Trapped, Handcuffed Or Held Hostage In California
The Mercury News reports from California. “Reeling from the recession’s one-two-three-punch of job woes, climbing mortgage payments, and evaporating equity, desperate Silicon Valley homeowners are dipping into a nearby income stream to avoid foreclosure: That bedroom just down the hall. ‘Renting out bedrooms is a growing trend,’ says Sunnyvale housing counselor Maritza Wong. ‘And it’s not just lower-income people doing it, but even people who were making good money before losing their jobs.”’
“‘I’m up against a wall and I had no other place to turn for income,’ said Rafael Porras, a waiter who began renting out a room in his downtown San Jose condo this month after he was squeezed by pay cuts at work and a mortgage payment about to rise. ‘But I had to do it because I don’t want to walk away from this place. My credit’s excellent, and without good credit, you’re nobody.’”
The Philly.com. “The average relocation rate for 2009, measuring job seekers who took positions in new towns, was about 13 percent, second lowest on record, according to a survey by Challenger, Gray & Christmas. The rate was just 11.6 percent in 2008, when the housing market collapse was at its worst. Many people can’t or won’t move because they have an ‘upside-down’ mortgage or kids in school, says Paul Sorbera, president of (an) executive recruiting firm which serves the hard-hit financial industry.”
“Having recently parted ways with his employer, Bruce Mirken seems the likeliest of candidates to pick up stakes and relocate for a new job. But he isn’t budging, not even if the perfect job in his areas of expertise beckons from out-of-state. The reason? He simply likes where he lives. ‘I’m not sure if I’ll find something similar to my previous position, but circumstances of my life are such that I am not going to leave San Francisco unless I have absolutely no choice,’ Mirken says.”
“If the worst-case scenario comes to pass - he runs out of money, is forced to sell his house and wears out his welcome crashing on friends’ sofas - Mirken might admit defeat and broaden his job search. ‘But I’d have to be feeling pretty desperate,’ he says. ‘Very seriously, my intention is to leave San Francisco feet first.’”
“Places where people typically tend to dig in their heels and refuse to move for lifestyle reasons include Chicago, New York City, California, Colorado and Austin, Texas. On the other side of the fence, there are unemployed people who would gladly move, but they are ‘almost trapped, handcuffed or held hostage by the current mortgage situation,’ says Jeff Wittenberg, chief leadership officer of (an) executive search firm.”
“As home values began to creep upward in the middle of last year, Silicon Valley home- owners may have thought the housing market slump was behind them. But they may be in for a ‘double dip.’ Other California metro areas Zillow thinks are threatened by a double dip include Santa Cruz, San Diego and Ventura. Stan Humphries, the company’s chief economist, said further home price depreciation makes sense in the face of high unemployment and the likelihood of continued foreclosures nationwide.”
“‘What we’re seeing is the natural evolution of the market correction, which we saw a little bit of relief from in 2009, because of substantial policy support’ from the federal government, said Humphries. ‘Things still need to be played out.’”
The Press Democrat. “Sonoma County last year recorded the lowest number of million-dollar home sales in eight years. Last fall in Sonoma County, there was a 15-month supply of homes in the million-plus market, compared with just a two-month supply of homes priced under $400,000, according to a September report by Rick Laws of Coldwell Banker in Santa Rosa.”
“But Doug Swanson, a broker associate with Pacific Union International in Santa Rosa, said much of that inventory is sitting because of some perceived problem by buyers. In this market, he said, buyers look at any problem as a reason not to buy. Swanson was one of a dozen agents and brokers from several firms that gathered Tuesday for the monthly meeting for specialists in luxury home sales. The group later toured the unfinished estate of real estate investor Robert W. O’Neel III. Now in foreclosure, the 29-acre Shiloh Estates property north of Santa Rosa includes a main house of more than 14,000 square feet, plus a wine cave, 10-car garage, recreation barn, pool and tennis court area.”
“About $9 million already has been spent on the home’s construction, and it still needs significant work to bring it to completion. The listing price is $3.5 million.”
“Cynthia Wood, an agent in Sonoma with Sotheby’s International Realty…noted Tuesday that the Sonoma Valley still had a 12-month supply of million-dollar homes. And if the economic downturn continues, more owners of such homes may find themselves pressured to sell. ‘It is absolutely still a buyer’s market,’ Wood said.”
From KFSN. “Several Valley families say a foreclosure business left them out of their homes and out thousands of dollars. For 10 years, 1162 Filbert Avenue in Clovis belonged to Robert and Christella Sanchez. Bertha Aguilar says it was supposed to be her dream home too. Aguilar: ‘We really thought it was going to be our home, it was really a nice house. Big.’”
“In May 2008 the Sanchezes, facing foreclosure, say they contacted United Investments which promised to ’short sale’ the home for them if they signed over the deed to their home and moved out. So they did. Then in December 2008 the Aguilars moved in as renters. They say United Investments advertised the home as a ‘rent to own’ opportunity, a way to get into the housing market for cheap.”
“The Aguilars say the company told them to ignore the foreclosure notices that kept appearing at the house. Aguilar: ‘We had never bought a home before, so we’re working with them thinking they’re a legitimate company. Trusting them and this happens.’”
“The foreclosure process, which the bank had started six months before the Aguilars ever moved in, was finalized and they were evicted: ‘They never applied any of our payments to the mortgage. Nothing was applied. I paid a deposit, all together I paid them like $5600.’”
“Arnel Reyes says in September 2008 he signed over his deed and paid $500 of a $2,000 fee to United Investments to try to save his Bay Point home from foreclosure and to protect his credit. Reyes: ‘They said if they couldn’t save it, they would foreclose under their name, not our name. Basically I spent $500 for nothing so it came around, it still foreclosed under my name, my wife’s name, and we still got hit with 7 years, 10 years of bad credit at this point.’”
The Modesto Bee. “Stan and Karen Salbeck have been trapped in a foreclosure nightmare since 2007. The couple’s been battling nonstop with their lender over a mortgage modification, exchanging correspondence via FedEx. ‘We’re up to 31 months without making a payment on this house,’ Karen Salbeck said. ‘We don’t know what phase of foreclosure we’re in because it starts and stops.’”
“The Salbecks’ home was supposed to be the couple’s sanctuary, not their downfall. They bought it new in 1992 for $159,000. But they refinanced it several times, including in 2005 at the peak of the housing boom, when they tapped the home’s equity and agreed to a nearly $500,000 mortgage. That loan was fixed for two years, then converted into an adjustable-rate mortgage.”
“Soon after getting the loan, Stan Salbeck got injured, forcing him to retire from his well-paying job as a Stockton firefighter. Then the Salbecks — like homeowners throughout the Northern San Joaquin Valley — watched their home’s value start sliding.”
“At first, the decline was gradual, so they tried to get their lender to accept a short sale. They found a buyer willing to pay $472,000 for the home in January 2008, but the Salbecks said their lender, Countrywide, rejected the offer. Since then, their home’s worth has plummeted to about half that value.”
“At one point, the Salbecks and Countrywide agreed to a loan modification that would collect $2,775 per month from the couple until the outstanding $492,362 debt was paid off. The Salbecks said they’re still willing to abide by that agreement, and they can afford that payment. But the now-defunct Countrywide inexplicably pulled out of that deal, and instead demanded more than $4,000 per month.”
“Karen Salbeck lives in dread of FedEx deliveries. ‘My dogs bark and I just run to the door,’ said Salbeck, who has memorized when the FedEx delivery route weaves past her home. ‘It controls my life. I’m afraid someone is going to come to my house and give me a 48-hour notice to leave.’”
The Bakersfield Californian. “The median sale price of existing single family homes in the Bakersfield area last month was $127,200, down 5.8 percent from $135,000 in December, but up 0.6 percent from January 2009. ‘Before we get too euphoric over the price recovery, the evidence still remains that the recovery is a long way from over,’ said the report’s author, Gary Crabtree of Affiliated Appraisers.”
“Supply is increasing, he said. Total active listings rose 9.9 percent from December to January while sales of existing homes fell 18.8 percent month-over-month and were down 30 percent for the year. Notices of default in Kern County fell 10.8 percent from 862 in December to 769 in January, according to the Kern County Assessor Recorder’s Office. Foreclosures during the same period fell 24 percent from 724 to 548.”
“Fifty-three million dollars (is) how much money, in total, the nine remaining, Kern-based credit unions reported losing last year. Credit union officials say the real story is the downturn in the economy — layoffs and declining home values that led borrowers to default on their car loans, mortgages and credit card debt.”
“Credit unions are now focused on cutting costs and making only the most prudent loans. Even so, they do not expect to recover in a meaningful way until employment picks up significantly across the region. ‘I think what we are experiencing … is a situation of adapting to a long, recessionary economy,’ said Robert Boland, CEO of Ridgecrest-based AltaOne Federal Credit Union.”
“Donna Severs, CEO of Bakersfield City Employees Federal Credit Union, credited her institution’s good fortune to its stable, closed membership of city and transit system workers, a group that has avoided widespread layoffs. Another big factor was its decision to pull back from real estate lending a few years ago, she said.”
“‘We’ve just tried to be real careful,’ Severs said. ‘So has everyone else — I don’t want to gloat. There but for the grace of God go us.’”
The Press Enterprise. “Coming off a nearly $10 million net loss in 2009, Temecula-based Mission Oaks Bancorp is taking steps to bolster capital, write off bad commercial loans and boost reserves to head off future problems. The parent of the five-branch Mission Oaks National Bank on Monday reported a net loss of more than $9.8 million for 2009. That was deeper than its $1.7 million loss for 2008.”
“A statement said the past year’s losses were primarily attributed to “significantly increased provisions” to the company’s allowance for loan losses, which totaled more than $8.9 million for the year ended Dec. 31. That compared with $4.5 million the prior year. President and CEO Gary Votapka said by phone Tuesday that losses were tied primarily to commercial loan delinquencies and foreclosures.”
“The bank does a mix of personal and commercial lending, including home mortgages, but is primarily focused on business services. ‘I don’t know of any kind of business that hasn’t been impacted by this economy,’ Votapka said.”
Dow Jones News Wire. “Anaverde LLC has won court approval to put its incomplete California housing development on the block this spring. Judge Mary F. Walrath of the U.S. Bankruptcy Court in Wilmington, Del., on Friday cleared Anaverde to put its Palmdale, Calif., housing development on the auction block April 7, according to court papers.”
“Anaverde sought Chapter 11 protection Jan. 15, immediately seeking to sell its assets, which include 3,500 undeveloped lots and an adjacent development planned for 157 single-family-home sites. The development never got off the ground after the subprime mortgage crisis drew little interest from the middle-income buyers Anaverde targeted. Further hurting the developer was the discovery that its lands sits on a spur of the San Andreas Fault, making construction on most of the property ‘infeasible.’”
Contra Costa Times. “The Sheraton Pleasanton Hotel, a prominent inn located next to Stoneridge mall that tottered into default and then foreclosure, has been bought by owners who plan to upgrade the complex. Numerous Bay Area hotels have slumped into defaults or foreclosures on their mortgages over the last year-plus. At the end of 2009, seven times as many hotels in the nine-county Bay Area had tumbled into defaults on their mortgages than was the case at the end of 2008, a new survey by Atlas Hospitality Group shows.”
“More hotels will become mired in foreclosures as the economy sours further, warned Alan Reay, president of Atlas Hospitality, which tracks the California hotel market. ‘In California alone, we have 67 hotels being foreclosed on, and 320 in default,’ Reay said. Both numbers are about five times the totals from a year ago, he estimated. ‘The number of hotel defaults is growing exponentially.’”
“Prices have melted down for hotels, he said. ‘From the 2007 peak in values, prices for hotels have fallen 50 to 80 percent,’ Reay said.”
The Friday Flyer. “The following article and charts were provided to The Friday Flyer by City Manager Lori Moss. Gene Wunderlich is the Director of Government Affairs for the Southwest Riverside County Association of Realtors.”
“The attached charts summarize Southwest California housing activity for the year just past and provide some perspective on where we’ve been and where we are today. The first chart is always interesting in that it gives us a six-year window on the market. One of the first thing you’ll notice is that sales were off 2008 levels – about 20 percent in Temecula, Murrieta and Lake Elsinore, 40 percent in Wildomar and Menifee and just 7 percent in Canyon Lake.”
“The Median Price of homes in the region continued to decline year-over-year in 2009 – down 15 percent, on average, from 2008. That ranged from dips of 22 and 24 percent in Menifee and Wildomar, to 14 percent in Temecula, 11 percent in Murrieta and just 2 percent in Lake Elsinore. That brought our peak-to-trough median price down 66 percent in Lake Elsinore, 58 percent in Canyon Lake, 52 percent in Menifee and Wildomar, 49 percent in Murrieta and 45 percent in Temecula.”
“We also have maps that show the current status of pre-foreclosure and bank-owned properties in the region. These numbers could change, perhaps dramatically, during the next 60 days. Banks typically hold off foreclosure activities during the holiday season plus some moratoria and loan-mod efforts are scheduled to expire in the first quarter, so the number of notices of default (pre-foreclosure) could increase significantly.”
“Similarly, there has been a lag between NODs (Notices of Default) filed and actual trustee sales to the banks. As banks get more aggressive about clearing their books of non-performing assets, we may see the banks taking more properties back, followed by an increase in releases to the re-sale market – as has long been rumored.”
“Ready for some good news? I mentioned peak-to-trough pricing in that previous paragraph because it appears – appears – that our prices may have bottomed out, or be very close to it. Looking at quarter-to-quarter run rates, we have showed 1st to 4th quarter declines every year since 2006. In 2009, 1st to 4th quarter showed nearly a 5 percent increase in Temecula, 4 percent in Murrieta, 24 percent in Canyon Lake and drops of just 1 percent in Lake Elsinore and Wildomar and 6 percent in Menifee, for a region-wide median price increase of 4 percent.”
“If we can just keep that up for the next 10 years we’ll be back to where we started.”
“If we can just keep that up for the next 10 years we’ll be back to where we started.”
Absolute idiots. Time for that second cup of coffee.
Whew!
For a moment there, I was worried that housing might become affordable, and that would be a disaster! But, if we can keep prices rising for no good reason at all, we can return to the years of the Bubble! Good thing wages are keeping up… oh, wait - they’re not!
What type of deranged eCONomy not only has rising unemployment + declining wages + rising housing prices, but also doesn’t see a problem with this?!
What type of deranged eCONomy not only has rising unemployment + declining wages + rising housing prices, but also doesn’t see a problem with this?!
————————–
This is exactly what I keep asking myself. What part of this puzzle are they not getting?
Time to move.
Do you think the Dumb Dems and the idiot in charge will continue to subsidise the down payments with $8000 for the next ten years? Don’t all yell at once!! Call the SEIU or Acorn to help you. NOT!!!
“Karen Salbeck lives in dread of FedEx deliveries. ‘My dogs bark and I just run to the door,’ said Salbeck, who has memorized when the FedEx delivery route weaves past her home. ‘It controls my life. I’m afraid someone is going to come to my house and give me a 48-hour notice to leave.’”
I’m the Fedex driver in Fallbrook…Wachovia (Wells) has just started to send their “get the f#ck out notices”. BOA (Countrywide) is our bread and butter, none stop every day.
Thank goodness we don’t need a signature on these bank notices or they’d never get delivered. Business is mostly cell phones, mtg.modifications/evictions, and an obligatory Amazon box now and then.
I’m full-time, getting 30 hrs. a week. Still no layoffs though.
The Salbeck’s are a perfect example of what’s wrong with the mentality of borrowers . It’s really larceny that is twisted into acting like a sympathy case.
(1) Bought property in 1992 for 159k .Ended up taking out 350K in equity by 2005 . Where did the 350 thousand go ?
(2)The Salbeck;s have gone 31 months without making a payment which is over a 199k in missed payments .Now this couple has benefited by over 450k if you include the free rent .
(3) Mr Salbeck at 47 said he retired because of health reasons and said they can afford a 2,700k per month payment . This is a good amount of money monthly to get into a cheaper place ,but they don’t want to move
The real problem is that they changed this loan into a recourse loan by all the refinances . These people that BS everybody about their motives are just trying to stroke the Banks and get them to write off the 450k they have taken and let them stay in the place for peanuts in spite of their extractions and free rent for 31 months . Does anyone really feel sorry for this couple who is acting like the taxpayers should rescue them ? They are saying they are willing to pay 2700 a month ,but these jerks aren’t paying anything per month .
Gamers wanting other people to pay for their folly.
I made a mistake .Its not 199k in missed payments it’s over 100k in missed payments however .
Yep, she’s stressed in case Fed Ex comes. Hasn’t made a freakin’ payment in 31 months — could have saved and bought another house outright in Modesto!!!
I can’t decide whether I’m jealous or pissed off!
These people got a pretty good ride out of milking their house for money to finance their lifestyle. They have nothing to complain about. They gamed the system and won.
Actions speak louder than words . They tried to do a short sale a long time ago that didn’t work out and the property went down more and now they are saying they want to stay . I guess I would want to stay also if I was staying for free . The issue might be the agreement that Countrywide made with them that Countrywide reneged on apparently . Maybe it was only a temporary agreement by Countrywide ,who knows .
KICK THEM OUT.
THROW THEM IN JAIL.
The home behind me in Long CA is in foreclosure. They paid $379,000 for it in 1996 and now owe $1,400,000. They have not paid the mortgage since last Feb. They do have a nice porche and bmw
This is a big issue . We are bailing out banks that aren’t even
foreclosing as quickly as possible to prevent more loss . Of course you have the Government that is at a cross purpose trying to keep people in homes they can’t afford, so they are just living there free . Oh well , who will be a winner and who will be a loser has nothing to do with fair .
Spot on Wiz. I wonder if the reporter even asked where the $350K went?
What’s your area of deliveries, one of the “big 4″ states of foreclosure, or somewhere else?
Fallbrook is in Socal
North San Diego County to be precise. Used to be a semi-rural area. I imagine that now its packed to the gills with McMansions.
my brother used to go down there from LA to hang out with friends back in the 1960s..he really loved that area.
It is beautiful, but hard to get in and out of if you have to commute to work. It still looks pretty rural, believe it or not.
“Business is mostly cell phones, mtg.modifications/evictions, and an obligatory Amazon box now and then.”
No little Viagra presents for the seniors from the government?
I dunno what to say about these people. Had all sorts of advantages with a low cost house and a high paying job. Firefighters and how worked that system is in Cali. The disability claim; really wonder about that. Were you crippled in an accident? So, this guy is in a wheelchair and can’t get another job or go to school for an education to do something less physical? Focus on what you can do.
Oye. So much to hate about these characters.
Refinanced your way to oblivion and now living for free. I know it’s Stockton but it isn’t the worst place to live in the world. A hour from Sacremento, hour and change from San Fran and Santa Cruz. Not for commutes but for activities on weekends or what ever.
So, this guy is in a wheelchair and can’t get another job or go to school for an education to do something less physical? Focus on what you can do.
Oh, for goodness sake! I have a good friend who’s in a wheelchair. He was in an auto accident and his injury forced his medical retirement from the National Guard. He’d go back into the service in a heartbeat.
These days, he works for a local private school, and he’s a community volunteer as well.
So, this idea that people in wheelchairs can’t/won’t work doesn’t wash with me.
Our top programmer here is in a wheelchair.
I should mention that I also have a wheelchair-using friend in PA (neighbor of my parents) who owns an insurance agency. He has a hand control-equipped car and airplane.
They said they can afford 2,700 a month for rent or mortgage, or whatever .That tells me they are clearing over a 100k a year ,even in retirement .My hunch is that they have over 600k sitting in some account .
.Look at how much they must of saved living free in the house for the last almost 3 years . They didn’t say anything about not having health insurance or that medical bills took their funds.The media never asks these people how much do you have in you or your kids bank account right now . Why don’t you pay down the loan you leeches .
Look I have talked to people who took out
money from their house making it a non-recourse loan . They go to a lawyer and they start a dishonest attempt to scam their way into a BK without any loss of funds they are pocketing . You can understand a broke person being released from debt ,or a person that hasn’t gotten any income for 2 years because of unemployment or tapped out because of medical bills . I know of someone who just got 30k in dental work done who is planning a BK and got the work done with the idea that the BK will make it free dental work .
excuse me …making it a recourse loan ….
State disabilty insurance pays pretty good in CA if you can get it no problem for a state worker I imagine plus its tax free
so this guy is doing OK IMO
If he was a firefighter, then he has medical unless he was fired.
Comment by potential buyer
2010-02-10 15:44:16
If he was a firefighter, then he has medical unless he was fired.
—————–
That would probably depend on when he was hired, and the terms of his disability (work-related?).
Do know that the days of “lifetime healthcare” are long behind us in every case I’m aware of (teachers, firefighters…not sure about police departments). The old guys did get grandfathered in, but these benefits are no longer available to the younger set, and haven’t been for awhile.
I guess that was part of my point. Hated that I wrote the post that way. Realize that was poor wording on my part too.
Most of the people that I know that are actually disabled seem to have a very strong desire to contribute.
From my experience with some severly disabled autism patients; their entire week was crushed if they didn’t get a chance to go do their little jobs. They craved to feel worth.
Hence, I struggle with the “disabled” and ran up a bunch of debt BS these people are spitting out. In the article the guy is standing there looking at the computer.
Right after taking a big cash out the guy suddenly can’t pay back the loan. Bunch of serial refinancers here.
Just says he was injured, not crippled. That could mean anything!
elvis,
Thank you very much for your insights!
Hope you get your hours up (unless you don’t need/want the money, and enjoy the extra time off).
“They bought it new in 1992 for $159,000. But they refinanced it several times, including in 2005 at the peak of the housing boom, when they tapped the home’s equity and agreed to a nearly $500,000 mortgage.”
So, let’s see, they took away…………$300,000 more or less with fees.
Then,” We’re up to 31 months without making a payment on this house,’ Karen Salbeck said.”…………
So, let’s use Interest Only at 5%, that would be 31 x 500,000 x .05/12 = $64,500 in back payments, or a total of $364,000 they have taken from the bank.
And they’re crying about maybe losing the house they already have poached approximately 6-7 years of average American total family income, basically living for free??
They’re afraid they might get a notice to vacate?
You bet. I wouldn’t want to get out free housing, either. Maybe the house will cough up some more money for them.
I need to go and dry my tears. This sounds just too sad for me.
Found their full address on the White Pages site. Stan and Karen actually live in Oakdale.
The first question to ask them: Where’s The Money? $300K in equity from refinancing and another $100K or more from 31 months of not paying the mortgage is a pretty tidy sum.
31 months an not one payment. After getting a 500k loan to boot. Man I would love to have had their lifestyle on all that ‘free’ money! Who’s the sucker now? I am!
Yep. Lots of us are probably feeling pretty foolish right now for not getting in over our heads then demanding a principal write-down.
“‘Renting out bedrooms is a growing trend,”
My son tried that here in Salinas to save money but it turned out that the LL just wanted the money but not the tenant. They told him he couldn’t flush the toilet at night because it woke them up. They put a small frig in the BR but he couldn’t use the freeze in the kitchen. He couldn’t change the heat, couldn’t use the family area downstairs, had to take off his shoes when entering, couldn’t have any guests over, etc. They were renting out two of their BR’s and during the 6months he was there turned over tenants until no one wanted to rent. They bought the house when the market started down to resell in two years and now have lost half its value.
When I was in my twenties and had just moved back to Pittsburgh, I fell for one of those room rental offers. Big mistake.
Turned out that my landlady had recently parted ways with her husband, who was a much nicer person than she was, and that she found the family home to be too big and unaffordable. So, along came Yours Truly.
I quickly realized that my landlady was a nutcase. She started accusing me of things that had no basis in reality, then she kicked me out. I found another room to rent via a lady I knew from church. Much better person to deal with.
About a month after I was kicked out, I got a call from former landlady’s 12-year-old son, who was one of the greatest kids I have ever known. I still think about him and wonder if he’s okay.
Any-hoo, the news the kid delivered shocked me. It seemed that kicking me out of the house wasn’t enough for Mom. She booted her son out too!
Fortunately, the boy was taken in by his father, and, IIRC, Dad raised him to manhood.
I don’t think any house is big enough for living with a 12-year-old.
However, that’s part of the package when you bring the cute little pink bundle home from the hospital.
(You should look him up on Facebook and see how he’s doing. He may need an outside voice telling him that, yes, his mother was a nutcase!)
Is is a modern day McMansion? The floor plan makes it very difficult to divide the house into family units.
“Silicon Valley homeowners are dipping into a nearby income stream to avoid foreclosure: That bedroom just down the hall. ‘Renting out bedrooms is a growing trend,’ says Sunnyvale housing counselor Maritza Wong. ‘And it’s not just lower-income people doing it, but even people who were making good money before losing their jobs.”
I have to calm my filthy imagination when reading between the lines of this article.
Uh are you trying to say they rent out rooms for a porno shoot????
Well uh …a man gotta doo wat a man gotta doo.
Note that renting out bedrooms has the effect of soaking up housing demand that in better times would reduce the existing home vacancy rate; unemployed adult children living at home with mom and dad has a similar effect on leaving more existing housing units empty.
I said it during the peak that people were looking at housing units in the wrong way. A housing unit is not an address. If you think of a housing unit as a bedroom, we’ve got a lot more supply than people think.
Rent out your extra room(s) before your kids get the idea of moving home ! hahahahahaha
Me too, considering San Francisco and its reputation.
Yes, I’m only twelve years old mentally, and I’m so sorry.
“I’m only twelve years old mentally,…”
At least we know what your gender is now…
I’m a real dog, it’s not just a nickname - a collie. I’m a male, but my owners followed Bob Barker’s advice, and you know….
And I’m a real bear, too…
And I truly am skinny.
And I’m a real bink…
Mine cobalts are a natural blue, too.
The dude abides…
I can jingle my…………….nevermind….
OK, I’m a realtor! there!
I’m a tomato?
3 toed and about to snooze…
my name is not a palyndrome.
“The average relocation rate for 2009, measuring job seekers who took positions in new towns, was about 13 percent, second lowest on record, according to a survey by Challenger, Gray & Christmas. The rate was just 11.6 percent in 2008, when the housing market collapse was at its worst. Many people can’t or won’t move because they have an ‘upside-down’ mortgage or kids in school, says Paul Sorbera, president of (an) executive recruiting firm which serves the hard-hit financial industry.”
Thanks to the underwater loan problem coupled with our federal government’s highly-successful campaign to turn as many American households as possible into homeowner households, American labor mobility is frozen solid at a temperature near absolute zero.
And so far as I am aware, nobody in DC is so far acknowledging about the relationship between the frozen labor market and the move to turn every American household into a homeowner household. Heckuva job, Brownies!!!
They missed another factor keeping people at home.
A lot of companies state “Local Candidates Only” in their ads now. I was on USAJobs today and one of the positions stated, “No relocation assistance”. I think that one was Key West.
If you have a roof over your head, you won’t risk moving with no prospects, especially if your current location is a fur piece from a potential job. If you’re on the Eastern seaboard, you can do a commute from Philly to NYC or DC - painful, but possible. From Cleveland or Detroit, it’s a bit much.
I would agree with this guy hands down, were it not for the ongoing massive federal government subsidization of home ownership designed to continually incentivize American households into buying homes. The eternal flow of reverse-Robin-Hood housing subsidies call his point into question.
* The Wall Street Journal
* OPINION
* FEBRUARY 10, 2010, 6:59 P.M. ET
The Poor Are Better Off Renting
Why have we encouraged people to put all their savings in one asset?
By EUGENE N. WHITE
As housing prices have plunged there’s been a major government effort to keep families in their homes. But negotiating lower interest rates or a reduction in the principal still leaves families with a heavy burden. Not surprisingly, a significant fraction of the families who have their mortgages adjusted ultimately end up in foreclosure.
The excesses of the subprime mortgages pushed many low-income Americans into this untenable position. But despite the terrible fallout, few in Washington challenge the notion that home ownership is for everyone.
This contemporary dilemma brought back to mind the story of my dad, who grew up in New York during the Great Depression. His mother, Lillian, was a beautician. Ed, his father, juggled several jobs, including one for an ice company, hauling blocks of ice up many flights of stairs to customers’ iceboxes.
One of my dad’s most vivid teenage memories was the annual move to a new rental apartment. He and his brother Sam were charged with the job of carrying the family’s furniture all the way to the new place. Their worst task was shouldering the rolled-up living room carpet, no doubt bickering over how to manage the awkward shape. Today’s crisis made me realize the benefit of these frequent moves during that turbulent era.
While suffering through the Great Depression, my grandparents never faced the challenge of making a fixed mortgage payment. Instead, they rented and moved every year. Their circumstances dictated whether it would be a move to a larger or smaller apartment. But mostly, in that era of deflation that lowered wages and prices, they were driven by the need to move because it was not easy to bargain for lower rent from their current landlord.
…
You go to parties and most everyone acts like nothing is wrong in the neighborhood. I would say 1 in 3 are severely underwater many owing 800k or much more on their mortgages.
You can see it in their faces, when you bring up the slightest hint of short sales or pending foreclosures they run from the conversations.
One such person told my wife look what my hubby just bought me a diamond bracelet, these are the same people who have been foreclosed on two properties and a country club credit lien because they don’t pay there dues all in the last 9 months.
I would love to tell them off and a few more of the jet set phonies who just had to have the euro cars,granite tops,travertine floors,stainless kitchen, media rooms, and resort backyard etc. all on a hope and a prayer.
Can’t wait for the U Haul truck at midnight, I will be outside and asking are you wearing your diamonds while you are getting thrown out and wrecking our values Mr and Mrs Great?
I would love to tell them off and a few more of the jet set phonies who just had to have the euro cars,granite tops,travertine floors,stainless kitchen, media rooms, and resort backyard etc. all on a hope and a prayer.
Aw, come on swguy, tell ‘em how you really feel!
“I would say 1 in 3 are severely underwater many owing 800k or much more on their mortgages.”
So long as they can keep making monthly payments until the values of their homes rise back above the amounts owed on their loans, it will all eventually be good again, right?
Methuselah? maybe.
So long as they can keep making monthly payments until the values of their homes rise back above the amounts owed on their loans, it will all eventually be good again, right?”
it would be immoral to just walk away if you can make the payments. Only well connected Banks can do that.
I was at a Super Bowl Party this weekend at a friend’s house. This was a friend from college, that always seemed to like the finer things in life, but had no money. His whole family was the same way to tell the truth.
Anyhow in one breath he is talking about the latest BluRay DVD player he had just purchased, and the even bigger plasma tv, upon which we would be watching the game, that was his Christmas gift, and then that when he had a minor plumbing problem that cost him $300.00 to fix, he had to go hit his Mom up for a short term loan until payday.
It makes it hard to feel bad for them when they are down on their luck again, because as soon as things are better for them they can’t spend or finance new purchases fast enough. And more importantly like to mock those around them about their antique cell phone, tv, vehicle or still renting.
And more importantly like to mock those around them about their antique cell phone, tv, vehicle or still renting.
Maybe you need to get new friends.
But if KenWPA found some new friends, then who would we mock on the HBB?
He didn’t really buy his TV and blu ray — he borrowed them. He was returning them the next day to Best Buy after impressing you all.
I’ve never understood being impressed by something that someone else bought. I could just as easily go shopping and buy the same exact thing if I wanted. So what? It would be different if it were something that they had designed or built, but if it’s just some mass-produced consumer gadget (or automobile, for that matter) then who cares?
I’m the same way. At my old office, golf was a big deal. One guy in particular was very fond of informing us all which now golf clubs he had bought. Whipity do dah. I wouldn’t have minded so much if he went on about actually playing golf, but not, it was about the equipment.
I learned long ago that the guy with the old ratty equipment is usually the most skilled (in this case, raquetball.) Duh, if he’s using old equipment, then he’s been playing a long time.
“And more importantly like to mock those around them about their antique cell phone, tv, vehicle or still renting.”
Some friends of ours (a couple w/ three kids) came by for dinner a couple of years ago. The guy thought it was funny that we had such a small kitchen and that there is a narrow passageway from the kitchen into the dining area where one has to duck to avoid banging your head on the kitchen pots.
But now they are the ones sitting in a McMansion purchased for $600K or so at the bubble peak, with the value of the home now deeply underwater below what they owe on their loan. I can’t gloat, as I like them and quite genuinely feel their pain. But on the other hand, there is a bit of irony that the guy took pleasure in deriding our relatively more compact rental home, compared to their spacious, though unaffordable, McMansion.
Some friends of ours (a couple w/ three kids) came by for dinner a couple of years ago. The guy thought it was funny that we had such a small kitchen and that there is a narrow passageway from the kitchen into the dining area where one has to duck to avoid banging your head on the kitchen pots.
——————-
Sorry, but that is funny…banging you heads on the pots and pans.
But I’m no snob. In addition to living in an “old” rental, our kitchen has mismatched Formica countertops!
“while you are getting thrown out and wrecking our values”
Whoever made the loan(s) to these people are at least equally, if not more, responsible for wrecking values.
And for driving up the values in the first place.
California house prices were mostly $200k-$300k ten years ago, which was in line with people’s incomes. Then lenders went insane and drove them up to $500k and higher. That was the real wreckage.
“And for driving up the values in the first place.”
Ah, there was no inflation during Dubya’s reign.
Comment by jbunniii
2010-02-10 19:44:50
And for driving up the values in the first place.
California house prices were mostly $200k-$300k ten years ago, which was in line with people’s incomes. Then lenders went insane and drove them up to $500k and higher. That was the real wreckage.
—————-
BINGO!!!!
The FBs are not wrecking housing prices. The prices were wrecked when they went from the $100K-$300K range to the $500K-$1MM+ range…all due to the magic of EZ money that (in the FB’s minds) never had to be paid back!
“As home values began to creep upward in the middle of last year, Silicon Valley home- owners may have thought the housing market slump was behind them. But they may be in for a ‘double dip.’ Other California metro areas Zillow thinks are threatened by a double dip include Santa Cruz, San Diego and Ventura.”
That’s what I am thinking; the potential returns to patience may have seldom been higher in areas where a double-dip in prices is a logical consequence of the recently successful but sadly unsustainable knifecatching home buyer incentive programs.
There but for the grace of God go
uswe.“The Median Price of homes in the region continued to decline year-over-year in 2009 – down 15 percent, on average, from 2008. That ranged from dips of 22 and 24 percent in Menifee and Wildomar, to 14 percent in Temecula, 11 percent in Murrieta and just 2 percent in Lake Elsinore. That brought our peak-to-trough median price down 66 percent in Lake Elsinore, 58 percent in Canyon Lake, 52 percent in Menifee and Wildomar, 49 percent in Murrieta and 45 percent in Temecula.”
Allow me to gloat: SoCal price declines turned out ‘worse than expected’ compared to what all the MSM-cited ‘experts’ said, but right in line with the most dire predictions on the HBB circa 2006.
P.S. We know a young couple who relocated to Murietta circa 2006 to take advantage of relatively more affordable housing out in the sticks compared to high price San Diego housing. I tried to warn them, to no avail. The ability of the nesting instinct to trump rational financial decision making is truly a wonder of human psychology to behold.
Know a friend of a friend who just listed his 1967 Cerritos Cal home which is a whopping 1,100 sq ft for 749k, he lost his job. At best the place is probably worth 125k, my friend hasn’t the heart to tell these people that the tooth fairy ain’t coming anymore.
I told him don’t worry, the bank won’t have any problem informing them of the impending foreclosure and the tooth fairy not showing up.
This is the biggest problem with the Real Estate Bubble, the divergence between economic reality and that illusory dream state. It takes some time for the prices to adjust when they got so badly misaligned with affordability and incomes.
People tend to believe that Santa is coming back soon. It’s just a matter of having the government manipulate the supply of money and credit, and creating tax incentives to get the house revenues flowing into HELOC’s for everyday living expenses and shopping sprees. They will go to bed and wake up to a new world. Unfortunately, we have Big Daddy Warbucks in charge of the Fed and Treasury, prolonging their sleep.
“People tend to believe that Santa is coming back soon.”
Bernanke Claus is doing his best to keep the illusion alive.
Know a friend of a friend who just listed his 1967 Cerritos Cal home which is a whopping 1,100 sq ft for 749k, he lost his job.
It will probably sell for close to that.
When the FHA will let you put down only $26,215 (3.5% of $749,000) and the FHA loan limit is $729,750 for the Cerritos area, there will be people lining up.
Cerritos is all Asian.
Even better. The Asians seem to be the main buyers in many places, bidding up properties…back to bubble highs, believe it or not.
I like that, tooth fairy listings (TFLs.) I see a lot of those on the central coast. And they sit on the market, month after month, drifting down in 10s of 1000s of $$ chunks. Then they disappear. Only to reappear. Ever larger numbers of recycled listings are sprouting up again, I suppose in anticipation of spring, after all - the acacia are already blooming there.
The most exciting part is that I’m starting to see listings in search of knife cathcher #2. Take this one on Ripple in PG (near Monterey CA)(MLS 81005984) 1200 sq ft:
listed 6/23/08 $865,000
price change 8/7/08 $795,000
delisted 9/13/08
relisted 9/15/08
price change 9/24/08 $775,000
sold 10/08 $655,000
listed 2/9/10 $790,000
Note there’s another listing on Ripple for $649,000, a couple of doors down, 1262 sq ft, looks a lot like the house above.
Actually may be worth $400 to $500k, but $750k is la-la land!
“If we can just keep that up for the next 10 years we’ll be back to where we started.”
If only trees grew to the sky, we could all be rich!
‘almost trapped, handcuffed or held hostage by the current mortgage situation,’
Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
“Relax,” said the night man,
“We are programmed to receive.
You can checkout any time you like,
But you just can never leave!”
Welcome to the Hotel California
Such a lovely place
Such a lovely face
They livin’ it up at the Hotel California
What a nice surprise, bring your alibis…
Wasn’t the actual Hotel California a mental institution?
I thought it was the Beverly Hilton.
The pic on the Hotel California album cover is of the
Beverly Hills Hotel
9641 Sunset Boulevard
Beverly Hills, CA 90210
I thought it was a brothel, at least judging by the words to The Eagles’ song.
The real Hotel California is in Mexico in Baja California Sur, on the Pacific side oposite San Jose del Cabo. It is where the song was written when the band was staying there.
The Eagles never publicly said what physical place the song was actually about. They describe it as a song about “prisons we build for ourselves.”
“prisons we build for ourselves”
Sounds to me like a perfect metaphor for an underwater FB.
1951 California, orange trees,large lots,horse ranches,no strip malls,clear sky,always nice, a really great place to live.
2010 California………………………………………….
…… Still trying to think of something postive?
It is the first state, thanks to illegal immigration, where the number of “minorities” exceeds the number of just plain white folks. I guess that makes the white folks eligible to be “Minorities”, and should be applying for benefits. That should be good.
2010 - avoid anywhere south of Carpinteria.
Remember, CA is huge: Yosemite, Big Sur, Napa, SLO, Tahoe, The Ranch, Rincon, Mammoth, Marin, SB, they all don’t deserve to be grouped with the bad apples.
Except for the days you couldn’t breath. I remember as a kid the days it would hurt your chest to breath in LA. I also remember we separated trash and had incinerators in the back yard. This was in West LA about 1958.
Really liked the Nelson family.
This is totally OT (but fun). In reading the URL of this edition of the HBB, I see the number 5875. Does that mean that we’re closing in on post #6,000? And how shall we celebrate this momentous occasion?
Party at Slim’s Ranch!!!!
I have a 780 credit score, no debt at all and Best Buy just turned me down! I wanted to use their 18 mos no interest card for a new laptop. I always hated best buy, but they had a great Gateway laptop with blue ray, i5 and 4 gb RAM for $499 last week.
I was turned down by HSBC - for a savings account for crying out loud! And my FICA was around 730 IIRC.
Both of you should consider yourselves lucky. Best Buy and HSBC are both a bunch of crooks.
I despise Best Buy. I went through an experience with that sham of an outfit about 4 years ago that I won’t get into here due to story length and irritation. If I were a suing type, I woulda won. No contest.
I’ll never do business with them again.
CentralCoastDude,
The 20 point hit to your FICO score will take for a credit inquiry is not worth it for a $400 purchase - even if it was approved.
Really? 20 pts? I never thought of that.
Meanwhile, I continue to make extra payments on our place I never took any equity out of, to get it paid off…
WTF is wrong with me???!!!!??????
You never let Suzanne research this……..LOL
MacAttack
Great move. A paid off home is vital in your older years. I don’t know if your a Baby Boomer, but we’re putting 100% down (on a sensible one-story), because our generation is doomed in retirement. A paid off home will be the key to survival if you’re not well to do, imo.
Nothing!!!!
Mac - Your IQ is too high -