Bits Bucket for April 26, 2012
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
Location:Northern Arizona, United States
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Monday, April 23, 2012
Michael Olenick:
Rentals Gone Wild
… as Winston well knew, it was only four years since Oceania had been at war with Eastasia and in alliance with Eurasia. But that was merely a piece of furtive knowledge, which he happened to possess because his memory was not satisfactorily under control. Officially the change of partners had never happened. Oceania was at war with Eurasia: therefore Oceania had always been at war with Eurasia. The enemy of the moment always represented absolute evil, and it followed that any past or future agreement with him was impossible.
George Orwell, 1984
Situated on one side of one hole of the McDowell Mountain Golf Club, on a cul-de-sac, is a 3BR, 2 bath, 2,000 square foot home for rent for the price of $2,150/mo. On the other side of the hole, on a different cul-de-sac, is a 3BR, 2 bath, 2,005 square foot house for sale with an asking price of $310,000.
Our rental, which doesn’t have a pool, is across the street from a house that sits on the golf course: it seems to have a small back yard that backs up to another house. Our house for sale sits on the golf course and seems to have a very nice pool. Public records indicate the house for sale was last sold to its current owners for $696,000 in February, 2006 whereas the house for rent was last sold for $250,749 in Dec., 1999. I’ve never been to Scottsdale but a quick check of other houses suggests both prices are reasonable.
Some quick math shows that with a 30-year loan at 4% interest the nicer house, on the golf course, would yield a monthly P&I payment of $1,183.99 after a $62,000 down-payment plus closing costs. If a buyer qualifies for a 3-percent down-payment they’d have to raise $9,300 plus closing costs which would yield a monthly payment of $1,435.59.
There’s no ambiguity: even with taxes and insurance taken into account it costs much more to rent a mediocre home in the same neighborhood than to purchase a really nice house.
Though it isn’t marked as such the home for sale screams short-sale; it’s price has been reduced and it’s being sold “As-Is.” There’s a fine chance some servicer, after a dozen rounds of “lost documents” and chain-yanking, will seize and auction it to an investor with a bundle of cash for less than the $310,000 asking price. That’s less than half the price it fetched at the height of the bubble, who will then rent it for a tidy profit while waiting for prices to increase.
News articles have been appearing all over about investors paying cash for properties in bubble-states. Phoenix-area homebuyers squeezed out by investors, reads a piece in the Arizona Republic which notes that “cash is king.” In my own backyard, here in Florida, Miami condos have apparently appreciated 49% in the last year alone according to Bloomberg, which points out about 2/3rds of all buyers pay cash.
Irrational exuberance seems to be back in vogue in the bubble states, never mind shadow inventory figures so high that nobody can grasp exactly what they are. People, probably those kicked out of these same houses, are “willing” to pay a premium for rentals, which may make sense when one considers that even inflated rental prices are still less than their bubble-era mortgage payments.
One theme we hear repeatedly is a lack of “inventory,” homes for sale, which is predictably driving up prices. Remember all that talk about foreclosures driving up home prices? Apparently the foreclosure slowdown caused by Robogate instead seems to have done exactly what Adam Smith said it would leaving bankers, economists, and investors shocked — shocked! — at the recent gains in real-estate prices. Infamous Robosigner Linda Green appears to have done more to increase home prices than every government program combined leaving investors and home flippers, reckless villains in the meltdown narrative just last year, as this year’s heroes.
It’s not only private bankers doing this: government-owned but still “private” Fannie Mae and Freddie Mac are selling properties in bulk to investors. Brazenly ignoring their Congressional mandate to minimize losses by selling to the highest bidder (rather than the friendliest), while working to promote affordable housing, they instead work to empower and subsidize high-volume property flippers and land sharks.
These artificial increases are, of course, unsustainable. I have a friend who works for one of the local towns near me here in South Florida. He’s a city employee but with budget cuts worries about his job, part of which includes boarding up empty houses. Lately, however, the empties often aren’t empty.
It’s not uncommon, he says, to board up a needle-strewn empty one month only to be called back by police to board it up again a month or two later. Except that the new occupants aren’t crack dealers: they’ve often done the servicer’s work and cleaned it up. It’s not unusual, he says, to find that they’ve done basic repairs, and one even installed new appliances. OK – that was unusual; it seems the appliance installer rented the house from a random scam artist, paying a security deposit plus first and last month’s rent. Police, of course, will do nothing.
Banks are obviously manipulating the housing supply in an attempt to reignite a bubble to hide their losses, a strategy that’s temporarily working.
Book publishers were recently sued by the Dept. of Justice for price fixing, using similar practices. But I guess they’re not too big to fail. Indeed, I’m half surprised government hasn’t labeled book publishers a national security threat given the problems we’d face if people read and educated themselves about basic economics.
So here we go again. Backyard investors will soon be saying “it’s different this time,” arguing that those rents will never fall as they sink their retirement savings into the same houses that wiped out the retirement accounts of the previous occupants. But Mr. Smith’s invisible hand always wins in the end, sometimes with a gentle nudge and sometimes with a violent smack. There are too many houses for too few people and no private funding anywhere on the horizon. As long as those basic fundamentals hold true it’s not a question of if, but only when, the rental bubble bursts and how much damage it will inflict on everybody else.
“Irrational exuberance seems to be back in vogue in the bubble areas…”
(First, create a market for your product.)
“… never mind shadow inventory figures so high that nobody can grasp exactly what they are.”
(Then sell your product into the market you just created.)
First, create a market for your product.
Much like the diamond market… artificial supply constraints and a culture meme of “3-month’s salary” for engagement rings and “Diamonds are a girl’s best friend”.
And yet, every year come valentine’s day…
Yours Truly doesn’t wear jewelry, unless you count that ID dog tag I wear when I’m out on my bike or taking a walk. So, no diamond-pals for me, TYVM.
Just buy her the ring, Ne. You’ll both be a lot happier.
Lol, how’d you know?
Woman’s intuition.
There’s no ambiguity: even with taxes and insurance taken into account it costs much more to rent a mediocre home in the same neighborhood than to purchase a really nice house….
There’s a fine chance some servicer…will seize and auction it to an investor with a bundle of cash for less than the $310,000…who will then rent it for a tidy profit while waiting for prices to increase.
I admit, this is what drove me. But I’m in the DC area which is strong with $50-$60K (at least) jobs and no shortage of prospective renters. But… Scottsdale? What is the job/rental base in Scottsdale?
I’ve also come to realize that some of these homes that have just been sitting w/no one in them may all be deteriorating. We’ve already taken a house once that was neglected and brought it back. You always underestimate what neglect costs to revitalize. IE, when the roof is bad there may be rot underneath that needs fixing. The hole in the side of the attic may now have birds or squirrels living inside. No one appreciated that the wiring was fixed or that the furnace had been replaced when there were no marble countertops to impress their friends with. We barely broke even when we sold prebubble burst. This is not a situation we are remotely interested in tackling again in an atmostphere of flat values at best and falling values at worst.
Ben’s work notwithstanding, I think the government is letting a large cross section of these homes go on purpose ultimately diluting the inventory and propping up the values of those still producing interest income.
No one appreciated that the wiring was fixed or that the furnace had been replaced when there were no marble countertops to impress their friends with.
Right now, there’s a lot of what I like to call cosmetic flipping.
As in, the buyer/flipper puts in new carpeting, new countertops and cabinets in the kitchen, new fixtures and cabinets in the bathroom, and possibly some new tile.
Then it’s on the resale market as a just-remodeled house.
Very seldom has a rewiring or a replumbing taken place. Likewise, serious work on the roof or the mechanicals. That’s for you, the flippee, to worry about.
“I think the government is letting a large cross section of these homes go on purpose ultimately diluting the inventory and propping up the values of those still producing interest income.”
Throwing away the value of perfectly good housing stock in order to prop up the value of what is selling is a great strategy for the monopoly Megabanks and GSEs. It’s not so great for the younger generation on Main Street America, which not only has no job prospects, but further has no hope of soon being able to afford a house as a place to live in.
But… Scottsdale? What is the job/rental base in Scottsdale?
Scottsdale is a wealthy suburb of Phoenix. The jobs (such as they are) are in Phoenix. And keep in mind that Phoenix’s economy is very FIRE-centric. It may be the state capital, but the state jobs aren’t a major part of the metro job base.
Hey AZ Slim, is the former film house Laserscan still operating in Phoenix? Always thought they were a pretty cool and professional group.
Am not locating them via Mr. Google. Don’t know if they’re still around — never heard of ‘em before. (And I’m down here in good old Tucson.)
Oxide asks: “…I’m in the DC area which is strong with $50-$60K (at least) jobs and no shortage of prospective renters. But… Scottsdale? What is the job/rental base in Scottsdale?….”
All the people from DC retiring to Scottsdale with their $50-60k/year govt. pensions!
“Banks are obviously manipulating the housing supply in an attempt to reignite a bubble to hide their losses, a strategy that’s temporarily working.”
this is the policy of the obama administration. if it didn’t have political support it could not happen.
of course…mr. market will “come a knocking”…just a little later than sooner.
“this is the policy of the obama administration”
Obama. Biggest. Con. Ever.
I do not see how Obama is any more of a Con than any other president since Carter.
I think with others we knew what were getting.
I do not see how Obama is any more of a Con than any other president since Carter.
I’m not defending him, but do you really think Bush Jr. was a con? I mean, you knew exactly what you got with him: A redneck republican from Texas… nothing more, nothing less.
Actually I think Obama made a campaign promise to support housing prices. And I heard him said he would do this in one of his State of the Union speeches.
How he got the “independent” central bank to cooperate in the effort is a story worth exploring…
Did his voters think he’d give them a Medicare prescription drug plan and drive up the deficit?? They all lie to get into office. How about Romney, is he really a conservative? ie Romney care. Does he really go hunting??
All of them do it.
drive up the deficit?
Regan did the exact same thing in regards to the deficit. Bush Jr. took a playbook from Regan in regards to military spending and the economy…
Fed’s housing blueprint is lost in din of politics
U.S. Federal Reserve Chairman Ben Bernanke testifies before a Senate Budget Committee hearing on the outlook for the U.S. Monetary and Fiscal Policy on Capitol Hill in Washington, in this February 7, 2012 file photograph. REUTERS/Jason Reed/Files
By Mark Felsenthal and Margaret Chadbourn
WASHINGTON | Tue Feb 21, 2012 8:35am EST
(Reuters) - In mid-2011, with the U.S. economy at risk of a new recession, top Federal Reserve officials began to explore a different way to shore up the recovery: looking for fixes for the battered housing market.
The central bank had just wrapped up $2.3 trillion in bond purchases in an unprecedented attempt to snap the United States out of its economic blues.
But its efforts were being frustrated. With nearly one in four Americans owing more on their mortgages than their homes were worth, millions remained locked out of credit markets and unable to reduce the cost of their loans.
The Fed’s board in Washington gathered a task force of around 30 staff and put them to work far from the public gaze on ways to turn around the worst housing slump in generations.
More than six months later, the central bank surprised lawmakers with a string of proposals, including deploying the firepower of the massive U.S. housing finance agencies Fannie Mae and Freddie Mac to help struggling homeowners.
But rather than spurring fresh debate among decision-makers in Washington on how to fix the housing market, the Fed put itself in the sights of Republicans angry at what they saw as election-year meddling, an intrusion on Congress’ turf and a veiled attempt to further the Obama administration’s agenda.
“I was truly taken aback when just recently, as you know, the Fed issued an unsolicited white paper … on housing policy where, if you didn’t advocate for, you certainly mirrored much of the positions of this administration,” Republican Representative Scott Garrett told Fed Chairman Ben Bernanke.
“Why would you issue such a paper when we don’t ask for it?”
Bernanke was in an uncomfortable spot, and he issued what amounted to a rare public apology at the February 1 hearing.
“We were trying to provide pros and cons, analysis, background — I’m sorry if you think we went too far,” he said.
Fed officials were taken aback by the hostile reaction. They say they intended their work to be a good-faith effort to pinpoint policy changes that could help the shell-shocked economy. The 33 percent plunge in U.S. house prices since 2006 has wiped out an estimated $7 trillion in wealth.
Their political miscalculation may have undermined one of their main hopes: building bipartisan consensus around ideas that could get the housing market off the ropes.
“It wasn’t that hard to predict that if you put out a white paper with specific housing proposals that are very political, you’re going to get a political reaction and that might in fact not be productive,” said former Fed staffer Julia Coronado, now chief North America economist for BNP Paribas in New York.
…
but do you really think Bush Jr. was a con? I mean, you knew exactly what you got with him: A redneck republican from Texas… nothing more, nothing less.
Are you that naive to believe that about a blood blood New England trust funder or do you think we’re naive enough to take your bait?
Are you that naive to believe that about a blood blood New England trust funder or do you think we’re naive enough to take your bait?
Are you referring to Bush’s membership with Skull and Bones or something else? I’m really not sure what you’re getting at here.
I guess I am naive enough to believe that about Bush. He got through his entire life on his dad’s political and economic connections. He’s not very bright, regardless of where he got his post-secondary and graduate education. He’s a redneck (nothing against rednecks, as I was enjoying CCR on the way into work this morning and just last night was upgrading and rebuilding my gun magazines).
I guess it depends on your definition of redneck. Partying with rednecks until you’re old enough to straighten up and take your rightful place in society isn’t really redneck…regardless of your accent.
Get honest Northeasterner. Rednecks don’t become president of the US.
Comment by butters
2012-04-26 07:44:04
I think with others we knew what were getting.
That didn’t work the way I intended…
Get honest Northeasterner. Rednecks don’t become president of the US.
How do you explain Lincoln?
“Are you that naive to believe that about a blood blood New England trust funder or do you think we’re naive enough to take your bait?’
Some between-songs stage patter from James McMurtry: “My friend Max (from Floidada TX) says that a good ol’ boy can become an intellectual, but an intellectual cannot become a good ol’ boy. And I believe this to be true. So how is it that the son of a couple of blue-blooded Connecticut Yankees gets to stand on the presidential podium and talk about ‘nukular’ weapons? I mean, Jeb doesn’t say ‘nukular’…and you know good and damn well Barbara doesn’t say ‘nukular’.
How do you explain Lincoln?
Being born in the woods doesn’t make you a redneck…especially that far north. Although staying there sometimes can. Lincoln got around.
Yeah… born in the woods 200 years ago when everyone else was born in the woods too.
C’mon now Norhteasterner.
a good ol’ boy can become an intellectual, but an intellectual cannot become a good ol’ boy
Exactly my point.
Redneck: Provincial. Country.
Lincoln was born in the back woods and lived a good portion of his life there performing manual labor. He was not formally educated, but very intelligent. He was a “good ‘ole boy” before he was an intellectual.
Bush spent much of his childhood and adult life in Texas. He served with Texas and Alabama Air National Guard. He worked in Texas and later became governor of Texas. He is the epitome of southern “good-ole boy”, aka “redneck”, despite his family’s connections with Connecticut wealth and power. He was never an intellectual, regardless of his Harvard MBA or rise to POTUS…
Lincoln was born in the back woods and lived a good portion of his life there performing manual labor. He was not formally educated, but very intelligent. He was a “good ‘ole boy” before he was an intellectual.
There was some 19th century writer — the name escapes me at the moment — who did a verbatim recording of how Lincoln talked when he wasn’t making a speech. Suffice it to say that away from the podium, Lincoln sounded like a real hayseed.
Didn’t Bush go to prep school at Andover? Not in Texas. The family summered in Maine, also not Texas.
Bush’s life per wikipedia
Bush attended public schools in Midland, Texas until the family moved to Houston after he completed seventh grade. He then went to The Kinkaid School, a prep school in Houston, for two years.[19]
Bush finished high school at Phillips Academy, a boarding school (then all-male) in Andover, Massachusetts,
Bush jr obtained his “southern drawl” after becoming Govornor of Texas. He talked much different prior to that.
As noted, he attended boarding school at Phillips Academy.
Bush jr obtained his “southern drawl” after becoming Govornor of Texas. He talked much different prior to that.
As noted, he attended boarding school at Phillips Academy.
He spent the first fourteen years of his life living in Texas and going to Texas schools…
He was never an intellectual, regardless of his Harvard MBA or rise to POTUS…
True. But there are more choices than just redneck or intellectual.
Rednecks don’t become president of the US ??
Evangelical rednecks do though….The last one I suspect also.. Thank God…
I think you’ve got a good point there, Carl Morris. Bush Jr. was really more of a party boy than a redneck.
I was always quite sure it was probably the years of binge drinking and coke parties that led to his memory issues.
You can call him whatever you want. He’s an Ivy League trust fund blue-blood. He was born into it. This lame attempt to re-characterize him is misrepresenting the truth.
Bush Jr. was a con? I mean, you knew exactly what you got with him
No. Not before he was elected. Before his first election he portrayed himself as a “uniter, not a divider”.
http://www.salon.com/1999/05/06/bush_2/
“I showed the people of Texas that I’m a uniter, not a divider. I refuse to play the politics of putting people into groups and pitting one group against another.”
I was always quite sure it was probably the years of binge drinking and coke parties that led to his memory issues.
Same thing happened to a college housemate. More than a few of us fellow housemates now think that he’s brain damaged.
Too bad, because at one time, this guy could have really contributed something to society.
“…but an intellectual cannot become a good ol’ boy….”
Ahem. I would beg to differ, though in truth, I’m not a boy.
“True. But there are more choices than just redneck or intellectual.”
Yes.
Like, for instance, POTUS’s son whose chameleon-like nature enabled him to affect the appearance of a Texas good ‘ole boy in order to capture the votes of the 99%. Mitt Romney ought to dump his political handlers and instead study the political moves of GWB.
“So how is it that the son of a couple of blue-blooded Connecticut Yankees gets to stand on the presidential podium and talk about ‘nukular’ weapons?”
The same way that JFK stood on the presidential podium and talked about the “Kuber” (Cuba) Missile Crisis.
And the same way that Jimmy Carter talked about “nuke-ee-er” power, weapons, what have you. And the same way that Obama tends to stammer while he’s shifting gears from one thought to the other.
For those who’d like to extend this critique to *my* diction, Saturday morning’s your chance. I’ll be the “Boot Camp” deejay on KXCI. That’s at 5:00 Arizona and California time and 8:00 a.m. for you back east-ers.
Slim, is there an online stream? Somehow, I doubt the signal will reach me up here in the NC mountains!
Slim, is there an online stream? Somehow, I doubt the signal will reach me up here in the NC mountains!
There sure is! Just go to this page, make sure your favorite Internet audio player is installed, and you’ll be good to go.
Our Slim has the PERFECT distinctive radio voice. Think; Miss Jane from the Beverly Hillbillies, crisp, clipped diction and all. Well worth a listen.
Our Slim has the PERFECT distinctive radio voice. Think; Miss Jane from the Beverly Hillbillies, crisp, clipped diction and all. Well worth a listen.
Uh-oh! I’m busted!
The same way that JFK stood on the presidential podium and talked about the “Kuber” (Cuba) Missile Crisis.
‘Kuber’ is exactly how a New Englander pronounces ‘Cuba’. They ignore r’s that are in a word, and add r’s where there aren’t any. Just ask my Bostonian aunt ‘Brender’ (Brenda to us non-New Englanders).
Any signs that a Romney presidency would put an end to real estate price supports?
nope.
Not sure if this information is current, but it certainly contradicts your assertion.
Perhaps the post-nomination etch-a-sketch will change the picture, though.
POLITICS
February 3, 2012
Romney’s Stance Hits Home
North Las Vegas Feels the Impact of Letting Bad Housing Market Bottom Out
By NEIL KING JR.
[FORECLOSE] Associated Press
Mitt Romney walks with Nevada Lt. Gov. Brian Krolicki, second from right, and homeowners David and Kathy Tyler and their daughter in April.
NORTH LAS VEGAS, Nev.—Mitt Romney has turned repeatedly to this city of sprawling subdivisions and sky-high foreclosure rates as he argues that the Obama administration has worsened the country’s economic plight.
Mr. Romney calls the city a place of “abandoned houses and abandoned dreams.” But for some city residents and top officials, their plight also speaks to shortcomings in the Republican presidential candidate’s own ideas on how to fix this region’s profound housing slump.
Mayor Shari Buck, a Republican and Romney backer, fears he doesn’t understand the depth of pain in a city where home prices have plunged by two-thirds in four years and where vacant houses litter the landscape.
Seven of every 10 homeowners in the city—including the mayor and most city elected officials—owe more than their house is worth. “I want Mr. Romney to come back to my city and to know firsthand what we are dealing with so he can make informed assessments of what really needs to be done here,” Ms. Buck said.
Asked to comment for this article, the campaign pointed to recent comments by Mr. Romney on the subject. The candidate, reflecting a view widely held within his party, has stood by his position that the government should stay out of the national housing mess and let the market “hit the bottom,” as he said here in October. Conservative economists have argued that any meaningful intervention would delay a recovery and transfer the problem from homeowners to taxpayers and investors. Such moves, Mr. Romney said last week in Florida, would be “a fool’s errand.”
…
At the same time, the RNC is trying to exploit fallen house values as an Obama failure. It’s too tempting for the GOP to go that route since so many of their voters are underwater.
Mr. Romney calls the city a place of “abandoned houses and abandoned dreams.”
I feel some song lyrics coming on.
“Not sure if this information is current, but it certainly contradicts your assertion.”
is Romney president yet?
Would you hire a man you know decides to strap the family dog onto the car roof to lead the free world? I would not.
I thought that sort of thing was considered fairly normal back then…is it that much different than letting the dog run around in the bed of your truck?
Would you hire a man you know decides to strap the family dog onto the car roof to lead the free world? I would not.
I wouldn’t either.
I mean, come on, Mitt. Put the dog in the kennel or hire somebody to dog-sit.
Or, get this, don’t have a dog in the first place. It’s okay not to have pets. Really, it is.
Didn’t President organizer actually eat dog meat years ago?
Didn’t President organizer actually eat dog meat years ago? ??
As a young child, you eat whats put in front of you…Your prejudice is rearing its ugly head again Niki…
Would you hire a man you know decides to strap the family dog onto the car roof to lead the free world?
If it was a pet, no.
If it was a dog for eatin’, then yes because bouncing around in the crate tenderizes the meat.
“Would you hire a man you know decides to strap the family dog onto the car roof to lead the free world?”
Yes. Now if he had left him chained to the bumper like Clark did in “Vacation” I might have to think about it.
[Clark has just been pulled over by a Colorado motorcycle cop]
Clark: Hi officer, what’s the problem?
Motorcycle Cop: Get out of the car!
[Clark exits from the car]
Clark: I don’t think I was speeding. Was I weaving or something?
Motorcycle Cop: Shut your mouth, sir! You know, if I weren’t in uniform, I’d split your skull with the butt of this revolver faster than you can say, “police brutality!”
Clark: Well whatever I did, I’m sure I can explain…
[the motorcycle cop forcibily takes Clark by the arm and leads him to the rear of the car, which has a dog leash still tied to it]
Motorcycle Cop: Explain this, you son-of-a-bitch!
Clark: Oh my God…
Aunt Edna: Is this your idea of a good restaurant? Dog killer!
Lasky: Has your father ever killed anyone?
Rusty: Just a dog. Oh and my Aunt Edna.
Clark: Hey you can’t prove that Russ.
“As a young child, you eat whats put in front of you…Your prejudice is rearing its ugly head again Niki…”
Prejudice against what or who? Just have to keep the stories straight, the hope and change messiah is a fraud.
But will “Mr Market” come knocking in our lifetimes? In my case, 20 years is essentially the same as “never”.
Things seem to be bass-ackwards around here. The price of rentals seem to be based on the price of momentarily-stabilized housing purchase prices.
The people that can undercut the prices of the new infestors aren’t……they are just raising their price to what the new infestors are asking for their properties.
I’m beginning to wonder if we somehow haven’t crossed paths with an identical, parallel “Idiocracy” universe, one where all this stupid stuff we are seeing makes perfect sense.
But will “Mr Market” come knocking in our lifetimes? In my case, 20 years is essentially the same as “never”.
Exactly.
I’ve said before.. if you can’t beat em, join em.. starting to look into buying a house… putting down a low down payment w/a low interest rate, and heading out the door if it goes underwater. Maybe I’ll even do a 5/1 option arm interest only pick a pay… At current rental rates if I pick the lowest payment for 5 years, then default I will probably save about 50-75k in rental costs.
But that’s unethical, not according to the contract, but according to most that post here…and intuitively, I guess, which is probably why you have not done this already.
“…..can’t beat them, join them……”
Which is precisely how I get stressed out.
When I see things that I know in my brain and gut are stupid/wrong/fundamentally unsound, and that I refuse to participate in.
Then, stand by and watch as other people commit to doing things that (I think) are stupid/wrong/fundamentally unsound,….
And profit wildly from them. With the PTB cheering them on, and baling them out when they get in trouble.
Which is the problem with all of these “What can’t go on, won’t” predictions. Seems like they can go on for a LONG TIME if the majority of the population is in cahoots.
Long enough to make my little contribution to fiscal/social sanity meaningless.
Which is precisely how I get stressed out.
Couple ways you can look at this:
1. Check your morals and conscious at the door and understand that a mortgage is simply a contract with specific consequences for failure to uphold terms. Borrowing money is a legal matter, not a moral or ethical one. Profit (loss) may occur, or not. You are betting on maintaining the status quo.
2. That morals and ethics matter and the act of borrowing money has consequences beyond just the legal. The status quo will not hold, and the karma of the universe will balance itself out eventually. Note that you will be at a severe disadvantage most times when in competition with those who hold the belief(1) above. Also note that you will only be right once, while those with the belief(1) above will be right, until they are wrong.
Long enough to make my little contribution to fiscal/social sanity meaningless.
“The market can remain irrational longer than you can remain solvent.”
I’ve said before.. if you can’t beat em, join em.. starting to look into buying a house… putting down a low down payment w/a low interest rate
Exactly what we’re doing. 90K interest-free down payment assistance from the city (deferred payment for 40 years or shared appreciation when we sell), 35K our own cash, and a 4% interest rate.
Putting in an offer for 617K today on an 1800sq. ft 3/3 SFH with a large yard and double garage.
Monthly nut will be $200 more per month (not including maintenance, I know) than we are paying in rent, but our rental is a 2/1 and 1000 sq. ft. so it’s pretty squishy.
6 months ago we would have been a shoe-in for this house, but now I don’t know. Investors out in scores, all cash offers, and flippers all over the under 600K market in San Francisco.
This is not conjecture, this is really what is happening here. It’s not a bubble, though, I think it’s just really measly inventory (down 40% YOY). There are still many properties that are not budging for many many months because they are in crap neighborhoods, overpriced, or very small and rundown.
In a true bubble people buy everything, so at least that’s not happening.
“In a true bubble people buy everything, so at least that’s not happening.”
Did the though ever occur to you that prices are out of reach and that’s why nothing is selling?
Did the though ever occur to you that prices are out of reach and that’s why nothing is selling?
Unfortunately things are selling quickly here and over asking, except for the overpriced crap.
During the height of the mania, even the overpriced crap sold.
It’s a seller’s market here in SF because inventory is so low and only if you have something people want to buy. I am glad to see some properties languishing, it gives me hope.
If you believe that irrationality is normal, then there is no hope for you.
“I’ve said before.. if you can’t beat em, join em.. starting to look into buying a house… putting down a low down payment w/a low interest rate, and heading out the door if it goes underwater.”
I get this attitude, I really do. Ten years of renting crapholes (because I have 5 big dogs) and waiting for prices to coming down. 10 years of never being late on a rent payment. 10 years of worrying about eviction in the event of a sale or because a landlord gets moody. And now I have a friend hiring lawyers to sue BoA to which she hasn’t made a payment in years hoping to get her entire debt deleted! (Oh, and she can’t get a job because if she had to work she’d “be so angry that I’d divorce [hubby] and we’d end up losing the house anyway.”)
Yes, I’m looking to buy. And I’d putting almost nothing down - mostly because the numbers just make sense and I want that extra cash cushion in the bank. And yes, 10 years ago I would have used my savings to pay off a house debt if I lost my job. Today? Not so sure. THAT is the affect of the bubble, when someone with perfect credit because she believes in paying her debts would consider protecting herself over the creditors. I would not even have considered that 10 years ago.
Of course, my employment is fairly safe, I’m looking to buy at 1.5x salary or less, and I will work on paying off the loan ASAP. And no, I stop paying because I’m a bit underwater. But still, if someone like me doesn’t feel the need to deplete her savings to repay a bank, I think we’re all in trouble.
(And before people start yelling at me, I have every intention of repaying and in as short a time as possible. I’m just trying to show that my mindset has changed, and I think the nation’s has too - and not for the good!)
if you can’t beat em, join em.
Or say “later dudes”…..
Even with what I have been seeing the last few months in Phoenix metro, I am leaning towards dead cat bounce. Don’t fall for it, something just isn’t adding up, pretty sure it’s just phony spin and pressure from aggressive Realtors and others in the industry.
Any signs that a Romney presidency would put an end to real estate price supports?
He’s already gone on record as saying he would remove the mortgage interest tax deduction on 2nd homes for wealthy taxpayers… that’s a start.
“…gone on record as saying…”
Reference, please?
Mitt Romney specifies tax deductions he’d cut
That’s ancient history in campaign time. Fast forward to the present:
April 26, 2012 9:15 AM
The search for candor in the presidential campaign
By John Dickerson
Topics Campaign 2012
…
Some journalists overheard Romney offering a Dixie cup of detail about closing loopholes for mortgage interest deduction for second homes and trimming some federal departments. But apparently if we thought we heard some candid ideas from the Republican challenger, we were mistaken. Romney’s campaign quickly rushed forward to say he was just repeating ideas he had heard on the campaign trail.
…
Notice the original reference was very specific: “private fundraising event on Sunday”. Also, it was Romney himself who made the statements. The refutation however was very vague: “Romney’s campaign rushed forward…” Who in Romney’s campaign came forward to refute the statements? When and where did they come forward? Has anyone asked Romney directly?
Politics as usual… but I think Romney would and does support this. I think his campaign is managing the message to not anger wealthy constituents, but this seems as a set up to gain votes at the center later in the campaign.
That is not going “on record.” On record has a very specific meaning and it involves talking to reporters when the reporters have persmission to repeat what you have said. This was said in the context of a private fundraising event and the only reason the reporters were able to repeat it is that they could hear what was being said on the other side of a wall.
Romney has admitted that his official 59 point economic plan is too vague to score.
On record has a very specific meaning and it involves talking to reporters when the reporters have persmission to repeat what you have said.
Fine. Romney’s off-the-record stance, is to do away with certain tax breaks for the wealthy regarding mortgages for vacation and 2nd homes, per the Wall Street Journal, a company owned by Rupert Murdoch (Republican), as quoted at a private function attended by Romney.
The off-the-record refutation of the above by no one in particular in his campaign at no particular time or place as referenced by CBS, an entity owned and controlled by Sumner Redstone (Democrat).
“…his official 59 point economic plan is too vague to score.”
It seems mind numbingly simple to me: BLAME OBAMA!
From OpenSecrets (navigate by selecting a politician and clicking the tabs at the top of the page):
Obama’s contributors so far:
http://www.opensecrets.org/pres12/indus.php?cycle=2012&id=N00009638
Romney’s contributors so far:
http://www.opensecrets.org/pres12/indus.php?cycle=2012&id=N00000286
Clicking on “individual contributors” is slightly amusing/disheartening, depending on your point of view
Wow…. the top #1 financier of Mitt Romney is….
drum rolll……
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Finance, Insurance, Real Estate
“Finance, Insurance, Real Estate”
How come all top politicians seem to enjoy playing with FIRE?
“Finance, Insurance, Real Estate”
Oy vey.
Banks are obviously manipulating the housing supply in an attempt to reignite a bubble to hide their losses, a strategy that’s temporarily working.
Say your Uncle Louie owns twenty houses that he rents out in a two block area. Say he dies, and leaves the houses to you. And say you have no interest in being a landlord. What would you do? Put all the houses on the market at the same time? Sell them a few at a time? Or try to sell them en masse to an investor?
“What would you do?”
I’d put in granite countertops and double the rent on those unhomeowning slackers! No wait, I’d triple it! And make them mow my lawn on weekends.
And once I had the triple rent deposit (to cover the massive increase in home value due to granite countertops) I’d sell the houses out from under their worthless bums and disappear with their deposits.
I’d make those loosers feed the squirrels.
“Put all the houses on the market at the same time?”
Your example presumes Uncle Louie has a lot of market power — kind of like the five oligopolistic Megabanks that currently control over 50% of the U.S. banking sector.
This is precisely what happened to me. But the properties were all in Compton/Watts, most were in disrepair and sub-code, and every one was tax-delinquent.
So I gave them to the IRS. All seventeen of them.
“Police, of course, will do nothing.”
Except harass you for speeding or try to catch you in a DWI or tow your car from a no parking zone.
Real crime? Forget it. Or, at best, they will show, just don’t hold your breath.
Except harass you for speeding or try to catch you in a DWI or tow your car from a no parking zone.
I have much respect for local PD, as they are truly on the front line of crime prevention and investigation. They deal with the scum of our society on a regular basis and do their best with what resources they have. Case in point: a drunk driver hit a parked car in my neighborhood the other night. Local PD showed up, took an accident report, gave a (failed) sobriety test, arrested the drunk driver, and called for a wrecker for both vehicles. Another example was of two undercover detectives who were in the right place at the right time recently. They witnessed a mugging as it was happening, arrested the perps, and returned the stolen jewelry.
I have nothing but contempt for the State Police and the Feds. The “Staties” in MA do nothing but set up speed traps to generate revenue and work road details. The Feds regularly put us in danger with little concern for the welfare of the locals: Feds and Staties got into a high-speed chase with a suspected bank robber that ended in my city recently. The chase ended when the suspect drove the wrong way down a one-way street and hit another car head-on. That person sustained severe injuries and the fire department had to use the jaws of life. I guess no one in the Feds and Staties had heard about the concept of observation and waiting until the risk to the public was at a minimum to proceed with direct action…
Here in the Centenial State, our state troopers tend to be former military types. I know a local cop and he has confided to me that cops and sheriff deputies here have no love for the state troopers.
our state troopers tend to be former military types.
Here in MA, the state gives preferential treatment to veterans for State Police academy graduates. My brother-in-law was in the marines and he has stayed in touch with some of his former unit. Many have gone on to become Staties… the recruiters go right down to Camp Lejeune.
State cops in Florida are at odds with Miami cops after they got in trouble for pulling over the Miami cop driving 120mph to his second job(judge let him off with no fine and expunged his record of course).
<>
http://miami.cbslocal.com/2012/04/05/speeding-miami-cop-to-cop-plea-deal/
(judge let him off with no fine and expunged his record of course) ??
They have there own set of laws they get to follow…
I went on a “ride-along” once, when I took some kind of Criminal Justice course in college.
Rode with “Officer Jensen”, aka “Mr Radar Gun” in our little burg.
We’re out on the Interstate at 1am, looking for speeders and drunks. Sitting on the shoulder of the road, about 1/4 beyond the crest of a hill. As headlights would pop up over the crest, we’d look at the gun to see what kind of number got rung up. (This is back in the 55mph days).
Car headlights appear, look down at the gun……..”105″ …… on come the lights as the guy blasts past us and doesn’t slow down. We go “hammer down” to catch him (a 440ci motor in a Dodge cop car is quite the hammer, BTW).
Guy tries to duck off at the first exit, but we catch him and pull him over. Officer Jensen walks up to the car, talks with the driver about 20 seconds, then walks back. Never pulled out his ticket book.
Seems that the guy was one of the PD detectives.
By this time, I had been written up a few times for speeding. Once for 8mph over the limit (by none other than Officer Jensen).
For this reason, I can point out the starting point for my generally cynical attitude and disgust with law enforcement down to the minute.
Seems that the guy was one of the PD detectives.
I’ll take a wild guess and say that the detective wasn’t on police department business.
Don’t get me wrong NE, where l live there are also those who deserve respect and those who don’t and there isn’t a single good cop out there who HATES the ones giving them a bad name.
It’s just that where I live, we’ve had a very long run of cops gone bad over the last year.
As they say, it’s a shame that 99% of cops give the other 1% a bad name…..
Rents are kept artificially high by limiting the rate at which RIOs are sold into the market.
Eventually the inventory will come to market, rents will fall dramatically, and all those houses that looked like great investments will be re-foreclosures.
ok so let me get this straight. I waited out the housing bubble by renting for the last 12 years, and now I have to ______ to wait out the rental bubble.
You fill in the blank, because I just dunno.
I waited out the housing bubble by renting for the last 12 years, and now I have to ______ to wait out the rental bubble.
Welcome to the “desert of the real”…
Rents are rising where money is flowing… i.e. where there are jobs and income, i.e. economic growth. Washington D.C., Boston, San Francisco all exhibit this. I don’t see this as a bubble, rather as a consequence of the concentration of wealth. Is it inflationary? Yes. Will it eventually stop? I don’t know…
As long as the Fed monetizes, as long as money flows to centers of education, technology, and government, as long as money is looking for a return, this will continue. The end game is the loss of reserve currency status for the US dollar. When that happens and how that plays out, I have no idea. I know I want to own real estate and precious metals when it does happen…
In San Fran?
There is nothing short of full blow depression that will tank prices in the city proper. You have all the conditions of creating a permanently high plateau. High demand created by jobs, low supply created by oceans, bays, mountains, etc.
The joke was that Phoenix, with its nothing but build able land for hundreds of miles in every direction would become a Manhattan, San Fran, or even SoCal.
I was in silly valley a few weeks a ago. The locals seem to think that paying 600K for a condo is perfectly reasonable.
The locals are competing with Facebook/Zynga/LinkedIn/Groupon stock option types. Lot’s of newly printed millionaires with the spate of IPO’s. As I said before, this is Tech Bubble circa 1999 all over again.
As I said before, this is Tech Bubble circa 1999 all over again.
I agree with you. I think that social media is hyped way to the sky. Or beyond.
And I’m not the only one who feels this way. Branding guy Rob Frankel recently bashed the whole idea of social media being the salvation for business.
Here’s a good Frankel quote for all the contrarians out there:
“One of the first myths about social media is the benefits of linking people together. Yes, social media certainly does connect people, including those you thought you’d never have to hear from again. But it’s a major mistake to assume linkage of people translates into actions of people, which is what I hear a lot from social media experts. Don’t get me wrong, I’m a branding guy and getting more people to evangelize my brand is a good thing. On the other hand, having a million people “like” my brand’s Facebook page doesn’t add anything to the bottom line.
“And that, in my humble opinion, can be a huge waste of resources.
“Yes, it’s flattering to get fifteen million views on YouTube, but until and unless you can convert those hits to sales, what’s the point? Having a million viewers on Pinterest sounds really slick. But when the smoke clears, can you really connect the dots from views or downloads to increased sales?”
I agree with you. I think that social media is hyped way to the sky. Or beyond.
It’s not THAT many people, either. Not sure how a thousand folks getting an infusion of cash can affect an entire metro area.
“It’s not THAT many people, either. Not sure how a thousand folks getting an infusion of cash can affect an entire metro area.”
it’s not really an entire metro area, it is specific “desired” areas within that metro, and then the sales happen at the margins, ie. only the few percentage of houses that sell drive the comps.
So here we go again. Backyard investors will soon be saying “it’s different this time,” arguing that those rents will never fall as they sink their retirement savings into the same houses that wiped out the retirement accounts of the previous occupants. But Mr. Smith’s invisible hand always wins in the end, sometimes with a gentle nudge and sometimes with a violent smack. There are too many houses for too few people and no private funding anywhere on the horizon. As long as those basic fundamentals hold true it’s not a question of if, but only when, the rental bubble bursts and how much damage it will inflict on everybody else.
Good article! And I sent a link, along with the above paragraph, in an e-mail to my friend who’s thinking of buying a rental house.
No word on whether she’s actually going to buy a rental. I did everything I could to talk her out of it.
But you can only do so much. Sometimes you have to speak your peace, then let your friends make mistakes.
Realtors Are Parasites®
Realtors are Predators.
However, once or twice in your life, if you get the rare one, they will be there when you need him or her to help you think straight and save many thousands.
If you educate yourself and select responsibly.
It’s all about personal accountability.
I wonder what the lunch ladies make at this place. State development agencies, the scam of scams…
FALMOUTH - It is a tiny school, with an enrollment the size of a modest elementary school. There is no campus, just a small office building. Its 400 part-time students are invisible here, attending classes at off-site facilities across the country.
Related
Yet the National Graduate School of Quality Management awarded its president, Robert J. Gee, $732,891 in compensation two years ago. By comparison, the president of Tufts University, with 10,800 employees and 5,500 students, had nearly identical compensation the same year, $738,596.
Gee has champagne tastes. In 2009, he persuaded the Massachusetts Development Finance Agency to authorize $2.64 million in low-interest bonds. That made possible his school’s purchase of a $3.25 million waterfront compound on Oyster Pond with spectacular views of Martha’s Vineyard, especially from the six-bedroom house earmarked to be Gee’s presidential residence.
http://www.boston.com/news/local/massachusetts/articles/2012/04/26/tiny_tax_exempt_falmouth_school_lavishes_salary_perks_on_president/?p1=News_links
I wonder what the lunch ladies make at this place
Since it’s a private school, I’m guessing they are paid very little.
Why would there be any lunch ladies at a graduate school with 400 part time students? Maybe a few vending machines….
More like a private staff dining area.
For reference, Ohio State employs 30409 FTE (full time equiavlent) employees and 61568 students, all campuses, 2008 or so data.
Is this Gee related to Gordon Gee who is/was the President of Ohio State?
Tax write off scam for the rich
(this is the third time I had to write this. apparently it’s tech FAIL week (other problems every day) and I didn’t get the memo)
*other problems elsewhere, not here.
“…Tufts University, with 10,800 employees and 5,500 students…”
Whoa, two employees for every student?!! What is it, a hospital? Yeah I know a college is more than professors. You’ve got food service, cleaners, landscapers, maintenance personnel, etc. But compare the Tufts numbers to the Ohio State numbers, which are almost exactly the inverse ratio. And I don’t think Tufts has the big athletic department payroll that Ohio State has.
Must be a typo. Wikipedia shows roughly 10,000 undergrads and grads.
Still, 2 employees per student. Small wonder tuition at private U’s is 30K+ per year.
I meant two students per employee. Still a very poor ratio.
Typical ratio now a days.
Higher ed is a good racket.
Guaranteed as well!
Rage grows over mortgage deal
By Les Christie
@CNNMoney March 13, 2012: 7:00 PM ET
Proponents of the settlement deal tout that roughly 1 million homeowners who owe more on their homes than their homes are worth are expected to have their mortgage balances lowered through principal reductions and another 750,000 would be able to refinance into loans with lower interest rates.
However, that’s only a fraction of the 11 million homeowners who are currently underwater on their homes, according to CoreLogic. And it’s also a mere sliver of the 3.5 million people who lost their homes to foreclosure over the past four years.
“The impact [of this settlement] will be small,” said Mark Zandi, chief economist for Moody’s Analytics. “It’s not a home run; it’s a single.”
Please buy our $2 million dream home
“If it’s offered to one group, it should be offered for all,” said Stacy Ovendale from Seattle, who says her home has lost nearly 50% of its value. “When my mortgage was written up, I had to take whatever program was available to me at the time, which happened to be FHA. … It’s so frustrating because my loan is with Bank of America but since it’s FHA, my mortgage is current and I have chosen to be responsible, there is nothing they can offer me in the way of principal reduction.”
“So, these people who are underwater get a break from the banks, and other hard working folks like us get screwed?” wrote Karthik Subramanian, of Aurora, Ill., in an email.
“What I think is unfair, is that people who didn’t overleverage their homes, who paid their mortgages on time, who didn’t borrow more than they could afford, even if the bank said they could afford more, the people who had good common sense and have done the right thing, are left with all of this business loaded on their backs,” wrote Jamie Smith of Sonoita, Ariz.
{Sorry Jamie Smith of Sonoita, Ariz. you are in line behind Karthik}
That said, every homeowner could benefit from such bailouts if they help to turn around the ailing housing market, where home price declines and slow sales continue to threaten the fragile economic recovery. The settlement, however, may not help enough borrowers to do even that, said Moody’s Zandi.
{the same Mark Zandi 42 days later on Apr 25, 2012 says}
“The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a telephone interview yesterday. “Home sales — both new and existing — and housing starts are now off the bottom.”
http://money.cnn.com/2012/03/13/real_estate/mortgage-settlement/index.htm - 70k -
Keepin’ hope alive.
Keepin’ hope alive.
Exactly, this isn’t the first time they’ve teased the underwater crowd. Like I’ve said before, I’ll believe it when I see it.
I’m expecting another round of stories about underwater homeowners who defaulted on their mortgages in order to qualify for F&F writedowns, only to learn that they are not qualified and are in foreclosure for not paying their mortgages.
Mark Zandi, chief economist for Moody’s Analytics. “It’s not a home run; it’s a single.
With Zandi’s stellar records, I am going to bet it’s not even a single.
Predicted by HBB just days ago. The public doesn’t give a fig for vague platitudes like”keeping the housing bubble afloat” and “helping a fragile economy.” $3-5 billion is a drop in the bucket of this economy. The moral hazard optics will cost far more come election day. I suspect we will see either very few actual cramdowns, or very thick and very public strings attached.
“The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. Home sales — both new and existing — and housing starts are now off the bottom.”
Here is Mark Zandi`s new hit single
http://www.youtube.com/watch?v=h0RnCw3vPCk - 118k -
Th banks are not going to write down the mortgages that were packaged up and sold off, DUH!
“If it’s offered to one group, it should be offered for all,”
I agree with this. Why not just hand $50,000 to every American household, whether they rent or own, in the interest of fairness? Why should owning a home on a mortgage you used as an ATM machine provide an advantage over others who did not?
You mean, other than adding $5T to the national debt, putting us 3 years closer to the moment of debt pop?
My proposed solution of like 5 years ago was to hand out about $3T, based on your 1040 reported income.
That was long before I truly understood what was going on and why the trade imbalances, international and domestic, would just make the debt we are forgiving, come right back.
“You mean, other than adding $5T to the national debt, putting us 3 years closer to the moment of debt pop?”
So long as the Fed’s printing press technology is in good working order, why is this a problem?
I agree with this. Why not just hand $50,000 to every American household, whether they rent or own, in the interest of fairness?
Sounds good to me! I could think of all sorts of things to do with $50k.
The Austerian School is driving the double-decker bus off the cliff in jolly old England. But Austerity is working so well in the rest of Europe…oh, wait, no it isn’t. Which economy is doing the best? The US, with the least amount of Austerian moralism. (Perhaps thanks to the Fed- the semi-independent body that can rise above the politics du jour, and make rational though unpopular decisions?)
http://www.slate.com/blogs/weigel/2012/04/25/austerity_in_britain_not_working_not_about_to_end.html
The United Kingdom has fallen back into recession. Scott Barber — via Joe Weisenthal — charts the economic performance there against the performance here.
[chart]
The numbers start to diverge in 2010. What happened in 2010? In May, the Labour government was ousted and replaced by a Conservative-Liberal Democrat coalition. In power, the coalition immediately set about cutting spending (by roughly $11 billion) and raising taxes. The goal: A balanced budget by 2015.
The result: The sort of slow growth that any Keynesian could have warned you about. S&P had this to say about it.
[W]e believe that a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues.
Yep
I think a lot of pundits are pulling out the “Crow for one” cook book.
The goal of all players is to drive down the value of their currency so labor is cheaper. The US is trying to do it w QE, Europe is trying to do it by coming as close as possible to the abyss without going over as they can. I hope they don’t sneeze. The other problem is if the entire world is doing this, eventually there will be no customers as everyone will be spending all their money of food fuel and shelter.
eventually there will be no customers as everyone will be spending all their money of food fuel and shelter
So just as the Soviet block collapsed, should we expect the same for the “capitalist” nations?
So just as the Soviet block collapsed, should we expect the same for the “capitalist” nations?
All empires collapse, the US is no different. My guess is the how and the when will be a surprise to most and the speed will be much faster than anyone could have thought.
will be a surprise to most and the speed will be much faster than anyone could have thought ??
Which we almost saw in 2008…..Not sure if we avoided it or delayed it…I guess thats playing out right now…
My guess is the how and the when (of America’s collapse) will be a surprise to most and the speed will be much faster than anyone could have thought.
My guess is that it will be very slow as it has been. I can’t see a fast collapse relative to other nations. And why would our currency collapse relative to others?
“My guess is the how and the when will be a surprise to most…”
Let’s agree up front that nobody will have seen it coming.
agreed. might be a slow fall off in global importance, economic impact, ect. like the UK.
“The Austerian School is driving the double-decker bus off the cliff in jolly old England. But Austerity is working so well in the rest of Europe…oh, wait, no it isn’t.”
I’m not schooled enough in econ to promote or dismiss austerity, but
it’s my understanding that when these countries take austerity measures, they are well aware that they’re in for some short-term pain. And that it’ll take a while (years) to see if it ‘worked’.
One of the main selling points of austerity is that investors recognize countries practicing it and reward them with lower interest rates, which makes it even easier for them to balance their budgets. But the opposite is happening, as investors see the deflationary spiral that the countries involved are falling into, and demand higher rates because of the perceived higher risk.
Comment by Robin
2012-04-25 17:17:05
Oxide,
Can you suggest “Oil City” equivalents in Southern California, or is that an oxymoron??
——-
I confess, I base my view east of the Mississippi, where you run into hundresds and hundreds of small towns surrounded by acres and acres and acres of arable land (sunlight and 30+ inches rainfall) all with sub $100K potential homesteads, all about 30 miles from the major cities, and 10 miles from the minor cities.
I have very little feel for California. But in SoCal, I found very little land like that — you go from a thin strip of heavily populated lush land to national forests/preserves to desert very quickly. I found a few things north of Oxnard, some run-down stuff in Santa Clarita, or perhaps something run-down in Hollister, but it was slim pickens. The just isn’t the (good) land. IMO. YMMV.
Most of SoCal was built on arid land. In fact, most of the west is like that, which is why water rights are such a big deal out here. There is a saying: Whiskey’s for drinking and water’s for fighting.
Most of SoCal was built on arid land located near the coasts. The ocean moderates the climate. Beyond the mountain ranges that (along with the ocean) define the heavily populated strips of coastal land lie the deserts. They are deserts because they are cut off from the moderating effect of the ocean due to the mountain ranges: They lie in the rain shadow of the mountain ranges.
During the mania thousands of people where convinced that it was a good idea to buy a home in the desert and then drive for an hour or so to, say, El Segundo, every day. This MIGHT have worked if they were the only ones doing this, but (alas) they weren’t: Thousands of people were doing this because thousands of homes were built in the desert hence these thousands of people were clogging up the highways that led from the desert to the coast. So a one hour drive turned into four, maybe longer.
Not fun, but - hey - at least they got to own on a plot of scarce desert land, something that they’re not making any more of.
(snark)
I don’t know what desert you are talking about that you could commute from to El Segundo in an hour. With rush hour traffic, that starts before 5AM and runs until 10AM, then starts again at 3PM and runs until 8PM, you can’t even make it to San Fernando Valley or San Gabriel Valley in an hour.
You certainly are not going the 70 miles from Palmdale, the 100 miles from Victorville, or the 90 from Beaumont in an hour, creeping along at an average of 25 MPH on SoCal freeways.
So the answer is…….bulldoze the mountains flat?
Hey, people will pay you to do that to your mountains in the east. Is there any coal inside the west coast mountains? Of course, you may not like what happens to any downstream water….
Denver moved to a stage 1 drought alert today.
Most of our water is snow melt from the Rockies. Every last drop has an owner downstream, via water rights, on both sides of the continental divide.
Except you Colorado b##tards keep hoarding all of that Arkansas River water……
If you don’t stop, we’ll sue………oh wait, we did that. Thirty years ago. Still tied up in court, last time I heard.
Like I said … whiskey’s for drinkin’ and water is for fightin’ over!
I knew a gal who went to Law School in UW in Laramie. She was planning on specializing in water rights.
“Like I said … whiskey’s for drinkin’ and water is for fightin’ over!”
Is your name Mark Twain?
A trend that started and stopped in its tracks was the movement of some commercial property east. Ontario for instance had a bit of an office mini-boom, as did Corona. The idea was to follow the people, allow businesses to open satellite offices closer to their employees. The recession doomed many of those projects.
I remember going to a conference on residential real estate in the early 2000’s. This was not a “get rich quick” conference, but a meeting of residential professionals and real estate economists talking about the long-term trends in California. The most striking projections I saw were those that projected where the growth was going to occur over the next 40 years.
Ultimately, because of NIMBYism, the efficient dense growth of urban cores was significantly downplayed…most of the housing growth was expected inland from the coasts. While there has been more of a push recently from government to develop more density near urban cores, NIMBYism is alive and well.
Ultimately, when we look back 20 years from now, I think we’ll find that growth resumed inland, as had been going on for a couple of decades prior to the bubble bursting. Admittedly, the thing that could change that is water–that said, I believe there are ways to alleviate water problems (like in Vegas, no more lawns, only fake grass, dual water systems for landscaping and potable, etc.).
The water issue is where Phoenix wins.
Up river form us, there are lots of mountains. The Gila flows into the valley on the west side from the San Francisco Peaks (Flagstaff and environs) and the Salt River (Rio Salado if you prefer, it goes by both) flows in from the East.
Only thing down stream from us is Yuma, and Mexico. Yuma doesn’t have much first meaningful use rights, and screw Mexico.
So, these two rivers are channeled in their entirety, into irrigation canals. Two rivers flow into Phoenix, and a trickle flows out.
“Two rivers flow into Phoenix, and a trickle flows out.”
The Colorado is sucked dry before it reaches the ocean. That has to blow some east coast minds, I’m sure.
SoCal?
What a disaster.
dang shame, too. Hey, congrats to Tony Villar! Mayor of a technically bankrupt, turd world city! You really showed us, Tony!
I know of several families that fled Hollister due to the gangs. We left SoCal in 2004 and had noticed, even in Santa Barbara, an extreme increase in the amount of tagging, vandalism, loitering, in our (neighbor)’hood.
So non-infested places you will pay a premium for at this point.
mikeinbend
Thousand Oaks, Newbury Park, and Simi Valley are dealing with a vehicle theft and home robbery crime spree. Our schools are now flooded with anchors. You were smart to get the heck out.
We moved to Ventura County in 1984 for a better life. The tables are turning. The pattern we ran from has caught up with us.
CA has a 3rd world feel to it ultra wealthy and then countless poor middle class missing from the coast to the desert. And they say CA is a trend setter
Provided by Business Insider:
Meredith Whitney was on CNBC’s Closing Bell Wednesday.
Jeff Cox at CNBC.com spotlights one area where she’s wildly bullish. She likes the agriculture and commodity states that are ‘right-to-work’ where businesses are creating jobs:
“I am wildly bullish on the U.S. in particular markets…I think the U.S. market looks terrific (though) as a collective the U.S. market is not going to grow all together,” she said during a “Closing Bell” interview.
“There’s opportunity from Texas all the way up to North Dakota, and you can play every industry on that basis,” she added. “It’s the agriculture-commodity belt — also the Right to Work states. That’s where businesses are moving because it’s easier to operate and create jobs. So you see a massive demographic shift to those areas.”
But there are three stats in particular she doesn’t like: California (which is the worst) followed closely by Illinois and New Jersey. In Illinois, in particular, she cited something new about parents being forced to pay for school busses because finances have gotten so bad.
“forced to pay for school buses…”
One of the wealthiest districts in the nation (Palos Verdes Unified School District, CA) didn’t “pay for school buses” — and neither did my parents. We kids did a lot of walking in the 60’s, and I don’t mean down the block. Middle school was 2.4 miles away along a bridal path, and high school a hilly 1.7 miles up Hawthorne. That’s a long way with 10 pounds of books and papers twice a day.
I don’t recall having many fat classmates, although on rainy days not a few arrived in Daddy’s limo. Not having to pay extortionate rates for contracted bus services allowed the school district to offer extensive music, art, foreign language programs, and instruction in astronomy, publishing, film, advanced laboratory sciences, etc.
But heaven’s forfend today’s kids should have to (shudder,) walk.
(crotchety rant off)
But heaven’s forfend today’s kids should have to (shudder,) walk.
True, dat.
One of my mother’s favorite complaints about the grade school two doors away is what she calls the Mommy Parade. It happens right before and after school.
Apparently, the school district-provide buses are not good enough for these Mommies. They have to drive their precious snowflakes to school.
My mother once asked a Mommy Parader why she was so insistent on driving Precious to school. Because of the bad word that Precious might hear on the bus! We can’t have that!
Well, my mother informed this Mommy about the language she’s heard on this school’s playground. Let’s just say that it’s the sort of talk that one might hear on a U.S. Navy ship.
The Mommy had no response.
You’re talking about my wife and son :-). I think I’ve finally got her convinced that since I’m on the way to work anyway it probably makes more sense for me to just drop him off than for her to warm up her car every morning for no other purpose than that…
“Mommy Parade”
LMAO……you just described my sister.
When she lived in California, we went to visit in 2006. Always drove the kids to school. One morning, I offered to do it.
Literally, the school was less than 200 yards walking distance from door to door. Maybe 100 yards, as the crow flies. I could have chucked a rock from her back yard onto the school playground.
The semi rural district my kids attended OTOH, was 5 miles to the elementary school, and 7-8 to the middle/high schools.
They don’t walk because of divorced parent kidnappings and other kids who carry guns these days.
That’s no hype either.
No more school buses in San Francisco anymore(except for special ed). Our 6th grader walks a mile to get the MUNI (city bus).
If you’re a parent check out free range kids website. Her book is even better. Crimes against children have gone way down, but hovering parents are bombarded with media scares about what could happen to you kid.
Statistically, your child has a way higher chance of being in a car accident on their drive to school than being assaulted or kidnapped if they walk.
I started taking the NYC subway alone at 10 years old. That was normal in the 70’s. I babysat infants in middle school: now I know some parents who still hire babysitters for their middle schoolers.
We are raising a generation of kids who are not able to take care of themselves. Ask any teacher who has been teaching 25+ years and they can tell you how much things have changed and how dependent today’s kids are compared to the previous generation.
If you’re a parent check out free range kids website. Her book is even better.
I loved that book! And, since I’d be remiss in my duties as your HBB Librarian if I didn’t cite the title and author, it’s Free-Range Kids by Lenore Skenazy.
I’d be remiss in my duties as your HBB Librarian if I didn’t cite the title and author, it’s Free-Range Kids by Lenore Skenazy
Thanks for adding that. In real life I am a librarian, but carry on as the HBB librarian cuz you are doing a really great job!
I didn’t think I was an overprotective parent until I read that book.
In real life I am a librarian, but carry on as the HBB librarian cuz you are doing a really great job!
Okay, sfrenter, I *knew* there was a reason why I liked your posts so much. It’s that librarian/book thing.
And thanks for the compliment _- much appreciated!
I had not seen the latest stats.
Good to know. Thanks sfrenter.
“They don’t walk because of divorced parent kidnappings”
I still remember explaining to my poor, bewildered mother that the overwhelming majority of missing children were kidnapped by one of their parents. It was kind of fun watching her mind boggle until she said “That’s impossible, how can a parent kidnap his or her own child?”
It was kind of fun watching her mind boggle until she said “That’s impossible, how can a parent kidnap his or her own child?”
It’s noncustodial parents wanting their “share” of the child.
“Thanks for adding that. In real life I am a librarian, but carry on as the HBB librarian cuz you are doing a really great job!”
Really sfrenter? Any chance you’ll be in Anaheim? I will.
“In Illinois, in particular, she cited something new about parents being forced to pay for school busses because finances have gotten so bad.”
I can do one better than that. No district in CA where my kids have gone to school has ever offered any bus service. The kids get to school in POVs, which has to be a tremendous waste of fuel and parent time. But the school district saves money by not running a bus service.
Typical for a state whose economy is heading to Hell in a handbasket…
I left Malibu in ‘93 because of all the weekend gang activity along PCH and the illegal encampments in the canyons and along the Backbone Trail. When they started tagging the oak trees in Tapia Park, I bailed.
Rich folk need to learn to be careful who they hire as live-in help. Such employees tend to have relatives who like to visit — and hang around. The trick, I think, is to find a place so gods-forsaken that NO one with a semblance of urban mentality would want to live there. Then remember that the hills have eyes….
I bicycled through Malibu in November 1981. I can remember stopping at a restaurant with friends I’d met bicycling up around San Francisco.
As we passed through Malibu, we encountered a film crew, which prompted a round of “Hey, take MY picture!” from my two-wheeled posse. The film crew ignored us.
Lost the friends somewhere around Pepperdine University. That area is pretty hilly, and then, like now, I’m a real turtle going uphill.
Continued on through Santa Monica, where I picked up the beach trail. Since it was November, there weren’t many people out and about. Biggest shocker was being just a few feet below the air traffic at LAX. Darn, those jets are big!
Trail went as far south as, I think, Redondo Beach, and then it was time to get back on the city streets. I made my way up the Palos Verdes hills and located the youth hostel. Spent the night there, overlooking the lights of LA.
Good times, good times.
“I left Malibu in ‘93 because of all the weekend gang activity along PCH and the illegal encampments in the canyons and along the Backbone Trail.”
I was up there last week on a one-day field trip. I was duly impressed that the housing stock looked far more upscale and secluded than La Jolla’s. The beach was also more capacious and less crowded. There were no signs of gangs to my naked eye…
DataQuick March 2012 Median Sale Price Chart
These are single-family sales:
Place Zip Sales Median % Change (Year-on-year)
Julian 92036 6 $245,000 -28.5%
All of San Bernadino County could be an oil city.
In due time…
I think the point of oil city is that you can go off grid, including growing your own food. San Berdo is hot and dry. Without mass irrigation, and the electricity to pump the water, you will not be growing much more than scrub.
I judge relative ‘dryness’ by the grass in the medians and around restaurants. Riverside/San Bernadino has grass for the most part. If the city has rocks or cactus, then it’s too dry to grow food.
Slab City is the place to be!
Thanks, Oxide
When I was a teenager, I longed for open space in the Santa Ana Canyon. Truly. The scrub off the 91 toward Riverside. Beautiful, if not bereft of lush vegetation. Of course, not attainable.
Not Oil City, so back on topic!
I was lucky enough to have had a job that prompted me to visit Sacramento, Dinuba, Reedley, Chowchilla, Sanger, Fresno, and so many other flyover California cities. Nice folks.
Also the coast of CA, I have often visited cities including SF, SLO, San Diego including La Jolla, Del Mar, Leucadia, Carlsbad and more. And all points in between. All points.
Of course, Newport Beach, Huntington Beach and Laguna Beach are out of our price range. Even Dana Point is high. San Clemente is a cesspool.
I look forward to digesting the responses, knowing that Huntington Beach would be subject to subduction in an earthquake, sliding seamlessly into the morass that once was oil but was replaced by pumped-in seawater.
Soon to be 60 and loving the coast, I long for an equivalent of Oil City with low prices, low taxes, and moderate weather.
Am I dreaming??
Is your heart set on the coast, Robin?
‘Economic unfairness’ growing, says BBC poll
By Andrew Walker Economics correspondent, BBC World Service
BBCNews
A new poll for the BBC World Service has found widespread perceptions of economic unfairness.
The poll found that more than 50% of respondents in 17 out of 22 countries believe economic benefits and burdens are not fairly distributed in their own nation.
But there was also strong support for free market capitalism.
Among those holding that view, most thought it had problems that could be addressed through regulation.
The poll of developed and developing nations, which questioned almost 12,000 in 22 countries between December and February, found that a majority in most countries saw economic unfairness around them.
In some countries, the view was held by an overwhelming number of respondents: 90% in the case of Spain; 80% or more in France, South Korea and Chile, and close to that level in Russia. In the United States it was nearly two thirds, and it was 61% in the UK.
In one country, Ghana, the perception of unfairness was less than 50%, but still ahead of the number thinking things were fair.
Four countries returned different results. In Australia, Canada, India and Kenya over half said that the benefits and burdens were fairly distributed
Poll, schmoll. Who gives a crap what the wretched refuse think?
And besides “Free Market Regulation” is an oxymoron.
Ah, but people LOVE oxymorons because after all, it’s different this time!!
India is a surprise.
And what about the Scandinvian countries, which probably have the most equitable distribution in the world? Are they just being ungrateful wretches?
This is really disturbing……
http://www.bloomberg.com/news/2012-04-26/wall-street-tracks-wolves-as-may-1-protests-loom.html
Police partnering with the Banks to conspire against OWS. Apparently the banks are like Elk and OWS are the Wolves!!!! Later they liken the OWS folk to Al Queda operatives.
Now, I walk past Zuccoti Park regularly and those OWS people sure don’t look likes wolves to me. And although I admit I don’t think I’ve ever met an Al Queda operative, they sure don’t look like I imagine Osama’s remnants to look. I could be wrong about this of course.
They even threw in an approving quote from Jamie Dimon…..a man I know of very well and a sure sociopath if ever there was one.
All this makes me wonder, on this chilly damp NYC morning: Is this really what America has become??
Sorry to be a bit of a Debbie Downer this morning.
You do have to consider the source.
Yes, it’s a fascist police state owned and controlled by the 1%er PIGS.
I posted this yesterday about the gathering of the PIGS in Aspen to coordinate their clampdown:
http://www.aspeninstitute.org/events/2011/07/25/aspen-security-forum
“The Forum is an annual summer gathering at our signature “Aspen Meadows” campus in Colorado of top-level present and former government officials from all relevant homeland security/counterterrorism agencies (the White House; Departments of Homeland Security, Defense, State, Justice, and Treasury; the intelligence community; and Congress); industry leaders (large and small homeland security/counterterrorism-related companies, as well as private equity investors, merchant and investment bankers, venture capitalists, and other financiers)
“Later they liken the OWS folk to Al Queda operatives.”
Baksters® are liars.
Without exception, the law enforcement/security mentality is that EVERYONE is the enemy.
Pass enough laws restricting freedoms and eventually everyone is
I can see the Occupiers studying up on wolf howling. It could make for some pretty entertaining protests.
Bid at $162k and lost to a crooked realtor deal on a house that sold for $162k for the same model on the same street last year. What do you guys think @ $189,750? I am getting old and tired.
17684 W Cinquez Park Rd Jupiter, FL 33458
Foreclosure Bank Owned
$189,750
MLS ID: A1632459
Added to Site
April 23, 2012
UNKNOWN-
http://www.zillow.com/homedetails/17684-Cinquez-Park-Rd-W-Jupiter-FL-33458/67165217_zpid/
It looks like lots of lipstick.
new(er) windows?
good plumbing?
roof?
nice neighborhood?
It looks ready to move into. Are you willing to pay that much?
Is it “as is”?
We are dealing with the same issue, and once we pencil out all the maintenance replacements, some of these overpriced REO’s pencil out (kinda). Gotta admit, it’s a really cute house.
Well built CBS good AC mechanicals but see below.
You ain’t old and tired Jethro.
Peace
2 comments for Polly –
1) You said something w/r/t my comments yesterday to the effect that “assuming things is a particularly bad trait for lawyers”. Well, my whole point is that I’m not going to assume anything, but I’m not going to go funding a 529 for my child (he/she won’t even exist for at least a few more years) because it’s foolish to think there won’t be sweeping changes in college costs and the structure of education between now and 2030-2040. I specifically said I was going to take a “wait and see” approach and spend a lot of time planning what assets/income to show when my child is in middle school/early teens.
2) Why would I look at the Princeton estimator for parents of upcoming or current students? I won’t have a child ready to apply for at least 2 decades? What I did was better–I looked at long term trends and extrapolated from my personal experience about what these schools value. Unless top colleges stop caring about rankings, they are going to become increasingly conscious about achieving high yield rates. When undergrad tuition is a *negligible* portion of the school’s budget (compared to endowment earnings, donations, and research grants), it is foolish to think that grant programs will become less generous. And it’s also pretty clear that the child of a lawyer (not big law partner) and a teacher will be comfortably below the median income of other students at a top college and therefore will receive aid.
Of course, what it really comes down to is, in 20 yrs a lot of things could change. Both my income and the entire college landscape.
Also, just to repeat my thesis from yesterday — 529 plans are not a good deal for most people. Having a 529 plan just advertises that you can contribute to your child’s college costs and makes you eligible for less aid than you’d otherwise get. Having a 529 limits what you can do financially to structure your income and assets to get the maximum in grants. This is particularly true if your child is lucky enough to be admitted to a top college which will bend over backwards to eliminate financial barriers for students. If you can get one top college to give a fantastic financial offer, other peer schools will generally match that offer. E.g. if a student is admitted to 3 or 4 top 10 colleges and receives different financial aid offers from each, the student will be able to use the best offer to get a matching offer from the others. This is a much better strategy to save on college tuition than to fund a 529 plan.
How times have changed! It seems that today everything is about buying labels. I always bought a house to make into a home. Something that fit my needs functionally, not based on statis. I bought my cars based on functionality. I made my college choice in the same manner. I only applied to one, not multiple, UC Berkeley and was accepted. Now every parent talks about the money spent on college applications and how many schools their kid got letters of acceptance to.
I’m talking about helping my future child get the best education and connections possible for the same price as a state univ. I don’t see anything wrong with that. Why should someone with 250k/yr in income (scaled for inflation) have to pay full sticker price for a school that has a stratospheric endowment?
I applied to the University of Michigan and Syracuse. Got into both and chose Michigan.
I figured that the Big Blue U was big enough to cater to whatever my little wandering mind chose to get interested in and it was. Michigan was a good place for people with a wide range of interests, and that was me then and now.
Good choice. Go Blue!
I tend to agree with Polly on this one, joester. In twenty years colleges (and by that I mean first-tier institutions,) will likely once again be the province of the wealthy, just like they’ve been historically.
Up until the middle of the last century (with the advent of the GI Bill,) only the very talented or those with family money could expect to become “college men.” Higher learning was run like a private club, and financed the same way.
Today a meaningful college education has priced itself out of existence for the masses, and what passes for higher learning functions mainly as a means of keeping the moderately talented off the job market for a few more years. If you expect your future offspring to join the elite, you’d best start saving now, because the industry is about to undergo a major redefinition toward the mean.
From 1945 to 1975, a college education, and/or technical training was essentially “free” to veterans. And a bunch of them took advantage of it.
1945 to 1975……..gee, what was going on in the rest of the country between those dates?……..
“…what was going on…?”
Massive inflation/cheese to benefit “the Greatest” at the expense of their kids?
No, wait….
1945 to 1975……..gee, what was going on in the rest of the country between those dates?……..
A nasty recession, as I recall. Lost my part-time after school job because of it.
I’m not sure what you’re alluding to X-GS, but during that time MILLIONS OF VETERAN GIs were integrating back into the civilian world and were NOT putting up with “business as usual.”
They were enforcing fairness across the entire spectrum as much as they could, culminating in the civil rights movement.
After all, we weren’t Nazis were we?
A 30 year recession??
To answer myself, no…just a pretty good run of prosperity and high wages.
“In twenty years colleges (and by that I mean first-tier institutions,) will likely once again be the province of the wealthy, just like they’ve been historically.”
Artist: Charlie Daniels
Song: Long Haired Country Boy
A poor girl wants to marry, And a rich girl wants to flirt.
A rich man goes to college, And a poor man goes to work.
A drunkard wants another drink of wine, And a politician wants a vote.
I don’t want much of nothin’ at all, But I will take another toke.
A rich man goes to college, And a poor man
goes to work.went to college.A rich man’s parents paid for his college; a poor man took out student loans.
I just read your reply from yesterday and wanted to add a few things.
You assumed when I talked about structuring income and assets that I would be commiting tax fraud. Really? Why wouldn’t you make the more logical assumption that I would study the rules and structure my finances accordingly. If anything, it would be gaming the system to make the college use endowment money to fund a grant. And no, I do not feel bad about that. I myself my contributions to the college’s endowment, so this is not really a one way street.
You also assume I’d invest money in my law practice. This is probably true, but it’s more likely that I’d put it into other assets/businesses where the return will be better and where the money would not be considered for tuition purposes.
This really comes down to the fact that a lot of things will change in the next 2 decades. And if my income goes through the roof, I’ll gladly pay full tuition. But if my wife and I are merely 200-250k parents in a sea of .001%-er parents, I’ll have no qualms about arranging my affairs to make the college’s endowment pay for a big chunk of my kid’s education.
Are you assuming that your child will get into a school with a large endowment? Do you still think that 529 plans are a bad investment for those not so lucky?
My children benefited from 529 plans funded by my parents. I don’t know that they will work so well over the next 20 years. But they really worked for us. One of my children is not interested in a 4 year degree and will compete an Associates and some certificate programs. If one had been interested in a technical program, the 529 plan would have paid for that, also.
More to the point, Joe, you’re assuming that in 20 years you’ll have a 250K (or equivalent) income. Don’t.
Articles by Kimberly Miller
South Florida housing prices have hit bottom, Zillow analysts declare 5:19 AM Wednesday, April 25, 2012
South Florida third in U.S. with shaky mortgages
7:48 PM Monday, April 23, 2012
Palm Beach County courts get $346,000 to gut foreclosure backlog
7:02 PM Friday, April 20, 2012
Real Time: Palm Beach County home sales and prices up in March
12:57 PM Thursday, April 19, 2012
———————————————————————————–
Articles by The UNKNOWN TENANT
Surfing near bait fish poses no threat from sharks.
5:19 AM Wednesday, April 25, 2012
Man loses leg to shark attack while swimming near bait fish.
7:48 PM Monday, April 23, 2012
Experts say: Run for tree in lighting storm
7:02 PM Friday, April 20, 2012
Man killed by lightning strike while under tree
12:57 PM Thursday, April 19, 2012
lol
Business News
Foreclosures up in half of U.S. cities
Published: April 26, 2012 at 8:12 AM
Advertisement
IRVINE, Calif., April 26 (UPI) — Roughly half of 212 U.S. cities tracked by market researchers saw foreclosure activity rise in the first quarter of 2012, a private firm said.
RealtyTrac, an online marketplace for foreclosure properties, said 114 of 212 cities with populations above 200,000 experienced increased foreclosure activity January through March.
In larger cities, the ratio held with 26 out of 50 metropolitan areas experiencing increases. City increases were led by Philadelphia, up 49 percent; Indianapolis, up 37 percent, and New York, up 24 percent.
The largest quarterly decreases among the 50 largest U.S. cities were Portland, Ore., where foreclosures fell 28 percent quarter to quarter; Las Vegas, down 26 percent, and Providence, R.I., down 24 percent.
Although up from the previous quarter, in 64 percent of the 212 areas tracked, foreclosure activity dropped from the first quarter of 2011.
“First quarter metro foreclosure trends were a mixed bag. While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter — an early sign that long-dormant foreclosures are coming out of hibernation in many local markets,” said Brandon Moore, RealtyTrac’s chief executive officer in a statement.
Stockton, Calif., experienced the highest foreclosure rate among U.S. cities in the first quarter with one in every 60 housing units involved in foreclosure processes.
Modesto, Calif., posted the second highest foreclosure rate and 10 other California cities were among the top 20, the firm said.
But the largest annual increases were outside California. From the first quarter of 2011, foreclosure activity rose 52 percent in Orlando, Fla., 41 percent in Indianapolis, 38 percent in Hartford, Conn., 37 percent in Miami and 33 percent in Philadelphia, RealtyTrac said.
…
Could the percentage of Americans who own a home really have dropped by 6% in one year?
Apr 26, 2012 7:03am
More Foreclosures Drag On Home Prices
Morning Business Memo
Home prices have been bogged down by a series of problems, from restrictive lending policies by banks to the weak housing market. But foreclosures are the biggest drag in many parts of the country. The real estate marketing firm RealtyTrac says number of homes in foreclosure rose during the first three months of this year in more than half of the largest metropolitan areas.
“First-quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter – an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”
Home ownership is down. According to a new Gallup poll, 62% of Americans say they own a home, compared to 68 percent last year. Some 53 percent of Americans believe their house is worth more today than when they bought it, down significantly from 80 percent in 2008 and 92 percent in 2006.
…
Viewer Stories: Housing Market Victims
Ashley from Cleveland, Ohio
I have two house payments. We put our first home up for sale in May 2007, which we lived in for 10 years prior, we moved to another home in Sept 2007. We have had a few offers, but it appears buyers out there just want something for nothing as well as forgetting there is no such thing as a “perfect house”. And you get what you pay for.
Jennifer from Red Lion, Pa.
Because of the housing slump our family was able to finally afford our dream home. There are two sides to every story.
…
Beverly from Louisville, Ky.
My fiancee and I bought our dream home in 2005, but it’s turned into a nightmare! He got ill and then lost his job; I changed jobs to be closer to home. I went through all of my savings, IRA and stock options just for us to survive for that year. It’s a struggle to pay our bills, and some months, they don’t get paid the full amount. I paid short payments many months on the mortgage, and now our house payment has gone up $250 a month to recover those short payments. We can’t even come close to paying that! The rate on the mortgage starts adjusting in July … who knows what it will go up to then? We are on the verge of losing our home, and I have been unable to find any help! I know I am not alone in this situation. Is there any help out there?
Greg from New Albany, Ind.
With interest rates dropping, my mortgage balance is only 40% of my homes value. I’ve never missed or been late on a payment, but my pathetic mortgage company, Nationstar Mortgage, has raised my payment about 35% in the past two or three years. I think my rate went from about about 6% to 9.99%. They told me they are doing it just because they can, no other reason. I’m not working right now, in the process of filing for Social Security benefits. They are screwing me.
Share Your Story
It seems everyones talking housing these days.
Heard from a girl whose home is on the market for $80k. $80k and her buyer w/the FHA loan is nickle and diming her for every little thing in the house. So you kind of get the idea she could barely afford it. She’s trying to get the deck painted. I’m wondering what that has to do w/safety or value. The seller did tell me the money she put into updating the house trying to make the sale go through. I thought is was significant considering the sale price.
I found that story really interesting because if you try to do that w/homes 3x that value they get really p.o.’d and suggest that even a furnace at the end of its life isn’t something that should reduce the sale price. Even the lawyers will advise you that you shouldn’t be making adjustments for every little thing. Why do I feel like I’ve been marked for extraction?
This article seems to contradict others that downplay California’s foreclosure rates in comparison to other areas that showed larger recent increases. On an absolute basis, California has many of the highest foreclosure rates in the country.
Today’s foreclosure grounds zero are tomorrow’s Oil Cities.
April 26, 2012
US Metro Foreclosure Activity Up In 1Q From 4Q - RealtyTrac
DOW JONES NEWSWIRES
The number of foreclosure filings in most U.S. metropolitan areas in the first quarter increased from the prior quarter, but foreclosure activity still decreased for most major cities on an annual basis, according to the latest report from market researcher RealtyTrac.
“First-quarter metro foreclosure trends were a mixed bag,” said Chief Executive Brandon Moore. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter–an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”
First-quarter foreclosure activity increased from the fourth quarter in 54% of the nation’s 212 metropolitan areas with a population of 200,000 or more. However, 64% of these areas saw a decline in foreclosure activity on a year-over-year basis.
Similarly, 26 of the nation’s 50 largest metropolitan areas experienced a quarter-over-quarter increase in foreclosure activity in the latest period, while 33 of these areas saw fewer foreclosure filings on an annual basis. Pittsburgh saw the biggest sequential increase at 49%, followed by Indianapolis’s and Philadelphia’s sequential increases of 37% and 30%, respectively.
Stockton, Calif., posted the nation’s highest metropolitan foreclosure rate last quarter. One in every 60 Stockton housing units had a foreclosure filing during the quarter, more than three times the national average. There were a total of 3,912 Stockton properties with default notices, scheduled auctions or bank repossessions in the latest period, down 13% from the prior quarter and down 19% from a year earlier.
Nearby Modesto, Calif., had the second-highest metropolitan foreclosure rate, with a rate that was fractionally lower than Stockton’s. RealtyTrac said 10 other California cities were among the metropolitan areas with the 20 highest foreclosure rates last quarter.
The Las Vegas-Paradise area had the eighth-highest nationwide foreclosure rate; one in every 82 housing units had a foreclosure filing last quarter. The area saw a substantial drop-off in foreclosure activity in the latest period, with foreclosure filings down 26% from the prior quarter and down 61% from a year earlier.
Among the nation’s 50 largest metropolitan areas, the Riverside-San Bernardino area in southern California registered the highest foreclosure rate last quarter. One in every 62 housing units in Riverside-San Bernardino had a foreclosure filing during the quarter, also more than three times the national average.
I wouldn’t dispute the numbers…they are indisputable.
However, my read on the situation is a bit different. Florida has ~22% of all their loans non-current, but they have been slow playing the foreclosure mess, so their foreclosure rates are not as high as they should be based on the level of distress.
California has now about 9.6% of their loans non-current, and the state continues to allow foreclosures (unlike NV that put on the brakes–which helped Vegas per the article). As such, where California was in the top 5 of all states with respect to non-current loans a couple of years ago (among the worst), it is now close to the bottom third.
Non-current loans are the fuel for the foreclosure fire. The lower the foreclosure rate, the longer the fuel lasts.
We all are quite critical on shadow inventory, and rightfully so. It prolongs the inevitable process of clearing the distress through the system.
The high foreclosure rates combined with falling numbers of non-current loans indicates a market that is working off it’s shadow inventory.
A low foreclosure rate with high level of non-current loans indicates a market that is holding back foreclosures and still has a high level of shadow inventory to come.
Overall, the housing story of the next couple of years will increasingly be about non-judicial states (like AZ and CA) and judicial states (like NY and FL), and how their path through the mess differs.
The other number I pay attention to is vacancy rates, which is an indicator of overall demand for housing in a market generally. The new data should be coming out in the next few days for the end of Q1. I’ll post a link when the US Census releases it.
The other number I pay attention to is vacancy rates, which is an indicator of overall demand for housing in a market generally. The new data should be coming out in the next few days for the end of Q1. I’ll post a link when the US Census releases it.
ISTR reading that the national homeownership and rental vacancy rates are running well above historic levels. Especially the homeownership rate.
Apartment vacancy seems pretty low at this point according to REIS.
http://www.reuters.com/article/2012/04/04/us-usapartmentmarket-idUSBRE83305720120404
For me, given the demographic shifts underway in this country, I try to evaluate current homeownership rates by age cohort (to try to tease out cyclical changes vs. secular in the overall homeownership rate). In that regard, what the recent data shows is here:
http://www.census.gov/hhes/www/housing/hvs/qtr411/q411ind.html
From Table 7:
Under 25: 22.7% Down Y-o-Y
25-29: 34.1% Down Y-o-Y
30-34: 49.6% Down Y-o-Y
35-39: 58.4% Down Y-o-Y
40-44: 65.8% Down Y-o-Y
45-49: 71.2% Same
50-54: 74.2% Up (marginally)
55-59: 77.8% Down (marginally)
60-64: 80.4% Up
65-69: 81.3% Up
70-74: 83.8% Up
75+: 79% Same
Using 1990 and 1995 as “normal”, those under 25 is significantly above “normal” today, which in 1990/1995 was ~15.5%.
Homeownership rates for age cohorts from age 25 through age 59 are all below 1990/1995.
Age cohorts from 60 and up are above 1990/1995 (for instance, 75+ used to be in low to mid 70’s, now at high 70’s. The most striking difference is in age groups 70+, where the difference is several percentage points higher today than 1990/1995. From 60-70, it’s pretty close today to what it was in 1990/1995.
Here’s the historical data going back to the 90’s:
http://www.census.gov/compendia/statab/2011/tables/11s0987.pdf
The most vulnerable groups to falling farther are obviously the under 25 crowd, where the most likely to be in a position to become homeowners are in the 30-55 age groups. 55+ are relatively stable for the most part.
Take a look at the data for yourself, but if you take 1990/1995 as an appropriate target, I think the overall number (aggregate homeownership rate) could be overshooting to the downside around now.
“A low foreclosure rate with high level of non-current loans indicates a market that is holding back foreclosures and still has a high level of shadow inventory to come.”
If the early-to-mid 1990s CA situation is any guide, we have a few years to go before prices bottom out. It took five years, from the end of the early-1990s recession (in 1991) until 1996, for housing to find a bottom, and this bubble was so much bigger, I’m guess five years (2009 + 5 = 2014) will just be enough to show how often the serial bottom callers can get away with misses before they are ignored.
CIBT-
One major difference though between the 90’s and now is that construction continued much more significantly in CA during that housing recession. It has pretty much stopped in CA this time around.
Based on the non-current loan numbers I’m seeing relative to the pace of inventory clearing, I would generally peg the bottom sometime in 2013, with the coastal markets perhaps showing improvement in prices as soon as the end of 2012, and inland perhaps delayed until the middle-end of 2013.
By the way, I know you’ll find this aggressive. There is an interesting “test tube” case going on right now in Nevada.
Nevada was foreclosing like mad, until they passed a law that stopped the foreclosures in their tracks. We are now hearing of homebuilders who have waiting lists for homes (going from selling 1 home per month to 12 homes per month). The change happened quickly…within a few months of the foreclosures stopping.
My view generally is that 1) foreclosures and other distressed sales have been dominating most markets, especially in non-judicial states (recent data put short sales and foreclosures at morethan 60% of the sales in CA); and 2) once the foreclosures burn themselves out, sale inventory will dry up.
Supply and demand would dictate that at a certain level of demand, if you reduce supply, prices will rise. Today is seems likely that demand will not go down much from where it is today, but based on the non-current loan reductions in CA, and the number of those distressed sales that are occurring relative to “normal” sales, it is likely that supply falls precipitously when non-current loans reach “normal” levels.
Yes, some people are waiting to sell until values go back up…and because of that, there will be more sellers, increasing supply, but not the instant Case Shiller goes to 0% y-o-y or m-o-m. Those sellers didn’t wait for values to hit rock bottom before selling…they are going to wait for some kind of price recovery before selling.
So, once supply dries up with foreclosures/non-current loans, it won’t rise until prices rise.
Sorry for the long ramble, but I wanted to throw out my reasoning behind my 2013 call–generally tying price bottom to non-current loans reaching “normal” levels (and thus significant reductions in distressed sales).
“…I would generally peg the bottom sometime in 2013, with the coastal markets perhaps showing improvement in prices as soon as the end of 2012,…”
I’m not sure why you expect the coast to come back first. It certainly hasn’t bottomed out first. Also, if I recall that Ivy Zelman mortgage reset schedule, the prime ARMs kept resetting all the way through 2012, suggesting high-end (e.g. coastal) supply will keep pouring into the market through the end of 2012 and beyond. People who can “afford” coastal housing also have more staying power to keep homes off the market in order to avoid selling into a bust; but eventually, every homeowner gets around to selling, and the high-end holdouts eventually hit a point of desperation where they, too have to sell.
Don’t know how much the schedule may have been changed by various top-down interventions…
“…once the foreclosures burn themselves out, sale inventory will dry up.”
That’s where we are miles apart. I see supply coming down the pipeline in the form of 6M-10M homes in shadow inventory that many folks (like you) seem perfectly happy to ignore. On top of that, there is an army of Baby Boomer home owners who are going to be seeking their exit from empty-nest family side McMansions over the next three decades, whether due to death or decrepitude.
And I see demand crippled for a generation by new college graduates strapped to the hilt with student loan debt and unable to find jobs or start families. The generation after them will be small due to low birth rates and low immigration to America, where opportunity isn’t what it once was. How the demand you are imagining will materialize to soak up the supply glut is a bit of a mystery to me.
@CIBT
Per the T2 analysis from a couple of years ago, the Option ARM reset schedule was accelerated due to negative amortization. They saw huge defaults on the Option ARMs before predicted by Zellman.
Article tonight in WSJ with a quote from Zellman:
http://online.wsj.com/article/SB10001424052702304723304577366294046658820.html
The applicable quote from Ivy herself: “We very much believe we’ve hit bottom,”
PB:
On Shadow Inventory:
1. New delinquencies are near normal (ie. the pig is in the python–see LPS “first look” data);
2. Where the current “non-current” loans are is a pretty good proxy for where the shadow inventory is;
3. In California, “non-current” loans have been falling very steadily from February 2010 (the peak at 15.3%) to February 2012 at 9.6%. If this were 2 months of data, I would feel funny drawing a line from the two points, but there are 25 data points that I’m using. In chronological order, there is only one time the number went up from one month to the next (May 2010 to June 2010), and one time it stayed the same. Every other time, the non-current rate went down one month to the next. Drawing a line from the data gets the non-current loans in California to normal by the end of 2013.
I’m not ignoring the shadow inventory, but using all the data I can to estimate when the shadow inventory has burned through in the state of California.
Home ownership rates for people over the age of 75 is 79%. The downsizing of the empty-nesters is far exaggerated. This is especially the case in California, where the existence of Prop 13 actually creates a disincentive for a retiree to sell.
The US is still growing at approximately 1% per year (3 million+ people per year), which is also the case in California (increasing in population by ~400k+ per year). We will not see a flattening of the growth in the US for some time to come–certainly not until we are through this housing mess.
There will be more renters for certain with student loan debt, which will keep pressure on rents. However, Ivy Zellman estimates that today, there are likely approximately 3 million renters who have a down payment and want to own a home.
Here is the video from CNBC from January 2012 (you can read the notes to the right that shows her estimate of 3 million):
http://video.cnbc.com/gallery/?video=3000068361
Pretty good haircut there:
County Tax Roll Details
Lot Size: 7,405
Last Sale Date: 12/21/2005
Last Sale Price: $379,000
Taxable Value: $123,729
Total Sqft.: 1,547
Year Built: 2004
PPSF at list price = $189,750/1,547 = $123/sqft
Unless that is a super nice area, it might be worth waiting another year until prices drop below $100/sqft, but if you are in a hurry, go for it! (What I would probably try: Offer $154,700 and see where your offer goes…)
That post was supposed to be a response to this one:
Comment by The UNKNOWN TENANT
2012-04-26 06:18:08
Bid at $162k and lost to a crooked realtor deal on a house that sold for $162k for the same model on the same street last year. What do you guys think @ $189,750? I am getting old and tired.
17684 W Cinquez Park Rd Jupiter, FL 33458
Foreclosure Bank Owned
…
3 days on the market and my Liar just told me they have a full price offer and a back up because wait for it…. “anything in that price range just goes right away.”
PS
I told my Liar 2 weeks ago that this house had been cleaned out and had a lock box on the door after having sat with trash in it for over 2 years. She said she called and there was no info on it yet. I had called B of A the servicer and asked them about it twice in the last 1 1/2 years and they couldn`t tell me anything and I would have to talk to the owner.
This is why I really question the benefit of a buyer’s agent. Seller’s agent is perfectly understandable. Someone who’s working specifically to get the house sold, and gets paid on a percentage of how much money they get.
Buyer’s agent though? I don’t get it. What value is added by a buyer’s agent? Title search, inspection, escrow, mortgage. Those are the 3rd party functions in the house-buying transaction. If you can find reliable parties to do execute those functions, then you can execute the transaction without another middleman.
Okay, so submitting an offer to buy with an inspection contingency. Do they sell those at MegaOfficeSuperStore? I think so.
To me, the buyer’s agent is working against me on the house price because they get paid based on a percentage of the house price too. Ultimately it’s my responsibility to make sure the transaction goes smoothly.
“To me, the buyer’s agent is working against me on the house price because they get paid based on a percentage of the house price too. Ultimately it’s my responsibility to make sure the transaction goes smoothly.”
At this point I think you are right. I have felt obligated to this Realtor because she has put 6 or 7 offers in for me over the past 6 years and showed us a bunch more than that, although I have found everyone of the houses that we put the bids on. Seeing how I have not gotten 1 of the 6 or 7 and I am pretty sure they have all gone to the listing agents buyer I think it may be time to move on. I sold my little place in 2005 without a Realtor at all. Not that it would have mattered with this house, it has a full price cash offer from an investor.
I have have found Realtors get really motivated when they represent both the buyer and seller.
If you are doing the legwork Jeff why not give it a shot? Unless you are under contract.
Worked well for me. Got a great price plus cash rebated into escrow. Smooth sailing.
I’m licensed in Ca.(So Ca)
I am no fan of Dual Agency. Many of bidding wars in my hood are from the Listing Agent in control of the offers.You’ll overpay.
I have yet to see a Dual Agency work well for a buyer. The fiduciary duty is to the seller. Period.
If you are doing all the legwork, I suggest finding a Buyer’s BROKER (the owner of the firm) and cut a rebate or referral back to buyer deal.10%-20% of their side of the commission.
Also, the relationship thing makes a big difference on getting a home. There is so much ass-k*ssing in the biz, it makes me puke.If the Listing Agent doesn’t like the Buyer’s Agent, it can make waves.
Market Pulse Archives
April 26, 2012, 10:00 a.m. EDT
Pending home sales up 4.1% in March to 23-mo. high
By Steve Goldstein
WASHINGTON (MarketWatch) — An index of pending home sales climbed 4.1% in March to reach the highest level since April 2010, the National Association of Realtors said Thursday. The index rose to 101.4 in March from an upwardly revised 97.4 in February, which represents a 12.8% gain from March 2011. February’s pending home sales index was initially reported to be 96.5. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. Sales of existing homes during the first quarter were the strongest in five years, and the trade group said the pending home sales data suggests the second quarter will be equally good.
Dow profits off 50%. Shutting factories in US and Europe
Baltic Dry Shipping still in the toilet.
Things that make you go “hmmm?”
It’s no biggie, because stock prices are up, up, and away!
Finally just a bit of movement in Colorado. It’s a foreclosure but it’s not trashed. It’s in the old neighborhood we had our house built back in 1997…in fact if you look at the pictures the weird orange thing behind it is my old house (it wasn’t orange when we owned it). The asking price is from about 1999…it was build new in 1997 for under 150k. I was there when it was built, I know all about it and its floorplan…it was originally owned by a son of the locally famous CU football coach McCartney who I think became one of the founders of Promise Keepers. We talked occasionally but we weren’t close. I’m just psyched to see something in Colorado for 90s prices that’s not trashed.
Now the wait for 1996 prices, which would be about $120k for this.
http://www.realtor.com/realestateandhomes-detail/1610-W-135th-Dr_Westminster_CO_80234_M21803-48414?ex=CO540361932
Ohhhhhh, the Promise Keepers! Have I got a story for you. Pour yourself a cup of coffee because this is a good one.
Back in the late 1990s, there was this fine day when I was sitting at my computer, minding my own business. E-mail came in, it’s from the old college beau, and oh, was it interesting.
He’d had quite a path through life after college. He’d gone on for the MBA and was working in marketing in NYC. He wrote me once while I was living in Pittsburgh and I really wasn’t interested in taking up with him again. Let’s just say that I’d gone in a different direction after college.
Well, in the e-mail, I learned what happened with marketing in NYC. He chucked that career and enlisted in the Coast Guard.
Nothing wrong with the Coasties, my dad went partway through their academy and then got a wartime commission, but why enlist if you have an undergrad and professional degree? Officer, boy, officer!
E-mail went on to say that he was working for a DC area defense contractor, was in the USCG reserve, and was a volunteer firefighter. “I’m saving lives!” he exclaimed.
Seemed a bit presumptuous to me. The fire service isn’t too big on bragging, from what I understand.
Oh, he also did a lot of bicycling and that sort of interested me.
But the part that nixed my interest was when he said he was a Promise Keeper.
I’ve meet a few. Most were decent guys.
The thing about PK is that it struck me as a personality cult thing. I think that once coach McCartney bowed out of the movement it lost all it’s momentum. Another problem it had was that the different flavors of fundamentalism that came under its umbrella were distrustful of each other (over theological differences), or at least that’s what my fundy PK co-workers told me.
What didn’t surprise me about former boyfriend’s joining the PK movement was that it seemed to fit well with the bossiness I used to experience back in college.
He was the sort who seemed to feel the need to tell me what and how to think. And, yes, I went along with that sort of thing when I was in my late teens.
Then I got out into life and found that I had a perfectly functional brain up there. And that I could use it to think my own thoughts in my own way.
So, when old whats-his-name re-appeared via e-mail, proclaiming his membership in a “submit to your husband” kind of group, let’s just say that my interest went through the floor.
FWIW, I don’t think that they put a whole lot of emphasis in the “submit to your husband” theology. In fact, it’s my opinion that in fundy circles, they mostly give lip service to that stuff.
Case in point: I have a female fundy relative. If you asked her if “submits” to her husband, her answer would be an emphatic yes. The funny thing is that she’s the one who “wears the pants” in that household and who makes all the decisions.
As in all things, your mileage may vary.
Is that the same coach who used the 5th down to beat Missouri back in 1990 and eventually win the national college championship for Colorado?
I don’t follow college football, so I have no idea. But it sounds familiar and would go with the guy’s reputation. When people found out I lived next to his son (who was also a high school coach locally) they seemed to think it was a big deal.
A fake clipping call on Notre Dame that negated a 92 yard Rocket Ismail punt return for a touchdown run in the Orange Bowl also helped to preserve CU’s extremely fortunate season.
If you’re the kind of person who has to tell people you keep your promises, you’re not.
It is not necessary to join a group called “Promise Keepers” to be a promise keeper. Nor is it necessary to join a group called “Christians” to be Christ-like. In fact, it more often than not leads to a life of hypocrisy. There is, however, a way to become a promise keeper: Keep your promises. Oh, and to become Christ-like? Live like Christ. But, the Church won’t tell you that because they can’t make any money off of you that way.
Wondering why Fannie pulled a listing off the market. Are they trying to keep the middle from cratering while the bottom end is selling?
Wife went thru foreclosure last December. Place was offered for 200k by Fannie, then 190k. Now I notice it is pulled off market.
Not wanting to screw up the low end sales that are occuring is my suspicion as to why. Fannie may not want people to know that the demand for the middle is mostly non-existant; until you drop the price down to very close to what the bottom end is selling for.
So the $200k property is only “worth” closer to $100k. What does this say about the 100k properties that are selling with multiple offers and above list? I think they would not be so hot if Fannie did not selectively pull some of its listings off market.
So are they manipulating the market? Or are they getting ready to bulk sale it? I am guessing the former.
Polly would you still suggest I park my $avings in a small low end home because whatever happens to the price; it will reduce our monthly expenses?
My lease is up in November. This gives me a little time to think and see how fast $avings disappear whilst renting at 1k/month and not having any rental income to offset this cost. And observe Fannie’s actions. If it was not our old house I would not have noticed it was pulled off market so quickly. I see others that they let sit on market much,much longer.
Why do you care about a house that your wife used to own? It should have no more meaning to you than any other house.
And why would the fact that a listing for a house your wife used to own was pulled off the market make any difference in what you should do with your money. Don’t spend any of it. Live on your income what ever it is. Write down every penny either of your spend and review the totals by category and the specifics every week. Figure out what your lowest income would be (imagine your wife gets the back injury you have and that you do lose your teaching certification and get bumped down the priority list by certified (recently laid off) teachers). How can you best use that money to reduce your costs so you can live on that money? My guess is a small house in the school districts you want your kids in is the best use of the money, but it might not be enough to get your family stable. This is your life, Mike. Take some responsibility for it.
Living on our income is not possible. Health care premiums/plus medication costs, while possibly reducible, have run us 20k per year over the last decade. Until I can procure a job money will be bled; but I plan on doing just that.
The house is relevant, not because my wife once owned it, I understand that irrelevance; it is relevant because I want to know why Fannie pulls some listings off market but not others.
i just happen to think they do not want the middle prices cratering while the low end is cooking for them.
I just happened to notice old house’s absence perusing the homepath website where Fannie unloads its inventory. It was there, nobody bought it, and now it is gone, and off market. That question seems pertinent to the general discussion here.
I want to know if I should, in the interest in my family, (not to be like the Donald) pull the trigger on a small home for under 100k. I would like to see some semblance of fair price establishment before commiting to more RE; as it has worked well for me and not so well for me in the past.
But could be the price is not the biggest deal if buying a house lowers the monthly nut by $800 bucks give or take.
Needing a job thing: that is why I am going to get a masters. It will either be in ELL or Special Ed. Cuz that is where I am seeing job openings. And I can do a local internship/practicum where I plan on standing head and shoulders above other potential candidates.
Seeing the house we used to live in pulled off the market gives me pause. that is why I asking about this practice. And trying to pay rock bottom price for a home I don’t have to pay 1k a month seems prudent.
Holding on to every penny and buying a small house is a head scratcher. It is one or the other; can’t have it all, can I?
I know you have my kids’ interest at heart; I respect that; but I have managed my life without the HBB as an adult for 20 years. So I am at a crossroads. Does not make me irresponsible; I am actually seeking decent advice instead of acting kneejerk style, which (unfortunately, as it turns out), has worked fairly well for me in the past thanks to RE appreciation and slumlording $$ extraction.
Not expecting it to be so easy in the future. Giddy to get out of Prineville without losing $$ to pay for my wife’s recent surgery
Having a paid off house could reduce the need for future income.
“Living on our income is not possible. Health care premiums/plus medication costs, while possibly reducible, have run us 20k per year over the last decade.”
Then this is your problem. All your energy should go to fixing this. I don’t know how. Only you can figure out what combination of lowering your costs and increasing your income will work. But you should know all of this to start:
The exact details of the charity care policies of every hospital and non-profit medical service provider in your area. Some of them provide discounts for people earning up to 400% of the poverty level.
If any of your drugs are on-patent prescriptions, you need to contact every company and find out if they have an assistance plan for low income patients.
The exact details of all the ways low income adults can get subsidized health insurance in Oregon. Is there a high risk pool you can join? What is Oregon doing to implement the ACA and will any of it help you sooner rather than later? Can you get any of your care at public clinics?
What is the cheapest way to get that master’s degree you need that won’t require any borrowing and lets you take on at least as much work as you do now?
What can your wife do to increase her earnings or bring benefits to the family? A group insurance plan would do wonders for your family even if it meant a pay cut.
Probably a few more, but that is a good start.
Thanks. Haven’t followed through on some of those ideas; but I should print that out it is so concise and will save our bacon.
I would advise trying to get a benefitted muni/county/state job, but those aren’t easy to get these days.
FYI we are finding that getting medication from Canada works reasonably well and the price is great.
Mike,
As I’ve mentioned many times before, Phoney, Fraudie, Skank of America, $hittyBank have been playing games with inventory BIGTIME. It’s a shell game where these houses disappear for as long as 3 years only to reappear, then move over to SkankOfAmericas books, then disappear.
At the risk of sounding like a reincarnated James Angleton, I’m observing evidence that there are paid operatives/proxies on all media channels who I believe act on behalf of the Federal Reserve moneychangers or possibly foreign central banks. There are some who message on various internet sites and they are there around the clock championing specific causes and attack any dissent. Round the clock. They may even be international (UK bank, etc). There is no possible way one individual can do all that media work in their spare time. No way yet I see it every day.
Go ahead and tell me I’m nuts.
There are some who message on various internet sites and they are there around the clock championing specific causes and attack any dissent. Round the clock.
I’ve observed those folks on our local newspaper’s site. And on the HuffyPo. Seems as though Arianna has created a magnet for them.
Paid proxies AZ.
championing specific causes and attack any dissent. Round the clock.
“makers vs takers” “producers vs parasites” “50% pay no taxes” “why do you hate the rich?” “blame it on the big bad corporations”
“why do you think the rich are evil?” “why do you want to punish the rich?”
YAWN
Them too Rio but I’ve come to the realization that those rantings are diversionary as financial enslavement through debt transcends all of it. Their goal is to keep everyone borrowing, to hell with the personal consequences.
If true, wouldn’t all of this amount to felonious crime?
Well GS….. we are talking about treasonous money changers aren’t we? To characterize it as felonious is putting it lightly.
http://www.bloomberg.com/news/2012-04-26/pending-sales-of-u-s-existing-homes-increased-4-1-in-march.html
2 Regions up
2 Regions down
“2 Regions up
2 Regions down”
Conclusions:
1) Housing has bottomed.
2) Real estate always goes up.
3) Buy U.S. houses and homebuilder stocks now, or get priced out forever.
My conclusion:
During the Bubble, all markets rose together
During the crash, all markets fell together
Before broad based recovery, things will be choppy–data will be mixed depending on where you are.
US headed for the “fiscal cliff” in early 2013?
For those of you unfamiliar with this topographical reference, the fiscal cliff refers not to a physical precipice but to the metaphorical one off which the U.S. economy will fall at the start of 2013 unless Congress acts. An array of tax cuts and transfer payments are scheduled to expire on or about Jan. 1. Among them, the lower marginal income, capital-gains and dividend tax rates, enacted under President George W. Bush and already extended twice; the two-percentage-point reduction in the employee portion of the payroll tax; and extended unemployment benefits.
At the same time, an automatic $1.2 trillion cut in discretionary spending (both defense and non-defense), as dictated by the Budget Control Act of 2011, will kick in because the supercommittee appointed to find such savings punted. All told, it’s being advertised as something akin to, well, a “100- year flood.”
By some estimates, the combined force of these tax and spending measures will slash several percentage points off growth in 2013 and 2014.
Not everyone is buying that analysis. Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut, says a share of the fiscal-cliff-hanging is based on a flawed Keynesian perspective that “all austerity is bad for the economy.”
http://www.bloomberg.com/news/2012-04-25/is-fiscal-cliff-a-keynesian-topography-mistake-.html
If past performance is any indiction all of these cuts will be avoided while the FedRes continues to conjure money.
Yes Stephen tell us about England, Ireland, Spain and Greece.
Gawd…. the realtors are still out there lying to the public about housing.
http://www.marketwatch.com/story/pending-home-sales-at-23-month-high-in-march-2012-04-26
Naked Capitalism unleashes a downpour on the housing bulls’ parade. Complete with thunder and lightning:
Top Experts Diss Housing Market Bullishness, Foresee Protracted Headwinds
It’s all about creating a sense of urgency, a fear of being left out, of missing a golden opportunity.
It’s what sales droids do.
LOSER!
The correct spelling for internet insults is LOOSER!
DoH! pwned!
HGTV has been rerunning as many shows about overpriced RE as they can.
Just watched 2 shows last night with young couples (who ARE these people?!!!) with half-million dollar budgets for a house!
If I’m going to watch fantasy programming, it should be either SciFi or maybe a Batman movie (live or animated). At least they aren’t pretending it’s real.
how much a month?
I think the government needs to send me $50K bucks.
Just call it my “2025 Federal Income Tax Refund (in advance)”.
Local company runs ads on the radio looking for volunteers for “Clinical Studies”/drug testing. They pay you to be a guinea pig.
Makes me wonder how the clinical trials for “Viagra” and “Cialis” were run. Did they actually pay those guys? Who got to check the drug’s “effectiveness”? And how did they check it? Peter Meters? Stretch Gages?
And where? In a strip club, with gay guys as the control group?
(Yeah, I’ve got way too much time on my hands today…….)
All you cheap skates ante up.
Must. Have. HBB.
+1 yo mugzter.
R U a principal? Me wife just told me there are 7 retirements this year in Poway. Could be a good opportunity to get into a great district at the point when things look most dire; eventually even the currently defunct CA economy’s outlook will improve, if we all keep the faith…
Realtors Are Deluded Drug Addicts®
Stock market doing half it’s average volume is being managed by the large funds with retail not playing, most still burning.
When retail returns can you imagine the financial planner’s bonuses due to his “brilliance”.
Except Toronto, most of Canada’s housing market has stalled and has gone over the falls - a bit. Terminal velocity will happen momentarily.
Off the wall - do Americans know that they buy Canadian oil at least 15% cheaper, energy equivalent, than even their own produced oil ?
It is hard to understand why the President stopped the Keystone pipeline. Like water cutting thru mountain ranges, excess oil capacity will find alternate markets - and the product is available only once.
Even though we are selling it cheaper to the USA we Canadians would still prefer Americans to the alternative buyers.
The routing over the Ogallala Aquifer was a real problem around here, even among some “Drill, baby” Republicans.
If the Ogallala is contaminated, you can put a fork in the farm economy (IOW, the only economy) between the Rocky Mountains and 90 West latitude.
Can the oil guys promise, under the threat of immediate execution by firing squad, that it would NEVER happen, their assurances to the contrary? Yeah, that’s what I thought……
If a pipeline leaks it shut offs at the pumping /control station which would only be a few miles upstream. Only the oil from that station to the break would spill, and generally into a crevase. 10,000 barrels would be a massive spill and can be cleaned up in a couple of days.
Roughly, the USA stretches from 75 to 125. The farming area you describe above is roughly from 90 to115 - half of the continental USA !
A horrible oil spill of 10,000 barrels would be 100 tanker trucks of product.
Which farmer were you talking about putting out of business - and getting millions of dollars in compensation for a short term loss ?
Respectfully, I do not mean offence with my reply, but the general thinking of total safety has never been practical - although we should always try for it.
Just as you would not allow an airplane clearance to fly if it were faulty, neither would the pipeline operators allow a flow if conditions did not warrant it.
If the Ogallala is contaminated, you can put a fork in the farm economy
Stopping the pipeline was environmental planning genius because we need to suck the Ogallala dry before we build that pipeline. We’re almost there.
The Keystone line had alternative routes with nine years of environmental studies behind each one, along with a hundred years data by Energy. Yes, the most direct route in one state would have taken it through the Ogallala, but other routes would not have.
Genius ? I disagree - politics.
Anyway, when North America runs out of oil why not just use the line to pipe water into the reservoir from Canada ! !
By not agreeing you have also locked in newly found northern US oil as well for the time being.
Just as we on HBB have our comments about realtors and wall street, so do I about the undo influence a bunch of ill informed actors in Hollywood have on political directions both in Canada and the USA in this and other matters.
Genius ? I disagree - politics.
I’m not against the pipeline. My sarcastic point was the aquifer has been almost run dry. To “protect” it now is a little late. Once it’s gone……well it’s gone.
A few articles about Europe
Spain’s credit rating has been downgraded again
S&P cut Spain two notches to BBB+, warning that the country could have to take on more debt to support its banking sector.
http://www.bbc.co.uk/news/business-17864647
Cuts and food banks in Holland
For seven weeks, the two coalition parties had tried unsuccessfully to reach agreement on billions of euros in cuts, together with the far-right PVV on whose support the minority government relied.
The three opposition parties - D66, Green Left and Christian Union - as well as the two former coalition partners put the proposed cuts to their MPs before a parliamentary debate on Thursday evening. All five parties agreed the terms of the deal by late Thursday afternoon, Dutch media said.
http://www.bbc.co.uk/news/world-europe-17859968
Hidden away, halfway down a busy street in one of Amsterdam’s less recognisable districts, an orderly queue is forming.
Downstairs, inside the stained glass community centre, the volunteers are running around frantically separating colourful donations into crates before the customers start flooding in. This is one of the city’s five food banks.
Over the past few months they have experienced an unprecedented demand.
http://www.bbc.co.uk/news/world-europe-17757235
And an article for Slim.
Louis Theroux on dementia: The capital of the forgetful
On a sunny late autumn day I visited Nancy and her husband, John, at their home in Phoenix, Arizona. We made friendly conversation in the kitchen.
Nowhere is this more in evidence than in Phoenix. For years Phoenix has been a mecca for America’s elderly, who are attracted by the year-round sun and dry desert heat.
Now increasingly it is a kind of capital of the forgetful and the confused.
Not coincidentally, Phoenix is also pioneering the way dementia sufferers are cared for and treated.
http://www.bbc.co.uk/news/magazine-17844315
And an article for Slim.
Louis Theroux on dementia: The capital of the forgetful
Oh, is that article timely!
Not so much for my family, but for a friend who just had to fire a client. She was doing consulting for him and just couldn’t get him to focus on things like why he would need a website for his own consulting practice.
Add that to the challenge of getting him to explain exactly WHAT he would do for clients, and my friend had her work cut out. Then there was the op-ed that she edited. He thought it made perfect sense, but it was gibberish. No two ways about it.
There are several in my circle who suspect that this man has age-related cognitive issues. Now we know.
ahansen and others keep talking about this debt funded party the Baby boomers all experienced.
I must have missed it. To summarize:
1973-80 = Inflation, two oil embargos, crappy job market
1981-86 = Recession (I don’t care what the government numbers said)
1987-90 = Not great, but okay. Leveraged buyout storm clouds on the horizon……….
1990-2000 = “Promotion” to supervision. Right-sizing, down sizing, hostile takeovers/private equity factory flippers, 3% raises/COLAs, 7% defacto inflation.
2001-2003 = Cavity searches, cheap credit, no raises/COLAs.
2004 = Divorce, layoff, starting from scratch at the bottom of the totem pole
2005-2007 = Almost back where I was in 2001
2008-2010 = Financial/employer implosion, another layoff, part time work
2011 = Full time employee, back to 2001 pay (not corrected for inflation)
All of this thanks to those damn union janitors.
Your experience may vary………
All of this thanks to those damn union janitors.
Now wait just a minute….
We know the janitors destroyed the school system in this country but to blame them for your personal problems is really piling on don’t you think?
??? Debt-funded party?
We early-1950’s boomers have gotten the short end of the stick throughout our lives, “enjoying” the fallout of our numbers at the intersection of a new social order and a rapidly-less-relevant infrastructure. We were too early for the innovations, too late to enjoy them once implemented, and stuck with the paying for them throughout. Oh, and blamed for the chaos as they transitioned.
I attended my 40 year hs reunion a couple of years ago and was struck by the fact that only about 30% of us owned a home. The number with what might be considered a “secure” retirement ahead was similarly disheartening– although our parents were pretty much to a person well-off. You sure it’s me you’re thinking of here, gulfie? I’m pretty militant in my protestations….
I’m qualified to speak on behalf of boomers. My father is a WW2 vet, European theater, I have 9 bros and sis’s(yeah I’m one of 10…. the best is last;)), they were born in 1942, 47, 50, 52, 55, 56, 58, 59 and 61. They’re all still alive, living in various areas. I can tell you that the 1 of 10 (the oldest) is the only one I can say who is “doing well” and has been living a reasonably comfortable retirement for 5 years. He was blessed with the brains and Ivy League education. The next 2of 10 would be in rough shape if it weren’t for 2nd marriages late in life. They’re just getting by as it is. The next 2 of 10 made some poor choices and one has turned it around but she admits it’s probably too late financially speaking. The other 5 of 10(including me) have been dislocated from post industrial decline. 3 of us are doing okay for now but it’s temporary. 2 of these 3 were canned after decades long service to big name companies. I was canned after just a few years from another big outfit. The other 2 are sinking financially.
The point? I’m from a family of boomers…. a big one… They aren’t the problem. Yeah they were all hippies, especially my sisters but they’re as poor as everyone else. This notion that boomers are loaded is so farcical it’s pathetic. Those born in the 50’s are doggone poor and that’s no joke.
The selfish problem in the family? Mom and dad. It’s aaaaaall about them. (and they ain’t boomers.
)
That begs the question, where is all the money if the boomers, gen x, y, and the millenials are broke and in debt?
where is all the money if the boomers, gen x, y, and the millenials are broke and in debt?
In the hands of the super-rich who took it, and who you like to defend.
SF, I just got caught up with today’s posts. I’d love to continue the free range child conversation another day. I am trying to figure out the best approach for my children. We’re thinking we will give them a lof of freedom and responsibility, but we’re still unsure where we’ll live.
For example, my wife spent age 16-17 in Amsterdam and managed the red light district & cafes, no problem. I started playing clubs downtown, on school nights, when I was 15.
Palmy, or anyone else that may know Pinellas, where would you live?
ft dot com
April 26, 2012 6:24 pm
Romney must release a credible budget
By Lawrence Summers
Political arithmetic is invariably suspect and one should always examine carefully the claims of those seeking votes. However, just as one should look at audited and unaudited financials very differently when deciding whether to invest in a company, smart observers have learnt to distinguish between the claims of political candidates and their advisers on one hand, and proposals evaluated by non-political scorekeepers such as the Congressional Budget Office on the other.
This principle has never been better illustrated than by the “budget analysis” put forward by Glenn Hubbard, an economic adviser, to Mitt Romney, the presumptive Republican nominee. In an op-ed published on Wednesday in the Wall Street Journal, he constructs a budget plan he imagines President Barack Obama might one day propose, engages in a set of his own extrapolations, then makes several assertions about it. He does not discuss Mr Obama’s actual plan or how it has been evaluated by the CBO. Nor does he defend the claims Mr Romney has made regarding his own fiscal plans.
Mr Obama has put forward a plan that would cut deficits by more than $4tn over the decade. It starts by making tough decisions on spending, bringing discretionary spending to its lowest levels since the 1960s. It includes $2.50 in spending cuts for every $1 in additional revenue. It also asks everyone to pay their fair share of taxes, repealing the tax cuts made by President George W. Bush for families making more than $250,000 and closing loopholes and shelters such as preferences for private jets, hedge fund managers, and offshore investments.
The independent CBO confirms that the plan would stabilise the debt as a share of the economy, returning us to a sustainable fiscal path. It would do that while allowing increased investments in education, research and infrastructure that are critical to stronger, shared economic growth in the years to come. By focusing on building a robust economy for the future, it expands the tax base and reduces pressures for future tax increases.
But rather than criticise this approach, Mr Hubbard ignores it – and instead chooses to invent a set of assumptions that bear no relationship to the president’s actual policies. His figures are not explained, but they apparently arbitrarily assume that the president must raise taxes to pay for spending above a level of Mr Hubbard’s choosing. This hypothetical exercise bears no resemblance to the president’s policies.
…
I looked at myself just now in the mirror and asked, “Are you an angry white man?”
The mirror kept its secrets.
ft dot com
Obama courts the ‘angry white men’
By Richard McGregor in Washington
If you talk to Barack Obama’s top advisers about US voters six months out from the November election, they will tell you that the president leads Mitt Romney with women, minorities and young people, and is way ahead on vision for the country.
In which case, some might conclude, the election is in the bag. After all, women turn out to vote more than men in the US. And Hispanics, the fastest-growing minority, favour the president by a margin of at least two to one.
In the next breath, however, the advisers admit the election will be perilously close for their boss, with Mr Romney, the presumptive Republican nominee, guaranteed a base vote of at least 47 to 48 per cent.
The difference is the “angry white man” factor. More than ever since Republicans began peeling them away from the Democrats as far back as the 1970s, white men – especially those without university degrees – vote conservative.
Running election campaigns in the US and elsewhere is both an art and a science. Much as automakers re-engineer their rivals’ best performing cars to see what makes them tick, campaign managers take apart the electorate before each new poll and then put it back together in a way that works for them.
After the 2010 mid-term congressional elections, Democrats who re-engineered their dismal returns were confronted by the fact that white working-class men had again voted in record numbers for Republicans.
The Republican party has spent decades targeting blue-collar whites on emotional cultural issues. The “guns, God and gays” theme captured the visceral distaste that socially conservative workers felt for the agenda of the Woodstock generation.
…