‘More People Than The Industry Can Support’
Some reports on the housing sector. “Rising interest rates, increasing costs for construction materials, and the decline in housing sales are having an impact on spending for home renovations. A broader monthly report on construction outlays indicates that renovations have declined 10 percent in the first quarter of 2006 from a year ago.”
“Although housing experts are optimistic about home improvement spending this year, a steeper-than-projected decline in house sales would raise concerns.”
“Home Depot CEO Bob Nardelli expressed disappointment about sluggish retail sales. The DIY sector has been growing strongly for years in the US as surging real estate prices and solid economic growth have encouraged spending on home improvement. But analysts fear that a slowdown in the housing market, combined with the effects of rising fuel prices and interest rates could depress sales this year.”
“ECC Capital Corp., a real estate investment trust based in Irvine, Calif., has reported a net loss of $6.4 million in the first quarter, a big improvement from the fourth-quarter results of the troubled mortgage REIT but a bigger loss than it recorded a year earlier. The company announced earlier this year that it would consolidate seven wholesale loan processing centers into three and lay off more than 440 employees.”
From Paul Muolo. “Last week when Aames Financial reported a $6 million loss for the first quarter it also revealed that it is in ‘discussions with several parties regarding a potential merger or sale’ of the company.”
“NMN reported that Impac Mortgage Holdings was considering offers. In releasing its earnings, company CEO Joseph Tomkinson said, ‘As competition has intensified, many of our competitors have relaxed their underwriting guidelines and created what we believe to be more layered risk in the market. Essentially, we are not comfortable investing in certain higher-risk mortgage products, and as a result have revised our underwriting guidelines and adjusted pricing.’ A few months back Impac rolled up its subprime unit, Novelle, into IMH.”
“The clock is ticking on legislation to create a new regulator for Fannie Mae and Freddie Mac, the Mortgage Bankers Association said last week. MBA’s chief lobbyist, Kurt Pfotenhauer, said the now-or-never point is rapidly approaching in the effort to create a new, more powerful regulator for the government-sponsored enterprises. ‘If GSE reform is going to go forward, action has to be taken soon,’ Mr. Pfotenhauer told reporters.”
“Fannie Mae said Monday that it would temporarily suspend issuing certain medium-term debt securities until May 23, the day its chief regulator will release a massive special examination into the mortgage company’s accounting and management problems. Fannie Mae said Friday that it would suspend issuing noncallable benchmark notes in May, the first time it’s elected not to issue since December 2004, but did not indicate why.”
“A slowdown in the mortgage industry has claimed Liberty Home Loan Corp. as a victim. The Tampa-based company at its peak had as many as 110 employees and six offices. MortgageDaily.com reported the closing in April and May of three large firms. Dozens of other mortgage companies are ‘teetering on which way to go,’ said Sam Garcia, editor.”
“Rising interest rates on home loans and tougher underwriting standards have put pressure on all mortgage companies, said Joseph Falk, the Miami-based legislative chairman of the National Association of Mortgage Brokers. When interest rates were falling, it was easy to hire staff and put loan officers to work because there were more customers than mortgage originators available, Falk said. But with rising rates, there are fewer customers. Nationally, new loans fell by nearly 20 percent in the first quarter of 2006.”
“‘As production falls, this leads to overcapacity of loan officers and mortgage companies,’ Falk said. ‘There are not enough loans to go around.’”
“There were 6,555 layoffs in the U.S. mortgage industry between November 2005 and April 2006, according to the trade publication National Mortgage News. ‘There are more people in the industry than the industry can support,’ said Michelle Taylor, a board member of the Gulf Coast chapter of the Mortgage Bankers Association of Florida.”
“It’s tougher for new companies, said Taylor, a 25-year veteran of the mortgage industry. ‘If you grow too soon too fast, you don’t know how to prepare for a down cycle.’”
I sent an email to Wendy, the bikini clad realtor in Long Beach. I asked her where the portfolio pictures were on her website. LOL - here was her response - enjoy - free free to send more emails to her. Her website is http://www.teamheath.com on one of the posts yesterday, someone provided a link to the billboard picture that Wendy had purchased. LOL - you can actually see the billboard on her site.
WLMOM@aol.com Add to Address BookAdd to Address Book Add Mobile Alert
Date: Tue, 16 May 2006 08:05:23 EDT
Subject: Re: Website Contact
To: housingbubblesob@.com
Al-
Click on the “Got Real Estate?” button.
Take care-
Wendy
This was also on her site. Very timely investment advice, don’t you agree?
Notice that like most realtors, she points out that leverage increases your gains, but doesn’t mention that it works the same way for losses; but then real estate never goes down.
From her web site:http://design.realestateabc.org/plalowen/www/homebuying/goodidea.shtml
Why Buying a Home is a Good Idea
The Best Investment
As a fairly general rule, homes appreciate about four or five percent a year. Some years will be more, some less. The figure will vary from neighborhood to neighborhood, and region to region.
Five percent may not seem like that much at first. Stocks (at times) appreciate much more, and you could easily earn over the same return with a very safe investment in treasury bills or bonds.
But take a second look…
Presumably, if you bought a $200,000 house, you did not pay cash for the home. You got a mortgage, too. Suppose you put as much as twenty percent down - that would be an investment of $40,000.
At an appreciation rate of 5% annually, a $200,000 home would increase in value $10,000 during the first year. That means you earned $10,000 with an investment of $40,000. Your annual “return on investment” would be a whopping twenty-five percent.
Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.
Your rate of return when buying a home is higher than most any other investment you could make.
Of course, you are making mortgage payments and paying property taxes, along with a couple of other costs. However, since the interest on your mortgage and your property taxes are both tax deductible, the government is essentially subsidizing your home purchase.
Property tax 1.5%, mortgage interest 6%, total 7.5%. Maybe a 40% discount on this if you’re in the right tax bracket and live in California, so net cost 4.5% per year. Throw in maintenance and insurance and it’s probably 5.5% to 6%. If this is more than it costs to rent a similar place, then you’re throwing your money away unless appreciation makes up the difference. If you run the numbers in most bubble markets at the moment, you find that as soon as double-digit appreciation disappears, you’re better off renting until prices come back down to earth.
This doesn’t even factor in the high transaction costs, relative illiquidity of the “asset,” and other disadvantages of owning.
Someone gave me good advice back in the mid 1990s, and it’s just as true today: buy a house if you want to own a house, not because you think it will be an investment, because in general (outside of speculative bubbles), it’s not.
I go nuts when I hear people talk about how much money they ‘made’ on their house. They take the selling price, subtract the purchase price and assume the total difference is profit! They make no allowance for improvements, repairs, interest paid, taxes, insurance, or even the broakrage commission!
No other investment is evaluated this way. No wonder they call it the ‘best investment’. If a stock broker operated this way he would be arrested.
A bit late for this post, but I wanted to note that I think a careful analysis of the tax advantage (mortgage interest deduction) of home ownership would yield some very surprising results. The standard deduction has increased a lot over the years and it is only when you exceed that, that you benefit from the mortgage interest deduction; further, it is only the amount ABOVE the standard deduction from which you “benefit.” There doubtless are some for whom this deduction is a godsend, but I don’t buy that it is of sufficient value to all homeowners to have a noticeable influence on their decision to own vs. rent.
God! How about a carload of pork bellies?
LMFAO…$200k homes with 20% down!!!
What fantasty world is this broad livin’ in…
Zilch credibility…
You think they’re real?
not a chance.
Nope, but I bet she’s really blond.
Looks like she went from an A to C lol…silicon valley girl
Commissions must have been good to her….at least she spent it wisely
She sells houses? I didn’t notice.
from FOREX DailyFX MAY15, 2006
…The NAHB housing market confidence index also dropped from 51 to 45 in May, the weakest reading in ten years. Home builders see the outlook for the housing market as “poor” due to higher mortgage costs, high prices crimping purchases and a withdrawal of speculators in the market. If the housing market goes, the Fed will be forced to cut short their rate hikes sooner rather than later, but it will not be until we see the inflation numbers on Tuesday or Wednesday will we get a better sense of what the Fed will do since it all boils down to which is pressures are more significant – growth or inflation. Meanwhile the much anticipated Treasury International Capital flow report came in much weaker than expected for the month of March. Foreigners purchased only $69.8 billion worth of dollar denominated securities in March, compared to the market’s forecast for a $79.9 billion rise. .. the depreciation in the US dollar is outweighing the possible earnings from the other markets. Most countries slowed their purchases with the exception of the UK, Caribbean based hedge funds and Mexico. The biggest red flag in the report was the major selling by Japan, the world’s largest holder of US treasuries.
http://tinyurl.com/qgjbu
PPI inflation is running at over 7%/annum — not a great time for BB to think about a pause IMO… (Low core inflation is only slightly more reassuring for those who do not drive or use other fossil-fueled transportation.)
—————————————————————————
ECONOMIC REPORT
Core inflation remains calm in April
PPI rises 0.9% on surging energy prices, but core rises 0.1% again
By Rex Nutting, MarketWatch
Last Update: 10:03 AM ET May 16, 2006
WASHINGTON (MarketWatch) — Led by higher energy costs, U.S. producer prices rose a hefty 0.9% in April, but prices outside of energy were well contained, according to Labor Department data released Tuesday.
So Gentle Ben is in a real pickle. CPI cooked beyond belief but running a lot hotter than anyone would like. Japan now making noises about raising, housing in trouble, and gold going parabolic. What to do, what to do?
Is globalization (and resulting wage pressure) the main reason why the Fed is cooking the CPI, or do you think its something like Social Security? I mean, if everything (including wages) was inflating, why cook the CPI? Just jack up rates and pull a Volcker.
I guess Japan does not want to get caught swimming naked as they were the last time the US asset markets crashed (circa 1990).
Read about “The Death of a Conundrum”
———————————————————————-
FUNDWATCH
Fund managers see economy deteriorating
Cash weighting on the rise at institutions; risk-taking on the decline
http://tinyurl.com/z77×6
By Simon Kennedy, MarketWatch
Last Update: 1:14 PM ET May 16, 2006
LONDON (MarketWatch) — Fund managers are increasingly skeptical about the global economy over the next 12 months, as mounting concern about inflation, interest rates, the U.S. dollar and corporate earnings is curbing institutions’ appetite for risk, according to a survey released Tuesday.
That link is f-d
Try this:
http://tinyurl.com/z77×6
Ben — My link above is taking me to the heartland on MapQuest, not to the MarketWatch article I linked in. Not sure if it is somebody messing with your sight, or just something strange happening at my end…
Anyway, the article (”Fund Managers Downcast”) is easily found on the front page of the Marketwatch.com web site.
How are they going to determine if the housing market goes? According to the comments on this blog, it’s going (down). According to David Liar, everything is rosy.
why is BECN going up ?
I feel so bad for wishing ill-will on some industry folk (I scold myself for feeling this way). But sometimes they just get so smug you can’t help it. In one case, it’s a realtor I know. This woman was a stay-at-home-mom making and selling candy from her home. She had a very average SFH - nice little split level, which was purchased during a non-bubble time and probably had a comfy mortgage. Then she decided to get into real estate. She’s been in it less than 5 years but is now the queen know-it-all about everything. SO irritating.
About a year ago she sold her “measley” little split level home and upgraded to a McMansion. Her mortgage is something like $3500/month or so. And of course she brags about it.
It’s really not jealously that makes me want to slap that smugness off her face. Honestly. In fact, I think she’s stupid. I’d have a WHOLE lot more respect for her if she would have gone the real estate route, made all the money, put it aside for smart things like her two sons’ college educations and an early retirement, and all the while didn’t rub her bubble success in everyone’s faces.
Money really does bring out different personalities in people. As will lack of money soon…
I think everyone can relate to that story. You know, it’s not success per se that brings out people’s hatred, it’s success that people kind of fall into and then brag about. As the saying goes, born on second base and thinks he hit a double. Success where people actually build something of use to society and climb their way up does not bring out this emotion. An entrepeneur who succeeds, for example Steve Jobs-he is well known as a bit of an egomaniac, but look at what the guy built up, basically invented the PC business, along with a few others. Truly an outstanding person who leveraged his considerable ability into something amazing. Now think of the average successful realtor-truly most of them were just right place at the right time. The majority of them were leading very unremarkable careers-no one would have picked them as most like to succeed, etc. Then, through the magic of the bubble, a lot of them suddenly fell into an amazing amount of income. I’m not saying all realtors had no raw ability, at all. The fact remains that you have a lot of realtors who are raking in six figures a year who would never be able to generate that type of income in any other situation-and won’t. Most good, commission salesmen realize that their income is going to be cyclical and live a much more modest lifestyle than their peak years income would allow them-they get a sense of what their 5-10 year average is going to be and budget to that. People like you describe are convinced that their income is on a totally new trajectory, and spend accordingly. Not only the popping of the bubble, but the various companies taking aim at the 6% commission are going to just nail them. Ask almost anyone who has used a realtor, particularly buy-side, and asked if that person earned their $12,000 or whatever-almost always the answer is no.
Quite correct. There is a whole group of people who move from bubble to bubble. It was IT, then real estate, but what next? Probably some kind of commodities expert. I know through association a few people like this - they are complete morons but feel like geniuses because they happen to be in the right place at the right time. Reading a book on a subject does not make one an expert.
From Itulip May 16,2006
You may ask, where’s the next bubble? But he intellectually honest answer may be, “nowhere” if by the question you mean where might you earn high real returns on investment. There are periods when the value of all assets decline in value. They often follow periods when all assets have risen in value. Note that I say “value” not “price” because price is not a consistent indicatator of value. The average price of a home in San Diego a year ago, for example, was a poor indicator of value. Incomes are rising, but the purchasing power of incomes relative to the cost of living has been declining. The price of the DOW has been rising, but its value has been falling. For this reason we plan to track the Real DOW for the next several years for our readers.
http://tinyurl.com/47ggb
All she’s known is a boom market and so she thinks she does know it all.
Both of those things will change soon enough.
Oh yes everyone is an expert in boom time. I have been an appraiser for 30 years and I know nothing at this point. Oh, unless you count things are bad and getting worse. And I know who is to blame. Knowitalls.
Try being in the appraisal field for 25 years and having twits like this, say you don’t WTF you’re doing…happens all the time.
That’s why the L/O’s ditch the honest and experienced appraisal firms and run with the idiots who know less than Miss McMansion, so they don’t ruffle feathers as they want her business.
Between the sleazebucket L/O’s and real estate sales morons like you mention, the entire real estate game is going down in flames.
Tell us how you really feel. LOL.
Typo — there’s a “w” where it doesn’t belong.
We need a dead pool with the names of all these former mtg companies. These stories alone list 4 companies that are no longer with us.
Next shoe to drop: Mass-layoffs at RE-dependent firms.
Second-to-next shoe: Newspaper articles blaming the RE crash on the weak job market.
or real estate firms themselves. here in the san fernando valley, ca….coldwell banker is closing their burbank office. i believe they’re closing 2 more offices here in the sfv. you won’t read that in the la times…a friend of mine works for coldwell banker and told me.
Oh, and the media will definitely pounce on this since it will attract viewership in SoCal and specifically San Diego.
OT, but can anyone verify the volume spike shown on this HB index graph? Either it is a mistake in the chart, or evidence of one helluva crash in progress…
http://tinyurl.com/gmrhk
Anomoly. No unusual volume on HB’s. All are following the same usual pattern. BTW, I covered shorts again yesterday after a nice 5% return following the last FOMC meeting. Will re-enter on the next spike.
“Home Depot CEO Bob Nardelli expressed disappointment about sluggish retail sales.
I’ve noticed the dropoff at the big box home stores. Last year everyone wanted to do a project to improve their home. Now it seems they don’t want to, or don’t have the money. Permits for home improvements have been quite a bit lower this year over last year in my area.
Related anecdote — saw an architecural draughtsman friend yesterday and asked if buiness was still as great as last year, if he was still turning away jobs. Answer was no, still busy, not turning away any work, but accepting as-builts now.
Growth of Median Home Prices Slowing
By Annette Haddad, Times Staff Writer
11:29 AM PDT, May 16, 2006
Southern California homeowners, say goodbye to your good friend: Double-digit price appreciation.
For the first time in 4½ years, the region’s median home price rose less than 10% year over year, data released today showed. It was the most dramatic sign yet that the Southland’s housing market is coming to the end of its long-running boom.
ADVERTISEMENT
In April, the median price for the six-county region was $485,000, a 9% gain over April 2005, but virtually flat from March’s median of $486,000.
What’s more, sales in April declined 21.3% from a year ago and were down 16% from the previous month, according to DataQuick Information Systems, a La Jolla-based research firm.
It was the fifth straight month of declines, but at 24,748 transactions closed, the number was still above the average for the past two-decades.
The housing market “is moving in the direction we thought it would,” said John Karevoll, DataQuick’s chief analyst. “It’s all part of a normal end game of the cycle.”
But identifying what the next phase may bring could be tricky. These days, Southern California’s housing market is defined by three undisputable facts: Slowing sales, flattening prices and a sharp increase in the number of homes for sale.
What’s more, about a third of homes on the market have had their asking prices reduced at least once, listing data provided by ZipRealty showed.
The experts call it a market in transition. It’s not the same red-hot sellers’ market of the last three years, but it’s also not a buffet of bargains for buyers either.
“No one’s in a panic mode,” said Patrick Lashinsky, senior vice president of ZipRealty, an Emeryville-based brokerage with offices in Southern California.
“It’s kind of like a pendulum swinging,” he said. “Sometimes it swings back a little too much, but right now it’s swinging away from sellers and more toward buyers.”
Median prices reached new records in three counties: Los Angeles, up 13.6% year over year to $508,000; Orange, up 9% to $628,000; and San Diego, up 4.3% to $505,000, DataQuick said.
The median in Riverside County rose 9.4% to $409,000. It gained 18.4%, to $360,000, in San Bernardino, and rose 10.4% to $584,000 in Ventura County.
Housing crash time? Nope — it’s PARTY TIME!
——————————————————————————
PAUL B. FARRELL
Party time (until real estate collapses)
Meantime, plan ahead, don’t lose money, go conservative
By Paul B. Farrell, MarketWatch
Last Update: 7:51 PM ET May 15, 2006
ARROYO GRANDE, Calif. (MarketWatch) — What does an addict do just before going into rehab? Yep, party time! Every addict. Every addiction. The closer the rehab, the wilder the parties.
Like now with America the oil addict, the debt addict. It’s party time. Government cannot stop spending. Consumers can’t stop buying. We’re partying! Spend what’s left of your savings, have a great time before you’re forced to stop living high on the hog. Before rehab. Yes, we all know we’ll have to cut back. Just not now. It’s coming, we just want one last fling!
Yes, America’s in a party mood. Spend now, load up the credit cards, forget the hangover.
http://tinyurl.com/z2hq7
This reminds me of a story from the telecom boom era of the late nineties. Level 3 Communications went from $125/share down to about $8 /share in a SINGLE YEAR back around 2000-2001. The last year before the crash, a good friend of mine worked there, and they threw the mother of all office xmas parties. Entertainment was provided by Kool & The Gang-yes the real band. An entire convention center was rented, the whole thing was Tycoesque, it was an artic voyage theme with people walking around dressed up as icebergs and so forth, gourment chefs that would make lobster, etc. to order, on and on, door prizes of $2000 pieces of jewelry, total estimated bill: $3.5 million. For a party. Then, the crash, next year the party was the company officers serving up steaks in the company cafeteria.
Great article.
The Party’s over when:
The Yuan is the world’s reserve currency.
Mexico complains about illegals crossing the border from the north.
Gas is selling at $30/gallon.
Cramer is hanging from a flagpole in front of Columbia U.
Gold trades at a 52 week low of $5,000.
The hot selling transportation in America is a bicycle.
The median price of a Home in the US is 1.8 million.
The Fed Funds rate is .01%
“The Fed Funds rate is .01%”
I assume you mean the nominal rate, as the real rate will be decidedly negative…
Exactamundo. Cash will be a liability.
I thought you were saying cash would be an asset. I guess it depends on how it is denominated, though (Swiss francs and Japanese yen will fare better than $US)…
Per MLS Orange County prices as follows:
4/15/06 to 5/14/06 $742,827 / 2,291 sales (+7.85% Price / 1%volume)
4/15/05 to 5/14/05 $688,757 / 3,888 sales
wonder what Gary Watts (Mr. 15% higher price) thinks of this
-41% sales volume in the above comment
That’s quite a paycut, isn’t it? I’m expecting some hurt to start surfacing.
Hey everyone,
It has been really interesting tracking this website over the course of the last year. Me and my wife sold back in June of 2005. Renting pretty much stinks, but it sure beats living paycheck to paycheck.
I’m just curious how many people reading this live in San Diego?
Are you still considering moving out of state?
If not, how much longer do you folks think that we will have to wait until housing becomes affordable again?
We are thinking of moving to portland, or texas (even though I’ve heard that people outside of california hate californians cause they have driven up the prices in their areas). We really don’t want to leave, but my wife and I aren’t getting any younger (we both just turned 29) - and are considering moving out of state in order to be able to afford to have a family - and give our kids a decent life. Not one that is filled with “Sorry Johnny, we can’t afford to buy you that - we need to pay our ludicrously large mortgage”…
It’s depressing as hell..
I live in San Diego, but have for 30 years since I was a kid. I’m not leaving because I owned before the runup so I’m not house poor.
But I will still say to my kids “Sorry Johnny, we can’t afford to buy you that - we need you to not be a spoiled rotten brat whose life is measured by the material possessions you have.”
I had three friends leave the San Diego area in the last 2004/5. One for Boise, one for Montana, and one for Arkansas(!). Yes they drove up the price elsewhere. But they are happy since a 20% haircut on $230K is a hell of a lot better than a 20% haircut on $750K.
Of those that left, one was retired and didn’t care. One was in their mid-30s with a very sick child and moved near family. The third was a young couple in their early 30s with a new child who wanted a house to go with their kid. They were the ones to wish they had stayed and rented.
I’m a native San Franciscan, but lived in San Diego until recently. (Mission Hills neighborhood). Initially moved from SF to SD due to work stuff, and the cheaper COL. (sigh). Then moved to MN because my wages are so much higher in MN compared to CA for me, and my money stretches further here too. It’s also a very convenient place to live. It’s freezing though, so that’s a huge trade off.
I love SD but I doubt I’ll ever go back (to live). The things I once loved (quaint quiet city with reasonable prices) is gone, and will never come back. And unfortunately, IMO the extra people haven’t added culture, they only added congestion. There is still relatively little to do culturally in SD except walk around in flip flops all year long and go to the beach. (not a bad life actually, but I did miss good restaraunts and museums and arts and theatre, etc, none of which is found in SD, but are plentiful here in MN)
Oh, there’s shopping in SD too, but I hate shopping, so the idea of going to UTC or Fashion Valley makes me want to puke, so that won’t pull me back!
But it’s super freezing here in the winter, and often super hot and humid in the summer, so I definitely had to trade off a few things. But now my financial security is pretty much set, and I sleep easily every night in my very affordable beautiful home that has a monthly mortgage payment of only 13% of my TAKE home pay per month.
it leaves me enough cash left over to fly back to CA whenever I want, which is every month in the winter.
But leaving CA is a hard decision. I actually found that once I left, in retrospect I was crazy for not leaving a lot earlier. to me, there was the CONCEPT of San Diego, and then the reality of San Diego. I miss the concept of San Diego a lot, but not the reality so much. (just as I was leaving, the house next to me paved over the front walk to park extra cars on the lawn. It was a growing trend, more and more people paving their lawn to park cars on… that’s definitely not the small town SD I wanted to live in)
clouseau
Your rant has more truths than the surface shows:
1) Shopping. You bet. It seems to be the primary local pasttime. I can’t stand it either. But there is no doubt the malls are thinning here. It’s got to be seen to be believed.
2) Resturaunts/museums. This is the only place I disagree. You can find a lot of great food here. And c’mon, the Prado? MOMA? I mean sure, we’re not SF or NY, but I think “none” is pushing it.
3) CARS PARKED ON LAWNS. Now this is the elephant in the room. Why would this start to be a trend (and I noticed it too!) — SEE #1 — The garage is full of crap and you don’t want to leave your tricked out new beemer on the street.
4) Congestion. It has gotten worse and worse but just improved dramatically (hurrah for gas prices). 4pm right now and sigalert shows mostly 60s on my drive home, a couple 30s/40s. It was mostly red during DST just six months ago.
I love San Diego. I’ve told people I feel “trapped” here. I love going to Baja. I love my neighborhood (North Park, right next to Balboa Park).
But I could not for the life of me imagine living in Temecula or Santee or even Mira Mesa and paying $400K just to be in San Diego.
Just want to say thanks for the feedback you guys.
I appreciate it. Although I am wondering why “House Inspector Clouseau ” is visiting this site, if his/her mortgage is only 13% of the income. Maybe just curiosity I guess. I’ll keep renting
Feepness,
The cars are parked on the lawn because there are multiple families living in SFHs. In my old neighborhood (O’side), this was a growing problem. Also had **many** converted garages (some all decked out with unpermitted kitchens, bathrooms, separate living/bedrooms, etc.) to house extra family members. This is one of the many problems due to the housing bubble. Seen those streets where you can barely squeeze through because the street is totally lined with cars, even blocking the driveways?
True, the developers, flippers, and realtors deserve what they have coming to them, but there are a helluluva lot of industries that have alot of potential exposure.
Ask any car, RV, boat, or motorcycle dealer how much of their product is paid for by home equity of one form or another. .. maybe refi for enough cash to get that new 5th wheeler …or write an 11,000 HELOC check to get out from under a trade-in defecit on that Expedition… maybe a mid-life crisis Harley.
There is all kinds of consumer activity that could (more likely WILL) dry up in a heartbeat if housing prices correct.
That’s what I’m expecting as well. All the RE cheerleaders are hanging their hats on the job market, but it’s based on consumption that could dry up even just when the RE prices flatten out.
Home Inspector Clouseau - I have similiar feelings regarding CA as you just expressed. I was in SF, but am finding that I like the amenties of ABQ and much more reasonable COL. Still coming back to CA for work stuff for awhile. But I did not grow up in CA, just working career started here.
An interesting observation by a sign guy in SoCal, from a VoiceofSanDiego article courtesy of Patrick’s site:
“Greg Speaks, general manager of Champion Signs, which provides most of the For Sale signs seen in the county, said business has been booming in the last few months. That’s not surprising, given the recent spike in inventory, but Speaks said what’s more interesting is that he’s not been getting too many signs back from customers.
The signs may be staying in front yards longer then in previous years.
‘I would say we’ve probably got 2,000 to 2,500 more posts outstanding than normal,’ Speaks said.”
thanks for the tip. i’m gonna go get me a signs-are-us franchise. signs could be the next bubble business.
in dc, condo buyers now pay different prices per square foot depending on when they bought in a new development factoring out things like view and floor.
the guy who got in last often now is paying least, not most, as one would expect.
http://dcbubble.blogspot.com/2006/04/airline-style-pricing-for-condos-you.html