A Growth Strategy Based On Hummers And McMansions
It’s Friday desk clearing time for this blogger. “What’s next for the burgeoning Occupy Homes movement? Should local activists continue to add — one by one — to the tally of foreclosed homes they are defending, as they continue to occupy ex-Marine Bobby Hull’s home in South Minneapolis? Or should they push to broaden the movement? ‘When banks are in the monopoly business, I call that cheating,’ said Bobby Hull, whose foreclosed home has been occupied since early December. ‘I want my money back!’”
“A New York man says Occupy Wall Street protestors went too far after occupying his own home where he and his two children lived. Protestors took over a man’s house in Brooklyn and presented it to a homeless family after they found it vacant and believed to have been foreclosed on by the bank. Mr Ahadzi is currently renting out a two-bedroom in a nearby neighbourhood in Brooklyn while he works to pay off the mortgage of the two-story property he says he purchased in 2007 for $424,500 but has since struggled to make payments on.”
“Just a couple years after its purchase, that home price dropped to $150,000 when the housing bubble burst. ‘Why can’t you fight for me?’ Mr Ahadzi says he asked them, himself being a victim of the foreclosure crisis after losing his job in 2009. ‘I paid the mortgage on the house for two years.’”
“Blaize McMonagle, a Florida homeowner who had one of 300 foreclosure cases heard in a courtroom during three days this week, said the judge sped through his case without a chance to defend himself. McMonagle, 30, bought his home in Winter Springs, Fla., in October 2007, but fell behind in his mortgage payments when he was laid off from his job in January 2008. He was able to pay for several months from his savings until July 2008. His bank put him in default in August-September.”
“McMonagle, who is now unemployed, said he came to the court on Tuesday morning ready to defend his case. His defense, he said, is that his bank no longer owns the loan for his home and it has ‘not been willing to work’ with he and his wife regarding a loan modification. ‘The judge asked me when the last time I paid was and then he gave a default judgment to my bank, without giving me any opportunity to defend myself,’ he said.”
“‘I didn’t get to speak,’ McMonagle said. ‘I have a constitutional right to defend myself and at least give the judge evidence and make my case, but he didn’t give me the chance to do that. He just ruled against me. I think it’s an abomination of the justice system.’”
“Mechelle Williams made headlines on Dec. 28, when she told presidential hopeful Newt Gingrich her Spencer home is scheduled for a Feb. 21 sheriff’s sale. Williams has worked at Eaton Corporation for 16 years and is thankful for the job that allowed her to purchase a four-bedroom home in 2008. ‘I was happy to have the house and the kids were so excited,’ Williams said. Though she qualified for 50 percent more than the purchase price, she ‘wanted to be very practical and keep the payment affordable.’”
“Despite that effort, she realized at the end of 2009 that it would be difficult to keep the home. Overtime hours which had been used to offset high food and gas prices were being cut, as were work hours overall. ‘The bank offered a modification that brought the payment down $10 a month. I said, ‘I can’t do this now and, within days, they started the foreclosure process,’ Williams said.”
“RE/MAX New England fired up a distress flare over the impact of the Dodd/Frank banking law. That legislation may be stalling the foreclosure recovery in Connecticut and elsewhere in the region, noted Jay Hummer, RE/MAX New England’s executive VP and regional director. ‘The present law, though written with the intent of protecting homeowners from predatory lending practices, has resulted in incredibly stringent guidelines which have stopped the flow of an open market,’ RE/MAX said in its press release.”
“Hummer specifically addressed ‘unrealistic’ appraisal requirements, saying they’re adding to the downward pull on prices. ‘If the bar for appraisals is set so high it cannot be reached, we will never see an increase in pricing,’ he said.”
“U.S. Census reports show that while the number of total housing units increased nationally by almost 14 percent from 2000 to 2010, the number of vacant housing units ballooned by almost 44 percent. Locally, 14 of 23 Atlantic County municipalities have seen the number of vacant housing units increase by 16 percent or more from 2000 to 2010. In addition, 11 of 16 towns in Cape May County and 10 of 14 towns in Cumberland County have seen a similar jump.”
“‘People are becoming frustrated by the system, and a lot of them are walking away from properties,’ said James Schroeder, an attorney and real estate agent with Keller Williams in Northfield.”
“‘Even those who can afford houses are not convinced housing prices have bottomed. They’re staying out of the market until they’re convinced housing prices have stabilized,’ said Michael Busler, a fellow at the William J. Hughes Center for Public Policy at Richard Stockton College. For example, he said, homes that may have been selling for $300,000 four to five years ago, before the crash, may be selling for $200,000 following foreclosure.”
“‘The last thing they want to do is pay $200,000 this year when they could get it for $180,000 next year,’ Busler said.”
“Foreclosure filings are down across the country and in local official records, but area realtors say that those numbers don’t reflect reality. ‘The number of filings don’t necessarily go in line with how many listings there are, because there are properties we have that we’ve basically been babysitting for over a year because they’re not ready to be listed yet. There are just so many vacant properties that aren’t on the market right now,’ says Jennifer Vozka of Remax Invest in Rhinelander.”
“Boise’s housing market gains a bit of unwelcome and retroactive notoriety, thanks to a New York Times article published this week. Using newly released Fed transcripts, the article details Federal Reserve officials’ apparent lack of concern about the housing bubble and its potential effects on the broader economy.”
“Former Federal Reserve Bank of San Francisco President Janet Yellen relaying information from her region: One builder she spoke with, she said, ‘toured some new subdivisions on the outskirts of Boise and discovered that the houses, most of which are unoccupied, are now being dressed up to look occupied — with curtains, things in the driveway, and so forth — so as not to discourage potential buyers.’”
“According to the article, the anecdote brought laughs in September 2006.”
“Market differentiations are beginning to show up — a shift from 2008 when house prices were down across the board, says economist William Emmons of the St. Louis Federal Reserve. Emmons, who was sharing his own viewpoint and not speaking for the Fed, said he often shows a map of mortgage delinquencies in the St. Louis region when he makes presentations about foreclosure to groups in the area.”
“‘The Mississippi River is the dividing line. On the Illinois side, there’s a higher level of delinquency and distress,’ he said. ‘It’s not because the local economies are that different, but in Illinois everything takes longer.”’
“For a more extreme example, he points to Florida, a judicial state, and California, primarily a nonjudicial state. ‘They both had extreme booms, and they’ve had huge declines in house prices. In 2006 they looked the same: no foreclosures. In 2009 they looked the same: a huge increase in foreclosures. But by late last year you could start to see a difference. California had much less evidence of bottled-up problems and Florida is still as bad as it always was,’ he said. ‘I think it’s going to be 10 years for Florida to get through this.’”
“Emmons believes that Americans have yet to take a hard look at the financial factors that fed the economic collapse, including the reliance on consumer spending and housing for the nation’s long-term economic growth. ‘That was not a good idea,’ he said. ‘That was not a sound long-term growth strategy — to generate long-term economic growth based on people borrowing money to buy Hummers and McMansions.”’
“According to Intermountain MLS, the average selling price of Boise homes has fallen $136,000 since 2007. Christian Eschen has worked as a real estate agent in Boise for seven years. Working on commission, Eschen has been hit hard by the market’s decline. ‘Since homes are selling for 40 to 60 percent less than they were five years ago, this has translated into a drop in income of about 50 percent per transaction for me,’ Eschen said. ‘This is for doing the same amount of work, or more if it’s a short sale or a foreclosure.’”
“For Fallon Eisenbarth, a Boise homeowner of 11 years, renting her property seems the only option. Her family is outgrowing their current home, which has depreciated in value by $62,500 since 2008. In renting, the Eisenbarth family says they are taking on more risk than they had planned but have no choice until the market rises. ‘As real estate appreciated, we stayed excited and planned to sell after a little while,’ Eisenbarth said. ‘Due to the decline in the market some of our plans have changed. Now we will not be selling anytime soon.’”
“While the number of sales he makes is only slightly lower than before the decline, selling prices are drastically lower. ‘Four years ago you could not buy a trailer with a foundation for $100,000,’ Eschen said. ‘Now that gets you a nice three-bedroom, two-bath house.’”
“Lain Walburn said she never imagined buying property at such a young age, but at 26, she signed on the dotted line and became a homeowner. Walburn attributes this opportunity to the plunging real estate market in Boise. While many struggle to pay their mortgages and watch property values diminish, Walburn is reaping the benefits of a system in turmoil. She was given a low-interest rate loan that required only a small down payment. Walburn purchased a four-bedroom Boise home with a swimming pool for a mere $99,000. The original asking price was $150,000.”
“Walburn purchased a home in foreclosure. ‘When the market was good, there was no way we would’ve been able to buy a house,’ Walburn said. ‘If it weren’t for the super low prices, we would’ve waited a few more years.’”
“Hummer specifically addressed ‘unrealistic’ appraisal requirements, saying they’re adding to the downward pull on prices. ‘If the bar for appraisals is set so high it cannot be reached, we will never see an increase in pricing,’ he said.”
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We have a very long way to go my HBB brothers and sisters.
Re: strict standards
What were appraisers like in 1980 or 1981?
They must have been strict- plus a ginormous rate of interest for the buyer. Seems natural to bias up or down depending on the obvious trend in the market.
I have a highschool friend who has been an appraiser for about 15 years. Before that he sold trinkets at the fairs.
“A Growth Strategy Based On Hummers And McMansions”
It was only stupid, if you were concerned about the economic future of the country, and it’s citizens.
If you were selling this garbage (overpriced houses, MBS) to the rubes, and pocketed the cash, it was all good.
Right on.
Pundits, newscasters, politicians still equate fast rising home prices with “the country” and “everybody” doing well.
The patriotic national interest in making the country richer is unquestioned. Well, I think we are all for progress but not what we have seen over the last 20 years.
“California had much less evidence of bottled-up problems and Florida is still as bad as it always was,’ he said. ‘I think it’s going to be 10 years for Florida to get through this.’”
If you don’t look for bottled-up problems in California, you won’t see them.
FL will be on the otherside of this mess far sooner that CA.
The corrupt CAR will insure that.
What’s interesting is that a Fed economist is tracking the relative outcomes of foreclosure delay. Recall that Florida had rocket dockets and was moving along, then the days to foreclose jumped out over 2 years. Like this:
‘McMonagle bought his home in Winter Springs, Fla., in October 2007, but fell behind in his mortgage payments when he was laid off from his job in January 2008. He was able to pay for several months from his savings until July 2008. His bank put him in default in August-September.’
July 2008 and isn’t acted on until summer 2011!
Anyhoo, I’d sure like to see this Fed map.
As I’ve mentioned before, the banks aren’t just “overwhelmed” with foreclosures. If they were, they’d be staffing up to handle the problem, and I’ll betcha money that more than a few people on this blog would be hired to help work through the backlog.
Instead, they’re dragging their feet because it’s the only way they can remain solvent. On paper. If they went hellbent for leather through all the foreclosures — y’know, the way banks usually do when they’re in different times than these — they’d have to recognize huge losses on their balance sheets.
And if they did that, the big boys and girls up in the 1% stratosphere would no longer be able to pay themselves those big bonuses. The horror. The looting of their companies would have to stop. Bummer.
“Instead, they’re dragging their feet because it’s the only way they can remain solvent. On paper. If they went hellbent for leather through all the foreclosures — y’know, the way banks usually do when they’re in different times than these — they’d have to recognize huge losses on their balance sheets.”
I remember the Fed leveling plenty of criticism at Japan during the mid-1990s for letting the banks hide plenty of elephants under their living room rugs. I wonder if it is different now that the shoe is on our foot?
I’d say that we have a lot of big lumps under our nation’s rugs. And those lumps want to get out and go stomping across the savannah again.
Be careful. There are stampeding herds of
carnivorous abalone out there just waiting
for you to hit the savannah.
What a curious thing.
What an interesting business model, that they can maintain positive cash flow merely by putting in arbitrary numbers in the right boxes on a balance sheet.
This could be a game-changer. From Reuters:
Insight: Top Justice officials connected to mortgage banks
“U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department’s criminal division, were partners for years at a Washington law firm that represented a Who’s Who of big banks and other companies at the center of alleged foreclosure fraud, a Reuters inquiry shows.”
“This could be a game-changer.”
Other than showing the banking industry has infiltrated the top ranks of the U.S. government with officials who will protect it from serious prosecution, why is this relevant?
That means that this is the bottom. Or close enough to it. It’s cheaper to buy than rent now, which is a BIG indicator. However, you may want to squeeze a bit more out of the sellers if you can, ’cause prices may get even lower. It depends on your situation. I prefer to stay on renting because I’m lazy and old. I really hate owning.
I thought that was a really astounding comment from the “home-owner”, at the conclusion of the article, but like all other stories you read, you need to parse them to understand the situation.
The reporting always seems to make you feel like some poor sap is being shafted by the ’system’.
You correctly noted BOUGHT 10/2007. Default 6/2008.
I say June, since he probably paid June and didn’t pay July. That’s * months of Payments, and he has been living there for about 4 and 1/4 years. FREE RENT. And complaining.
He says: “‘I didn’t get to speak,’ McMonagle said. ‘I have a constitutional right to defend myself and at least give the judge evidence and make my case, but he didn’t give me the chance to do that. He just ruled against me. I think it’s an abomination of the justice system.’”
When just before that, they say:‘The judge asked me when the last time I paid was and then he gave a default judgment to my bank, without giving me any opportunity to defend myself,’ he said.”
I am sure it went more like this: When was the last time you made a payment?? June of 3008?
JUDGE: You mean you haven’t made a payment in 3 and 1/2 years???
HOMECRYER: That’s right, your honor, but you see, the bank didn’t really own the mortgage anymore, you remember all the robo-signing and stuff and you should really give me the house…………..
JUDGE: Ruling for the Plaintiff. CASE DISMISSED.
Then the whining. “didn’t get a chance to defend myself”..blah blah. Get out of the House you deadbeat bum.
This is what’s scary. People like him who think he is getting the short end of the stick. What is so hard to understand that no payment = no house?
I worry about this spilling over into other areas of the economy. If we don’t have strong contract laws, which are the bedrock of almost everything, what do we really have?
If we don’t have strong contract laws, which are the bedrock of almost everything, what do we really have?
Perhaps the ‘deadbeat’ was seeking to enforce contract law, when the judge refused to hear him ,and sided with the banksters.
“To hell with the deadbeat’s defense, throw the bums out” is anything but adherence to the law. It’s ignoring the law in order to speed things along.
RAL, I don’t think he ruled in favor of the lender, rather i think he ruled against the former homeowner. If the lender doesn’t own the home why is Mcgonagle going to them for a modification that, incidentally in either case, they don’t owe him? And if he doesn’t have title to the property why is he occupying it? He can’t prove it’s his house either.
Oops, sorry, I misread that. Meant for alpha.
He can’t prove it’s his house either.
The party initiating the foreclosure has to show they have a right to do so- that’s the law. The judge never made them prove that right- a major oversight if, indeed, we want strict adherence to the law.
If we just want to throw out whoever isn’t paying their bills, then yes, this is effective. But let’s not pretend it’s some strict adherence to the law- it isn’t. It’s the exact opposite: We just ‘know’ the deadbeat doesn’t deserve to be there, so we’ll throw him out now and worry about the law later.
Not sure, but perhaps the fact that Mcgonagle went to the lender (who he claimed didn’t own it) seeking a mod, was seen by the judge as an admission that the borrower did indeed think they owned it.
The judge’s responsibility is to interpret the law, no? As such, either he egregiously ignored it (unlikely), or there was enough evidence beyond reasonable doubt that the lender did have the right to foreclose. Despite his words, Mcgonagle’s actions would indicate that he thought they did as well.
Building a better gilded cage.
All these people in foreclosure who bought in 2008-2009, succumbed to “it’s never been a better time to buy” meme..
Now “it’s a great time to buy” too with prices retrenching to 2002-2003 levels, a time when bubble-icious prices were already 80% of the way to bubble top. I say again that nobody should buy above 1998 prices. No income gains since then, no change in fundamentals, no support for prices above 1998 levels. It’s going to take time and they will get there, probably in part from further real drops, and in part from inflation eventually bringing notional incomes up enough for sellers to save face by keeping notional prices up a bit..
A nice tidy little summary.
no change in fundamentals
I would argue that fundamentals have definitely _worsened_ in the interim. So price declines from 1998 levels should be in the bag.
My thought exactly. Lower inflation adjusted wages, higher unemployment, imminent Baby Boomer retirement, fewer potential buyers with good credit scores not already maxxed on debt, reduced immigration, negative household formation… WAY overbuilt supply.
Supply and demand fundamentals have definitely moved against house price inflation..
Darrell,
Get with the program. You should be able to see that the Phoneix area is crawling with speculators (err, investors) who see sure-fire riches arising from desert sand.
Even the media has gotten into the game, regarding the shill comment that we would soon be in a supply shortage from earlier this week.
You should be able to see that the Phoneix area is crawling with speculators (err, investors) who see sure-fire riches arising from desert sand.
We’re not immune from such people here in Tucson.
And they’re flocking back into the low-end housing market ($150k and below) in hopes of snapping up houses that they can rent out. Our 16% rental vacancy rate doesn’t seem to deter them.
Our 16% rental vacancy rate doesn’t seem to deter them.
If it pencils out to make a decent ROI after factoring in reasonable deductions for vacancy and maintenance when rented out at a sufficiently below-market rate, it might make sense not to be deterred.
If you are pricing 20% below market for an attractive property, your unit will probably not be the one that stays vacant.
If it pencils out to make a decent ROI after factoring in reasonable deductions for vacancy and maintenance when rented out at a sufficiently below-market rate, it might make sense not to be deterred.
From what I’m seeing, the concepts of “penciling out” and “ROI after factoring in reasonable deductions for vacancy and maintenance when rented out at a sufficiently below-market rate” fly well above these in-VEST-ors’ heads.
They just see the recent house price decreases and decide it’s time to snap up a bargain before the prices start rocketing back up into the ionosphere. And you and I both know that such appreciation won’t happen anytime soon.
In the meantime, these in-VEST-ors will learn the pitfalls of landlording in ways that are not revealed in those “get rich in real estate” seminars. Oh, will they ever.
As I stated a few weeks ago, the vast majority of cases I have seen are people factoring 7-10% ROI based on putting down 3% for government-sponsored mortgages. Then they factor in no maintenance and 100% occupancy. That’s one helluva return, Scotty.
Then they factor in no maintenance and 100% occupancy.
That’s one helluva education that they are gonna earn, then!
Coming up next: It’s a fantastic time to buy!!!
Note: You have to use the three exclamation points. They’re a mandatory requirement of the NAR.
Coming up after: “It’s always a good time to buy if you intend to live in the house and need a secure place for your kids to grow up”
I think there is actually some truth to that one, provided:
- that it is a price you are happy paying for the house, even if prices decline in the future
- that the the delta that you are willing to pay for increased stability is greater than the likely future price declines
- that you are thinking of housing as a “sunk cost”–e.g. you are not counting on future price gains to fund retirement or any future consumption, nor even planning to get your purchase price back out of it in the future.
- that you do not need to be mobile for your employment.
Agreed.
I just seem them trying to play with people’s emotions, since the financal aspects don’t seem to be working.
Anyone else seen that NAR commerical on HGTV with the old man talking to his grandson about homes?
“it’s a great time to buy”
Predicated on the presumption the Fed will find a way by hook or by crook to get housing-bubble-era home price inflation back into high gear…
If not the Fed, then our local governments. This is what’s happening in Tucson:
INFORMATION ON AFFORDABLE HOMEOWNERSHIP PROGRAM
Are you interested in buying a remodeled, energy-efficient home in Pima County but don’t think you can afford it?
The Pima County Community Land Trust can help you buy a home:
•For only $1,500 out of pocket.
•Even if you earn as little as half the area median income.
•With financial assistance that reduces your mortgage to 80 percent of the home’s appraised value.
•And contain your monthly housing costs, including utilities, to 35 percent or less of your monthly gross income.
Find out more about the Pima County Community Land Trust at an information session on Thursday, January 26, 2012, from 6 p.m. to 7:30 p.m., at the Pima County Housing Center, 801 W. Congress St. The informational sessions are co-sponsored by the City of Tucson and Pima County.
The Community Land Trust is also inviting the public to attend its Open House Tour of 12 homes on Saturday, January 28, 2012 from noon to 5 p.m. Visit http://www.pimacountycommunitylandtrust.org for more information. Register for door prizes at each location; the more homes you visit, the better your chances of winning.
I’m willing to bet that there is not a single historical example of a mania/bubble being successfully re-inflated once it has broken; after the illusion of “it always goes up” has been pierced, I suspect it is not possible to get people back into the mind-set required.
Of course, maybe this time really is different.
“part from inflation eventually bringing notional incomes up enough”
Erik — what is going to bring about this inflation? I’ve been doing some reading and does not inflation usually come from a supply shock/”cost-push” forces or “demand-pull”?
What is going to bring about these conditions for an inflation of housing prices?
Supply Shock/Cost-Push
1) Mass arson
2) Widespread bulldozing
3) Natural disaster affecting the entire US housing supply but not the people
4) Energy costs increases (so we use empty houses to heat the full ones and stoke steam engines)
Demand-Pull
1) Increased global demand for US housing
2) Rapid decline in the demand for money (e.g. Black Death/Mayan calendar thingie)
3) Increase in the money supply
4) Decreasing unemployment (arsonists and bulldozer operators)
Or were you just suggesting wage inflation which housing increases tracks pretty well throughout history?
Thanks!
’said Bobby Hull, whose foreclosed home has been occupied since early December. ‘I want my money back!’
So he’s got the house and now he wants his money back? Maybe we should extend this thinking a bit. Like, ‘I paid to democratize the middle east and all I got was Saddam’s toilet. I want my money back’!
‘The U.S. military is vacating Saddam Hussein’s ornate palaces at its war headquarters in Baghdad and will turn the property over to Iraq next month, but Saddam’s prison toilet is leaving with the Americans.’
http://www.reuters.com/article/2011/11/07/us-iraq-usa-base-idUSTRE7A63ZY20111107
but Saddam’s prison toilet is leaving with the Americans.
That’s just freaking _weird_! Who really wants to go to a museum and see a famous person’s prison-crapper??
Dick Cheney?
And it gets weirder than that:
‘Man arrested over Saddam’s buttock’
http://www.belfasttelegraph.co.uk/news/local-national/uk/man-arrested-over-saddams-buttock-16106102.html
I want my money back!
It doesn’t surprise me that that guy has a piece of the Saddam statue. It is a famous historical piece, and I would have expected many Iraqis to want a piece of it, similar to the chunks of the Berlin wall that everyone wanted when it came down.
What surprises me is the Iraqi government suggesting that it is a cultural relic. And that the Iraqi people were stupid enough to let the rest of the statue get sold for scrap when small pieces of it would have made made great historical mementos.
The Cabinet War Rooms in London have Churchill’s chamber pot…though that wasn’t my main purpose for visiting.
“…Bobby Hull…”
The former hockey star!?
That was my first thought.
“One builder she spoke with, she said, ‘toured some new subdivisions on the outskirts of Boise and discovered that the houses, most of which are unoccupied, are now being dressed up to look occupied — with curtains, things in the driveway, and so forth — so as not to discourage potential buyers.’”
“According to the article, the anecdote brought laughs in September 2006.”
__________________________/
This is after the bubble already had burst in some areas. For those in that room who laughed, please know that I laugh too. I laugh when I see how much interest I earn on my CDs, as a consequence of a sick mania that you encouraged and then pretended to be oblivious to. Hilarious.
The bubble started hissing air here in the summer of 2005.
The festivities started, oh, in June 2005 when our leading local fishwrap ran a story about real estate deals going ker-flewie. It seemed that appraisers were balking at the high valuations on Tucson houses.
Which meant that sellers would have to drop their prices or buyers would have to come up with more money. Talk about a deal-breaker.
During the monsoon season, I noticed that “for sale” signs were popping up the way mushrooms do. They were everywhere. Wasn’t like that in the summer of ‘04, which was when I was trying, trying, and trying to find an affordable house.
Not only were the “for sale” signs proliferating, they were staying up for months. And in a few cases, years. That was quite a change.
One fine evening during the fall of 2005, I stopped by an elderly friend’s house. I was in the community college’s construction program, and oh, were those classes full of people.
My friend’s house was on my bike route home, and we liked to watch the evening news together. On that evening, the news had a story about house sales slowing down. That got our collective attention, since stories like that had been scarce during the past few years.
I finished my community college course work in August 2006. By that time, enrollment in the construction program had really dropped. Place was turning into a ghost town.
In the fall of 2006, my friend took out a reverse mortgage on her house. Many of her friends suspected that she wasn’t of sound mind beforehand, and the crazy spending spree she embarked on only confirmed our suspicions.
On Christmas Eve 2007, my friend fell and broke a leg. It took her three hours to crawl to her phone to call for help. After hospital treatment and rehab, it was determined that she could no longer live in her house.
She moved out of Tucson and up to northern Arizona with one of her sons. The family fixed the Tucson house up and tried to sell it for eight months (June 2008 to February 2009), but they couldn’t.
They let it go back to the bank (Wells Fargo), and it was foreclosed in the summer of 2009. It was sold in early 2010, to what I think was one of those “first-time homebuyer tax credit” people.
“are now being dressed up to look occupied”
Around 3 years ago, I posted telling the story of how I would drive past a local condo development that had some, uh, people standing in them in the same place every night.
They had put black cutouts at the floor-to-ceiling windows, made to look like the silhouette of happy occupants.
Cardboard cut-out FBs!!! I love it!
Art imitates life…
I seem to recall a condo promotion in San Diego that had young people partying in some units when showings were going on and that the revelers were paid to be there. Maybe someone else remembers that too.
Trick as old as time. Clubs have been known to pay women to come and flirt with guys to keep the crowds coming back, and not just strip clubs…
That was one of my all-time favorite stories, in part because it was both illustrated and told with a cynicism about real estate that was rare for that time. (I think Ben pulled it from a blog.) The showings were in a condo tower. The adjacent building had been seeded beforehand with beautiful people who were visible from the units being shown: through one window, an attractive, fit young woman could be seen doing aerobics in a sports bra, and through another, you could view a buff shirtless man with six-pack abs reading a book while lying on a lounge chair.
I recall that one too. Been trying to find a link to the website, as the best line was about the murphy bed that came out of the wall where the dining table was in a studio: it was something like:
“you’re just finished dinner and you already have her in bed. way to go, champ”
Do they still have companies that “stage” your house or condo for sale? Remember those, when the selling got harder at the beginning of the collapse? Companies would move out your furniture and bring in rented items and decorations to give the place a better appeal.
I thought that was funny. I’m sure it helps make the place look more appealing if a professional decorator gives it a go-over, but really. I can look at an empty space and figure out what i would do with it.
Do they still have companies that “stage” your house or condo for sale? Remember those, when the selling got harder at the beginning of the collapse? Companies would move out your furniture and bring in rented items and decorations to give the place a better appeal.
Home staging was done in the house right behind mine. That was back in 2005-06.
Long story short: It didn’t help to sell the house for the price the owner was hoping for.
In 2010 I saw some opportunities in Phoenix to live in high end houses for the purposes of staging them. The deal was that you had to sign a lease to move when the house sold and had to own high end furniture. It allowed you to live like a millionaire on 2500$ rent per month. Seemed like a scam all around.
September of 2006 I posted a photo on this very blog of a water truck making the rounds of a JTS subdivision “Estates at Lincoln Crossing” in Lincoln, CA (Sacramento MSA). The builder Jack T. Sweigart, was watering the lawns because he previously sold almost all his homes to flippers. The flippers were bailing out, utilities were turned off and Sweigart did not want new buyers to know the subdivision was collapsing. He sold 50 more house to FB’s over the next year.
There were 138 houses in the subdivision and guess what? 135 foreclosed…the other 3 paid cash or had large downpayments…
He who said we may go back before 1998 may be right. I was being conservative when I said 1998, since sometimes I tend to go overboard.
Some areas started the run-up before 1998. Here in Central Virginia it was in reality late winter/early spring when the horses bolted from the gate.
I sold a house in January of that year, could have made 25% more by waiting a year. By the time i looked to buy everyone was asking too much for junk (I waited a year). Consequently I built on a lot I owned and came out OK, still live there.
I just sold a house of mine in Roanoke VA at a price that was probably circa-2000. Other houses on the street priced higher have not sold after 9 mo on the market.
It seemed to be a total lifestyle change in the late 1990s:
Large SUV - Check
McMansion - Check
Outdoor power toys (camper, boat) - Check, (check)
I’ve written about this before but 10 years ago it was impossible to get into a campground, as the outdoor boom was in full swing. Now it’s the opposite.
I’m still thinking the RV industry is going to be waiting for a while, RV’s quickly become uneconomical with high gas prices. By my guess, more boomers will be deciding between traveling cheaply and staying home, instead of the choice between cruises and RV trips.
Once all the glut of all these goods are worked out of the system we can finally have a recovery. The RV industry has changed a lot making lighterweight campers. This makes old stuff obsolescent quickly so they might recover quicker with a much smaller than planned for market.
Housing is going through the same thing, only on a much longer timeframe.
“One builder she spoke with, she said, ‘toured some new subdivisions on the outskirts of Boise and discovered that the houses, most of which are unoccupied, are now being dressed up to look occupied — with curtains, things in the driveway, and so forth — so as not to discourage potential buyers.’”
“According to the article, the anecdote brought laughs in September 2006.”
Potemkin Village McMansions in Boise — who’d've thunk?
Housing Prices Are Falling
Interest Rates Are Falling
Why buy a house today when you can buy later for 65% less?
Had enough of those “occupiers.” Capitalists should occupy back!
I remember in the late 70s I stopped by the booth by the Socialist Students at my college by the college union. I asked the guy at the booth if he had a car. He said yes. I said fine, then give it to me. I have only a bicycle to ride to campus. You socialists are supposed to share the wealth. He was speechless or course.
You don’t understand socialists.
Socialism for you and your family. It is only fair…
They intend to RUN it…
The protests are partly against the occupation by capitalism of all aspects of our lives. They have little, if anything, to do with socialism.
If you want to visit a place totally occupied by capitalists, go live in Celebration, Florida, or The Villages. Have fun and send us a postcard.