Bits Bucket for December 29, 2010
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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First post. He he.
Anyway, I think houses in some places are a good deal right now. Mortgage is way lower than rent. Not San Diego or San Francisco, but there are some places - lower end stuff.
Agreed. Many homes in Modesto, Stockton and Tracy California are now available under $100k, but this is largely in the poor neighborhoods where section-8 is widespread. No thanks!
That is in the smog belt of California, another reason they are cheap.
In south sacramento homes were going for <50k.If you like crime than go all in.Homes there are cheap for a reason.
It’s too bad that the economic situation for the University of California system is crumbling. They are missing an historic opportunity to pick up large tracts of houses near the UC Merced campus on the cheap, which could be used for “student housing”. Normally UC builds condos for married and graduate student housing, and pays for them at “government contractor rates”. In other words, they tend to pay dearly for them. Distressed housing could be a bargain in comparison.
I’m sure some “investor” will snap them up.
If the investor is paying cash at auction, he/she/it can often get the house for an obscenely low price, put it up well below “market value” to sell quickly, and still end up well-compensated. One of the nice things about cash I guess.
“but this is largely in the poor neighborhoods where section-8 is widespread. No thanks!”
Same thing here in SE Florida. Is this part of the master plan? The lower end stuff is back to just about pre-bubble prices, but the decent neighborhoods are still for the most part at least $100k too high, and in some cases much more.
I hypothesize that this is related to the rise in income inequality.
income inequality
haha, the buzzwords du jour…
income inequality
haha, the buzzwords du jour…
Some words become buzzwords for good reason.
haha, the buzzwords du jour…
Yawn. Change in statistical distribution of incomes then. I’m not trying to make a political statement, just saying that particular neighborhoods have different pools of buyers, and some of those pools of buyers have been shown to be doing better in this depression than other pools of buyers.
Income inequality is a buzzword?
Get help. Quickly.
Now I am not a very good hypothesizer, and I am sure you can hypothesize with the best of them. But is it possible that the $ amount of the low end stuff is much less of a hit on banks balance sheets than the decent well established neighborhoods? Low end houses that sold and refied for $200k being unloaded at $80k = $120k loss. If decent neighborhoods that sold and refied for $450k were being unloaded for $175k (pre-bubble prices) that would be a $275k loss.
Income equality ??
From Douglas Kass Seabright Partners;
Screwflation:
Like its first cousin stagflation, is an expression of a period of slow and uneven economic growth, but, its potential inflationary consequences have an outsized impact on a specific group. The emergence of screwflation hurts just the group that you want to protect — namely, the middle class, a segment of the population that has already spent a decade experiencing an erosion in disposable income and a painful period (at least over the past several years) of lower stock and home prices. Importantly, quantitative easing is designed to lower real interest rates and, at the same time, raise inflation. A lower interest rate policy hurts the savings classes — both the middle class and the elderly. And inflation in the costs of food, energy and everything else consumed (without a concomitant increase in salaries) will screw the average American who doesn’t benefit from QE 2.
Now I am not a very good hypothesizer, and I am sure you can hypothesize with the best of them. But is it possible that the $ amount of the low end stuff is much less of a hit on banks balance sheets than the decent well established neighborhoods?
If true, this wouldn’t necessarily contradict my hypothesis, so I immediately like it on those grounds. Banks also have a good reason to limit the rate of their realized losses, and these properties may represent a larger share of those losses. The one thing that might derail this theory is if the distribution of foreclosures was such that there are so many more homes of low value that they make the higher value homes irrelevant.
Yet a third idea: Foreclosures are actually fairly evenly spread through all income classes, but something different is happening with the foreclosure process on jumbo loans that is slowing it.
I still think my first idea about different income classes having different amount of financial strife resulting in different outcomes for various neighborhoods is the most true, but absent actually going out and paying for/analyzing data it’s all just guessing.
Like I said, I am sure you can hypothesize with the best of them. I don`t know how that is coming out, but it is supposed to be a compliment.
I don`t know how that is coming out, but it is supposed to be a compliment.
Well we’ve all seen that the lower end of the RE market has dropped further and faster than the middle and upper ends. The question is the extant to which the middle and upper ends are going to end up with big declines but haven’t gotten their yet. And which hypothesis that you use to explain what we’ve seen greatly influences what you think will happen in the future.
Comment by Big V
2010-12-28 23:22:47
Anyway, I think houses in some places are a good deal right now. Mortgage is way lower than rent. Not San Diego or San Francisco, but there are some places - lower end stuff.
——————–
Agree with this, and would add that if one is borrowing most of the money (20% or less down payment), then the past few months have provided an opportunity to buy homes in a number of areas where the PITI payments are pretty equivalent to rent.
The only problem with this, is that these ultra-low rates are providing the “affordability” rather than the price, which means that prices are still at risk of falling if/when interest rates rise.
If you can get PITI/rent parity in a high-rate environment, it’s a good deal; but in a low-rate environment, not so much, IMHO.
Are the affordable areas where no want wants top live?
“Are the affordable areas where no want wants top live?”
http://www.youtube.com/watch?v=BRJnEbt89w8 - 125k -
The Clark gets lost in the hoodby xCallEmRogues
2:19 to the right is a better clip.
Comment by arizonadude
2010-12-29 08:18:42
Are the affordable areas where no want wants top live?
———————
Yes, of course. Those were the areas that dropped in price during the “subprime is contained” period. Only when the price declines started moving into the better areas did the PTB put on the brakes and begin really manipulating the housing and mortgage markets — first, with their “foreclosure moratoriums” and then with the almost 100%, govt-backed mortgage market with its artificially low interest rates and low downpayment requirements. Then, the tax credits, then HAMP, then etc., etc.
The reason for the disparity is because the price declines were halted by artificial means when they moved into the better neighborhoods.
“…if one is borrowing most of the money (20% or less down payment), then the past few months have provided an opportunity to buy homes in a number of areas where the PITI payments are pretty equivalent to rent.”
And to understand why this is not as good a deal as it might appear at first blush, imagine renting a comparable property subject to a lease contract which requires you to put a security deposit of 20% of the property’s value into escrow for the duration of the contract. There is an opportunity cost of capital to putting in a downpayment which used home sellers conveniently neglect to mention when they talk about ‘how-much-a-month’ it will cost to buy a place.
The opportunity cost argument didn’t work with my wife 2.5 years ago, and she was pretty much right.
(S&P 500 down 7.5% since then…)
House selling price, reasonably stable hereabouts in SE Houston. (At least until the next 500 layoffs.)
And the low interest rates make it difficult to justify the “opportunity cost” argument.
Believe me, I agree with you, but it’s a hard sell in this low rate environment. The War on Savers is still in full swing…
I agree that interest rates affect affordability. However, rates can rise and still have housing pretty affordable relative to history at today’s prices.
California’s affordability index is currently at 47 (the higher number, the more affordable).
The average index value from 1992-1996 (encompassing the prior post recession recovery) was 38.
The average index value in California from 1988-2005 (including some bubbly years, but also some slower years was 31.
The low during the peak of the madness in mid-2007 was 11.
I think people who buy now are going to look back 5 years from now and generally feel good (some better than others), in much the same way that people who bought from 2004-2007 generally feel bad (some worse than others).
California’s affordability index is currently at 47 (the higher number, the more affordable).
Did they not change the way that is calculated compared to the 80-90’s?
No.
There were some differences prior to 1988 (mainly with respect to how the determine the area’s income level), but since then they have stayed the same (20% down, no more than 30% of income, average interest rate, etc.).
Prior to 2006, they published the information monthly. Starting in 2006 they publish quarterly. The calculation is the same.
I recall a different affordability measure WAS monkeyed with (altering the interest rate, etc.). Despite all their other issues, CAR stayed constant on this measure…if not, they would have monkeyed with it in 2007, when affordability hit ridiculously low levels at 11…
I should hasten to say that I look at the data series put out by CAR called “Housing Affordability Index - Traditional”, which I take to mean uses the traditional methodology. It is possible that they began to publish a different number, I only look at the “traditional” number to try to have consistency.
And the final follow-up…CAR’s “First Time Buyer” index is the one they monkeyed with…in 2008, they changed that one to use the 1-year ARM as the interest rate….
The “Traditional” measure, the one that I use above was not changed.
Even in the DC MD VA area there are a few homes popping up that almost look reasonable compared the rent. However, the rent/buy parity is due to skyrocketing rents, not falling house prices. If you use the 2.5x income metric, housing is still one economic tier more expensive than historical; e.g. you need to be making over $100K just to afford mid-middle-class housing like an older townhome.
The low-price homes tend to be older stock, major fixer-uppers/foreclosures, or attached product (or all three). They are being snapped up as falling knives. The newer fugly red/tan fake stucco Pergraniteel 9-foot-ceiling homes are still listed at wishing prices, as CRE companies or builders hold out for more pretty-young-things to come to the area and rent-to-buy.
I would rather wait until the main wave of product hits the market, where there is more selection. It’s to the point where I’m afraid that the house itself will depreciate faster than prices will drop, and i’ll be stuck with a fixer-upper.
The government Immodium can’t hold back the inevitable forever. The eeevil federal government has just ended a hiring frenzy and is beginning a retirement frenzy (with a pay freeze to help it along). As the influx of pretty young things slows, as retirees with equity want to sell and move, as illegals flock back home, and as interest rates creep up, house prices can only drop. The pretty young things who are already here would probably love to buy into SFH, but are priced forever into their condos…
In other words: DURATION DURATION DURATION…
“…you need to be making over $100K just to afford mid-middle-class housing like an older townhome.”
In the D.C. area, $100K income IS mid-middle-class.
Maybe if you work for the Federal gov’t. I’m sure there’s no shortage of people working at low paid, menial, P/T jobs in the private sector.
OF COURSE there are plenty of people working low paid, menial, P/T jobs in the private sector. But we wouldn’t be calling them middle class. There are plenty of lower level GS employees making 30-50k as well. ‘Round here, that’s scrambling to hold onto the bottom rung of the middle class.
Oxide,
Totally agree with you about duration.
We are seeing much the same market in Southern California as you are seeing in D.C. Rents have skyrocketed here as well, making the buy/rent argument a bit fuzzier. We’re fortunate, because I anticipated this rise in rents when we first began renting in 2004, so I made some deals with the LL (prepaid rent, we help with the repairs, maintenance, and upgrades, etc.), and we’ve not had to deal with regular rent increases — I’ve raised them myself to head them off at the pass…get to control it better that way.
If we had to start renting right now, one could make a strong argument in favor of buying.
Interesting to hear about the hiring freeze.
“government Immodium”
$100K income IS mid-middle-class ??
Then what “class” does this guy qualify as… ??
“Santa Clara County’s veteran fire chief, Kenneth Waldvogel, will retire at the end of the month, but the 57-year-old won’t be packing up his office just yet. He’ll be back on the job in January, taking home his $236,691 annual salary as a consultant — on top of a $200,000 yearly state pension”…….
LOL. Shameful, but if he did not take the opportunity, someone else would.
That’s no damn excuse.
As for his class, that’s the upper 3%.
scdave,
No doubt, that’s inexcusable, but stories like that are very much in the minority.
Remeber to keep your eye on the ball — the elite/financiers are the ones who have decimated our country. We can’t let them distract us with their “divide and conquer” tactics, making us turn on each other, instead of turning our anger on them.
How do you do “fake stucco”?
It just is an indication that rents will drop too.
San Diego first then San Fran. goes into bankruptcy! Not good for value of houses.
In San Diego, starting to have to make a hard decision. Paid a premium to live in the UC area close to the beach/work (2100) in a 1500 sq ft house. But I can get a similar house over in the Rolando or La Mesa area for about 300k list . Which would reduce my monthly nut (buying cheaper than renting) but that’s with 20% down. La Mesa isn’t my “dream location”, but as I continue to save, and when I’m ready to get closer to the beach/work again, rents and monthly payments are about in line, and I could rent it out. Meantime, my monthly goes down 300-400 for PITI, and maintenance vs tax return about balances. Then I get a stable rent locked in too.
On the flip side, a 250-300k la mesa 1500- 1700 sq ft. might drop down to 180k - 210k for a “paper” loss of 70-90k, or it might lose just 20-30k. If it “only” loses 20-30k I wouldn’t even care, where as if it lost 70-90k, I would care, but since I would only live there or rent it out, it wouldn’t “kill me”, and I would still be paying off principal, and not paying rent. The patrick.net calculator says the tipping point is 350k for a 2100 rent.
So what do the hbber’s think, live in a rental that just won’t get the same love and care my own home would, or buy something I can fix up, but is farther away from work and the beach, may lose “paper money”, but saves me money monthly?
BTW, equivalent house to rent in La Mesa would be equal rent/buy (1700/mo-300k), but I would rather pay $400 more and rent here than rent there. Here (UC) houses are still in the 600k-700k range, well out of the $2100/mo range.
Bicycle / Coaster / Trolley,…utilize the stations as compass points.
Do not compare rents near the beach to house prices 40 miles inland. That is apples and oranges.
If you want to live near the beach, then compare rents near the beach to houses near the beach. If you are willing to live inland to get lower payments, then compare rents inland to house prices inland.
Comparing rent on the coast to a house inland is just stupid.
Well I don’t think that prices are going to start appreciating any time soon, although mortgage rates ARE likely to be going up. But the traditional wistom is that you shouldn’t purchase a house that you don’t think that you’ll be happy living in 10 years from now. Keep in mine that even if you CAN rent the La Mesa house out for a neutral or even positive cashflow, you may not be able to get a second mortgage unless you can show that you’re able to make both mortgages even if the La Mesa house is vacant or worse, filled with a non-paying tennant.. Because with the bursting of the bubble, lenders are simply NOT willing to assume that if worst comes to worst you’ll be able to sell at a profit.
At a very real level, being a landlord for less well off shifts the risk that they won’t be able or willing to pay for their housing from the bank to you. OTOH, there will be a good number of people who buy near the bottom, become successful small-time landlords and pay off those mortgages. Next step: profit. But it’s not going to be quick, and risk-free money.
You should also account for the price difference on the house.
If houses drop 8% in price this year, which seems conservative to me, then buying a 300k house will cost you $24,000 or about $2k extra per month on top of the mortgage payment, maintenance, and taxes.
So what happens when San Diego goes bankrupt??
When legal pension mandates collide with the brick wall of real world budget constraints, guess which one wins?
San Diegans, read the handwriting on the wall.
Alabama Town’s Failed Pension Is a Warning
Meggan Haller for The New York Times
Prichard, Ala., presents a worst case for public pension funds: It stopped sending checks in 2009.
By MICHAEL COOPER and MARY WILLIAMS WALSH
Published: December 22, 2010
PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
Since then, Nettie Banks, 68, a retired Prichard police and fire dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old retired fire captain, has gone back to work as a shopping mall security guard to try to keep his house. Eddie Ragland, 59, a retired police captain, accepted help from colleagues, bake sales and collection jars after he was shot by a robber, leaving him badly wounded and unable to get to his new job as a police officer at the regional airport.
Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security. “When they found him, he had no electricity and no running water in his house,” said David Anders, 58, a retired district fire chief. “He was a proud enough man that he wouldn’t accept help.”
The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.
It is not just the pensioners who suffer when a pension fund runs dry. If a city tried to follow the law and pay its pensioners with money from its annual operating budget, it would probably have to adopt large tax increases, or make huge service cuts, to come up with the money.
…
Meanwhile 36 of the top-paid UC administrators are demanding about a 50% INCREASE in their pensions.
They want pensions raised from around $200K to around $300K “because they are ethically entitled to it”.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/12/29/MNDC1GUSCT.DTL&tsp=1
Thank you very much for this. Very interesting.
Holy guacamole!
Under UC’s formula, which calculates retirement benefits on only the first $245,000 of pay, an employee earning $400,000 a year who retires after 30 years would get a $183,750 annual pension.
Lift the cap, and the pension rises to $300,000.
And how will they pay for that? By turning people against the rank and file’s pensions.
See how that works?
Now you know where it’s coming from.
Correct, eco.
I’m very suspicious of this “anti-union” drumbeat that has been streaming at us from the MSM the past couple of years.
Notice how there is more outcry about working people’s wages/benefits than there is about the financiers’ compensation and benefits? The financial industry CAUSED the “pension crisis” (not to mention the entire “financial crisis”) but somehow, they are coming out unscathed.
For all my ranting about pension mandates and brick walls, I take absolutely NO pleasure in learning of these honest and decent people and their dire circumstances.
Rather than sitting in their homes until the power and water got shut off, they should have been screaming from the rooftops. To anyone that would listen.
La Mesa is too hot.
How often do you go to the beach? If it’s once or twice a month, I’d go for a cheaper place inland. On the other hand, gas prices are going up so it’ll cost you more to commute if you move inland.
Gotta agree, jojo. Mathguy, even from 3000 miles away I get the vibe that the beach means a LOT to you, enough that you’d want to move back in a few years.
Meanwhile, you’re only thinking about buying a place because you’re “supposed to.” Peer pressure is a bad reason to do anything. Also, you shouldn’t make ANY plan that depends on “renting the place out.”
I vote that you stay put and enjoy the beach.
Unless you’re married, why not rent a (nice) beach bum bachelor pad and save your money?
Credit Suisse and commercial real estate - in this case mountain resorts.
They are the bag-holder for two highly-distressed properties: Idaho’s Tamarack and Montana’s Yellowstone Club.
Right now Credit Suisse is objecting to a proposed buyer for the remains of Tanarack. The buyer is offering $40 million and the bank is owed something in the range of $350 million. That’s less than 12% of what’s owed. What I can’t understand is why Credit Suisse doesn’t put together a management team and take it over directly. Surely they could recover more of the $350 million if they did this, rather than let some 3rd party profit from their loss. Credit Suisse is a big international player.
http://www.idahostatesman.com/2010/12/28/1469621/apnewsbreak-swiss-bank-objects.html
According to another account, Credit Suisse DID bid to take over the Yellowstone Club in 2009, but was outbid by the successful team. There they recovered a much higher percentage of what’s owed - $115 million was bid and about $229 million in loans is outstanding. That’s about 50%, a much better deal for the creditors.
http://www.bozemandailychronicle.com/news/article_1658b77b-fcdd-5ac6-b03d-a61d4559ecb5.html
These actions took place in separate states, and the news media isn’t pulling together the overall story of Credit Suisse’s antics. Was Credit Suisse’s bid for Yellowstone Club an honest bid, in which case they believed they had the management savvy to pull it off? Or was it merely a ploy to push up the bidding price?
Credit Suisse held the note ($50M) on a property here in Mammoth that was slated for a Ritz-Carlton. The owner (Roger Stahbauk’s group) backed out and the land went back to CS.
At auction the property couldn’t fetch $5M min bid.
I guess there’s a finite supply of people who can pay $100 for a lift ticket plus whatever the RC was going to charge for a room.
There was some big resort in Steamboat Springs that ended up foreclosed recently. Apparently there is no demand, yet hotel rates keep going up there, even in the off season. My son’s soccer team plays in a tourmament every summer in Steamboat and every year the hotel rates seem to get dramatically higher and higher, even though the tournament doesn’t come close to filling up the hotels (in fact tournament attendance had dropped over the past few years, judging by team counts). So much for Mr. Market and Deflation bringing prices down.
Check out Steamboat Rentals - Mary Kay’s bunkhouse or some of the other privately owned rentals that we offer in Steamboat. I bet you can get a better deal then staying in a Hotel.
Only $100 for a lift ticket ?! The cr@ppy ski area here, where it’s usually raining, was charging $100 twenty years ago when I decided I couldn’t afford to ski any more. I can’t imagine what it costs now.
The teeny hill down the street that CNYers have access to cost $45/day. Top to bottom takes 7min if you ski real slow.
Agassi and Graf bailed out of their planned Fairmont hotel at Tamarack before the groundbreaking. According to wikipedia…
President and Mrs. George W. Bush stayed at Tamarack in August 2005, giving the resort significant national exposure. They came to Idaho as guests of Dirk Kempthorne, the state’s governor and former U.S. Senator who later became a member of Bush’s cabinet as Secretary of the Interior.
In September 2006, recently retired tennis star Andre Agassi and wife Steffi Graf announced through their development company, after significant delays, that they had finalized an agreement to develop a luxury mountain project at Tamarack. Groundbreaking for the Fairmont Tamarack was scheduled for 2007 with completion expected in 2009, on their first lifestyle development project. Following more delays, Agassi and Graf withdrew from the project in June 2008.
Lift tickets are cheap outside the few flagship gotta-go-to resorts. Bogus Basin above Boise is only $48 for an adult lift ticket, and only $429 for a season pass. Ski free if you are 70 years old - I have something to look forward to.
Dennis,
Wasn’t that property orig. ‘owned’ by Tim Blixseth ( and after D-court, ‘Edith’? ) What w/ all the cross-defaultin’ and all I kinda’ lost track myself?
Oh, btw, “Bogus Basin” isn’t another one of Dennis’ snide remarks, that’s what it’s actually called. Something about bogus gold-claims being sold, was it?
During the Idaho gold rush in the mid 1800s, almost all of the mountain valleys or “basins” above present-day Boise city were found to contain lots of gold and silver. But one basin closest in only had “fool’s gold” or iron pyrite. This basin was dubbed by the miners as “bogus basin” and the name stuck.
Bogus Basin ski resort is a non-profit organization about 18 miles by road from downtown Boise. It’s a boon to families since you can just drop kids off at the transit “park and ride” lots and take the bus up there.
http://www.bogusbasin.org/
DinOR,
Well I googled “blixseth tamarack”, and found this headache-inducing article.
http://www.newwest.net/city/article/blixseths_son_leads_new_lawsuit_against_credit_suisse/C8/L8/
Bogus is “only” $48?
DinOr,
The Blixseth’s were involved with the Yellowstone Club.
“headache-inducing article”
And you never fail to not disappoint! Good lord, Caymans, Credit Suisse, sons, ex-wives, court, BK filings, counter-suit. Something for everyone!
The Times discovers negative household formation due to doubling up, and calls it “unexplored.” Unexplored by whom?
Sometimes I think the HBB is like the Indians before Columbus “discovered” America.
http://www.nytimes.com/2010/12/29/us/29families.html?_r=1&hp
“Of the myriad ways the Great Recession has altered the country’s social fabric, the surge in households like the Maggis’, where relatives and friends have moved in together as a last resort, is one of the most concrete, yet underexplored, demographic shifts.”
“Census Bureau data released in September showed that the number of multifamily households jumped 11.7 percent from 2008 to 2010, reaching 15.5 million, or 13.2 percent of all households. It is the highest proportion since at least 1968, accounting for 54 million people.”
“Even that figure, however, is undoubtedly an undercount of the phenomenon social service providers call “doubling up,” which has ballooned in the recession and anemic recovery. The census’ multifamily household figures, for example, do not include such situations as when a single brother and a single sister move in together, or when a childless adult goes to live with his or her parents.”
Speaking of doubling up, my parents lived with my grandparents until I was ten. When we moved out, one of my mother’s younger siblings — newly married — moved in. The below market rent helped the grandparents, and was what was necessary to save for a downpayment.
my dad and his brothers did that too, as newlyweds and between marriages. G-ma had both a separate room/bath and house.
Same here we lived in a 2 family house upstairs grandparents downstairs…until I was 9 and my father had his house built…he was a bricklayer.
and he built a 2 fam house so we might have a place to save for our down payment..
Sometimes I think the HBB is like the Indians before Columbus “discovered” America.
Hey everyone, they’ve brought warm blankets!
Ha!
Did they bring fire-water?
They did bring fire-sticks. With the smoke coming out the end, they must be a form of peace-pipe.
The full statement should really be “Columbus discovered America for the Europeans”. Truncating the statement makes it a half-truth.
“Columbus discovered America for the Europeans who forgot those guys from Iceland established a colony 500 years earlier”
Actually the Israelis discovered America first. One of the lost tribes of Israel sailed the Atlantic a very long time ago. Their descendents are the American Indians.
You can learn a lot from the LDS church.
Home price plunge is widespread
By Les Christie, staff writerDecember 28, 2010: 11:24 AM ET
NEW YORK (CNNMoney.com) — Home prices took a shockingly steep plunge on a monthly basis, an indication that the housing market could be on the verge of — if it’s not already in — a double-dip slump.
Prices in 20 key cities fell 1.3% in October from a month earlier, an annualized decline of 15%, according to the S&P/Case-Shiller index released Tuesday. Prices were down 0.8% from 12 months earlier
“The double-dip is almost here,” said David Blitzer, chairman of the Index Committee at Standard & Poor’s. “There is no good news in October’s report. Home prices across the country continue to fall.”
Why the housing bulls are wrong
The inventory of homes on the market is up about 50% compared with last year at this time, and there are millions of potential homes for sale waiting on the sideline for markets to improve.
Much of that “shadow inventory” is held as repossessed properties by banks, who will eventually have to release them back on the market.
http://money.cnn.com/2010/12/28/real_estate/home_prices_fall/index.htm - -
“Much of that “shadow inventory” is held as repossessed properties by banks, who will eventually have to release them back on the market.”
Who says?
ExtendHoard andpretendransom.‘Much of that “shadow inventory” is held as repossessed properties by banks, who will eventually have to release them back on the market.’
Why will they ‘have to release them’? Couldn’t they hang on to the homes until they collapse into scrap piles, if that suited them? After all, if the homes are owned by the banks, then the banks get to enjoy all the rights and privileges of ownership, including the right of negligence.
Well through the FDIC, WE supply the banks with low cost insurance. Since that REO is listed as an asset on their ballance sheets, it is important for regulators to have a realistic view of the liquidation value of that asset.
I would think it would be important for the FDIC to have the liquidation value of that asset propped up, by whatever means are available.
How long do the banks want to pay property tax? The longer they sit on them, the more maintenance the homes will need making them harder to sell.
We have one REO in our neighborhood that’s been empty for maybe a year or so. It was beginning to seriously deteriorate five months ago when we were looking at it. It’s still empty, and still not on the market.
“After all, if the homes are owned by the banks, then the banks get to enjoy all the rights and privileges of ownership, including the right of negligence.”
Except that in a large proportion of these cases the banks are only the servicers of the mortgage and it’s sometimes really difficult to tell who really does own the home. I would think contractual obligations of servicers to the MBS holders may include protecting the value of the asset but then again, maybe not. Polly? Natalie?
It’s different in Washington.
Washington region posts gains as home prices still falling in most U.S. cities
By Dina ElBoghdady
Washington Post Staff Writer
Wednesday, December 29, 2010; 12:56 AM
The Washington region posted the highest year-over-year home price gains in the nation this fall, as real estate values slumped in nearly every other metropolitan area, a key housing report said Tuesday.
A healthy job market, particularly for high-salaried workers, buoyed demand and prices for housing in the D.C. area, local economists said. Home values climbed 3.7 percent in Washington in October from a year earlier, making it one of only four regions nationally to avoid a dip in prices, the Standard & Poor’s Case-Shiller home-price index said.
It is unclear how long the region will be able to buck the national trend. One of the anchors of the local job market - private government contractors - may face significant cutbacks over the next several years as the Obama administration has vowed to rein in defense spending. But many economists expect that the local housing market is strong enough to weather layoffs now that prices appear to have stabilized.
…
CLICK!
“It is unclear how long the region will be able to buck the national trend.”
For as long as the government can continue to spend 180% of its revenue.
Yes, it is different in Washington Metro
We have ALL of the jobs here, remember???
Silver lining: As I recall, both U.S. stock and housing prices were crashing as of Feb 2009. At least the stock market has tenaciously hung in there lately.
P.S. I have the feeling that the great big dead cat bounce in U.S. housing prices is history now, as evidenced by falling prices on plummeting volume (aka “housing price free fall”).
* DECEMBER 28, 2010, 11:37 A.M. ET
Home prices falling faster in biggest US cities
Associated Press
NEW YORK — Home prices are dropping in the nation’s largest cities and are expected to keep falling next year, as fewer people purchase homes and millions of foreclosures come on to the market.
The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday fell 1.3 percent in October from September.
All cities recorded monthly price declines. The last time that happened was in Feb. 2009.
Atlanta recorded the largest decline. Prices there fell 2.9 percent from a month earlier. Home prices in Washington dropped 0.2 percent in October, the second monthly decline after five straight increases.
Home prices in Dallas, Portland, Ore., Charlotte, N.C., Tampa, Fla. and Denver have fallen for four straight months.
The 20-city index has risen 4.4 percent from their April 2009 bottom. But it remains 29.6 percent below its July 2006 peak.
This year is on pace to finish as the worst for home sales in more than a decade. High unemployment and tight credit have kept people from buying homes, despite some of the lowest mortgage rates in decades.
…
Here are a comment and a question for you:
Comment: If U.S. home prices are expected to fall 5-7% overall, then areas where prices rose disproportionately might be expected to fall by even more.
Question: Why would anyone in their right mind buy in a highly overvalued area where price declines greater than 5-7% were likely to result in, say, a $25,000 (5% of $500,000) loss in the first year of ownership?
Humphries Expects U.S. Home Prices to Fall 5-7% in 2011
Dec. 27 (Bloomberg) — Stan Humphries, chief economist of Zillow Inc., and Michael Feder, chief executive officer of Radar Logic Inc., talk about the outlook for the U.S. housing market. They speak with Carol Massar and Su Keenan on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)
P.S. I seriously expect the 5%-7% further decline to turn out to have been a severe underestimate, as seen through the lens of the rear-view mirror — similar to what played out after the onset of price declines in 2006, around the time when Ben Bernanke was assuring the MSM that U.S. housing prices were unlikely to decline.
MACBETH
If thou speak’st false,
Upon the next tree shalt thou hang alive,
Till famine cling thee: if thy speech be sooth,
I care not if thou dost for me as much.
I pull in resolution, and begin
To doubt the equivocation of the fiend
That lies like truth: ‘Fear not, till Birnam wood
Do come to Dunsinane:’ and now a wood
Comes toward Dunsinane.
“when Ben Bernanke was assuring the MSM that U.S. housing prices were unlikely to decline.”
Do you think he actually believed that?
———>BULLETIN<———–
Sellers: Todays price is your best price
Buyers: Why buy today when tomorrows price will be halved or more?
When the would be sellers lose their “attachment bias” and resign that houses will be going down for a long time, even their house, then we can have the conversation.
WHAT?! My house is SPECIAL!! I’m not going to give it away!
I was trying to persuade one of my co-workers just the other day, that regular maintenance (new roof, replacement windows) do NOT make her house worth more. She didn’t want to hear it, and wouldn’t believe it. Now she bought pre-bubble, so she shouldn’t be upiside down, but she STILL persists in believeing that her house is special and should go for a premium compared to other houses in the neighborhood. She is going to be very unhappy when the lists and waits.
Buyers: Why buy ?
today when tomorrows price will be halved or more?It was drilled into ol’ Hwy,….you know, that stern 3rd grade math teachers glare: “Least common denominator!”
NYU Economist and Professor Roubini: ‘Housing Prices Can Only Move Down’
http://www.cnbc.com/id/40828545
Professor Roubini
Ha, man bites dog:
Economic Doomsayer Nouriel Roubini Buys $5M East Village Penthouse
Friday, December 17, 2010, by Joey Arak
Bloomberg reports that Roubini is the mystery buyer of the incredible triplex penthouse at 6 East 1st Street in the East Village, formerly the neighborhood’s priciest listing. He paid $5.5 million for the 3,700-square-foot loft, which was last asking $5.995 million, and was once priced at $7.35 million. Maybe he was talking trash about housing as a negotiating ploy?
More like ‘bear bites bull.’ Hamburger meat — YUM!
Hahaha to all the Idiots wanting to travel during the holidays and get stuck for 10 hours on a plane….
I don’t fault Bloomberg or the airlines….almost all the stranded didn’t have to travel…
Yes.. hyow stupid, wanting to spend the holidays with family.
Stupid to have moved away in the first place.
Well actually it is…..you have 364 other days of the year to travel…and if you get stuck with a whole lot less people its easier to find alternative ways….
No different then to get stuck in a jammed subway car where the AC quits during a summers morning rush hour….
2 hours later when the subway is empty you can tolerate it
DJ,
As someone who recently passed through JFK and luckily missed the Euro snow mess, your comment irritates me. Why are you taking pleasure in someone else’s misfortune?
Please keep in mind that those of us who don’t spin records or watch cats lick themselves for a living might have schedules that don’t permit us to cherry pick our travel times.
Ah that’s the key…..you take your chances….Now if you were flying in or out of the airports today you would have a much easier time.
Sorry…but I make it a point to stay away from rush hours as much as possible, even if I earn less $$$….but most people dont want this option.
Its no different then a NYE gig…i charge $400 if its very close to home, but Times Square..You’d better be talking $1000 and up…
SVguy,
To a degree, I understand. At the same time, weather patterns don’t necessarily ‘cherry pick’ how or when they roll in either?
My take is to always look at the nightmare scenario. Sure, you’d like to visit, who wouldn’t. So… what would be the -worst- possible time for something to go wrong? Exactly.
For my money, May & Oct. are always the best travel mos. But I hear you, my wife typically schedules her trip home to the P.I around Easter. What could possibly go wrong? If ppl really want to see you, they shouldn’t mind what time of year.
Dj,
I try and do the same thing myself. I start work early, don’t vacation on major holidays, etc. For some reason your original post brought some hostility out of me. Maybe my 34 hour return trip is still fresh in my mind.
no problem man we are all friends here….
stupid to go to NY in the winter, or any other time for that matter.
The talk now (Zillow chief economist & Radar Logic CEO) is that up to 50% of U.S. homes with mortgages may be underwater (i.e., more is owed on the mortgage than the home could sell for) by year-end 2011.
Needless to mention, they also predict a price bottom will be reached by year-end 2011 (all price bottoms are predicted to happen “by the end of next year”).
“up to 50% of U.S. homes with mortgages may be
underwater”
Talk to a Realtor. 50%, that means the glass is half full!
IT`S A GREAT TIME TO BUY!!!!
Optimist: glass is half-full.
Pessimist: glass is half-empty.
Engineer: the glass is too big.
Housing bear: There is too much water.
Democrats: The Glass and Water Recovery Act of 2011
Optimist: glass is half-full.
Pessimist: glass is half-empty.
Engineer: the glass is too big.
Economist: the glass is too small.
“The OC!”
Google maps / Foreclosures / things look spotty, maybe measles…
OC Register:
Orange County Realtor and housing market prognosticator Gary Watts.
Us: What’s your Orange County outlook for 2011 …?
Gary: Another dismal year of sales. We will not have government intervention as we did last year with the first time home buyer. If rates continue to creep up, another blow to home sales. Look for the number of sales to range between 28,000 to 30,000 for Orange County.
Us: What will be the 2011 drivers of real estate change, good or bad?
Gary: There will be nothing driving real estate sales in 2011. The shadow inventory from the lenders will continue to make its way into the market and we will see increased inventory and lower sales. This is not a good combination for the real estate market.
Actually, that’s a GREAT combination for the real estate market…if you’re a buyer.
Good News! American companies are hiring again.
Bad News! Not in America.
American Companies Flourish With Foreign Hiring
Slate
American companies are getting back on their feet, but American workers aren’t. This isn’t because companies aren’t hiring but, rather, because they’re doing it overseas. According to the Associated Press, companies like Coca-Cola, DuPont, and Caterpillar are increasingly moving jobs to India, China, and Brazil—countries with rising middle classes, skilled workers, and growing consumer demand. Because of this, economist after economist tell the AP that the next decade’s growth will largely happen in Asia and add that the trend isn’t just limited to multinational corporations: As big companies take on fewer American employees, more entrepreneurs are launching businesses with only global hires. Compounding the problem, analysts worry that the American education system isn’t preparing students to compete in the global market. “Companies will go where there are fast-growing markets and big profits,” said Columbia economist Jeffrey Sachs. “What’s changed is that companies today are getting top talent in emerging economies, and the U.S. has to really watch out.” Still, the trends are working out well for U.S. companies—the stock market is set to enjoy its best year since the financial crash, and all but 4 percent of the country’s top 500 companies reported profits. “There’s a huge difference between what is good for American companies versus what is good for the American economy,” international economist Robert Scott said of the trend.
Makes sense that the money is moving over there. It is just easy and cheap to set up business in those countries and doesn’t require a lot of innovations. Just move existing business for better profit margin. I bet Walmart and Starbucs can expand for another 100 years in China.
We were supposed to innovate but think about it, innovation is expensive and success is guaranteed. No brainer for people with money.
“No brainer for people with money.”
That would not include you…. or me… or anybody else here.
It’s all relative, my friend. I may not be on the top 2% of this country, but certainly in top 1% of the world. I bet so are you. Cheer up!
And also whatever money I have I have it invested in foregin stocks/gold/silver. I don’t trust this phoney consumer economy.
“I may not be on the top 2% of this country, but certainly in top 1% of the world.”
Yeah….. you look mighty lofty when comparing yourself to the gutters of Calcutta. Yep Martha…… wurrrr rich!
Man, you have serious issues. Didn’t your Momma tell you Money is not everything? I am as unhappy as you are about the way some of the people in this country amassed their wealth. So what, that’s life! Since you think yourself as a peon, you must be used to it by now. As for the ill gotten wealth, I am sure they will pay the price one way or another. In the meantime, enjoy ur life. You have loved ones around you. You have enough to eat and place to sleep. It can’t be good for your health and sanity to have this much anger and envy.
When you have to compare a 1st world nation to a 3rd world one to look good, you’ve already lost the arguement.
No envy, no anger. Just the facts.
Don’t like facts I see Butter.
“Good News! American companies are hiring again.
Bad News! Not in America.”
Really bad news: This isn’t news.
“American companies are getting back on their feet”
Back on their feet. Last time I checked they ‘ve been making money money hand over fist for the past few years, Maybe not as much as they would have liked, but do they ever?
“analysts worry that the American education system isn’t preparing students to compete in the global market”
“What’s changed is that companies today are getting top talent in emerging economies”
Amazing what affordable education can accomplish. I’ll bet those 3rd world colleges don’t have gleaming student centers, classroom buildings, gyms, “residence and dining halls”, collegiate sports, etc. And most of their staff are faculty who actually teach several classes per semester.
Meanwhile American kids borrow 30K+ per year to attend a private school because the local state U’s are getting harder and harder to get into and are overcrowded.
So colleges just need to graduate skilled workers who will work for 3rd world wages? Or are they talking about other skills like speaking Mandarin? (how many would that really help?)
Cost of higher education is certainly one factor. Also what you study makes a difference, speech communication, leisure studies, African studies, sport psychology, special ed, music and of course the MBA, ‘cos Americans want to get rich quick.
Go into a computer lab at 8am on a Sunday morning and take a look at who you find there. Mostly Indian and Chinese engineers and (computer)scientists while the basket weaving majors are still in an alcohol induced coma. For many of the more affluent college is primarily about sex, drugs and rock ‘n roll and less about education. Math and science is hard and cuts into party time. On the other hand there are many who simply can’t afford it any longer and are scared to go deeply into debt in uncertain economic times.
joke:
What does the liberal arts major say to the engineer?
Do you want fries with that?
Agree. I think it was Spengler who said that our kids are only equipped to serve coffee to those Chinese and Indian engineers/scientists/doctors.
Spengler writes for AsiaTimes.
I don’t think the lure for these companies is a better-educated workforce. IMHO, the lure is a CHEAPER workforce, and a large class of people who are making more money and just beginning to move into their consumer phase.
They are trying to pin the blame on working Americans by saying that we don’t have the proper education, but the truth is, we’re just more expensive.
If we’re so “stupid,” why is so much of the development and innovation still being done in the U.S., but when that’s done, the manufacturing is done overseas?
Not only that can you believe such a contempt our popular culture has for students who are good at math, computer or science? They are geeks and nerds. And that’s true even in our schools. At least you would think that the nerds and geeks are celebrated not chastised in schools.
In the land of the blind, the one-eyed man is… persecuted.
Ever heard of “kill the messenger?” It isn’t just a clever phrase.
Yeah, more Americans should be getting Computer Science degrees. That way when their jobs are outsourced they will still be paying off thier student loans. Sounds like a winning plan to me. Besides, once the Indians and Chinese graduate, they will work longer, harder, and cheaper in thier quest for a Green Card.
Mean while, back in India, riots are breaking out because the price of onions is too high.
Special Ed. is fairly lucrative if you go into teaching. It’s tough work, and a growth market as well.
Yes I have a friend who does a radio show and she specializes in Autistic kids….
http://www.facebook.com/pages/Your-Beautiful-Child-Radio/267131007610
Those Chinese and Indian engineers work hard because they are the cream of the cream in their countries. There are plenty of stupid Chinese and Indians, but we never see them because they never make it to America.
When you have a population of around 1 Billion, the top 1% in IQ is 1 Million strong.
The top 30% in IQ is the same as the ENTIRE population of the US.
Not any more. May have been true 10/15 yrs ago. The top ones are staying home, there’s just too much opportunity for them back home. We are getting the second tier and the spoiled brats nowadays.
It’s also a generational thing. A lot of these super-students are the first generation to have a chance to make good money, and they come from a background of poverty- so they’re hungry and driven. Once they make it, their kids will grow up fat and easy, they’ll learn to enjoy the finer things, maybe even major in the humanities, and the guys will sit down to pee. Oldest story in the world.
I’m seeing this too, Alpha. The original super-students are old enough now that their kids are in college. And those Asian and Indian kids — with American accents — are just as likely to be out drinking like the nothing else on Fridays.
Ummm Alpha..have you ever been to NYC?????
I challenge anyone to stand up in the “stall” and aim correctly if you are more then 150lbs…
Tiny cramped is just the beginning….then the doors open inward and you have to straddle the toilet just to get out….
But they are just the right size for the 5′2″ mehikan illegals
—————
and the guys will sit down to pee. Oldest story in the world.
“Really bad news: This isn’t news.”
It gets worse.
This hasn’t been news for 30 years.
“and the U.S. has to really watch out”
Wa… wat.. watch out for ‘what’ exactly? What are you implying here Jeffrey? ( Does he mean like a 2nd wave after we’ve all been forced into early retirement..? )
Appreciate the heads up.
So much for my career in Criminal Investigation or Construction Management.
Students seeking to move up in life by getting a degree from a for-profit college are being trapped in a growing underclass of education debtors. Under U.S. law, their loan obligations can rarely be discharged in bankruptcy, making them more onerous than credit-card debt or subprime mortgages taken out before the housing bubble burst. Along with blocking students from further education and access to housing, defaults can subject them to government confiscation of tax refunds and Social Security payments, as well as paychecks.
“I’m cornered, and I don’t know what to do,” DiGiacomo, a 30-year-old former U.S. Army supply and logistics specialist, said in an interview. “I would love to forget I ever went to those two schools and start from scratch.”
Students at for-profit colleges, which rely on federal financial-aid programs for as much as 90 percent of revenue, carry the biggest loans in U.S. higher education.
While currently enrolling one in eight U.S. students, for- profit colleges account for almost one in two federal-loan defaults, according to data released Sept. 13 by the Education Department.
I know a young pup who got one of those “criminal justice” degrees from a state school. Says the waiting line to become a cop is huge where he lives, and some departments are laying off, and he would still have to attend the academy for a year (also a waiting list there).
Anyway he gave up and now works at UPS, as a package handler. He says the holy grail there is being a delivery driver, at least for the pay.
But it can be really hard on you…my driver starts at 830am gets to us at the end of his route around 530-6…but holiday time he has delivered packages to us past 10 pm a few times… once I was in bed and it was almost 11pm when he delivered his last package on the truck to us…
——————
He says the holy grail there is being a delivery driver, at least for the pay.
I’d think the ‘dream UPS job’ would be to drive their semi’s from town to town. Door to door delivery is a hard job. I can’t imagine doing it in NYC.
Drivers rotate between long haul and local deliveries.
““I’m cornered, and I don’t know what to do,” DiGiacomo, a 30-year-old former U.S. Army supply and logistics specialist, said in an interview. “I would love to forget I ever went to those two schools and start from scratch.”
He would have been better off getting a two-year degree from the local community college in auto mechanics or bookkeeping. At least he’d be making 30+ a year with no debt load.
Firstly, anyone coming off active-duty mil. into ‘this’ economy gets what they got coming to them. Sorry. When I got off active they told me, no unemployment for YOU!
Secondly, I don’t know how much better off any recent grads from non-profit schools are faring? My SIL will grad. soon and I have my fingers, toes & eyes crossed. Wish us luck.
Lastly, had trad. schools updated the course offerings accordingly, there never would have ‘been’ such a rise in for-profit schools?
When I got off active they told me, no unemployment for YOU!
My wife and I had the opposite experience in the 1990/1991 timeframe. I was surprised to find that we both got unemployment and didn’t even have to look for work since we were in college. Hers was even extended once thanks to George Sr.
My step is getting unemployment too..he tried to re-up but they wouldn’t let him. I guess coming out a E-3 after 5 years wasn’t too impressive. Anyway the mil is getting picky who gets to stay in.
“…coming out a E-3 after 5 years wasn’t too impressive.”
That will do it.
I’ve posted this before, but worth doing again. My daughter graduated from a second tier Washington university in 12/08. She and all of her close friends who graduated around the same time are gainfully employed in decent paying jobs with decent benefits. All of her friends got degrees that prepared them for real careers, eg: IT, Finance, Marketing, Graphics Design, Accounting, etc.
Some of the companies they work for are Fidelity Investments, UPS (management track), Grant Thornton, Microsoft (contract to employment), and others whose names escape me.
It took them a bit longer to find work and the starting pay iwas less than it was for graduates a few years earlier, but on the other hand none of them bought $400 sq ft Seattle condos.
Ancedotal evidence, but at least my experience says its not as bad as we would like to believe.
Does being a ’supply and logistics specialist’ in the army not prepare you for a job? Or is it something that doesn’t carry over from the military to the civilian world?
Students at for-profit colleges, which rely on federal financial-aid programs for as much as 90 percent of revenue, carry the biggest loans in U.S. higher education.
————–
Gosh, but I thought “private” entities always did things better — and for a better price! — than the public entities. It’s just shocking to read that the “private college” customers are getting ripped off…just shocking.
/sarcasm
BofA Tries To Foreclose On Couple That Never Missed A Payment
Bank of America told this couple that their house would go into foreclosure on Christmas Eve, which came as something of an anti-Christmas Miracle to them considering they had never missed a single mortgage payment.
The problems started when the couple looked into refinancing their home and asked the BofA loan specialist for the “cheapest” option available. That rep tentatively put them in the Federal government’s “Making Home Affordable” program, which was developed to help people who are behind on their mortgages.
The couple decided not to use that refinance option but that rep’s action put on their credit report that they were seeking a loan mod and sent out a credit destroying blast to all their creditors. Their credit card limits were reduced to $18,000 from $30,000, all their credit card APRs were jacked up to universal default levels, and other creditors started shutting down their accounts.
http://consumerist.com/2010/12/bank-of-america-tries-to-foreclose-on-couple-that-has-never-missed-a-payment.html
Well they did ask for the cheapest option available. Perhaps letting the house go into foreclosure, pocketing the monthly payment for now and moving into a rental when and if they kick them out, would be the least costly option in the long run. Sometimes the right answer is not the one you were expecting.
“This killing time, is killing me”.
“The couple decided not to use that refinance option but that rep’s action put on their credit report that they were seeking a loan mod and sent out a credit destroying blast to all their creditors.”
This gets right to the reason that too-big-to-fail firms in the financial section need to be broken up. There is not enough competition among financial service providers for them to have the incentive to provide decent (competitively-motivated) alternatives. Any economist who is not a dumb sh!t knows that for a competitive economy to thrive, you need many firms in competition; a few vampire squid Megabanks won’t work.
PB,
Correct. I even got that impression long before TBTF became an accepted acronym. As in; where you gonna’ go? Oh, we own them too.
I’m hoping Elizabeth Warren will lead the charge on returning competition to the financial services sector (despite her future status working for the biggest too-big-to-fail bank of them all).
Liz ( the squarest gal you’ll ever have a crush on! )
In the late 80’s/early 90’s ( where we started making a rapid and steep departure from anthing resembling ‘competition’, the banks -would- listen to a certain amount of guff )
After that, it was Hold Please: Automated: On-Line: Self-Service: Figure It Out Yourself/ here’s the number to your State regulator and best of luck!
She’s up against 30 years of industry collusion without any backup support.
I wouldn’t hold my breath.
“She’s up against 30 years of industry collusion without any backup support.”
She has an MSM bully pulpit, the vision thing, a good mind, a gender preference, and The One’s support. She has already proven her willingness and ability to stand up to banking industry whores with high-level government posts. I think she will give the Megabanksters what for.
This is why having foreclosure papers properly served is important.
Don’t the banks have the legal right to just post a note on the door that the home has been auctioned? (This is how BoA notified some friends of ours that they were losing their home, when said friends returned from a trip out of town.)
I believe the auction notice must happen prior to the auction (30 days??)
Around Boise they post “notice of auction sale” on the door a long time before the auction date. IIRC it’s 3 or 4 months. Posting on the door has the advantage of letting any RENTERS know ahead of time. If it all went through the mails, or via a personal process server, the renters won’t know until the day it happens.
So banks can now jack interest rates and shut down accounts just for LOOKING for a lower cost option? This borders on thoughtcrime…
Been doing it with CCs for decades.
I like the one where if you check your credit report too many times… it results in a lower credit rating.
Bullcrap.
Why would they need over $18,000 in credit card debt? Was that how they were able to make all their mortgage payments in time? Seems like there was more going on here.
I thnk you’re right…see my comment above. How can just looking for a re-fi start such an avalanche. There must be some major skeletons jangling around that credit report.
Not necessarily. As the credit industry has pretty much had free reign for the last 30 years, they don’t have to justify a damn thing and like any loan shark, are just looking for an excuse to take more of your money.
“… and like any loan shark, are just looking for an excuse to take more of your money.”
And yet millions of people willingly keep on giving them their business.
The U.S. is populated with dummys.
“The U.S. is populated with dummys.”
Then again, a lot fewer currently have buckets of money and boxes of stupid than they did back in 2006.
I detect no shortage on the box of stupid side :-). So there’s really only one thing missing…cue Combo.
Why does the hot chick want to know if I haven`t had a DUI?
Maybe she wants a bad boy?
“Maybe she wants a bad boy?”
That was another Seinfeld show.
Haha
“Bad boy” image only works if you have either looks, money or fame. If not, you are just creepy.
Pretty much nothing works for men if you don’t have at least a bit of one of those. Then again that’s true for women as well, just the priority level of the three are shifted.
Maybe she’s looking for a designated driver? Someone with “nice guy syndrome” who can drive her and her “bad boy” home.
So you don’t judge her for hers.
ATT double billed us for internet service this month.
When our automatic bill pay refused to pay the higher amount
ATT then sent us a threatening letter saying they were going to send our bill to a collection agency and cut our service 1 day after xmas. This letter must have been mailed 2-3 weeks after we didn’t pay. My wife sent them a payment without asking questions. I looked and found that they had double billed.
My guess is someone needed to meet their numbers this quarter. I’ve never had such a letter sent 2 weeks after missing a payment and there is just no excuse for double billing in the age of computers.
Let us know how long it takes for you to get the double bill portion either refunded or credited toward next month’s bill.
My guess is a very long time, with lotsa calls, emails, repeat sending of a copy of the bill, etc. Think HAMP.
This is why I avoid doing business with Corporate America as much as possible. My ISP is a local firm. I bank at a credit union. No land line.
Keep up with those admirable efforts CO!
(Mikey & Ol’ Hwy are a coverin’ your flanks! psst,…Mikey, there’s one, you see ‘em? …recognize that Corp logo Mikey? Yeah… cable TV, food, trash pickup, eyes tell ya…we is surrounded!)
Their lucrative landline business is dying. They must be getting desperate for money.
One of the few things that prevents me from ordering DSL is that they still insist on making you pay for useless land line phone service.
AT&T has been offering “naked” DSL here for at least the last year. That’s the term; google it.
Years of magical thinking, according to a Minyanville forecaster, as governments double down on borrowing to avoid facing an end to the age of aspiration and onset of austerity.
http://www.marketwatch.com/story/our-world-after-the-banking-crisis-2010-12-29
“As I look at the world, wherever possible, elected officials have traded more contingent liabilities for time.”
“But beyond the financial implications of this trade, there have also been immense social consequences. As I offered earlier this month, I am very concerned that our years of magical thinking have widened an already tenuous divide between the classes. And not just here at home, but in Europe as well. Read Minyanville’s “Our Increasingly Dangerous Asymmetric Economy.”
“To these eyes, 2010 represented a doubling down by developed-nation policy makers on the bet that what we have experienced is nothing more than a temporary recession which can be righted by extraordinary measures. That through financially engineered CPR, the distressed patient can not only be brought back to life, but ultimately thrive anew. But looking at bank loan portfolios, where with the exception of credit cards, delinquencies today are comparable to levels a year ago, I still have my doubts.”
Tuesday, December 28, 2010
Bank execs may have to reveal their bonuses
Businessman with $100 bills in suit jacket pocket.
International regulators are pushing for a plan that will force banks to disclose how much they’re paying in bonuses, and to whom.
Wednesday, December 29, 2010
Jobless report to include those unemployed more than two years
Job seekers wait in line for a job fair
Until now, the unemployment reports did not include those who had been unemployed for more than two years. Now the jobs bureau will be keeping track of all of the long-term unemployed, and it could reveal the true depth of the economic downtown.
This could get interesting…
Yes, this is good news.
http://finance.yahoo.com/news/China-to-cut-crucial-rare-apf-2574493440.html?x=0
It would appear that there is some benevolence in the hearts of China’s ruling class. Unlike their American counterparts they are acting to assure a continuing stream of raw materials to be used in the economy of the future.
Re-post from last night, things that make you go hmmm…
Not to mention sticking it to the US.
One rock, 2 birds.
I haven’t tried posting an article so let’s hope this works:
Flipping foreclosed houses
This article appeared in our local newspaper the day after Christmas and I haven’t seen it posted here, yet. It looks like the sharks are still circling in the water here in Sonoma County. I thought is was interesting that one of the FBs featured in the article now finds renting better than owning. They’re renting for $1800 a month now, which I think is a pretty high rent for the area. It made me realize we have a lot of FBs keeping our rents high because, after making their ridiculously high mortgage payments, just about any rental price looks good to them. On the same page as this story there is a link to a smaller story that ran on the same day, “Review finds few permits by investors.” It specifically mentions Chris Peterson, one of the flippers described in the article I hope I’ve provided a link to.
By NATHAN HALVERSON
THE PRESS DEMOCRAT
Published: Sunday, December 26, 2010 at 3:00 a.m.
Last Modified: Saturday, December 25, 2010 at 7:46 p.m.
( page 1 of 8 )
Flipping homes, where an investor buys a house, makes some improvements, and then quickly resells it for a big gain, might seem like a relic of the real estate boom.
Related Links:The major players in county’s auctions Review finds few permits by investors But it has again become big business.
Real estate investors are buying homes at foreclosure auctions from banks and then reselling the properties within months or even weeks for large gains — often reaping bigger profits than speculators enjoyed during the heyday of the real estate run-up in the first half of the decade.
“…— often reaping bigger profits than speculators enjoyed during the heyday of the real estate run-up in the first half of the decade.
How long will this lucrative opportunity to pick up nickels in front of steam rollers last?
Evidently, at least some speculators think the opportunities may be short lived. From the article:
“During the real estate boom years, Peterson was one of the top home builders in the Bay Area and his mortgage company originated more than $215 million in loans in 2005, according to the company.
He sold his mortgage company at the peak of the market, and then put his construction company, Rivendale Homes, on hiatus when the real estate market imploded.
“The opportunities change rapidly, and you have to move quickly,” Peterson said.
Their new model was simple: Buy, rehab, sell.” This is the same Chris Peterson who is mentioned as possibly not applying for proper permits in “Review finds few permits by investors.”
This is, in fact, the original model.
But again, you still have to be smart or you will get burned.
You also need to have access to lots of capital. I suppose a REIT with investor funding could do very well right now buying foreclosure homes on the courthouse steps for whom few end-user buyers can get financed. We have a friend who bought a foreclosure home (for his wife and himself) by forking over $500K+ in cash; about half was his own money and half was a personal loan from a business partner.
You do if you’re dealing with insanely priced RE like that. Where I live, 500k buys a real mansion on the edges of 1 Percenter Estates.
There’s plenty of inventory and profit on the lower end.
Yeah, but does everyone want to live where you are, like they do in San Diego?
P.S. My subjective belief is that said friend will (1) come to rue the day he bought that foreclosure home and (2) won’t care too much, as his collective family wealth will buffer him against the worst possible consequences of catching a falling knife.
Baby Boomers have little or no retirement savings. Rinse, wash, repeat for Gen Xers, but yet we’re being told that the recession is ending. Anyone who has been in a hurricane knows that the calm of the eye doesn’t mean that the hurricane is over, but that the worse is about to follow.
If commodities continue to rise in price and states continue to raise the basic cost of living through tax and fee increases even those who thought they’d carefully planned may be moved into the discomfort zone.
If medical continues to raise a lot may arrive at 65 with nothing.
A lot are already there.
I have now seen 6 recessions and worked through 5 of them in the last 36 years.
It NEVER ends.
If you don’t make enough money to survive one down cycle, you almost never fully recover again.
Russian roulette. Do you feel lucky?
It sure helps to be a renter in a rental market without rent increases when many others are underwater loan owners facing ARM resets to fully amortizing monthly payments.
the year that was
Vote Now For The Biggest Business Debacle Of 2010
By Chris Morran on December 29, 2010 12:30 PM
We asked for your input in nominating the biggest business screw-ups of the year and you responded. Now is your chance to vote for a loser from the final five nominees.
In no particular order, the most nominated debacles are:
Foreclosure Fracas, aka Robosigners Revealed:
2010 saw Bank of America and other lenders putting a temporary halt to foreclosures after it was revealed that, among other idiotic actions, banks had hired so-called “robosigners,” untrained rubber-stampers, to process mortgage paperwork. BofA was also the source of numerous stories of improper foreclosures and seizures.
…
What? No mention of Repubs voting against ending tax breaks for offshoring jobs from an economy that is 75% consumer driven?
Lame AND bogus.
US Foreclosures Jump in Third Quarter: Regulators
By: Reuters
U.S. home foreclosures jumped in the third quarter and banks’ efforts to keep borrowers in their homes dropped as the housing market continues to struggle, U.S. bank regulators said on Wednesday.
The regulators said one reason for the increase in foreclosures is that banks have “exhausted” options for keeping many delinquent borrowers in their homes through programs such as loan modifications.
Newly initiated foreclosures increased to 382,000 in the third quarter, a 31.2 percent jump over the previous quarter and a 3.7 percent rise from a year ago, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said in their quarterly mortgage report.
The number of foreclosures in process increased to 1.2 million, a 4.5 percent increase from the second quarter and a 10.1 percent increase from a year ago, according to the regulators.
Is the fed the only one buying stocks right now?
Why dont they start buying homes too?
“Why dont they start buying homes too?”
What gives you the idea they aren’t already (either directly or through their Megabank, Inc proxies)?
I’m sure they will dream up plan to acquire real estate.
The federal reserve is the largest holder of US treasuries.Something seems real shady here.
So far as I am aware, Fed purchases of Treasuries have been standard operating procedure pretty much since 1913. The interesting development since 2008 has been all the other assets they have added to their portfolio (e.g. toxic MBS).
FAQs: MBS Purchase Program
The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS).
…
What was the policy objective of the Federal Reserve’s program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.
…
I wonder if they buy securities back by credit card debt? Seems like they buy anything these days.
“Seems like they buy anything these days.”
That’s the advantage of owning a fiat money printing press: They can fork out however much newly-created anti-Combo-poof electronic fiat they wish to deep-six any paper assets of their choosing off the market forever, in order to artificially prop up prices. Unfortunately, unless you use a bulldozer to back up the intervention, this does not work very well for physical assets like vacant McMansion tract home developments.
“The universe of eligible borrowers who have not already been evaluated . is being exhausted,”
What universe is this? What are the inhabitants of this universe called? Foreclosons? Victons? Owemos? Refinons? Squatons?
Foreclosures rise in Q3 as fewer people get help
By CHRISTOPHER S. RUGABER The Associated Press
WASHINGTON — The number of foreclosed homes rose over the summer after fewer people at risk received assistance lowering their monthly mortgage payments, a new report shows.
“The universe of eligible borrowers who have not already been evaluated . is being exhausted,” said Bryan Hubbard, a spokesman for the OCC.
Many troubled borrowers owe more on their homes than the mortgages are worth, a situation known as being “underwater.” Many banks don’t want to modify those mortgages, analysts said, because that would require them to write off a portion of the loan.
Been down in FT.Liquor-Dale for a few days. Cold Monday night, frost on the grass,damn heat pump ran all night down there too.
Plenty of money flowing around the Los-Olas Dr.(water-way-ocean area) a friend of mine who is in the construction renovation biz(small company),is very,very busy, but say’s he is working his azz off 6-7 days a week to get it. Also a whole lot of the downtown big money condz are not lit up at night, they must be out of town.
I-95 North and South, heavy traffic both ways.
Ft. Liquor-dale? Is that “southern” for Ft. Laundry-dale?
Also a whole lot of the downtown big money condz are not lit up at night, they must be out of town.
Who is “they”? The developers who never sold the condo units?
“Ft. Liquor-dale? Is that “southern” for Ft. Laundry-dale”?
~ Not sure what Laundry-dale means?
Since the 70’s that I can remember, Ft.Lauderdale has been referred to by sailors and inhibitors of the Pier 66 - Bahia-Mar- Lauderdale Yacht Club(LYC) area as Ft.Liquor-dale Northerns and Southerns alike.Lots of offshore sailboat feeder races come through that place, I have raced in plenty,over the years.Tons of drinking going on.
Had a buddy just return from Lauderdale recently. He was all abuzz about how things are happening there.
Construction in certain areas there is picking back up, with out a doubt. Plenty of multi-million dollar homes sitting on the market also.
A neighbor of the place I stay has had it for sale at $2.65 million for nearly to years now.
Just rented it out for 12 months at $120,000.00. The renter is putting up two college aged off-spring while they attend school.
Just rented it out for 12 months at $120,000.00. The renter is putting up two college aged off-spring while they attend school.
——————-
Holy cow!
Another crazy example of how much wealth some people have, while others live hand-to-mouth.
Thanks for the update on Ft. Lauderdale. Very interesting…
“FT.Liquor-Dale”
Good one!
+1, hadn’t heard that one either!
Unemployment rate hits 10-year peak in 112 U.S. markets
Business First
Thirty percent of the nation’s 372 labor markets are currently saddled with their worst unemployment rates in a decade, according to a new study by Business First.
A total of 112 markets posted higher jobless rates in October 2010 — the latest month for which official figures are available — than in any October since the beginning of the 21st century.
The Buffalo area was not in that group, though it came close. Buffalo’s 2010 rate of 7.5 percent was its second-worst for any October since 2000. The worst, 7.9 percent, was registered a year ago.
“…worst unemployment rates in a decade…”
(Covers eyes and sticks fingers in ears): The housing market will bottom out next year.
Good thing the Repubs voted for ending tax breaks for offshoring jobs!
Oh wait… no they didn’t. In fact, they blocked it.
Why would anyone vote for tax breaks for companies who offshore jobs?
Dummies!!!!!!!!!!!
CAT has had an amazing run. From about 20 to 90+.Most of their hiring is overseas.The govt has got to get a hold of this job offshoring or its doomsday.I guess we can trade stocks and homes to each other.
Maybe they have secret ties to the KGB….. or the chinese mafia…via campaign contributions
FT dot com
US sees spike in mortgage foreclosures
By Suzanne Kapner in New York
Published: December 29 2010 20:33 | Last updated: December 29 2010 20:33
US mortgage foreclosures jumped in the third quarter as fewer borrowers qualified for loan modifications that would have reduced their monthly payments, bank regulators have said.
The rise in repossessions and decline in loan modifications are further signs that problems in the US housing market are persisting, in spite of forecasts by some analysts of a recovery before the year-end.
The number of homes entering foreclosure rose 31 per cent compared with the second quarter and 3.7 per cent compared with the year-earlier period, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said.
These newly foreclosed homes will add to a growing backlog of 1.2m properties already in some stage of repossession, a 4.5 per cent increase over the second quarter and 10 per cent more than the previous year.
As of the end of the third quarter, 187,000 homes completed the foreclosure process, a 14.7 per cent increase over the second quarter and a 57.5 per cent jump from the same period a year ago.
As these properties come on the market, they are expected to depress home prices by between 5 per cent and 10 per cent over the next year, economists said.
…
Neighbor next door got his NOD in FEB 2008.Still there after 3 years, no payments.
Doubt not the unequivocal economist who tells the truth.
* OPINION
* DECEMBER 30, 2010
Home Prices Are Still Too High
They would have to decline another 20% just to get back to the historical trend line.
By PETER D. SCHIFF
Most economists concede that a lasting general recovery is unlikely without a recovery in the housing market. A marked increase in defaults and foreclosures from today’s already elevated levels could produce losses that overwhelm banks and trigger another, deeper financial crisis. Study after study has shown that defaults go up when falling prices put mortgage holders “underwater.” As a result, the trajectory of home prices has tremendous economic significance.
Earlier this year market observers breathed easier when national prices stabilized. But the “robo-signing”-induced slowdown in the foreclosure market, the recent upward spike in home mortgage rates, and third quarter 2010 declines in the Standard & Poor’s Case–Shiller home-price index—including very bad October numbers reported this week—have sparked concerns that a “double dip” in home prices is probable. A longer-term view of home price trends should sharply magnify this fear.
Even those economists worried about renewed price dips would be unlikely to believe that the vicious contractions of 2007 and 2008 (where prices fell about 30% nationally in just two years) could return. But they underestimate how distorted the market had become and how little it has since normalized.
By all accounts, the home price boom that began in January 1998, when the previous 1989 peak was finally surpassed, and topped out in June 2006 was extraordinary. The 173% gain in the Case-Shiller 10-City Index (the only monthly data metric that predates the year 2000) in those nine years averaged an eye-popping 19.2% per year. As we know now, those gains had very little to do with market fundamentals, and everything to do with distortionary government policies that mandated loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit.
…
“A marked increase in defaults and foreclosures from today’s already elevated levels could produce losses that could overwhelm banks and trigger another deeper, financial crisis.”
Gee, do you really think so? This would come as a totally unforseen shock, wouldn’t it?
Why, TRILLIONS of dollars just may be pooooooooofed out of existence if this somehow were to happen.
(Which, of course, would make the trillions of dollars that remain in existence all the more scarce and thus all the more valuable.)
The U.S. housing situation is so dire at this point, it resembles the moment in a silent movie when the villain has tied the heroine to the train track, and the train is coming around the bend.
Will Ben and Tim pull a rabbit out of the hat in 2011 with a deus ex machina endingto save the U.S. housing market from further declines? Hang on to your hats, ladies and gentlemen, for the exciting conclusion to this story (guaranteed to end by 2020)!
“Why, TRILLIONS of dollars just may be pooooooooofed out of existence if this somehow were to happen.”
And it must follow, as the night the day, that more QE will soon be on the way.
P.S. Combo — I’d like to offer a year-end thanks for your posts. The consistency, and consistent accuracy, of your theme is quite impressive.
Want to know the proportion of gov jobs in your major labor market? Check out this link:
Critics insist that government employment is inordinately large in the Buffalo area, that the public sector dominates the local economy to an unusual extent.
They’re wrong.
A new Business First study shows that 16.75 percent of the jobs in Erie and Niagara counties are government positions. That’s still above the national average, to be sure, but it puts Buffalo no higher than 36th place in a ranking of the nation’s 100 major metros.
Sacramento is more heavily dependent on government employment than any other market, with 28.82 percent of its jobs in the public sector. Eighteen other markets are above 20 percent, including Albany (seventh place) and Washington (10th).
What about the private sector? Where does it reign supreme? In the unlikely locale of Grand Rapids, Mich., where private employers account for 91.01 percent of all jobs, leaving only 8.99 percent for government.
Business First used August raw data from the U.S. Bureau of Labor Statistics to calculate each market’s share of public- and private-sector jobs. The database below has the breakdowns for all 100 markets. If you click View Details, you’ll find a similar split for the year 2000.
http://www.bizjournals.com/buffalo/blog/the_score/2010/10/the_hard_numbers_about_government_jobs.html
No, Europe, Buffalo is not a sh*t hole | Business First
Business First - by Gary Burns
Date: Tuesday, December 28, 2010, 9:14am EST
“By now you’ve probably noticed that some European players and visitors to Buffalo – in town for the World Junior Hockey Championship – have had nasty, nasty things to say about their experience here”……
“Example: Widely reported this morning was a translation of a blog entry from an international hockey observer posted on Sweden’s Hockeysverige.se website. The comment came from a Finnish visitor, as told to his Swedish friend, who relayed it for all to see on the Internet: “The city is a sh*t hole. I’ve spent one night there and decided that it was not only my first, but also my last. … Take one exit wrong from highway and you find and you find yourself in a very, very, very scary ghetto. I feel safer walking in downtown Moscow during the night than walking in downtown Buffalo.”
Oh, grow a set, pale-face. There’s also really cool areas like Elmwood with lots of shops, cafes, etc. Beautiful old houses for many blocks in either direction as well…
-The capitulation is at hand
Ok I’m speculating but in the last 48 hours, I’ve observed more market messaging and mass conditioning of the public regarding falling housing prices than I’ve seen yet. And the fact that this is occurring parallel with Christmas and New Years seems contrived.
First, all day yesterday on the front page of Marketwatch, various headlines, all of the same theme in big bold letters like “US Home Prices Retreat” and “US House Prices Tumble”.
Second, I had the misfortune of watching Larry “I’m not a gay coke addict” Kudlow tonite and what he stated could be written by any one of us. As we all know, Lyin’ Larry is a Fed mouthpiece, corporate apologist and Master of The Obvious who demonizes everything after the fact. And that is precisely what the old pervert did tonite. “Get out of the way”, “let the housing market correct”, “let the prices fall”, etc etc. This is a 180 degree reversal for him/her.
Until now, the MSM reporting of falling housing prices was a soft sell. They nibbled around the margins of the issue being careful not to cause a panic. I speculate that some other structural change will be rolled out in 2011 by DC in order to detract the deluded HouseDebtors/BagHolders/LazyLoanOwnersExpectingFreeRetirement from the grim reality that a house is actually a massive money pit.
Republicans take control of the House in a few days ending 4 years of Democrat control.
The end of the “hope and change” stimulus/ union bailouts/ nationalize whole sectors of the economy/ FB bailouts/ etc. may be at hand.
Most political pundits are expecting gridlock.
Gridlock = no more floor /fake demand to the housing sector
DoubleBanana…. you have another 6 years of ObamaDerangementSyndrome to endure.
Wrong. They will keep the status quo going which means more bailouts, more support for FB’s.
Bush’s bailouts still haunt us and will for a long time as do his wars.
O is only a man, not a god.
And what are you going to post when they vote to raise the debt ceiling, after America clearly voted for fiscal responsibility in the 2010 mid-terms, eh?
The end of the “hope and change” stimulus/ union bailouts/ nationalize whole sectors of the economy/ FB bailouts/ etc. may be at hand.
———————
Seriously? Have you forgotten already that all the bailouts began under Bush?
If we had nationalized the banks in 2007/2008, we’d be closer to a recovery than we are now. We’ve only prolonged the recession and made it much more expensive with all the give-aways to the financial sector (which dwarfs anything given to the unions, BTW).
“The capitulation is at hand”
My predictions:
1) Volume capitulates in 2011.
2) Price starts to capitulate in 2011, but doesn’t finish until after 2015, due to Fed-funded countervailing friction to slow the rate of price declines.
3) If the Fed loses control of the long end of the yield curve, all bets are off on the pace of price decline.
Stucco,
Volume is already in the gutter at 60% of peak. And that includes the HouseDebtorTaxCredit. I’d wager volume would be half or less without it. Anyways, based on the observations I’ve made over the last few days, it seems their is an intentional shift in the way the data is reported. Lower expectations….. and lower the next month or quarter…. and lower after that.
“Volume is already in the gutter at 60% of peak.”
Soon to get worse, due to a perfect storm of rising mortgage rates and falling prices, after many MSM-favored ‘experts’ had been offering their foolish assurances that a bottom was in.
Sometimes, they starting hitting the “housing is down” stories really hard so the sheeples’ brains will be warmed up for the next housing stimulus. It starts to panic them, so they begin demanding some new type of FB bailout.
We’ll see if they can stand back.
OTOH, if they finally let it fall, it will be because we have spent the past few years shifting all the risks from the private sector to the taxpayers via refinances into govt-backed debt. Now, the declines can commence.
Ten-year market value change–Tulsa, Norman, OC peaking now.
Graphs of ten-year trend of median home prices with interesting outliers…
I know that median price doesn’t tell the whole story, but this is fascinating:
In the graph, click on “ten year market value change”.
http://realestate.yahoo.com/Oklahoma/Norman
http://realestate.yahoo.com/Oklahoma/Tulsa
http://realestate.yahoo.com/Oklahoma/Oklahoma_City
http://realestate.yahoo.com/Nebraska/Omaha
Question of the day:
Will 2011 be the year that true panic ensues in the U.S. used home sales market?
If real panic sets in, do you even want to be an owner?
No. Not until the panic has subsided. At that point, many folks will loudly agree, “Real estate is the worst investment.” They will even urge you not to buy (it happened to us, circa 1996 — our CA neighbors thought we were foolish and would lose money when we bought then). That will be the time to buy.
We’re not there yet; not even close.
It would definitely help me to put my rage over the housing bubble behind me to see some of the worthy perpetrators wearing orange jump suits. I can’t imagine that I am the only American who feels this way.
Jail Time Promised in Foreclosure Fraud/Robo-Signing Investigation
By Michael Kraus on December 15, 2010
Several months ago, the 50 states attorneys general joined together to investigate allegations of widespread fraud in the mortgage industry. Since that time, we have learned that the goal of the probe is supposedly “widespread mortgage modifications“, but we have heard little else about the investigation. There were rumors that lenders wanted to settle the case quickly and pay some form of fine or restitution to homeowners who may have been wronged. Well, it appears that Iowa Attorney General Tom Miller want to go a little further. At a homeowner advocate meeting in Des Moines, he commented:
“We’re not going to one of those resort white collar prisons….”
“We will put people in jail.”
…
The U.S. legal system hasn’t been functioning. May as well toss them in the corrupt professionals “trash bin” with the rating agencies. Any true recovery will be in terms of generations, IMHO.
Summer foreclosures near a quarter million
Last update: December 29, 2010 - 9:19 PM
The number of foreclosed homes rose to nearly 245,000 over the summer after fewer people at risk received assistance lowering their monthly mortgage payments, a new report shows. About 470,000 homeowners received help either directly from banks or through government programs in the July-September quarter, according to a report released Wednesday by the Office of the Comptroller of the Currency and Office of Thrift Supervision. That’s a 17 percent drop from the previous quarter and a decline of 32 percent from the same period last year. The report only covers the 64 percent of mortgages that are held by national banks and thrifts.
Busy, busy, busy…Fed motto: “Crises is us.”
* MARKETS
* DECEMBER 30, 2010
A Peek at the Crisis-Era Agenda of New York Fed Chief
By CHANA R. SCHOENBERGER And DAVID BENOIT
The Federal Reserve Bank of New York released the daily agenda for its president, William Dudley, dating back to January 2009—a period that encompassed the tail end of the financial crisis.
Mr. Dudley’s agenda shows that the president of the largest Fed bank was in close contact with the heads of New York’s biggest financial institutions and with counterparts around the world as the central bank fought to manage the tottering banks and brokerages it helps oversee. The schedule also shows his interactions with corporate titans outside of Wall Street, as well as frequent meetings with journalists and politicians.
A former Goldman Sachs Group Inc. economist who took the top New York Fed job when Timothy Geithner left to become secretary of the U.S. Treasury, Mr. Dudley had numerous meetings with executives from his former firm during some of the most frenzied days of the crisis. According to the records, he met several times in early 2009 with Chief Executive Lloyd Blankfein, one-on-one as well as with other Goldman leaders. Mr. Dudley also made time to meet his Goldman successor, economist Jan Hatzius, more than once at a bar called the Pound & Pence near the New York Fed’s downtown headquarters.
In reference to the meetings, New York Fed spokesman Jeffrey V. Smith said, “In order to effectively perform his public duties, the New York Fed president must meet regularly with market participants, fellow regulators, the heads of institutions supervised by the Fed, members of advisory committees on small business and the regional economy, international officials and many others.”
…