central bankers in general, you have not got it.
Nor can you explain it by “soft” factors such as greed and bonus payments. These played a role but none can serve as an adequate explanation of why the crisis broke out when it did, since they had been present for many years.
My own gut feeling: this has been a crisis of economic policy first and foremost. The financial crisis was necessary for the economic crisis to occur but it was not sufficient on its own. Each depended on the other.
The best description I have found of how economics and finance interacted is by Anton Brender and Florence Pisani*. The two French economists describe in great detail how money from European and Asian exporters ended up in US consumer or mortgage debt and how risk was transformed in the process. The main point is that global imbalances would not have become so extreme if global finance had not provided exotic new instruments.
Dollar-rich Chinese, Japanese and German investors did not lend the money directly to the subprime mortgage market but they invested in opaque credit products, such as collateralised debt obligations, which they mistakenly deemed to be as safe as US government bonds.
…
People are abandoning their homes all over town. It’s unreal.
One man’s abandoned home is another man’s future foreclosure.
Roubini warns of double-dip recession:
http://www.ft.com/cms/s/0/90227fdc-900d-11de-bc59-00144feabdc0.html