Bits Bucket for May 5, 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.
About Me
Name:Ben Jones
Location:Northern Arizona, United States
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It`s gonna take a lot longer to leak 10.3 million shadow inventory homes and that`s what Stanley Johnson, LPS and myself believe is a lot closer to the real number. And they are NOT all in Florida Cali and Zona.
3 years, no payments
By Les Christie @CNNMoney January 1, 2012: 4:40 PM ET
NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.
It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.
http://money.cnn.com/2011/12/28/real_estate/foreclosure/index.htm - 66k -
“The Sunshine State’s shadow inventory of 550,000 distressed homes makes up a third of the nation’s unlisted foreclosures”
“Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely.”
“LPS Applied Analytics, to between 8.2 million and 10.3 million”
Shadow properties cause some concern
By Kimberly Miller Palm Beach Post Staff Writer
Posted: 7:14 p.m. Thursday, May 3, 2012
The Sunshine State’s shadow inventory of 550,000 distressed homes makes up a third of the nation’s unlisted foreclosures, raising the specter of a price crash in such hard-hit areas as South Florida.
But a Florida Realtors report that identified the more than a half-million troubled properties, said the homes are leaking onto the market in an “orderly fashion” that will prevent sinking values.
The report, released Tuesday, defines shadow inventory as homes with mortgages 90 days or more delinquent, homes in the process of foreclosure and homes repossessed by the bank but not yet listed for sale.
“Two years ago, it was a market wracked with uncertainty,” said John Tuccillo, chief economist for the Florida Realtors. “We didn’t know what was out there or what was coming. Banks didn’t know how to deal with Realtors and Realtors didn’t know how to deal with banks.”
Now, Tuccillo said there is a bigger push to do short sales - where the bank sells the property for less than what is owed by the borrower - and the whole industry is more educated about handling distressed homes.
http://www.palmbeachpost.com/money/shadow-properties-cause-some-concern-2338893.html - 73k -
Michael Olenick: 9.8 Million Shadow Inventory Says Housing Market is a Long Way From the Bottom
Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely. For example, the Wall Street Journal published a Nov. 11, 2011 article, “How Many Homes Are In Trouble?” where values varied from 1.6 million (CoreLogic), to “about 3 million” (Barclays Capital), to 4 million (LPS Applied Analytic), to 4.3 million (Capital Economics), to LPS Applied Analytics, to between 8.2 million and 10.3 million (Laurie Goodman, Amherst Securities).
Why do these numbers vary so much? Even though CoreLogic is generally considered to have one of the best databases of loans, its estimates of loan performance and odds of default are based on credit scores, which is a badly lagging indicator. Laurie Goodman is seen by many as having the most carefully though out model, even though industry insiders are keen to attack her bearsish-looking forecast.
I have a large database of my own, and am familiar with housing and mortgage information sources. I’ve come up with my own tally of shadow inventory and have also tried to analyze — OK — take a stab at – what I call “shadow liability,” meaning the amount of money taxpayers, investors, banks, will be lose if those homes are liquidated. Assumptions using those terms are also in the attached spreadsheet. My analysis comes up with a total close to that of Goodman’s range, 9.8 million using a narrower definition than Goodman’s of what constitutes shadow inventory.
Put more simply, things are actually worse than any of the prevailing estimates indicates, although Goodman is very close to the mark. Current loss experience suggests that this figure is staggering, easily in the $1 trillion range.
Why aren’t those losses more visible yet? Well, evidence suggests that servicers are stalling the foreclosure process, not taking title to and selling these houses. For the lenders, such delay likely allows them avoid the write-offs of both the negative equity as well as the worthless second liens. More generally, it keeps the trillion dollar losses hidden. Lenders aren’t acknowledging their stall tactics, however. When people notice how slowly foreclosures are progressing from initial steps to resale, lenders point at their foreclosure fraud related dysfunction. Lenders conveniently don’t mention that such dysfunction was self-induced, instead blaming borrowers and courts.
http://www.nakedcapitalism.com/2012/01/michael-olenick-10-million-shadow-inventory-says-housing-market-is-a-long-way-from-the-bottom.html - 202k -
such delay likely allows them avoid the write-offs of both the negative equity as well as the worthless second liens. More generally, it keeps the trillion dollar losses hidden…….
If the lenders had mark to market all the bad (valueless) loans they would be out of business on Monday. So whatever needs to be done will be done until they are solvent - if they ever were. Much of finance is accounting tricks to make the books look good while not paying taxes.
What you said is absolutely true on the balance sheet end of it (the numbers end of it) and I believe it to be true on what the balance sheet represents (the reality end of it.)
If the occupant of a house allows himself to think himself clever enough to live in a house for two-three years without paying for it then he probably will begin to think of himself as the true owner of the house and will think that possibly he will end up owning the house for good if he plays the game long enough.
It useful to the bank for the occupant to feel this to be the truth because then the occupant will treat the house as if he truly owns it rather than the house being owned by the bank.
If the occupant feels he owns the house he is living in then he will maintain it as if he does own it. This maintenence will keep up the value of the house (of which the bank owns) AND HENCE will keep up the value of of the neighboring houses (of which, some of them at least, are also owned by the bank).
So it is all good - for the banks.
“$o it is all good - for the bank$.”
$ … [the beginning & the end] … $
Financial Poetica
One way lenders insure the property stays maintained during a short sale it to offer the seller several thousand dollars to stay in the house until close of escrow and leave the house undamaged (not stripped) and in broom clean condition.
In marginal neighborhoods this has become very common.
One way lenders insure the property stays maintained during the foreclosure process is not to announce the foreclosure until the very moment when the marshall (or whoever) shows up to toss their butts out.
Up until this very moment the FB is often teased with the idea that help is well on its way.
teased with the idea that help is well on its way…..
I have seen this happen more than once.
A couple of times the property was very close to closing escrow with a short sale - but then foreclosed a few days before closing would occur.
This was a couple of years ago, so maybe the banks have gotten better at one hand knowing what the other hand is doing - but I doubt it.
” …lender$ point at their foreclo$ure fraud related dy$function. Lender$ conveniently don’t mention that such dy$function was $elf-induced, instead blaming borrower$ and court$.”
The Cling-on$ have their treasure$ in boxe$, … The “TrueEnabler$” are packin’ their $uitcase$, makein’ plan$ fer their $ummer rejuvenation$ in a place plea$ant.
$ome dwell with their fear$ & fate$, “other$” … with exuberant laughter$ & $hear joy$.
Who$e laughing, “Long-Term”?
heheeeheeeheeeeheeeheeeheee
“Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.”
I reiterate my question from yesterday about whether home owners who stop paying their mortgage but continue to enjoy the value of the service stream the mortgage payments were meant to purchase will have to pay income tax on the implicit unearned income, which is the rental value of the home?
” …will have to pay income tax on the implicit unearned income, which is the rental value of the home?”
Can’t the homemoaner “lease out” said “title distuptationious” property to an “Unknown Tenant” for the grand total sum of $1.00 per month? Is it “Not-Legal” to lease to an “Unknown Tenant” who just also might happen to bee a relative of some sort? The legally signed “contract” says: “$1.00 per month.”
[can you just imagine the "Game$" they scenario-play at the Federal Re$erve Inc. $ummer Retreat$?]
Have your legal repre$entative, contact my legal repre$entative.
Now on to other i$$ue$: Wings, Suds & Celtics game starts @ 4 pm PST Sunday, … [love watchin' them "old men" play] thegreengirlsaloon [shameless plug!], eye’ll back by the pool tables
Hey Jeff: Check out 126 Magnolia Way. Paid $605,000 in 7/05 with 3 mortgages totaling $580,000. Listed for sale 12/08 for $459,000 and listing removed 1/23/10. Empty with a sign on window saying being handled by Chase, but not for sale yet. IRS has a lien for $57,000 and another lien/judgement for $21,000. Looks like original owner back in Ravenna, Ohio. When does mold set in?
One can assume there is a higher proportion of deadbeats and cheaters in single family homes than in apartments (the west coast term “apartment” is a unit in a multiplex that you rent - not own. I think the northeast term is a small flat in a multiplex that you “own.” ).
My neighbors where I pay rent in apartment complex are mostly good. The next door neighbor of my Phoenix apartment learned to follow the lease agreement and not blare cRAP noise. The apartment management told me they want to keep their long term tenants happy and many of them come home to relax and not be around noise.
Realtors Are Liars®
It Was the Housing Bubble, Stupid
http://www.cepr.net/index.php/blogs/beat-the-press/it-was-the-housing-bubble-stupid
teases:
[Bernanke] gave a speech last month in which he forgives himself and others in policy positions for being surprised by the dangers posed by the collapse of the housing bubble. He noted that we lost $10 trillion in wealth when the stock bubble collapsed and that was no big deal. Why should we have expected it to be a big deal when we lost $10 trillion in wealth when the housing bubble collapsed? He then goes on to comment on the wonders of bank leverage and financial crises.
….
By contrast, housing wealth has continued to decline. We have now lost close to $8 trillion in real housing wealth compared to the bubble peak in 2006. And, there is no plausible story whereby housing wealth will come back quickly.
….
By contrast, bubbles are simple. They sit there expanding in broad daylight. Could any sentient being miss the stock bubble or the housing bubble?
There is more. I [heart] Dean Baker.
The difference between the stock bubble crash and housing is most stock is owned by the wealthy who can afford to lose part of their wealth. Housing loses are borne by those who have much of their “assets” in the house that loses value.
Even those who bought many years ago, with good down payments, are now underwater. Some areas dropped in value by 60% or more.
And many more will fall by 60% or more as 30 years of over leverage unwinds.
Even those who bought many years ago, with good down payments, are now underwater ??
Exactly…Some, honest, hard working people have lost everything…
Being underwater and losing everything are two very different things.
Bravo, combo.
My house is “worth” less than 1/3 of what it cost me to build (for cash, myself) 15 years ago. And I couldn’t care less.
Lost everything?
Right there is part of the problem. They never had anything to begin with. You know it. I know it… Just say it.
You off the med’s again RAL ??
When you can’t refute the truth, you lob an insult. Kind of like you’re construction contract experience.
Well if they had a good down payment, then they had something. Of course, it doesn’t count as a good down payment if it’s borrowed from a family member, or taken as a cash advance on a credit card.
Partly true. Pension funds are large stockholders. I would not say the teacher who will get a smaller monthly check can afford to lose part of his / her wealth. Esp. if they bought an overprices house.
In my engineering career, most engineers I know contribute to their 401ks regularly and guess what? They buy stock mutual funds regularly. Guess what? They own stocks.
I want evidence (URLs) of what percent of stocks are owned by wealthy - but first you have to define “wealthy.”
I work with a technician who has a net worth over $3,000,000. Another one where I worked in Maryland did well in company stock and bought a very nice house with his investment.
HBB is about laughing at FBs who think RE is the way to riches. It’s also about being against the government-based home loans and CRA that got the U.S. into this mess. It’s not about class warfare. Class warfare belongs in North Korea.
In no three year period did I end up with lower net worth than at the beginning. And I’m just an engineer and I am well off. I don’t want your class warfare. You taka my money, you have to get past my Colt 45 first.
“The reason why this argument is important is that financial cri$i$ can be complicated and mysteriou$. They are hidden in complex financial asset$ on balance sheet$ that almost no one see$.”
+
“Bernanke $hould know that both $ides of his a$$ertion are $eriously mi$leading.”
PD Eastman:
“Do you like the price of my $tucco?”
“No!, No eye do not like the price of your $tucco!”
“Good-bye”
“Eye think not! … Good-bye indeed!”
All hail! “The TrueEnabler$”!
Facebook IPO:
Friends on this block please suggest the fate of facebook IPO. There is a great buzz of this stock to go to Google and Apple levels after it opens later this month. Looks like it might be offered to people at around $65-70 after is opens at around $28 for special money making wall streeters. I’m thinking of buying a couple of hundred of these.
You want to buy a couple hundred money making wall streeters?
Man! You must have cash coming out the wazoo if you can afford to buy a couple hundred wall streeters
.
The ticker symbol is going to be FB, which is enough to make me want to avoid purchasing any of their IPO.
“The ticker symbol is going to be FB, which is enough to make me want to avoid purchasing any of their IPO.”
Now THAT is funny.
A Realtor looks almost honest when compared to the Money Changers.
The stock market is a racket. Yes you can get lucky. Yes you can lose your a$$. I played that game for a long time and finally saw it for what it’s worth. It’s nothing but a casino, run primarily by a group that doesn’t care if you live or die.
It’s nothing but a casino ??
I compare it to playing 7-card stud against the house but you only get 4 cards…
“…run primarily by a group that doe$n’t care.”
Brevity = Truth
I would do some research before you decide WHEN to buy into an IPO. I don’t know where I read this but it seems 2 weeks after the IPO was the right point to make a decision on buying or not.
You can then have the euphoria die down, listen to what the analysts are saying, etc. Just because this company looks similiar to Google, that doesn’t mean it will have google’s moonshot rise.
I look at the FB IPO as going to a roulette table in Vegas, plunking down some cash on RED and the tell the dealer to spin. You might get lucky, you might not.
Is 6 months the typical grace period? I am sure they will prop it up that long although GRPN failed miserably.
Trying to $ave Face by booking @ the beginning$?
$eems like a “old wive$ tale”.
“Old wives’ tale”
From Wikipedia, the free encyclopedia:
“Such “tales” usually consist of $uperstition, folklore or unverified claim$ with exaggerated and/or untrue detail$.”
FaceBook is not mucking fuch. I think facebook tears friends apart and decreases communication more than it brings friends together. People I used to e-mail do not e-mail me anymore since I’m now on Facebook. They don’t send Facebook messages either. It is all about broadcasting events in your life. At best, you give them “likes” to support their communication.
I prefer LinkedIn. It is far more valuable for my career. I give and receive LinkedIn “recommendations” and receive “profile views” from many recruiters. Being searched by recruiters is a great thing.
I do have friends who think Facebook is the best thing since the iPhone (and I do not own an iPhone, but do own a Droid).
Is anyone here familiar with 529 Plans?
I’m wondering if it’s possible to fund an account, take a tax deduction, and then take a tax free withdrawal in the same year to pay tuition.
What happens if I use the self funded 529 account and later get reimbursed by an employer for taking a class?
Perhaps you might bee able to get yer self some dandy health Insurance too.
[ I think that's what they do @ the "local" ($25.00 per meeting) water-Di$t board$ in "Thee OC".]
529 plans are funded with after tax money; there is no federal tax deduction for these contributions. Only the earnings are considered tax exempt if the funds are withdrawn by IRS rules.
Thanks, Hi-Z.
Hi. Report on inventory here in suburban Boston (Arlington, Lexington, Concord, Waltham,and Belmont.) Lots of it but at the higher end. $500K - $700K. Some of the more costly ones are even $729K. Is n’t $729K the magic number for Fannie / Freddie?
The stuff is overpriced extremely. Keep in mind these are old houses on small lots. Lots of charm (some them) but lots of decades sometimes century old wiring, plumbing, etc….
Last year there were lots of under $400K places.
Funny yesterday someone posted a story about craftspeople / tradespeople mostly men (capenters, plumbers, etc…) getting work off Craigslist searching for just any odd job. I was wondering how much worse the economy gets before most reasonably employeed people have servants (a la India or China?) I don’t want one but maybe it will become a big growth segment. When I say reasonably employed for example say a secretary or teacher in Chicago making $45K per year and paying $1000 per month for an apartment or house.
Or Definitely Polly and Muggy.
“Or Definitely Polly and Muggy.”
Wait, what? Are you saying I am a servant-haver type, or reasonably employed?
If the latter, yes, I think I am reasonably employed.
‘The bodies of 23 people were found hanging from a bridge or dismembered in ice boxes and garbage bags in northeastern Mexico on Friday, in an escalation of brutal violence involving rival drug gangs on the U.S. border. In a first incident, the bodies of five men and four women were found hanging from a bridge in Nuevo Laredo, in Tamaulipas state just across the border from the Texas city of Laredo.’
‘More than 50,000 people have died in drug-related violence in Mexico since President Felipe Calderon launched a crackdown on traffickers after taking office in late 2006 and deployed tens of thousands of federal police and soldiers across Mexico.’
I used to go hang around Nuevo Laredo with friends a lot in the 90’s. We always felt safe, and it’s hard to imagine what those people are feeling these days. The first thing I thought about was when I was a kid; the Manson murders were a big deal. We’d watch them on TV paraded in handcuffs, with their wild eyes. What’s going on in Mexico is much worse than what we’d tolerate in this country.
Did you know that the US govt has pushed this militarization of the drug war in Latin America? Did you know that at the recent LA summit, some of the leaders tried to get the US to at least start thinking about legalization, and our president shot it down cold?
50,000 dead since 2006?
How can this be?
Did you know that Mexico has nearly a total ban of legal gun ownership?
Because banning guns reduces crime.
Or so I have been told by many in Washington DC.
In Switzerland nearly everyone adult male is required to own a gun. No widespread gun violence. Must not be the guns. Don’t tell the far left bleeding hearts this. One of their constituancies is the prison population.
If I’m not mistaken, a large proportion of the Swiss population is in the Army reserve. They retain possession of their service weapons while they are inactive.
Years ago one of my neighbors, a native of Switzerland, said that the authorities did not tolerate the use of Army weapons for anything other then intended (official) use.
“…One of their constituancies is the prison population….”
WTF? Time to switch the channel, hon. Hate to pop your bubble, but Switzerland is a socialist society.
More than 50,000 people have died in drug-related violence in Mexico…
Thanks to fertile Catholicism there’s abundant replacements.
Actually, the birthrate in Mexico has dropped to levels approaching the US. It’s about 2.6 births per woman IIRC.
But thanks for showing your true contempt.
But thanks for showing your true contempt.
+1 Never subscribed to a religious franchise.
Guns and drugs need to be legal.
Guns and drugs and prostitution need to be legal.
50,000 is approaching the number of Americans lost in the Vietnam conflict.
I have heard a few news reports over the past 24 hours on something I posted here yesterday about how a large number of U.S. workers leaving the labor force can result in a drop in the unemployment rate. I even heard Romney describe the effect in a news report.
As I heard the latest version of this account this morning, it hit me that this is going to be a recurring feature of the U.S. labor market for maybe the next two decades, thanks to an army of Baby Boomers nearing the end of their productive working years.
Some of these folks will remain productive, and continue working, which helps keep the unemployment rate low. Older workers who are less productive and cannot find work will drop out of the labor force in droves, but that will also drive down the unemployment rate. Young workers tend to be more readily employable than older ones, but; hence new entrants to the labor force will also favor a lower unemployment rate, once we get past the jobs shortage of the Great Recession. However, since the Baby Boom generation is so much bigger, exiting Boomers may offset the pace of new entrants to the labor force.
Considering all of the above factorss, it seems reasonable to expect a downtrending unemployment rate against the backdrop of a declining American labor force for years to come.
It’s not only the elderly. I was listening to Bloomberg yesterday and a guest mentioned that the young are also dropping out of labor force. Some may be going back to school. Others, who knows?
This may very well be the case. Some other things to consider:
1. How many boomers will actually retire? Do they have the nest egg to do so? If not, this negatively affects the employment ladder….takes longer for younger employees to move up and make room for new entrants.
2. Supposing the boomers do leave the labor force en mass. Are there enough new entrants coming into the labor force to maintain a healthy ratio or working : non-working (collecting benefits)? If not, how do we afford the additional overburden on SS and Medicare?
Re #2, there’s no shortage of people willing to move to the USA, legally and illegally, should there be jobs available.
“should the jobs be available” is the key to this point as well.
I’m beginning to wonder if the unemployment we are experiencing now is cyclical or structural?
I would like to work into my 70s, if I can keep my mind sharp (logic puzzles as well as my own career in software help keep my brain active). But I could not imagine traveling a lot like what I’m doing these days, particularly over 1500 miles from home base.
Even if I downsize my salary and become a 1099 consultant in Texas or Florida, I’d still bring in income. The question is if it’s reasonable to be a 40 hour a week engineer if my investment annual average gain is 200% of my income.
I love working in my field. I love the social aspects and being around others in solving software problems and making a product. I cannot imagine becoming like a cow in a pasture eating and making cowpies all day. That’s called retirement.
Did you know that the US govt has pushed this militarization of the drug war in Latin America ??
Well sure….We need to do this so we keep our kids safe…Oh, wait a moment…Maybe we need to ban hand sanitizer also…Bottom line is kids will find a way if they can…
IMO, Solution, for K-12, mandatory drug & alcohol testing for every last one of them…Screw the civil rights argument…If they new they had no chance to get away with it, many, maybe most would not do it and that may go a long way to help save the most vulnerable…Poor kids with lousy parents…
After high school, your an adult, if the country can send you to die for some radical ideology then you should be able to use a drug if you choose to do so…
50,000 dead = Vietnam War by the way…Thats how big the Mexico problem is…
What I don’t get about drug addiction is why anyone in their right mind would ever want to begin indulging in the stuff.
Show some people a picture of a person that just blew away their head with a shotgun and there is no way that they could be convinced that they should do the same.
Show the same person a picture of what happens to a someone when they’ve been on meth for a while and they will want to know how they can get hold of the stuff.
I really just do not get it.
why anyone in their right mind would ever want to begin indulging in the stuff ??
Do kids have minds ?? Ask anyone who uses drugs or alcohol when they had their first taste…Ask yourself that question…
Maybe if we intervene prior to them becoming young adults many can avoid the inevitable train wreck that awaits them…
Fear.of.me.pa’s.wrath., was the keel on me ship.
Reckon, there’s family units out there in America that don’t fit that foundation.
[ Eye's Missing Bernie Mac
]
Exactly Hwy….The kids have no fear because they know they can get away with it….Deny & lie until you die…If they knew there was “NO CHANCE” they would not get caught they may have that “fear” you suggest of pa Bernie Mac…
I was scared of my dad… which is why I left home at 17 and moved in with a bunch of potheads.
Unless you keep your kid in a crate, the fear thing will just drive them to where you can’t reach.
Prescription painkillers are a large problem in my neck of the woods. A sports injury can be the entryway into this addiction.
On the plane last night from LA to Phoenix the guy next to me loaned me his English language newspaper from Taiwan. One article mentioned the US increased its foreign aid to the Philippines this year significantly. I was flabbergasted since there is this talk of $500 billion additional defense spending cuts to be announced in January. Why is spending increased now? Are they increasing defense spending $700 billion this year quietly and then going to make a lot of noise of cutting by “another” $500 billion starting in 2013?
I love the way the word “wealth” is tossed around like dirty rag.
Most of us have never seen wealth, none of us will ever experience wealth and that is completely acceptable to me.
“Wealth”……. a word dangled out there by the money changers for all the goobers. Go get it goobers! Tear each other apart! lmao
Most of us have never seen wealth, none of us will ever experience wealth and that is completely acceptable to me…..
The striving for wealth is a fairly new idea. My parents never strove for wealth, nor my grandparents. They did strive and obtain a fairly secure middle class life style for the times.
Our vision of what the middle class life style should be is what has changed. Of course we are told daily by advertisers just what the life style should look like and we must buy whatever it is to get there.
We need to learn the difference between what we need and what we want. Understand why we want something. Knowing how much is enough is important.
Our vision of what the middle class life style should be is what has changed. Of course we are told daily by advertisers just what the life style should look like and we must buy whatever it is to get there.
I frequent a number of offices within a 200-mile radius out in fly-over country. I ‘m amazed at the level of consumption by some of the $22k/yr office ladies fortunate to marry successful men. The $40k two-door sports coupe or SUV, “flirty” clothes, teased hair, nails, bleached teeth, data phones, latte, etc., and of course there’s the assortment of family photos revealing their k-school kids who might like to attend college, but that’ll be dad’s responsibility because mom is burning through the cash on vanity consumption.
The striving for wealth is NOT a new idea. This has been part of America since the revolution. So the “American Dream” must be a new phenomenon? I think not.
Get away from the drooling envy of class warfare. That belongs in red (and drab gray) societies.
Drooling? That would be guys like you who can’t bring themselves to admit that you’re a wage slave and will die one. The war is with yourself.
No it’s not wealth. All it is, a bubble price or valuation fueled by cheap money.
Most of us have never seen wealth
Seeing as the wealthy own most of everything, yeah, most of us have rubbed shoulders with wealth somewhere along the line.
I think of it as a six degrees of Kevin Bacon sort of thing. For some of us on this board, they’re working w/0 degrees to wealth. Some of us a bit more. I’ll bet most of us wouldn’t need six degrees.
(Smile) RAL.
A dear friend with an eleven-figure (!) net worth is undergoing marrow transplants for recurring NHL next week. Ask me if I’d trade places with him….
@Oxide
Thx for thinking about my situation and doing legwork regarding what is out there in OR. I do not recall saying I was going to spend the whole of 100k on grad school, though. Just whatever part of the $$ it takes. Luckily for me; it will not cost the whole amt of money I have at my disposal. And I would end up with a better employment prognosis with said masters.
I can get a degree-mill from online school
(Don’t need the licensure as part of my program; which most include)
So it is about a year of full time; seen the online cost as low as $9,000.
However, I am a brick and mortar type of student, it is just heck of more interesting. And OSU Cascades has 3 programs that interest me. They spread it out over 2 years and it takes place either in the evenings and weekend seminars. It will cost a bit more than the bargain basement online program(or I could go U of Phoenix and blow over 20k); but degree mills….ugh.
As it stands, I like the programs you researched; only a better fit is available here in Bend. I would not have to move, living 5 miles from OSU Cascades here in Bend. I received my license here; they have a couple options for teachers who just need the degree part; not the “learn to be a teacher” part. I see ESL and Special Ed teachers who have caseloads of less than 30 kids at a time; I know places where I will be doing my practicum, and gain a marketable skill beyond just the basic k-8 elementary teacher; which sounds, and I have confirmed this thru a couple jobs teaching 4th grade, like a whirlwind of paperwork and parents to me. No way to get it done in 40 hrs/week.
@ everyone
What about selling my oil city home OWC? I trust my buyers to stick with the price even if they fall; as they are my parents and want to downsize into a single level when their time comes; and will continue renting it out now to pay the mortgage until then.
So as not to get the $$ in one lump sum; but rather just get what I need and continue to have an income(from the paper I would holding). So my $$ will paying me 4%-5% in the meantime; and I would not have to find another shack to buy. I remember my Dad doing an OWC with a neighbor growing up; selling off 3 acre avocado plot attached to our home. He eventually had the guy paying him 18%(this was in the 80s). Worked out for him.
Why would I want to do that? My buyers already do not wish to pay a broker; why would they not want a better than a lender rate and almost no closing costs? I know it could be a more risky proposition; however, it sounds a bit less sketchy with my buyers being my folks especially, than researching and finding another property for $80k (when I know the one I am selling is actually very nice, and in the “best” neighborhood in Prineville). I have seen them and as we all know they would need to be weeded out before buying one.
I could collect 20% down which would pay for the immediate needs of paying medical bills on my wife’s behalf. And then not having to give up the monthly income for the next few years; which I would be giving up if I take all the money now.
And the Oil city home I already own; it does not need any work; has a great tenant in place which the new owners(my parents) would use to pay me the monthlies until a balloon payment comes due in 10 years or so. Haven’t figured out the best amortization schedule to follow (15 yr/30 yr) or when to call for a baloon(5 yrs/10/yrs, or no balloon).
We could schedule the amortization to best meet our mutual needs; cut out the loan “officer” middleman; plus my buyer( parents) will not add risk to the equation as they would still pay the sales price even if prices crater 50%. Unlike if I did not know them in which case I would not do an OWC for lack of other resources/excessive risk.
I did do pretty well(at least not royally screwed) with a lease option; when the guy decided not to buy after two years I at least got to keep his deposit. He had at least given me 30k in deposit’s that he had to forfeit; which helped soften the blow of selling on the open market after the two year option was not exercised.
Geez mike, iffin’ dinosaurs really became birds, when they need shelter, they just fetch some twigs & build a nest.
Ain’t “Financial Innovation” Evolution$ creatin’ some awfully strange lookin’ loan phene-o-type$?
Yeah, the apes got the Hubble, but the birds is the one singin’ up high in the treeS.
Mike, my “research’ was five minutes on google.
I don’t know what OWC is.
Not being a landlord myself, I don’t know exactly what your strategy is, but it doesn’t sound very secure.
Instead of selling your house and buying a new one, why not just kick out the renters and move into it yourself?
“I don’t know what OWC is?”
Owner Will Carry.
2Banana….
I see you’re on the blog today… question for you.
You’ve alluded to your knowledge of PA, NJ and upstate NY. Can you comment on current market conditions in upstate?
PA Upstate (Allentown north and west) - Cheap housing, cheap land and low taxes. No high paying jobs.
NJ (All of it) - Expensive housing, expensive land and insane taxes. All the good jobs are around the NYC area and people still commute 2 hours one way from Middle/South Jersey. The Jersey Shore is still in a bubble. $15,000/year taxes on a nothing-special 4 bd/2bath house on a 1/4 acre of land is common.
NY Upstate - Expensive housing, expensive land and insane taxes. Absolutely NO jobs or any kind. ALL cities in upstate NY are dying. Really pretty - good for a vacation. $8,000/year taxes on a nothing house in the middle of no-where with 1 acre of land is common.
You nailed upstate pretty well. Are you from upstate? Relatives there?
I have lived in all three.
You would think that upstate NYS (with no jobs) would be cheap. Cheap land, cheap houses and low taxes.
It is exactly the opposite.
It will never recover.
It is too bad. Upstate NYS is beautiful. And has abundant natural resources (water, farming, electricity, wood, etc.). It should be thriving. It should be a great place to live, work and raise a family.
The NY state government and public unions have destroyed it.
Where in upstate did you live?
“The NY state government and public unions have destroyed it.”
Or preserved it.
“Or preserved it.”
This ^^
You really have to wonder about suburban NY. Each week I read the for sale in the city and region feature in NYT RE section. Last week there was nice house:
MUTTONTOWN COLONIAL $1,849,000
NASSAU: 1 Earle Drive, Stone Hill
COMMON CHARGE: $765 a month; taxes: $46,552 a year YEP $46,552!
http://www.nytimes.com/slideshow/2012/05/06/realestate/20120506-OTMREGION.html?ref=realestate#10
“NJ (All of it) - Expensive housing, expensive land and insane taxes.”
I have watched the masterful job that has been done by the PTB in keeping house prices in decent and good neighborhoods up over the past several years in SE Florida. I have easy access to the records in my county so I can prove what has happened here. I am pretty sure this is happening in the NYC, Boston, NJ (All of it), DC etc. areas only on a much grander scale because of the huge numbers of people and units. I am not saying there were huge numbers of people buying investment properties in the North east like there were here but I am saying the Stanley Johnson comercial played there and I am willing to bet there are millions of underwater serial refinancers who have been hidden in the shadows.
3 years, no payments
By Les Christie @CNNMoney January 1, 2012: 4:40 PM ET
NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.
In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
“California Realtor Charged With Grand Theft”
http://www.presstelegram.com/news/ci_18793070
With crooks like this guy at work, no wonder housing prices in CA are inflated by 300%.
California Realtor Indicted For Inflating Prices
http://www.presstelegram.com/breakingnews/ci_19159183
“California Realtor Indicted For Inflating Price$”
Now RAL, he pays $349 in yearly fee$ to a National Cult that gives him licen$e to perfect that $kill. Also, eye $ense$ a pattern in yer post$ again.
Idaho Realtor Charged With Embezzlement
http://www.idahopress.com/news/local/nampa-commercial-real-estate-broker-charged-with-embezzling-more-than/article_a6d58a1c-4983-11e1-ad3d-0019bb2963f4.html
The great realtor rip-off
Why is it so expensive to buy or sell a house in America?
http://www.economist.com/node/21554204
“IN BRITAIN, if you want to sell your home, an estate agent will list the property, find a buyer, help you negotiate a deal and guide you through the transaction, all for a commission of 2-3% of the sale price. In America, realtors provide the same services for roughly double the fee.”
Generally, the sales commission ranges between 2% and 3%, paid to the agent by the Vendor (seller). In addition to the agent’s fee, there will be a Vendor’s lawyer’s conveyancing fee. Both of those fees are subject to UK Government Value Added Tax (VAT) which is currently at 17.5%.
The Purchaser does not pay any real estate fees but will pay Government Stamp Duty Land Tax (SDLT) based on a sliding scale between 1 and 4%.
There is no multiple listing service in the UK although some agents share properties between themselves through individual agreements.
There is no requirement for agents to be licensed in the UK although the reputable firms will only employ those with a proven track record. There is, however, considerable Government legislation regulating the industry.
http://www.leadingre.com/England
Thousands of Japanese marched to celebrate the switching off of the last of their nation’s 50 nuclear reactors Saturday, waving banners shaped as giant fish that have become a potent anti-nuclear symbol.
Japan was without electricity from nuclear power for the first time in four decades when the reactor at Tomari nuclear plant on the northern island of Hokkaido went offline for mandatory routine maintenance.
“”
http://seattletimes.nwsource.com/html/businesstechnology/2018147043_apasjapannuclear.html
How much will Japanese competition for fossil fuels increase prices globally? Will their economy be further depressed by increasing energy costs or power shortages?
I think a lot can still be done in this country to reduce wasteful use of energy. But there does come a point where conservation produces diminishing returns.
I could understand earthquake-prone Japan shutting down all nuclear plants. Yet to replace the cleanest burning energy featuring low carbon footprint with fossil fuels seems a nightmare for environmentalists.
In Arizona meanwhile the Palos Verdes reactors hum away peacefully in the clean desert air. I am for building more of those in the U.S., which has large areas that are geologically benign.
Thousands of Japanese marched to celebrate the switching off of the last of their nation’s 50 nuclear reactors Saturday, waving banners shaped as giant fish that have become a potent anti-nuclear symbol.
The problem with oil is the political expense. However, the Japanese have now had two nasty experiences with radiation, and fusion is still too far away, but I guess there’s aways coal.
It’s a Faustian bargain. Clean, limitless power while everything is going well. But if the SHTF, many square miles remain uninhabitable for years.
The Japanese nuclear plant experienced melt-down because their emergency backup generators that were needed to activate cooling water systems were all located in the basement, and they became flooded when the tsunami hit; poor planning on their part. Now they’ll be playing craps for their energy needs, and hedge funds will be gaming them from both directions.
Actually, they flooded because the GE-built diesel generators were defective and wouldn’t start. The same generators are used in all US nuclear power facilities.
It’s been a while since I read about it, but I recall that their storm surge wall was 20′ high, but the tsunami crest was 40′ high and moving at nearly 100-mi/hr; holy chit! Anyway, a cascade of water flooded everything at ground level and below, so the submerged generators meant no pumps, so no cooling water. Again, IIRC.
LOL - I just got a warning TOS from a blog that is implicitly biased toward Real Estate in a particular metro area. I basically asked a question if a poster who is positive on the market works for a real estate agency. Well I guess my next message will be that I’m kicked off the board. I told the moderator that I’m not the only one who knows the bias of that board. Other people privately sent me messages saying the same thing.
What fun!
Give me a link. There are others here beside me and you who are happy to be truthful in a truth-challenged environment.
It’s the City-Data blog for the Phoenix metro community. The moderators are very biased and I highly suspect the biggest cheerleader on that site is the one who cries to mommy moderator to do something about stopping my posts that are negative about real estate. I just want a balanced opinion on that site. My take is that there are a lot of Canadians who are buying Phoenix properties and some of them read the blog and pay attention to the cheerleading by the RE types. I just want to warn them but I’m not allowed.