It’s Never Going Back To Where We Were
The Press Enterprise reports from California. “First-time buyers with limited funds aren’t the only ones looking for deals in the depressed Inland Southern California real estate market. People confident of their incomes and flush with cash are seizing the opportunity to buy vacation homes in the desert and mountain resorts that they hope will become a profitable investment or a dream retirement. Sharon and Richard Burns, of Juneau, Alaska, were vacationing last week in a three-bedroom house they bought in August in Palm Springs. Sharon Burns said…’It seemed like a good time to take advantage of the real estate market. I think there is an opportunity to invest and make a capital gain down the track when the market recovers.’”
“Vacation home buyers in the desert also demand bargains, said Chris Gilfillen, a real estate agent who specializes in selling houses priced at $1 million and more in La Quinta and Rancho Mirage. ‘They feel totally empowered and feel if someone isn’t basically punished they didn’t cut a good enough deal,’ he said.”
“In some cases, baby boomers in their 60s with shrunken assets are selling mountain vacation homes where they had hoped to retire. ‘We have had a lot of heartbreaking calls,’ said Bob Angilella, a leading Re/Max agent in Big Bear.”
The Sacramento Bee. “Investors paying cash for houses accounted for one in four home sales during the past year in Sacramento County and West Sacramento, becoming dominating players in a distressed market and squeezing out scores of first-time buyers, 2009 statistics now show. Many of these cash buyers are from the Bay Area. Carey Covey, a Cook Realty agent in Sacramento, said he recently sold a bank repo to a Sunnyvale investor by phone. He paid $55,000 – in cash.”
“‘I never met him. He never saw the property,’ Covey said.”
“‘I have lists and lists and lists of houses I have looked at and put offers on. Everything has been investors, investors, investors,’ said Kimii Carter, a city employee in West Sacramento. Carter said she made offers on 30 houses south of downtown Sacramento, including a $145,000 bid on a $114,000 listing. She’s in escrow on her first house, but it’s smaller than she hoped and not exactly what she wanted.”
“‘I felt I had to take it. It’s my only option,’ she said.”
“Rob Wassmer hasn’t been affected so much. Fourteen years ago he bought an east Sacramento house – in the Fab 40s – cheaply at the very bottom of the last housing bust. His older neighborhood has largely escaped the brunt of 52,000 foreclosures across the Sacramento region since 2007. But Wassmer knows the financial whipping people have taken in Lincoln, Elk Grove, North Highlands and Yuba City. Being an academic, he knew there had to be a number for the carnage.”
“Wassmer analyzed $9 billion in sales prices from 36,822 home sales in Sacramento, Yolo, Yuba, Sutter, Placer and El Dorado counties between January 2008 and June 2009. Almost half were homes sold by banks. The other half were sold by regular folks. He concluded that the foreclosed homes cost this one region of America $2.7 billion in price cuts and lost equity over just 18 months.”
“Said Wassmer, ‘This is a call for regulation.’”
The Colusa Sun Herald. “Colusa County officials are looking at tax-defaulted property as an opportunity to add houses to their holdings. Among the properties going up for sale is 40 acres in Arbuckle, owned by Contractors Yellow Pages, a California corporation, a Century Ranch parcel, owned by a Bay Area couple, and several homes and lots in Williams, Arbuckle and Colusa.”
“Unless the taxes are redeemed, the county could invest in a home on 10 acres in Arbuckle, valued at $299,752, for only $19,663. A $75,000 Colusa home in the 1300 block of Clay Street can be picked up by the county for as little as $6,441, according to the approval of sale authorized by the Colusa County Board of Supervisors on Tuesday.”
“Colusa County Treasurer Dan Charter said the county would have to come up with a funding source to purchase the property, and would not be allowed to use investment income. He said he would also, for the sake of public image, prefer the county invest in property not inhabited by its owners.”
“‘I would hate to see the press show up to take pictures as we evict people from their homes,’ Charter said.”
The Record.net. “A second round of tax credits may become available to 20,000 California home buyers before summer arrives. State Sen. Roy Ashburn, R-Bakersfield, has introduced legislation that would provide $200 million worth of $10,000 tax credits to buyers of both new and resale homes. The bill mirrors a proposal made by Gov. Arnold Schwarzenegger in his January State of the State address.”
“Building industry professionals are hopeful the California Legislature will support Ashburn’s measure. ‘It’s great for the industry and for the total economy in San Joaquin County,’ said John Beckman, president of the Building Industry Association of the Delta. ‘When housing was booming, the entire economy was booming.’”
The Merced Sun Star. “For people like Brad Miller, it’s the sound of hope. Four years ago, Miller, owner of Atwater’s B&B Plumbing, employed 30 people mainly doing plumbing work on newly constructed homes. Today, B&B employs three people who largely do repairs. The company, however, just landed a contract to plumb four homes, part of a group of models which could lead to the construction of another 105 new houses.”
“The project is a ray of light in an otherwise very dark market. Unemployment in Atwater hovers at 20 percent with few signs of turning around. City Manager Greg Wellman said any job-creating event is a good one, but it remains to be seen if the Claremont project is an isolated spark or the beginning of a wildfire. What makes the project work in a down market is Sterling was able to pick up finished, ready-to-build lots at a bargain price, he said. The streets are done, curbs and sidewalks are in. All the lots need are houses.”
“‘Because the amount of these deals is limited, I am concerned this could be a temporary phenomenon. But anything that adds jobs and gets people back to work is what we are trying to focus on,’ Wellman said.”
“Charlie Woods, Atwater’s community development director, questions how well Sterling’s project might sell, pointing out that it will compete with a substantial inventory of discounted homes. He notes, ‘Whatever the housing market will be will be a much closer reflection of the household incomes and the employment in this area.’”
Palo Alto Online. “Russ Hancock doesn’t make predictions. But as CEO of Joint Venture Silicon Valley, Hancock doesn’t like what this year’s ‘Index of Silicon Valley’ portends for the valley’s potential recovery from the current economic hole. Key findings indicate the valley may not be able to regain its worldwide reputation as ‘the epicenter of innovation,’ Hancock said in an interview with the Weekly.”
“He said the Index shows disturbing signs of weakness in core areas that have made Silicon Valley a byword in technological innovation for decades. ‘Two years ago we said, ‘There’s bad weather out there, but we may be OK,’ Hancock said of past Index findings. ‘Last year we said, ‘No, it’s hit.’ The storm winds hit and had gale force.’”
“‘Something is going on. Venture capital hasn’t made money in about 10 years,’ industry-wide, he said.”
The Press Democrat. “Sonoma County is a golfer’s paradise, but the recession, an oversupply of golf courses and the sport’s fading popularity are enough to give golf course owners a stroke. Pricey private clubs that once had waiting lists now have members lining up to exit. And nearly all courses are either slashing fees or running aggressive promotions.”
“‘I won’t sugarcoat it. It’s very difficult,’ said Tom Isaak, president of Petaluma-based Course Co., Inc., which operates 15 courses in California and Washington. One of those is Foxtail Golf Club, the 36-hole municipal course in Rohnert Park. Since taking over the course in 2001, the company has spent $3.1 million on upgrades to the course. In addition, it has suffered operating losses of about $2.8 million, or about $300,000 per year, Isaak said.”
“The company bet it could turn around a course that had fallen into such disrepair that players referred to it as ‘Mountain Shambles’ instead of its former name, Mountain Shadows.”
“Joe Ross of Sonoma joined Adobe Creek late last year, lured by the $1,200 all-you-can-golf annual fee, down from $1,600. His golfing buddy last week, Sonoma remodeling contractor Al Vogt, said the soft economy and the deals are allowing them more time to play golf than ever. ‘We’re playing more because there’s no work,’ Vogt said.”
“Vic Pectol, a retired accountant from Novato, said the 40 percent swoon his 401(k) took last year made him wonder if he’d be able to afford to continue playing golf as much as he’d like. As the market has recovered, those fears have subsided, and Pectol says he still manages to play three or four times a week. One of his golfing buddies hasn’t been so lucky. His son is a Petaluma mortgage broker who lost his job in the real estate implosion. ‘He’s cut back quite a bit,’ Pectol said.”
The Glendale News Press. “Flower shops saw a steep drop in business for Valentine’s Day, which is typically the biggest sales day of the year for the sellers. The decline in activity at the start of 2010 was a letdown for store managers, who hoped for a rebound from a dismal sales year in 2009, which was the worst in memory, they said. ‘It’s worse than last year,’ said Jason Lee, a manager at Conroy’s Flowers on Glendale Avenue.”
“Business was also slow at Little Bee Flowers on Glendale Avenue, which received few takers for its 15% discount on pre-orders, said Sarkis Markosyan, a manager at the store. Although the store had its worst sales year in 2009, it secured 39 pre-orders that year, Markosyan said. This year just six customers ordered in advance of the holiday, he said.”
“‘The economy is so messed up right now,’ Markosyan said. ‘People don’t have a lot of money.’”
The Lodi News Sentinel. “America is on the road to recovery but is only beginning to rebound from a recession unlike any since the end of World War II, a former chief economist for U.S. Bancorp told more than 200 people gathered at the Brookside Country Club. John W. Mitchell said the nation still has fundamental economic issues, such as a looming Social Security crisis that must be addressed in the coming years. He said one of the biggest keys to recovery is in the nation weaning itself of federal stimulus.”
“‘If something can’t continue forever, it won’t,’ Mitchell said.”
“He also expressed concern with the strength of the commercial real estate market, concerns that were shared by one local business spokesperson. ‘Mitchell accurately indicated the next shoe that might drop is in the commercial real estate market,’ said Pat Patrick, CEO of the Lodi Chamber of Commerce. ‘We’re holding our breath on that one.’”
“Mitchell said while California’s unemployment rate is worse than the national average of 9.7 percent, the recession has caused significant job losses in every state. ‘I found it very interesting that all 50 states lost jobs,’ said Phil Marcus, a AAA Insurance agent. ‘Here in California we are kind of isolated and we tend to think it’s only us, but it’s all 50 states.’”
“Marcus said his biggest takeaway from the event was the realistic portrayal of the nation’s economy. ‘t’s going to recover, but it’s never (going to) go back to where we were,’ he said.”
The Del Mar Times. “Real estate professionals in areas in and around Del Mar are looking for markets to stabilize and even improve slightly in 2010, but such factors as rising interest rates and a potential wave of new foreclosures could put a damper on things. Bob Angello, a broker in Del Mar, said pundits are predicting that rates could climb above 6 percent by March.”
“‘The truth is, anyone looking to buy, move up or refinance must do it before spring. Interest rates are at an all-time low,’ he said. ‘Once the government stops purchasing mortgage-backed securities, which is the reason (rates) are low … then the rates will rise. History tells us once they start to rise, they will do so quickly and dramatically.’”
“‘As long as homeowner distress does not rebound and recent federal government programs designed to avert foreclosure have some success, a more conventional recovery in the residential sector should be underway this year,’ said Mark Schniepp, author of the UCLA Anderson Forecast’s San Diego report.”
“Factors such as buyer demand - and available inventory - can and do vary from community to community, and by the level of home prices. For example, in communities where homes are available for $500,000 or less, inventory is low and prices could increase in 2010, according to local real estate professionals. However, inventory remains high and demand sluggish in some higher-end communities where homes sell for $2 million or above.”
“‘Overall prices have rolled back to the 2004 to 2005 range, which seems to be a floor. Prices have not dropped any lower nor are they predicted to,’ said Shawn Hethcock, of Willis Allen’s Shawn Hethcock and Shawn Rodger team in Del Mar.”
“Among the factors that could put pressure on higher-end markets is the relative difficulty of obtaining so-called jumbo loans, due to tighter lending requirements established by banks. Amy Green, co-owner of Coastal Premier Properties, based in Carmel Valley, said the prospect of rising interest rates, while potentially dealing a blow to the housing market, could stimulate demand in the short-term.”
“‘The threat of interest rates going up may help put a little drive into them, motivate (buyers),’ Green said. ‘My advice is if they see something and the numbers work, it’s your home, so go for it.’”
“Those seeking to buy properties and ‘flip’ them for a quick profit face the biggest risk, Green said. ‘Some will do well, but if there’s a big release of inventory, they could get caught.’”
“Jason Barry, of Barry Estates Inc. in Rancho Santa Fe, said ‘time will tell’ if interest rates do indeed rise in 2010. But for now, Barry said, prices have dropped and demand has increased. A year ago, Barry said, buyers were scared away from the housing market by the fallout from the financial meltdown on Wall Street. Since then, he said, many people in the financial services industry have recouped much of the money they lost and are coming back.”
“‘They’re feeling better about it. Sentiment has changed,’ Barry said.”
The Salem News. “If you haven’t heard of it, Redline is one the worst pieces of filmed entertainment ever made. It may however be recognized by posterity as the most acute documentary of the greed, stupidity, and excess of the first decade of the new millennium. Redline was produced and paid for by Daniel Sadek. The movie is a grandiose fantasy depiction of his own life.”
“Daniel Sadek was a car salesman in Orange County California until 2002, when he founded the company Quick Loan Funding. He proceeded to churn out $4 billion in mortgages, purchased and securitized by Citibank, Bank of America, Bear Stearns, Countrywide Home Loans, Lehman Brothers, Merrill Lynch, and Morgan Stanley.”
“I drag the story of Daniel Sadek and his ill fated attempts at film making out of the dustbin of recent history in order to raise a question. Why would the largest financial institutions in the world pick a car salesman with no education or business experience to be their partner in issuing, securitizing, and selling $4 billion dollars in home mortgages? Did they have any second thoughts about their partnership when, in 2007, Sadek released his spectacle of a film with the tagline ‘Fear Nothing. Risk Everything.’?”
“The answers to these questions are simpler than one might expect. These financial institutions knew that lowering mortgage standards and partnering with petty hustlers would result in a flood of new mortgages, issued to people without the income to pay, and at values far in excess of the real value of the underlying properties. They knew that many of these borrowers would default. They knew that crisis would ensue.”
“These financial institutions also knew that this would be highly profitable for them. What is the extent of potential profit from mortgage and credit card related money creation? According to Fed data, U.S. household debt increased from $6.4 trillion in 1999 to $13.8 trillion in 2007. Most of that debt is in home mortgages. Depending on how many people default, increased profits for financial institutions should be hundreds of billions of dollars or more.”
“The entire process of mortgage issuing for the past decade has been fundamentally fraudulent. This was not an accident. Like everyone else, the leading financial institutions in the country were well aware that people with no incomes could not pay off half-million dollar mortgages. They were well aware that their accomplices like Daniel Sadek were common criminals who would issue plenty of mortgages precisely to those who could not pay.”
These financial institutions also knew that this would be highly profitable for them. What is the extent of potential profit from mortgage and credit card related money creation? According to Fed data, U.S. household debt increased from $6.4 trillion in 1999 to $13.8 trillion in 2007
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Comments like this make me think that some years down the road, historians are going to reguard TARP as the biggest scam ever foisted on the American people by its government and its major corporate institutions.
What the ramifications of this are going to be, I’d rather not guess…
And yet we still see no one held accountable, not one perp walk after years of stories like this. How long can criminal fraud hide behind the “no one could have seen this coming” excuse ?
With all the lawyers in this country, and no major lawsuits regarding the 401k rip-off? We are no longer a country of laws.
Fraudsters will keep saying “no one could have seen this coming” as long as quacks like Bernokio are in office.
Why now is a great time to sell!!
“‘The truth is, anyone looking to buy, move up or refinance must do it before spring. Interest rates are at an all-time low,’ he said. ‘Once the government stops purchasing mortgage-backed securities, which is the reason (rates) are low … then the rates will rise. History tells us once they start to rise, they will do so quickly and dramatically.’”
I had an acquaintance ask me about possibly selling his house here in Hillsboro, OR and moving to Folsom, CA. He doesn’t want to sell for a few months because his wife is expecting twins and is due around May. I told him to put the house on the market with the deal being dependent on a lease back for a couple of months. I told him the real estate industry will be doing all it can for you - telling everyone out there that now is a great time to buy!! I told him to get it sold before interest rates go up and the govt. buyer credits disappear. Of course, I told him to rent once he gets to Folsom, CA for a few months to see where things are at. We’ll see what happens.
My bet is they’ll buy. Anyone caring for twins doesn’t want to think about having to “move twice”. Hopefully it will turn out to be a financial slap on the wrist and not a punch in the face for them.
My favorite message to these types is “Sell today because what you get tomorrow will be less….. for many years to come”..
Anytime someone tells me they plan to sell “when the market gets better,” I tell them to get that puppy on the market RIGHT NOW.
Today’s market is a seller’s market. This is the time to sell, not buy. The sooner they do this, the more likely they will get out before the second (and more damaging? more prolonged?) part of this downturn hits.
From the original post:
The Glendale News Press. “Flower shops saw a steep drop in business for Valentine’s Day, which is typically the biggest sales day of the year for the sellers. The decline in activity at the start of 2010 was a letdown for store managers, who hoped for a rebound from a dismal sales year in 2009, which was the worst in memory, they said. ‘It’s worse than last year,’ said Jason Lee, a manager at Conroy’s Flowers on Glendale Avenue.”
To which I say:
Am I the only one on this blog who thinks that cut flowers are a huge waste of money? I mean, come on. They look nice when they first appear in your life, but a week later, they’re history.
Ditto for Valentine’s Day meals at restaurants. Boy, do they crank the prices up on those. Heck, I’d wait until tonight to go out.
Yesterday I walked the 1.5 miles to the local farmers market and spent the princely sum of $7 on a bunch of tulips (pink, red and purple)
As I carried my treasures back home, people smiled at me when they saw them. It seems that carrying flowers around allows strangers to perceive me as a friendly presence and feel safe in saying “good morning”.
Arranging the flowers allows some artistic expression which I find satisfying.
Now as I peer down at them from my loft office, I am reminded in the midst of all that is happening in the world that life can be beautiful.
So no, I don’t consider them a “waste of money”. Instead I look forward to finding the next bunch of flowers every Sunday - no matter what kind they may be.
And who knows? Not only are tulips beautiful; maybe they can become an investment as well!
Black tulips only go up!
I cut my flowers for free from Allena Hansen rose fence
Nice.
I had roses delivered to the workplace of my Valentine. It had the subtle effect of a PDA. Dinner out the day before Valentines, so frugal extravagance. Dinner out isn’t a requirement, it is sweet foreplay. Fleeting glory yes, yet these things can be treasures in the memory.
Fresh cut roses for my wife is like mayonnaise on a marriage sandwich.
I don’t know if that’s good or bad. I can’t stand mayonnaise, and only use mustard.
Just pick the condiment of your choice.
Trojans.
That was funny Grizzly.
a lot of flowers went to waste yesterday, the shops were full of cut flowers with no takers, even the roadside vendors were still out at dusk trying to unload the extra inventory they were stuck with.
Looks like a lot of people just attended Slim’s Curmudgeonly School of Romance.
I don’t ask for much, so cut roses from the local nurseries are a beautiful indulgence. They fall in the category of good food and good wine, to be enjoyed in the moment, ephemeral by design. Diamonds, blech….those fall into the category of “property.”
I don’t give a damn what they cost, my wife
loves them and I love my wife.
That’s very sweet, Rancher, and explains why you guys seem to have a happy marriage (caring about making the other person happy).
We went out for Chinese food last night. There were only about five or six tables occupied in the entire place.
We’ve noticed the same at our favorite local Chinese restaurant. Friday nights and its less than half full. And not so long ago it used to be packed.
Everyman including myself loves to give flowers and or candy to their women. It works !!!
“Am I the only one on this blog who thinks that cut flowers are a huge waste of money?”
I’m guessing about 50 pct of other posters agree with you (and are of the same gender…).
Nope.
I told my dearest husband not to get cut flowers because I find it depressing when they die one week later. It really is such a waste. I prefer artificial flowers.
This..
“‘The truth is, anyone looking to buy, move up or refinance must do it before spring. Interest rates are at an all-time low,’ he said. ‘Once the government stops purchasing mortgage-backed securities, which is the reason (rates) are low … then the rates will rise. History tells us once they start to rise, they will do so quickly and dramatically.’”
…and this..
“‘The threat of interest rates going up may help put a little drive into them, motivate (buyers),’ Green said. ‘My advice is if they see something and the numbers work, it’s your home, so go for it.’”
………….
When are the sheeple going to realize the ratio between interest rates and prices.!!
Interest down = prices up..
interest up = prices down.
The affordability has to balance out.
I know..the Realtard will tell them..haha
You can always refi when rates come down..
But you can’t (yet) get a principle reduction if value drops.
Watch value drop when rates rise. Pre spring buyers, will be close, if not underwater then.
We can’t predict when this crazyness will end (Continued gubber-mint intervention). But it’s sure not anythime soon.
A 50% reduction in todays prices, is not out of the question.
You can always refi when rates come down.
As was widely done in the early 1990s.
…A 50% reduction in todays prices, is not out of the question…
If nothing else, it would get the price/income and price/rent
ratios back closer to normal in many areas.
(I am in South Orange County, Ca.)
Rising interest rates would be the best thing in a long
time to happen.
It would flush out a lot of hot air in the prices and create
incentives for people to save $$$ cash for down payment.
Am I asking too much?
Rising interest rates would also be a major help for fixed income seniors who have seen their investment earnings all but disappear.
It’s been dreadful to watch our house $ earn nothing, when it’s 100,000’s of $1,000’s. At least it’s insured through a London based insurance co, and not the FDIC. I’ve always felt bad for the seniors, too. They’ve been punished with the rest of us frugal and responsible people.
Isn’t it funny how the AARP hasn’t come out against this interest rate manipulation? Where have all the seniors been during this past decade? Perhaps they just look at their rising housing and stock prices, and ignore the fact that they can’t get any yield on savings.
The Del Mar Times. “Real estate professionals in areas in and around Del Mar are looking for markets to stabilize and even improve slightly in 2010, but such factors as rising interest rates and a potential wave of new foreclosures could put a damper on things. Bob Angello, a broker in Del Mar, said pundits are predicting that rates could climb above 6 percent by March.”
“‘The truth is, anyone looking to buy, move up or refinance must do it before spring. Interest rates are at an all-time low,’ he said. ‘Once the government stops purchasing mortgage-backed securities, which is the reason (rates) are low … then the rates will rise. History tells us once they start to rise, they will do so quickly and dramatically.’”
Anybody know when is gov ending support of mortgaged-backed securities? Mortage rates are typically a point or so above 30 year Treasury - but otherwise, Mortgage rates (30 year fixed) and 30 year Treasury move in tandem. Is there a chance mortgage rates are going to decouple from 30 year and stop the close alignment?
…Anybody know when is gov ending support of mortgaged-backed securities?..
Why did govt begin buying MBS? It was because the secondary mortgage market froze up.
Investors got spooked as it became known that much MBS was overrated and the underlying properties overpriced. With that, a huge amount of economic activity came to a virtual standstill. Govt stepped in to keep the economic wheels turning.
Govt will stop buying MBS once private investors again feel MBS is a good, safe investment. All that needs happen, for that to happen, is property prices fall to realistic levels.
Or when they run out of capital or political willpower.
Or maybe the private market resents the price fixing (interest rate fixing) in the mortgage market, and expects to be paid appropriately for their risk?
Until rates are allowed to rise **to where they belong, without govt intervention** they can expect those private market investors to stay away from mortgages.
You’d think all these geniuses would grasp this concept (which they do, but are using it as an excuse to remain in the market).
Spot on, Joey. I personally think it would be best for Uncle Sam to let housing prices bottom out sooner than later, in order to allow private mortgage lending to recover, but I guess the PTB think otherwise, as they are doing their best to prop up home prices…
….in communities where homes are available for $500,000 or less, inventory is low and prices could increase in 2010…
So what. Who’d want to own one of those less than half-a- million dollar shacks!
“In some cases, baby boomers in their 60s with shrunken assets are selling mountain vacation homes where they had hoped to retire. ‘We have had a lot of heartbreaking calls,’ said Bob Angilella, a leading Re/Max agent in Big Bear.”
Boo hoo hoo hoo…
Is Bob Angilella kidding with that line? “heartbreaking call” and “divesting in moutain vacation homes” in the same sentence?
Sorry to resort to name calling but Bob you are a boob.
sure, retiring to your mountain vacation home sounds great until you realize shopping and the more frequent trips to the doctor are turning out to be a giant pain.
When I was 17 I wanted to live on top of a mountain. That phase didn’t last long.
“When I was 17 I wanted to live on top of a mountain. That phase didn’t last long”
Yeah…My brother and I had enough personal problems with our own parents and all their Rules while in the high desert.
I just couldn’t see us living on Big Bear mountain with a entire gang that thought and looked like cranky old Moses.
If I heard once I heard it a thousand times…
“We’re going to retire to _______. And we’re going to open up a ________(usually a failed business model like bed and breakfast but use your imagination.) It’s out in the country and we’re going to “farm”(heh heh heh). All the retirees are moving there and prices are going to explode so we’re going to ‘take the plunge’ and buy. Life is really good. Sally took early retirement and we sold our ‘home’ (to a sucker) for 500k which is a nice down payment on a $1.5 million ______. We’re going to live in our $300k motorhome while “we build”(heh heh heh). We bought a condo in _____ so we could be near the grandchildren and it’s doubled in price in just 6 months…. we’re gonna be rich!!!!!!!!”
Someone fast-forward to 2009 and tell us about this bankrupt pair of losers with their failed business, failed health, return to work(walmart) and mountain of debt.
Boy, Realtors Are Liars, you really nailed it with that post.
I thought it sounded cool for a phase, until I talked to a few people who actually live in the mountains and who recounted tales of multiple days without electricity. No thanks.
C’mon….. lets hear the tales of woe you dreamers, liars, mortgage slaves, “I’m gonna take retirement early” asswipes…… lets here it. Just for old times sake tell us of your delusions of grandeur.
People confident of their incomes and flush with cash are seizing the opportunity to buy vacation homes in the desert and mountain resorts that they hope will become a profitable investment or a dream retirement.
“Vacation home buyers in the desert also demand bargains, said Chris Gilfillen, a real estate agent who specializes in selling houses priced at $1 million and more in La Quinta and Rancho Mirage.
What does this cover - about 12 people????
Well, let’s not forget all those “rich Canadians”.
We’ve still got lots of equity in our houses since our bubble hasn’t yet popped. Maybe I better be off to the bank to cash out now. Use that cash to get myself a nice vacation property in Florida or California that I can visit once or twice a year. I’d be a fool not to.
Rich Canadians who are happy to buy a house in a country that they aren’t even legally entitled to live in permanently. I wonder how many of them there can possibly be.
I have never understood the concept that a “vacation home”
could somehow become an “investment”.
Much like buying a flashy 2nd car that you don’t really need.
Fun to impress the neighbors with, but “investment”?
Your pulling my jeester…
Fun to impress the neighbors with, but “investment”?
I live in a city that’s full of show-off-y vehicles. Big honkin’ pickup trucks, SUVs with those spinner rims, and all manner of four-wheeled devices with mega-amplified stereos.
Needless to say, the moment I see anyone driving one of these things, I go into stereotyping mode and think:
1. These people are living way beyond their means. And using debt to make up the difference.
2. They’re probably living in run-down dumps and running them down even more. They’re the kind of people to whom the concept of picking up the litter in the yard is unknown. And I pity their landlords.
I noticed driving into work today that there are a lot more small, modest cars on the road these days than say 5 years ago. I should know, I drive one myself (and this weeks trip computer says I’m averaging 34 mpg on my tank of gas).
When I see those 12 mpg behemoths with their 40 gallon gas tanks I shudder to think of what it must cost to fill their tanks, even at today’s lower fuel prices. I can only imagine the wailing and gnashing of teeth when gas hits $5/gallon.
When I see those 12 mpg behemoths with their 40 gallon gas tanks I shudder to think of what it must cost to fill their tanks, even at today’s lower fuel prices. I can only imagine the wailing and gnashing of teeth when gas hits $5/gallon.
Wasn’t too long ago that I saw my next-door neighbor (of get drunk and threaten my plumbers fame) walking to the grocery store. Which is something that I do unless I’m bicycling to the food co-op.
What was so unusual is that this neighbor never walks anywhere. He’s gotta come and go in this big, honkin’ pickup truck with an amplifier muffler. Makes the truck sound like a tank, IMHO.
Turns out that the tank-truck had broken down.
I should know, I drive one myself
Confirmation bias - ? Sure plenty of behemoths here, still.
speaking of “show offy” vehicles. “Goodfellas” was on this past weekend. i absolutely love the part when he pistol wips that a-hole accross the street while the a-hole is showing off his corvette to his friends.
definately in the top 100 best movie scenes ever category.
Everytime I watch Goodfellas I laugh when they show them standing in front of the dinner at the airport and it says it’s 1963 but the car they are leaning against is a 1965 Chevy Impala…
Thus my aggravation with the Hummer, with the added perversity of being a write off for “bidness” and being exempt from air exhaust regulations. These days I pity Hummer owners, they’re in Members Only hell!
Every person I’ve known who’s had a vacation home sooner or later rues the day they bought them. What they don’t realize is that you’re chained to them as in a boat anchor. They feel
that they have to use them, thus keeping them up,
and they never get to go other places. One of the
reasons large motorhomes or coaches sold so
well.
Yeah that we’re going to The Lake this weekend starts to sound a little weary after awhile.
My parents have neighbors who, until recently, had a second home at the Jersey Shore. Mom reports that they’re very glad to be rid of it.
Growing up in Socal was nice. My parents had
nice friends and one extremely wealthy
couple had this humongous and stately home
on the south shore of Lake Arrowhead that
my folks could use anytime they weren’t in
residence. Huge boat dock, beautiful old
mahogany ski boats, the works. That was
and still is my idea of a vacation home, especially if it belongs to someone else.
I grew up in Northern NJ and my parents also had a home in Normandy Beach at the Jersey Shore. It was the best time of my life and my parents never regretted owning the home. My parents are long gone and I’m in Southern California but I still miss the Shore.
At least you have the Jersey Shore now.
How come whenever a realtor uses the term flush with cash, I always interpret it as they are going to flush their cash?
The Record.net. “A second round of tax credits may become available to 20,000 California home buyers before summer arrives. State Sen. Roy Ashburn, R-Bakersfield, has introduced legislation that would provide $200 million worth of $10,000 tax credits to buyers of both new and resale homes. The bill mirrors a proposal made by Gov. Arnold Schwarzenegger in his January State of the State address.”
California is BANKRUPT by 30 billion dollars and yet they find money for this. AND they demand a federal bailout.
Total insanity.
Trouble is you get your CA state tax refund in the form of an IOU. I’m not sure the banks are going to be willing to cash those.
This is definitely a surreal situation with the California budget in its current condition.
Unreal how delusional some people are, and how willingly politicians fold to lobbyist$$$.
“‘As long as homeowner distress does not rebound and recent federal government programs designed to avert foreclosure have some success, a more conventional recovery in the residential sector should be underway this year,’”
Sure, and as long as they keep on making loans to dead people, we get all of the jobs we shipped overseas back, interest rates stay at 0%, and purple unicorns rain money down from the sky, we’ll be just fine.
Personal income way down, jobs that pay enough to buy a home in the tank, 1% interest on your savings,mid size and small banks all but broke,malls and strip malls half empty.
I could go on with even more bad news but the picture is already painted and it ain’t pretty folks, the recovery is a total fraud like the 2005-2006 housing market smoke and mirrors at best.
Dude — I don’t suggest you ever try employment as a porcine beautician. You just don’t seem to have the right stuff.
“Sharon and Richard Burns, of Juneau, Alaska, were vacationing last week in a three-bedroom house they bought in August in Palm Springs. Sharon Burns said…’It seemed like a good time to take advantage of the real estate market. I think there is an opportunity to invest and make a capital gain down the track when the market recovers.’”
Why ANYONE would buy property right now in California is beyond me. The state is worse than flat broke. Counties and towns are broke as well. Roads are in terrible shape, services are being cut back, the state unemployment level is among the highest in the U.S…..do I need to go on??
Me, I’m renting for another couple of years to see where this all shakes out. Decent places to live today may not be so decent after another couple of years of budget disasters.
I hear ya, Lisa. I like Pasadena (currently reside in Thousand Oaks), but Pasadena is in L A County and the LAUSD is looking to add an additional parcel tax of $98-(June Ballot-County Tax). In 3 yrs we’ll be exempt by age (other half), but still.
“I think there is an opportunity to invest and make a capital gain down the track when the market recovers.”
Oh my. Never forget the the other two ingredients of the Real Estate Investing Timing Recipe. Remember, it’s “When, AS, and IF”
“‘Something is going on. Venture capital hasn’t made money in about 10 years,’ industry-wide, he said.”
Of course not, they’ve been investing in bullsh*t social networking baloney instead of pursuing the small solar ,LED and other green-tech companies begging for funding. Silicon Valley is full of empty R&D parks that will never be filled and wages have been stagnant for 10 years. A recovery is not likely here.
…they’ve been investing in bullsh*t social networking baloney
And here we are, socializing and networking here on the good ole HBB. Does any VC invest in this space? No-o-o-o!
Instead, we have all sorts of interesting real estate ads to view, and, in some cases, mock.
Love the LED technology stuff I’ve been seeing. It is going pretty slow though.
I suspect we will see them in common use with in 10 years though.
Will save an incredible amount of energy once they come on line.
Solar is still plodding forward. There have been some advances but it’s going to be a while before it is competative.
Wind is getting a good bit of attention though. I like the offshore wind systems being proposed. Wind is just about cost competative with coal.
In 2000 I visited a BP Solar solar panel plant near Williamsburg, VA. It was a plain-jane large warehouse type of plant, and we got lost looking for it, it was so obscure. It was one of the most inefficient assembly lines I’ve ever seen. Later I heard that this plant had closed.
Yesterday I was traveling up the I-270 corridor, and there *clunk* right next to the highway is a brand-spanking new BP solar plant, still under construction. It’s all shiny steel and glass, with a contemporary design that screams “corporate arrogance.”
I guess BP is getting back into it. And I guess that little warehouse wasn’t showy enough, and not in an area with a high-enough profile. Gotta have the corporate photo op, right there for all to see.
PG&E got approved for more wind machines near Tehachapi, Ca. Fine print on my electric bill says that my bill will go UP so I can support PG&E and the environmental fruitcakes. Where did Ca go wrong ??? But don’t vote for MEG !!!
A lot of VC money had gone into LED lighting…unfortunately it is still the light of the future
“The Sacramento Bee. “Investors paying cash for houses accounted for one in four home sales during the past year in Sacramento County and West Sacramento, becoming dominating players in a distressed market and squeezing out scores of first-time buyers, 2009 statistics now show. Many of these cash buyers are from the Bay Area. Carey Covey, a Cook Realty agent in Sacramento, said he recently sold a bank repo to a Sunnyvale investor by phone. He paid $55,000 – in cash.””
More evidence of the massive speculation taking place in distressed markets right now. In fact, looking at sales volume, it appears there are as many investors now as there were at the peak. I don’t know what can or should be done about it, but I don’t like the fact that deep pockets are pricing first time buyers out of the market.
Can’t wait to see what the investors’ facial expressions are like when they actually view their “investments” in person.
More evidence of the massive speculation taking place in distressed markets right now. In fact, looking at sales volume, it appears there are as many investors now as there were at the peak. I don’t know what can or should be done about it, but I don’t like the fact that deep pockets are pricing first time buyers out of the market.
———————
This is exactly how I feel. We will never be rid of these parasites until buyers (and renters) essentially strike and refuse to buy or rent from infestors. I am growing to hate them (especially the flippers), and I don’t use that term lightly.
Well , the people are being lied to again as usual . I guess people believe
the hype . I find this amazing in that they should know it’s all BS by watching this crash after everybody ,including the Media ,endorsed the fake bubble prices .
A longtime friend called up wanting to buy a house sight unseen in another
State . In essence I told this friend that they were nuts . After a while I got sick of the conservation because I could tell that this person was going to
do what the hype machine out there suggests . The kicker was this friend wanted me to help them get the property . I said ,”Look ,first rule of real estate is you better know what your buying . You could be looking at outdated pictures on that website for all you know .” I also said that I don’t
help friends acquire real estate because if it doesn’t work out than I don’t have to feel bad . I received a call back from this friend that they were going to get the place inspected . As far as I was concerned this was another attempt to get me involved in this transaction . I said ,”I don’t give advice and I don’t get involved in real estate transactions .”
“Vic Pectol, a retired accountant from Novato, said the 40 percent swoon his 401(k) took last year…”
Uh, Vic baby, the market was UP last year. It hit its bottom in March and rebounded nicely from there. Even over the period 12/31/08 to 12/31/09 the market was up. What did you do, get off the elevator when it stopped in the basement last March?
Bill in Carolina - the market bottomed in March, almost precisely the time “the ONE” advised, probably with Warren Buffet’s advice, a good time to get in, or get back in. I did. -
‘When housing was booming, the entire economy was booming.’”
(puts up hand to ask a question) Didn’t we try this before and ended up in this mess ?
Why yes, yes we did. But you need to understand that **this time, it will be different.**
/sarcasm
“People confident of their incomes and flush with cash are seizing the opportunity to buy vacation homes in the desert and mountain resorts that they hope will become a profitable investment or a dream retirement. Sharon and Richard Burns, of Juneau, Alaska, were vacationing last week in a three-bedroom house they bought in August in Palm Springs. Sharon Burns said…’It seemed like a good time to take advantage of the real estate market. I think there is an opportunity to invest and make a capital gain down the track when the market recovers.’”
How nice of these morons to help Megabank, Inc unload their REO inventory at an artificially government-inflated price.
* The Wall Street Journal
* FEBRUARY 15, 2010, 8:54 P.M. ET
Foreclosures Seen Still Hitting Prices
By JAMES R. HAGERTY
More waves of foreclosures will keep downward pressure on home prices in parts of the U.S. over the next several years, two new studies project.
The studies—by John Burns Real Estate Consulting Inc. and Standard & Poor’s Financial Services LLC—both conclude that most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure.
The Treasury Department is expected to give its latest update this week on government efforts to avert foreclosures.
The John Burns study estimates that five million houses and condominiums on which mortgages are now delinquent will go through foreclosure or related procedures that put them on the market over the next few years. That would represent the bulk of the estimated 7.7 million households behind on their mortgage payments.
This “shadow inventory” of homes expected to hit the market is enough to last about 10 months, based on the average sales rate over the past decade, the Irvine, Calif., firm says.
The problem is largely concentrated in Arizona, California, Florida and Nevada. The shadow inventory is equivalent to 27 months of sales in Orlando, 24 months in Miami and 18 months in Las Vegas, the study estimates.
Over the past nine months, home prices as measured by the S&P/Case-Shiller index have increased modestly after a three-year plunge. That is largely because efforts to avert foreclosures have slowed the flow of foreclosed homes onto the market, temporarily constricting supply.
John Burns, chief executive of the consulting firm, said investor demand for foreclosed homes remained strong. Thus, he said, prices were likely to be about level over the next few years, despite the looming foreclosure supply, if the economy continued to recover and mortgage interest rates didn’t rise sharply. But if the economy slumped anew and interest rates jumped, he said, “that’s going to cause prices to fall further.”
The S&P study also says that the “overhang” of foreclosed homes expected to go on the market points to lower home prices.
Some borrowers are catching up on payments after having their loan terms modified, but S&P says current trends suggest that 70% of such borrowers eventually will redefault.
Loan modifications “may be helping marginally, but they are not going to solve the whole problem,” said Diane Westerback, a managing director at S&P.
…
The problem is largely concentrated in Arizona, California, Florida and Nevada.
Well, that’s hardly a surprise, considering that these are the four states that practically personified the housing bubble. I don’t think it’s far-fetched to predict that most houses that were bought in these four states between 2002 and 2008 (or so) will end up in foreclosure if they haven’t already done so.
“‘The truth is, anyone looking to buy, move up or refinance must do it before spring. Interest rates are at an all-time low,’ he said. ‘Once the government stops purchasing mortgage-backed securities, which is the reason (rates) are low … then the rates will rise. History tells us once they start to rise, they will do so quickly and dramatically.’”
Don’t tell me there are dumbsh!t ‘experts’ who really believe the Fed’s MBS purchase program is going to end any time soon?
Just back from the central coast - a couple of notes:
re: the ATT golf tournament, my brother reports that a number of hospitality tents weren’t carrying the real co. names. He said the financial institutions were there, just not obvious about it. Party on, just keep it hidden.
Despite beautiful weather, 3-4 day weekend, valentines day, golf and up north Mavericks surfing, I had no problem getting reservations at my favorite restaurant (for 6) and it didn’t seem exceptionally crowded there sat. night. Ditto as walk ins on fri. and sun. nights elsewhere. Rooms still available - which is unheard of for ATT weekend.
Trader Joes clearly over ordered on flowers, judging by what I saw tonight.
It seems to me that the valleys were hit by a tsunami w/ the bubble pop, but the coast is being slowly eroded by an ever advancing tide.
Good info. Thanks for sharing it.
We saw the opposite down here when we went to The Cheesecake Factory in San Diego on Monday night. It was about a 40 minute wait, and the place was packed. It’s in a mall parking lot, so we wondered if stores were having President’s Day sales or something, driving traffic up at the surrounding restaurants? It was strange, though.
“He proceeded to churn out $4 billion in mortgages, purchased and securitized by Citibank, Bank of America, Bear Stearns, Countrywide Home Loans, Lehman Brothers, Merrill Lynch, and Morgan Stanley.”
…
“The entire process of mortgage issuing for the past decade has been fundamentally fraudulent. This was not an accident. Like everyone else, the leading financial institutions in the country were well aware that people with no incomes could not pay off half-million dollar mortgages. They were well aware that their accomplices like Daniel Sadek were common criminals who would issue plenty of mortgages precisely to those who could not pay.”
Dumb questions of the day:
1) Is fraud illegal?
2) Were Megabank, Inc’s subprime mortgage lending kingpins guilty of fraud?
3) If the answers to 1) and 2) are Yes and Yes, why have we seen no perp walks?
4) Is it really true that ‘no one could have seen it coming’?
“The answers to these questions are simpler than one might expect. These financial institutions knew that lowering mortgage standards and partnering with petty hustlers would result in a flood of new mortgages, issued to people without the income to pay, and at values far in excess of the real value of the underlying properties. They knew that many of these borrowers would default. They knew that crisis would ensue.”
Isn’t this a blatant case of financial fraud? I am thinking some other regulators besides the bubble-blind Fed might need to be involved in order to clearly see it. How about the FBI or the DOJ, for instance?
“These financial institutions also knew that this would be highly profitable for them.”
Did they know that fraud was a crime and that committing it would eventually land lots of them in jail?
Heard from Congressional hearing:
So Mr. Goldman Sach, what you did was like selling cars with
faulty brake? And then you bought crash insurance on these cars?
GS: No Sirs, Mr. Moody and Mr. SP looked at these cars and told
us they were perfect. The insurance thing …
Tim Geithner: Not another word Mr. AIG.
If only my dreams were as good as yours. But no-o-o-o, I have to dream about the wolf-guy from New Moon..
(this is not a good thing)
PB …I got back late so I don’t even know if you will see this post . It has been driving me crazy how fraudulent this whole scheme was . Had
it not been for the fact that they just ran out of greater fools I think they would of continued with the scheme .They knew nobody was policing what they do . I think for a while they thought that real estate would just level out eventually ,but there reached a point were they knew that it wasn’t sustainable I think . Getting bailed out prevents
proper Justice on their crimes IMHO . Companies just making standard profits weren’t good enough for these greedy pigs . All of a sudden CEO’s looked like they were worth these big salaries when it was just in large part the product of a hyped up market,easy financing , and a whole lot of fraud . Hank Paulson should be made to give back the 1/2 billion he made in 7 years at GS and Mozillo should of been in a orange suite already .
Amen, Wiz!
they just ran out of greater fools
We didn’t even run out, we just hit peak GF and could no longer sustain the previous growth rate in total GFs.
“‘Overall prices have rolled back to the 2004 to 2005 range, which seems to be a floor. Prices have not dropped any lower nor are they predicted to,’ said Shawn Hethcock, of Willis Allen’s Shawn Hethcock and Shawn Rodger team in Del Mar.”
The “floor” is near peak bubble prices? Yeah, sure it is. How did that “permanently high plateau” work out everywhere else?