The Victim Of Our Own Creation
Readers suggested a topic on local market observations. “Report on your county. 1st: Fairfax Va - inventory still low- lots of INwesters buying around me. One chopped down all the trees- a feng shui move I guess.”
One said, “Volusia County, FL. 529 properties owned by Federal NMA. 443 currently owned by major banks: Deutsche, Suntrust, B of A, Wells, Fifth Third, among others. 437 sheriff’s sales scheduled for October. Same old shacks for sale that were listed two years ago. Some fell off the radar during the summer, but most will show back up again when the snowbirds arrive. Private equity seems to be sapping up everything that doesn’t already have granite and stainless.”
The Herald Tribune in Florida. “A recent newspaper story about the number of $1 million-plus houses that sold in August caught the attention of Kim Ogilvie, a top-selling Realtor with Michael Saunders & Co. The high-end market may be seeing a lot of sales, she noted, but more than half of the purchase prices of those August transactions were for less than the sellers had paid for the properties. ‘Buyers are still very sensitive to price,’ she said, especially when they are spending $3 million or more. ‘They are not willing to throw their money around.’”
“Yet in such an environment, and with the headlines touting price gains of 10 to 12 percent, Ogilvie said, ‘Sellers are so cocky that everyone is trying to raise their prices 10 percent. I am losing listings because they want to raise their asking prices. Some agent will get that listing (by agreeing to list at an inflated price) and then have to cut the price’ to sell the house. ‘We could see another bubble; we could be the victim of our own creation.’”
eNews Park Forest in Illinois. “Home prices in Chicago may be on the rise again, but the housing recovery is bypassing families like the Gutierrez’, who face eviction this winter. Time is running out for Domynika Pawelczak, Juan Gutierrez and their teenage daughter, who have been ordered to leave their home by early November.After the Gutierrez family began writing letters to TCF, the bank offered them a new loan less than a week before the May auction. But the offer increased the principal by $22,000, asked for $4,000 up front and reset the mortgage for 30 years again.”
“Nearly 7,000 Chicago-area families received notices of foreclosure activity in August.’It was like we had never made a payment, even though we have lived in this house for over 8 years now,’ says Pawelczak.”
The Calgary Herald. “Although the real estate market in the Phoenix, Ariz., area passed its best-before date a couple of years ago, there is still room for Canadians to lay claim to a bargain or two, says an industry watcher. ‘It’s far too late for Canadians to capitalize on the bargains that existed in 2009 through 2011,’ says Mike Orr, director of the Centre for Real Estate Theory at the W.P. Carey School of Business at Arizona State University. ‘However, prices are still going up and likely will continue to do so until a significantly greater supply comes to the market.’”
“Calgarian Evelyn Studer, an executive and single mom, first entered the Phoenix housing market in early 2012, putting in an offer on an investment property that cleared the short-sale process 10 months later. Since then, she has closed on a second rental home — another short sale — and recently put down a deposit on a recreation home that she is having built. All three properties are in Goodyear.”
“‘Now, although prices are going up, they are still reasonable. For instance, the base price of my recreational property went up more than $10,000 (US) in six weeks, but is nicer than my Calgary home and for half the price — and it will have a pool and hot tub,’ Studer said.”
The Sydney Morning Herald in Australia. “Buoyant auction clearance rates have underpinned price growth in Melbourne and Sydney this year, but instead of triggering a sigh of relief at the market’s return to health, there are fearful cries of a boom and surging house prices. Agents are having none of it. ‘Adjectives like ’solid’ are more accurate than ’surging’,’ says Paul Castran of Castran Gilbert, a Melbourne agency that sells everything from development sites and apartments to family homes. ‘The boat has left the dock and we are just at the beginning of a new cycle,’ Castran says.”
“Frank Valentic, from Advantage Property, who acts for investors and home owners buying and selling property, says the number of investors on his books has doubled in the past 12 months. ‘People have a herd mentality. When they see the market moving, they want to jump in. Investors were sitting on the fence last year. Home buyers will always need to upsize or downsize, but investors don’t have to buy so they are looking at the timing and they see growth now,’ Valentic says.”
“About 25 per cent of his investor clients are buying for super funds. ‘They are mainly at the lower end of the market, spending around $500,000 depending on the size of their super fund, rather than the family upsizers in the $1 million to $2 million market,’ he says.”
“Yet in such an environment, and with the headlines touting price gains of 10 to 12 percent, Ogilvie said, ‘Sellers are so cocky that everyone is trying to raise their prices 10 percent. I am losing listings because they want to raise their asking prices. Some agent will get that listing (by agreeing to list at an inflated price) and then have to cut the price’ to sell the house.
Prices were already inflated by 200%(yeah… don’t fool yourself…. 200%+) and now they think they’re going to find a buyer by inflating it some more?
Hey all you Debt-Donkeys looking for an exit….. DOUBLE your asking price today.
‘Mark down the summer of 2013 as a trifecta for the Flagstaff real estate market. With August sales figures now in, the market racked up three straight months with median sales prices above $300,000, according to data from the Northern Arizona Association of Realtors.’
‘The median price in August for a detached single-family house came in at $304,000 for Flagstaff and its surrounding communities. That is up 21 percent from a year ago, and the number of sales is up 14 percent.’
‘Ann Heitland of RE/MAX Peaks Properties points out on her blog that the housing supply at prices below $500,000 remains below six months based on the number of sales compared with properties on the market — houses priced at $400,000 are finally starting to sell (13 in August alone).’
‘But in the $500,000 to $600,000 range, there were just two sales and 33 homes left on the market; at $700,000 to $800,000, one sale and 25 unsold.’
Things have slowed down here after interest rates went up. Interesting that one point could put the brakes on. I get emails on foreclosures, they seem to be increasing in the last month. Meanwhile, a little spec building is going on, nothing major. I still have guys approaching me for work; any work, although the better tradesmen are busy.
Absolutely crazy. I was in Flagstaff over the Labor day weekend. I thought there might be something, uh, “special” about the place to justify high prices there. I wouldn’t pay $200k for anything I saw there. Good beer, though!
Prices are already inflated by 200% …”
Thank God for that! I’d have to write down a lot of mortgages if that wasn’t the case, and if I did that my bank just might be declared insolvent which means it might be shut down and then I would have to go out and try to get a real job.
A warm and sincere thank you goes out to all you debt slaves out there who work hard at your jobs and then WILLINGLY send to me some very large chunks of your paychecks.
DebtDonkey: Your wish is my command. Thank you Sir.
‘In Housing Smoke and Mirrors “Re-tuning the HARP”, several dissonant tones were heard in relation to the condition of the housing market. The discord has been created by the “Taper” talk and the consequent sharp rise in interest rates…The latest MBA financing data, suggests that buyers have not been forced into the market by the threat of rising financing costs. The recent fall in interest rates, after the big increase, stimulated refinancing but had no impact on purchase loans. Buyers now have understood that they own a call option which has some value. Rising interest rates are clearly weakening house prices and falling interest rates have not hit a level that is affordable; it is therefore more attractive to remain on the side-lines.’
‘The FHFA has recently reported that HARP refinancing activity fell 26% from April to May. The policy makers are clearly worried that HARP is not delivering results, in its current legal configuration, at the new higher level of interest rates. HARP is broken and needs fixing. The Treasury has also been examining the delinquency issue in relation to re-default rates amongst borrowers already in the HAMP programme[ix].’
‘The Special Inspector General of TARP (SIGTARP) also found that, of the HAMP re-defaulters, 22 % have entered into the foreclosure process[x]. SIGTARP also found the percentage of modified homeowners who end up as re-defaulters has steadily increased over time. At the end of 2009, the share stood at 1 percent and has since risen to 26 percent as of April 2013. The likelihood of falling out of the programme also seems to increase over time. SIGTARP also found that only 21% of funds earmarked for HAMP have been deployed to date; so there remains plenty of firepower to throw at this programme. Treasury is making the case for HAMP but SIGTARP is saying that HAMP is not working.’
‘The latest LPS report signals that delinquencies began to spike in June[xiii]. From May to June, the delinquency rate jumped by 9.9% to an annual level of 6.7%, which is the highest level seen since February. The foreclosure rate remained steady; which suggests that an inventory of distressed properties is building again. If these delinquencies are in Judicial States they will take a long time to show up as foreclosure sales. There is a latent inventory of distressed properties building again; and clearly the Federal Reserve and Federal Government wish to modify HARP and HAMP to deal with them.’
http://econintersect.com/wordpress/?p=40785
Did a drive-by on a foreclosure property here in Central Florida, a 3/2 built in 2003, very good condition, 2800 square feet on 4 acres of land. Last sold (some lucky bastard ’snapped it up’ at the ‘bottom’!) in 2010 for $250,000, now priced at $189,900. OOPSY! That is about $67 sq/ft and headed lower. Also seeing a marked increase in the number of ‘Bandit’ signs in the streets- both for RE and for employment.
but but but…. it’s the land!!!!!
I guess it’s not “the land” either.
Meanwhile, in many places in western WA you can’t even buy 4 acres for $189,900.
Home Sales Contracts Slow, But Strongest August Since 2006 As Supplies Tighten
The NAR reported a decline in the number of contracts to purchase existing homes in August, with a seasonally adjusted decline of 1.6%. That was better than economists’ consensus expectations of -2.3%. Fooled again! Too pessimistic again. Economists don’t seem to be able to get a handle on the nature of housing bubbles.
http://wallstreetexaminer.com/2013/09/27/home-sales-contracts-slow-but-strongest-august-since-2006-as-supplies-tighten/
….impending doom !
http://www.youtube.com/watch?v=PQsf3OGET3U&feature=player_embedded
“That was better than economists’ expectations of -2.3%.”
Q. Why do economists include decimals in their forecasts?
A. To demonstrate to the world that they have a sense of humor.
So NAR’s estimate was sunnier than expected huh? Surprise surprise bu t NAR has a filthy reputation of lying to the public. In fact they lied about housing sales every single month for 5 years running…. And they call it a “mistake”. No NAR… you corrupt bastards don’t make mistakes like that.
http://gantdaily.com/2011/12/14/national-association-of-realtors-inadvertently-overstated-existing-home-sales-for-years/
I’m visiting San Francisco and leased a place through airbnb. There’s a ‘Sold’ sign in a flat next door. I found the propert in Redfin:
Beds: 1
Baths: 1
Sq. Ft.: 867
$/Sq. Ft.: $917
HOA Dues: $316/month
Property Type: Condominium, Top Floor, Unit Below
Year Built: 1939
Community: Mission Dolores
MLS#: 410786
This is a trendy neighborhood for Silicon Valley engineers; I am not quite sure how theh can afford such places
This is a trendy neighborhood for Silicon Valley engineers; I am not quite sure how theh can afford such places
They lucky ones whose stock options at the startup panned out. The not so lucky ones live in shacks with muchos roommates or commute long distances
I’m in Phoenix today. Part of the 101 in the east valley is closed for maintenance. Drove south on Price rd past the Chandler Mall. Remember that loft building that was under construction at the top of the bubble in 2006? It is still partially constructed. Looks like a typical partial constructed building you see in old Mexico. It is up for sale. Sign on the building. I suppose they were aiming at marketing lofts for people who have too much money that they had to live by a Mall. Grotesque consumption life.
“Consumer society” and a government that spends other peoples money. We gotta turn both around.
Aren’t malls pretty much dead now? It’s all about big box consumption centers.
I go to the outdoor malls to eat, mostly. Lunch at Irvine Spectrum. Or in Phoenix it was usually eat dinner at Desert Ridge and followed by browsing at the bookstore…
Aren’t malls pretty much dead now? It’s all about big box consumption centers.
Some of those are dying now too and the fad seems to be the “Outdoor Mall” aka fake main street but with only food and entertainment and Apple stores, none of the other stuff that was on real main streets back in the day.
‘The rate of homes in San Diego going under contract within two weeks — from listing to escrow — slowed from 36.1 percent to 31.6 percent, according to Redfin’s Fastest Markets Report for August 2013. Compared to other markets, San Diego’s market slowed the most from July to August.’
‘Nationwide, home-selling speeds fell for the fourth month in a row. In August, 27.9 percent of homes went under contract in less than two weeks, down from 29 percent in July and 33.7 percent in April.’
‘Las Vegas sped up the most from July to August. In Las Vegas, 24.7 percent of homes went under contract within two weeks in August compared with 18.3 percent in July.’
‘Sacramento slowed the most in the year, dropping from 40 percent to 34.1 percent.’
‘San Jose remained the fastest-moving market in August, with 43.6 percent of listings under contract within two weeks despite slowing slightly from 46.1 percent in July.’
‘International sales of U.S. residential real estate dropped by $14 billion to $68.2 billion, according to the National Association of Realtors’ analysis of data from March 2012 through March 2013. That’s down from $80 billion spent by foreign buyers the year before. ‘As prices increased and rules changes, that has slowed down. Foreign national loans are limited to houses being used as second homes, so they can’t be rented out,’ said Diann Tonnesen of Las Vegas Living. ‘There seems to be more stability and inventory in the market. It started happening around the beginning of the year and now we are seeing the market change.’
‘Most of these buyers want to do some financing, but they can’t get it,’ Tonnesen said. ‘If they could get financing at even 5.0 or 5.5 percent with 40 percent down, that would be OK, but it’s not available. All the private lending has dried up entirely, so buyers from Canada and Australia are making inquiries, but there’s not a lot of purchases.’
‘Amber Anderson of Pacific Sotheby’s International in San Diego said that she has seen an uptick in buyers coming from China. She said a large part of the allure for her clients is how relatively easy it is to buy U.S. property, as compared to other countries where prices are high or it’s nearly impossible to buy.’
‘My international buyers are here looking for that second or third house. Most places in the world you can’t buy property like you can here, where there is a Multiple Listing Service and there are searchable properties. You can find a house on a bluff in La Jolla and whether you’re from Switzerland or China you can buy it unless you’re on some kind of blackout list,’ Anderson said. ‘I tell buyers here that your competition is not just down the street. They’re somewhere halfway around the world.’
All the more it makes T Bills and quarter ounce American eagles more attractive. Got popcorn?
Yep. San Diego’s housing market is slowing down to a permanently high plateau!
But so long as the Fed delays its taper forever, or at least never stops snapping up $40 billion a month in mortgage-backed securities, San Diego area home owners need never again worry about price declines.
P.S. Though a 1-month price increase rate of 2 percent from June to July may sound low, especially compared to the recently reported 2.8 percent increase from May to June, a 2 percent monthly rate of price increase translates into a 27 percent annualized rate ( (1.02^12-1)*100 = 27%) — HIGHER than the most recent year over year increase. And a 2.8 percent rate of monthly increase occurs at an eye-popping annualized rate of 39 percent!
These rates of increase are clearly unsustainable, suggesting we may have just witnessed the maximum price increase velocity that will be realized in the second housing bubble tsunami wave to wash in from the Fed-engineered financial earthquake.
San Diego home prices leveling off
By Jonathan Horn
1:38 p.m. Sept. 24, 2013
Move-up buying is going through a revival. Rising home prices have allowed more property owners to get out of negative equity, allowing them to sell their homes for a profit or at least break even. Misael Virgen/ UT San Diego Move-up buying is going through a revival. Rising home prices have allowed more property owners to get out of negative equity, allowing them to sell their homes for a profit or at least break even. Misael Virgen/ UT San Diego
Home prices San Diego County began to flatten out this summer, but their jump over the last 12 months is the largest in any yearlong period since March 2005, the S&P/Case-Shiller Home Price Index showed Tuesday.
Home prices in the county rose 20.4 percent from July 2012 to July 2013, trailing just three other cities included in Case-Shiller’s 20-city index. San Diego beat the national average of 12.4 percent.
But from June to July, prices grew 2 percent, which is a decline from the 2.8 percent they rose from May to June, according to the index, which lags two months.
David Blitzer, chairman of the index committee at S&P Dow Jones, said an increase in interest rates in May could be a reason for demand for housing to decline. All 20 cities on the index saw monthly increases, but fifteen of those gains were smaller from the month before.
“More cities are experiencing slow gains each month than the previous month, suggesting that the rate of increase may have peaked,” he said in a statement. Blitzer noted that the Federal Reserve’s announcement last week that it would not begin to taper its stimulus program that keeps long-term interest rates low could provide a temporary boost to the housing market.
…
Check this out PB:
http://www.zillow.com/local-info/CA-home-value/r_9/#metric=mt%3D34%26dt%3D1%26tp%3D5%26rt%3D6%26r%3D9%252C12447%252C54296%252C33839%26el%3D0
If it’s still formatted the same, it shows the month-to-month home price increases by City (declining).
Toward the bottom are most coastal communities.
Sunnyvale is actually DOWN month on month.
San Jose and Santa Clara up less than 1%
Mountain View and Cupertino up 1%
So Cal coastal markets up but a bit more, but still about 1.5% or below generally. San Diego is up 1.7% month on month.
Inland markets however, are still rising very quickly.
The coast was first to move, and the ripple moved inland.
The question for the coastal markets is “what’s next”?
“Anderson said. ‘I tell buyers here that your competition is not just down the street. They’re somewhere halfway around the world.’”
Such hubris.
Well, EVERYONE wants to live in San Diego because its SO different there. I think its the vibrant culture and the effervescent theatre scene. And the proximity to Tijuana. They’re not making any more Tijuana, you know…
They aren’t making any more medical marijuana, either. Something tells me at least some folks are missing the former mayor!
“…a hands-off order by ex-Mayor Bob Filner…” An accidental funny!
Acting Mayor Gloria reverses pot order of former Mayor Filner
By Tony Perry
September 12, 2013, 8:00 p.m.
SAN DIEGO — Acting Mayor Todd Gloria has reversed a hands-off order by ex-Mayor Bob Filner involving medical marijuana dispensaries.
Just days after taking office, Filner ordered code compliance officers and police officers to stop issuing citations to dispensaries.
In many cases, citations were the first step toward litigation by the city attorney to force dispensaries to close. Filner also opposed such litigation.
The city does not have an ordinance indicating areas where pot dispensaries are allowed. As a result, all of the marijuana dispensaries are operating outside the law.
Along with ordering that no more citations be issued, Filner forwarded a proposed zoning ordinance to the City Council designating certain areas for medical marijuana dispensaries.
But the proposed ordinance failed to win council approval. Several council members said they were concerned that dispensaries could affect residential neighborhoods.
Last week, in his first week as the acting mayor since Filner’s Aug. 30 resignation, Gloria informed the city’s chief operating officer and assistant chief operating officer that enforcement of zoning violations by pot shops could resume.
Gloria revealed his action Thursday while talking to reporters. As City Council president, Gloria, a fellow Democrat, became acting mayor when Filner resigned amid sexual harassment allegations.
“What I want to do,” Gloria said, “is provide some certainty for the patients who need it (medical marijuana) and to the neighborhoods who are afraid of it so we can tell them what the rules of the road look like. Right now we have none.”
…
‘In what could be intepreted as something of a reversal in an already slow recovery of the residential real estate market, Long Realty reports August active inventory in the market was up 19 percent from a year ago, outpacing closings that were up 4 percent. Months of inventory was also up to 3.5 from 3.1.’
‘Also, compared to August 2012, the Tucson market added 1,344 new properties under contract, down 9 percent from a year ago.’
‘A positive indicator is that the median price of sold homes in August 2013 was $159,000, up 10 percent from August 2012.’
Oh dear:
‘Invitation Homes, a major investor backed by the $64 billion Blackstone Real Estate Group. From Apple Valley to Woodbury, Invitation has been on a buying spree in the Twin Cities, paying cash for about 570 single-family homes. Marcus Ridgway, Invitation’s chief operating officer, recently gushed about the area’s “fantastic” education system and vibrant economy.’
‘Experts also say it’s inevitable that some of these institutional investors someday will become sellers. Ridgway didn’t rule out the possibility that Invitation eventually might flip its holdings.’
How much longer before inception of the rush to the exits?
This is hilarious. Meanwhile, in places like NV and AZ, these outfits have driven prices up, then left. Now, inventories are building with few buyers.
Ran across this listing again. First saw it in May, still no sale. It’s gone up $8,000 though, apparently aging like a fine wine.
That is the type of house you park a Toyota Yaris in the driveway. But not a Lexus.
Nah you’d park a ‘96 ford escort station wagon with the original cassette stereo in the driveway, and ill bet they still bust in.
Here is a hypothesis: What if the global central banking cartel has colluded in a coordinated writedown of the value of fiat currencies around the globe? Wouldn’t that be enough to result in double-digit gains in the value of housing in all the developed nation economies without creating a bubble?
Monitor
Tom Holland
Wednesday, 25 September, 2013, 4:04am
Contradictory figures fuelling China property bubble debate
To settle this argument we need to know how much housing was built since 1995. Sadly, the official numbers are all over the map
Chatter about a bubble in China’s property market has risen to deafening volumes lately.
Since the authorities released numbers last week showing that home prices in major cities climbed 15 per cent or more over the 12 months to August, a whole tribe of bears has emerged from the woods to warn that the Chinese property market is being propelled by an unsustainable speculative frenzy and is now primed for a devastating collapse.
Nonsense, retort the bulls. The market is propelled by healthy demand, and anyway, prices eased last month compared with July.
As always, making out the true picture is tricky.
The classic bubble argument goes something like this: China’s new middle classes are keen savers. But deposit rates are barely positive in real, inflation-adjusted terms. And the stock market is down more than 60 per cent from its 2007 high.
That only leaves housing as a trusted store of wealth. As a result, buyers have piled into property, purchasing multiple flats in new developments with their newly earned cash.
As buying pressure pushed prices higher, the market acquired a momentum of its own. Developers and local governments built new homes by the million, and everyone who could raise the money - students, young couples, grannies - snapped up as many as they could in the confident expectation of making handsome capital gains in a permanently climbing market.
The authorities have attempted to cool things, imposing restrictions on multiple purchases and requiring hefty down payments. But the persistence of price rises demonstrates how easy speculators have found it to evade official controls.
The consequence today is that the price of a new home has soared far beyond the means of the average first-time buyer. Meanwhile, millions of brand-new apartments sit empty in uninhabited ghost cities, all-too-visible symptoms of China’s speculative excess.
Bulls counter that the demand is real. The vast majority of buyers, they insist, are purchasing flats to live in, not as investments. Most families own just one, and many paid cash, so leverage is low.
…
Robert Shiller is at it again:
http://www.nytimes.com/2013/09/29/business/housing-market-is-heating-up-if-not-yet-bubbling.html?pagewanted=all
‘Is it possible that we are lapsing into what I call a bubble mentality — a self-reinforcing cycle of popular belief that prices can only go higher? Some answers arise from a study that Professor Case and I have been conducting since 2003.’
Another one of those, ‘it’s not yet, but it could turn into one’ pieces. He has this:
‘In reading the most recent answers, I see no signs that home buyers have learned the lesson I tried to convey in the second edition of my book “Irrational Exuberance” in 2005. That message was that existing-home prices have shown virtually no tendency to trend upward in real, inflation-corrected terms over the last century. While land is limited, it’s only a small component of home value in most places. New construction often brings down the value of older homes, which wear out and go out of fashion, dragging down prices.’
‘It’s as if people are applying to housing an idea described by Frederick Lewis Allen in his 1931 book, “Only Yesterday.” Before the stock market collapsed in 1929, he said, people thought that “every crash of the past few years had been followed by a recovery, and that every recovery had ultimately brought prices to a new high point. Two steps up, one step down, two steps up again — that was how the market went.”
On this:
‘older homes…wear out and go out of fashion, dragging down prices’
Around here an ‘older home’, which is inefficient, needs much more maintenance, etc, will sell for $250-300k. These houses probably were sold new for $25-35k. How I see these sorts of numbers, and viewpoints like Shiller’s is, this bubble has been going on for much longer than most realize. And some of this housing stock is far more over valued than even the bears here imagine.
“Two steps up, one step down, two steps up again — that was how the market went.”
Two-hundred steps up, one-hundred steps down might prove a lot more painful, especially if massive leverage played a major role in the upswing.
“And some of this housing stock is far more over valued than even the bears here imagine.”
California starter home
The image of a California “starter home” (aka “foreclosure home”) that I just posted came from this article:
Neighbors deal with messy aftermath of home foreclosure
By Carol Ferguson, KBAK - KBFX - Eyewitness News -
BakersfieldNow dot com
Published: Oct 15, 2012 at 3:24 PM PDT Last Updated: Oct 15, 2012 at 8:34 PM PDT
BAKERSFIELD, Calif. (KBAK/KBFX) — Neighbors are not happy about a house in foreclosure, with junk and trash piled up in the front yard for months. They want somebody to clean it up.
It turns out the house was bought by an investment company, and company officials promise fast action, even with a mess this big.
“We can get this cleaned up in one day,” Preet Bhathal told Eyewitness News on Monday. He said this was the deadline for the current residents to be out of the house, and his company will now move quickly.
The small, white house is in the 3100 block of Apollo Street in northeast Bakersfield. Several large piles of stuff sit on the driveway.
“All of the trash blowing down the street, every day we’re out here picking up the trash,” neighbor Mark Abonnel said. “And the kids coming and going through the trash right now. You don’t want any kids getting anything from it.”
…
Zestimate $129,643 09/27/2013
02/27/2013 Sold $115,000
08/16/2012 Sold: Foreclosure Auction $72,000
Year Built 1961
Not being in the foreclosure rehab business, I was naturally curious what they might have done besides clearing away the trash out front to earn a $43,000 paycheck over the course of six months?
The interior paint and carpet looks like the bank did it. (Covers up the smell too). The bath and kitchen cabinets, with the granite, looks like post foreclosure work. So I’d say just the cabinets, cabinet tops and sinks.
“So I’d say just the cabinets, cabinet tops and sinks.”
A $43K paycheck net of costs would be quite lucrative, then?
It depends. Did they inspect it before the foreclosure sale? Did they know if the HVAC was gone, or the water heater? Was the copper stripped out? Unless you know all that, it’s possible they lost money on it.
hmmm… let’s examine…
He says;
“it’s not the land”- CHECK
“these houses were sold new for $25k-35k”-CHECK
“New construction often brings down the value of older homes, which wear out and go out of fashion, dragging down prices.’”- CHECK
And you’re not a complete idiot for paying more than $35/sq ft for a 20 year old shack?
Then what are you? A moron? Blind deaf and dumb? Delusional? Misguided? Suckered?
The govt/media are circling the wagons in India:
‘Rajiv Takru, financial services secretary in the finance ministry, does not mince his words. In an interview to TOI, he says wilful defaulters will be sternly dealt with and assures that the banking sector is sound and there is no cause for alarm over rising bad loans. Excerpts:
What are your views on the mounting bad loans in the banking sector?
Non-performing assets (NPAs) are something that nobody would like to encourage, and certainly we are not interested in encouraging them or in supporting them or holding out a fig leaf of an apology on behalf of NPAs. There are reasons why they suddenly appear to have grown. We have created a system of system-based NPAs, which means the system itself throws up NPAs. Now that system-generated NPAs have started coming out, some balance sheets have taken a hit.
And wilful defaulters?
There are people who thought they could get away with default . They thought, ‘So many guys are going for CDR (corporate debt restructuring) at this time, why shouldn’t I also go for CDR?’ I don’t think we are going to be kind. I have been saying that we have to be as harsh as possible with them. A promoter must either shape up or ship out. We have discussed it with the banks. There is absolutely no confusion on that score. This is something which is going to be implemented. If there is a case of a wilful defaulter, which we come to the conclusion as lenders that it is something that is deliberately created , then that person has to be prepared now to surrender his project. He has to get out, otherwise he has to salvage the project himself. We won’t give indefinite extensions.
Some state-run banks have been downgraded by rating agencies. What are your views?
I think SBI and others have come out very clearly that Moody’s is wrong. Just because some rating agency says something about somebody is no reason why we all need to break into a sweat.
The RBI has banned zerointerest rate schemes on credit cards. Companies say this will hit sales…
There is nothing called free money. Nobody gives you free money. There is a hidden charge that is always there in these transactions. Festival sales have a logic of their own. It is just a peak period of demand when people buy for various reasons and people will still buy.
http://timesofindia.indiatimes.com/business/india-business/Govt-wont-be-kind-to-wilful-defaulters/articleshow/23189072.cms
Seems like the lending industry has put India’s household sector in a similar position to the U.S. household sector circa 2008: Deeply in debt, just in time for the onset for a major economic contraction.
Suck-em-in/shake-em-down seems to work well on many continents!
Wow.
“and assures that the banking sector is sound and there is no cause for alarm over rising bad loans.”
I sense panic:
“there is no cause for alarm”
“Just because some rating agency says something about somebody is no reason why we all need to break into a sweat.”
Just, wow.
(And a bit funny too.)
But then,…
“this bubble has been going on for much longer than most realize. And some of this housing stock is far more over valued than even the bears here imagine.” - That’s kind of scary, considering the source.
In the background, Housing Analyst can be heard saying, “Housing is 250 - 300% overvalued!”
At least, that’s what I keep thinking of.
Suck-em-in/shake-em-down - Rawhide!