A Con Only Works When The Mark Is Greedy
It’s Friday desk clearing time for this blogger. “Bidding wars. All-cash deals. Foreign buyers. Manhattan? No, Queens! Jim Pappas, the owner of Jackson Heights-based real estate brokerage Rock Realty, told the Daily News many are from China, but buyers from Greece, Brazil, India, Tibet and Nepal are also hitting the market. Some buyers are coming in with all-cash offers and are bidding on properties without seeing them. Pappas is currently handling the sale of a house on 84th St. in the historic section of Jackson Heights. ‘Five offers were submitted sight unseen in less than one week,’ he said. ‘It’s crazy. There’s a frenzy.’”
“The first quarter figures for 2014, supplied by Strafford County Registry of Deeds Dennis Vachon, show that real estate activity in the county, from January through March, has taken a plunge. In neighboring Farmington, Craig Lancey of R-W Real Estate had this comment to make on some prospective home purchasers: ‘Too many buyers spend months chasing the ‘pot at the end of the rainbow’ looking at distressed properties and making low ball offers, only to find their best opportunities have passed them by. The 2013 fourth quarter interest rates climbed as high as 5.5 percent. They are now in the low 4 percents. Free money doesn’t last forever!’”
“Is the Sun setting on Atlanta home prices again? Yes, it probably is. In fact, it’s fair to say that the Atlanta metro housing market is a few months past any supportable market peak, and there is some good data to support this conclusion. The big hedge fund buyers are slowing their home purchases, while ramping up to sell off rental properties to other investors. Turn-key investing is becoming a ‘hot’ item once again as the big investment companies who bought up billions worth of foreclosures now seek to quietly sell them off.”
“The media will be reporting months-old data, saying that home prices in Atlanta are up quite a bit over 2012 and are ‘recovering.’ But I think the recovery part of this is already behind us at the moment. 2012 and 2013 were the recovery, such as it was. At present, in April of 2014, my sense is that supply-demand problems are still wide-spread, and we’ve gained back 50% of the losses from the crash. The only question now is what generated those gains – growing end-user demand or large scale hedge funds buying up foreclosures.”
“One big reason that many sellers have held off because of the unusually harsh winter weather. But other homeowners — especially those who bought during the housing boom — still can’t sell without taking a loss, and those properties are likely to stay off the market. ‘There are still sellers waiting for the market to improve in order for them to get out,’ said Jeff Adler, a Keller Williams agent in Ridgewood.”
“‘A lot of sellers have been taken aback by the amount of decline from the peak to where the market is now,’ agreed Jorge Ledesma, a Re/Max agent in Teaneck. ‘It’s a bitter pill to swallow when you see so much equity in your home, and through no fault of your own, you see it go away.’”
“Nobody lives in the home next to Kimberly Merida. The three-story Bellevue house, which is in foreclosure, was abandoned last summer. If someone doesn’t claim the vacant property soon, it may become a problem for Merida. She has been thinking about putting her house on the market in a year or two, and abandoned properties tend to bring down a neighborhood’s real estate values. Nearly 36,500 homes in Pennsylvania were in foreclosure in February, according to RealtyTrac. ‘It might be (a concern) because foreclosures sell for less,’ she said.”
“There were 584 foreclosure starts in El Paso County in the first quarter of 2014 from January 1 to March 31. That’s 35 more than the same period in 2013, but more importantly, says Thomas Mowle, El Paso County Public Trustee, it could lead to the first year-over-year increase in foreclosures in El Paso County since 2008-’09 at the height of the housing bust. If the first quarter trend continues, Mowle says El Paso County will see a 26 percent surge in foreclosures this year. ‘There’s not an obvious cause for why it’s going up,’ Mowle said, ’so we hope that it’s going to go down, but it is a little troubling that it’s been continuing for a few months now.’”
“The other shoe has dropped. A foreclosure inferno that raged across the Inland region and other hot spots in the U.S. is considered by industry experts be effectively contained, but new data shows banks have begun to turn their attention back to properties that have been in limbo. Foreclosure starts rose 10 percent in California in the first quarter from the same period in 2013, according to RealtyTrac. It was the first double-digit percentage increase for filings involving notices of default — the first step in the foreclosure process — in California since 2009.”
“In the Inland region, the 3,911 notice of default filings jumped even more, 21 percent, for the first three months of the year from the 3,236 filings over the same span of time in 2013. Banks, now adjusted to the 2013 California Homeowner’s Bill of Rights, are now taking steps to clear out the standing stock of homes that have long been in default. ‘I would suspect it will take a year for lenders to catch up with the foreclosure deficit created in 2013,’ said Daren Blomquist, VP of Irvine-based RealtyTrac. ‘We estimate that only 10 percent of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant.”
“Businessman Allen Zhao has been waiting since the middle of last year for prices in the scenic southern city of Hangzhou to rise high enough this year to sell his two-bedroom apartment for about 2 million yuan. Last Monday, he was horrified to hear that his neighbour let her place go for just 1.7 million yuan. ‘That is not much more than the price I paid in 2012,’ said a rueful Mr Zhao, 45. ‘Now I’m regretting not selling earlier - more bad news about the property market keeps coming in every day.’”
“Please allow me to take you back to 1991 and a Japanese middle manager looking at a sleepy suburb, an hour and 20 minutes from his job in the city. The Tokyo city government employee, who was then 36, took out a loan for almost the entire $400,000 (about £1 million at today’s value) and bought a cramped four-bedroom apartment. With property values then rising at double-digit rates, he would easily earn back the loan and more when he decided to sell.”
“Ten years later he tried to sell his property for $200,000, half what he originally paid. I’m afraid he still lives in it today. Of course the assets bubble bursting in Tokyo sent a tsunami of property devaluation right across the country, and a recession that still continues in Japan.”
“Now if a one small-bedroom flat in Knightsbridge cost more than £1 million, what do you think Buckingham Palace would fetch if the for sale sign went up? I leave you to guess where this will all end. So to all those first-time buyers, especially in Somerset, please hold on before you buy, and don’t be fooled by this property boom or for that matter low interests rates. Remember being trapped in negative equity will rob you of your freedom to choose where you can live. For these are not my words, but those of a Japanese gentleman by the name of Mr Nakashima.”
“It’s been said that a con only works when the mark himself is greedy. It’s a paraphrased adage from the glory days of caricatured grifters and confidence men, but it still rings true today. David Crisp and Carl Cole, the now-forlorn faces of a notorious Bakersfield mortgage scam that skimmed tens of millions of dollars from fraudulent home purchases, have been sentenced for their crimes.”
“It’s still too early to tell, but by some accounts, California’s real estate world may be showing signs of rebirth. In some locales, home prices are inching upward and banks are once again dolling out lines of equity for home improvements and debt consolidation. Who’s to say that a thriving market wouldn’t once again entice others to take the path of Crisp & Cole? And, if they do, how long will we wait to make note of the fact that the emperor has no clothes?”
“As of now, we’ve got some finality. The scheme is dead and buried. Going forward, though, it’s a different story. If we don’t learn from this homespun cautionary tale, how can we really say we’re all that much better than the con men?”
“The big hedge fund buyers are slowing their home purchases, while ramping up to sell off rental properties to other investors. Turn-key investing is becoming a ‘hot’ item once again as the big investment companies who bought up billions worth of foreclosures now seek to quietly sell them off.”
Turn-key investing is becoming a “hot” item once again because prices went up. And prices went up because these hedge funds moved into the area in a big way and bid them up.
But … but … but now these hedge funds want to sell them off, and if these funds become sellers rather than buyers then where is the money going to come from to keep the prices up?
Amy is running a B and B out of her condo. Rotating Chinese investors through every weekend.
B&B = Bathhouse and Brothel?
Amy does not bathe.
Amy = stanky?
‘It certainly looks like the mountain is moving into the next phase of the effects of this foreclosure market. The big investor owned flip homes. We have not seen too many of these homes until recently…Last month I sold two of these large investor flip homes and both have had some issues. The problem for the buyer is, the seller disclosed the fact that the home was purchased as a foreclosure and there may be conditions unknown to him or her. Because they have never lived in the property and have only owned it a short period.’
‘What I have observed is, the investors give the homes wonderful facelifts, but in many cases they do not address some major issues.’
I guess that means the big investors want to unload to subprime borrowers on 5/1 ARM with a low intro rate and then sell of the notes to investors as inflation protected. When The SHTF both the big investors and banks are out of the picture when housing implodes. But maybe this will get banks moving quickly on foreclosures before their holdings go further into the tank!
‘What I have observed is, the investors give the homes wonderful facelifts, but in many cases they do not address some major issues ??
Not sure where the property is and what the disclosures laws may be but if it was in California the fact that he bought a foreclosure and that he only owned it a short period time would not relieve the seller from the disclosure law…There is a reasonable duty to know or you “should have known” in California disclosure laws…If you are a flipper, who has further knowledge of construction practices, you are then held to a higher standard…
I suppose a lot of the flippers are in LLC’s or Corporations to attempt to shield themselves from liability but I am not even sure that does…
“The big hedge fund buyers are slowing their home purchases, while ramping up to sell off rental properties to other investors. Turn-key investing is becoming a ‘hot’ item once again as the big investment companies who bought up billions worth of foreclosures now seek to quietly sell them off.”
Good luck to the hedge hogs at secretly slipping out the exit door of the crowded, burning theater.
“…where is the money going to come from to keep the prices up?”
If this global capital flight is for real, then we should be worried about more than just house prices.
As long as they bring their capital here, then fine.
As long as they bring their capital here, then fine.
It’ll help, but if the global economy crashes we won’t be unaffected.
““It’s been said that a con only works when the mark himself is greedy.”
Everyone is greedy to some extent. But from the delusional pimping of some on this board it is easy to see how frauds and cons occur. Sometimes despite all evidence to the contrary.
Those big fraud schemes usually involve lots of others who also should be charged.
“In the Inland region, the 3,911 notice of default filings jumped even more, 21 percent, for the first three months of the year from the 3,236 filings over the same span of time in 2013.”
Not to worry…an army of all-cash Chinese investors is waiting on the doorstep of the Inland Empire, ready to snap up foreclosure properties right and left and drive prices ever higher!
How does this compare to defaults in 2009, 2010, 2011, & 2012?
What does it matter when these there are 4.4 million excess, empty defaulted houses in CA?
You can’t compare “defaults” to “notice of default filings”. Apples and oranges.
Besides, what matters is the magnitude and direction of the change. If NODs continue to increase at 21% per quarter for a year, then there will definitely a resounding recrash. I don’t know if the trend will continue, or for how long, but it’s a big deal anyway.
What was the rate of NOD increases in 2009, 2010, 2011, and 2012? Was it 21% per quarter?
Non-current loan rates (which include defaults, NOT just notices of default) have been on a steady decline since February 2010 in California.
The increase in NOD filings was after a collapse of NOD filings in Q1 2013 given the start of the homeowner bill of rights.
At least you’ve begun to admit the foreclosure moratorium in CA. Isn’t being honest easier?
Zactly. I thought Rental Watch said there was no moratium. Now he is trying to say that the steep increase in NODs doesn’t matter because it’s only backlash from the moratorium. The truf is never far behind, is it?
There was a one month slowdown (not stop, aka “moratorium”) in January 2013. The year on year numbers are showing a bounce off that ONE MONTH slowdown.
Next quarter will show a year on year decline.
The overall trend in distress has been a steady reduction in non-current loans since Feb-2010.
The non-current loan rate in CA is now 5.1% (defaults, NODs and foreclosures). Further decreases in NODs is because they have been cleared from the system, NOT because of a moratorium.
See the graphs here (which doesn’t show January 2013, which is well below February 2013).
http://www.propertyradar.com/trends/california
I have a longer response coming with a graph to data, but let me be clear:
There is no moratorium on foreclosures in CA, and there has not been one.
There was a new law that altered the foreclosure process that took effect in January 2013. That new law caused lenders to change their process, which caused a temporary slowdown in foreclosure processing, which lasted about a month.
The evidence isn’t hard to come by:
The January 2013 to January 2014 NODs in CA showed an INCREASE of 57%. A huge leap off the depressed January 2013 number.
However, the Q1 2013 to Q1 2014 NODs only showed a 10% increase in NODs (despite the January to January leap of 57%–one third of Q1).
What does that tell you about the February 2013 to February 2014 and March 2013 to March 2014 numbers?
They are WAY below a 57% increase, and probably a decrease in NODs to get the average down to ONLY a 10% increase after such a big year-on-year change in January.
As validation of this, Property Radar (name changed from Foreclosure Radar…I wonder why?) shows a 7% DECLINE from February 2013 to February 2014 in NODs filed in CA.
We will get the March 2014 data probably in the next week…I expect that will show an even larger year on year decline than February (probably more than 10%).
Here is some more data for you:
CA’s non-current loan rate per LPS (the percentage of loans in default, under NOD/in the foreclosure process).
Feb-2010: 15.3%
Feb-2011: 12.6% (down 2.7%)
Feb-2012: 9.6% (down 3.0%)
Feb-2013: 7.3% (down 2.3%)
Feb-2014: 5.1% (down 2.2%)
“Normal” is approximately 5% over long periods of time. There is frequently someone who has missed 1 payment (which is all it takes to become “non-current). At 5.1%, there are only 8 states in the US that are lower than CA, including shale boom state of ND, at 2.7%.
How does a loan that is “non-current” become “current”? The borrower cures the delinquency (makes the payment(s)), the house goes through a short sale, or is foreclosed.
The average length of time from NOD to foreclosure in CA is 307 days, per Property Radar.
Compare that data with a judicial state, say NY:
Feb-2010: 12.8%
Feb-2011: 13.3% (up 0.5%)
Feb-2012: 13.2% (down 0.1%)
Feb-2013: 13.5% (up 0.3%)
Feb-2014: 11.8% (down 1.7%)
The average length of time to foreclose in NY is over 1,000 days (noted by RealtyTrac recently).
Which of these states looks like there was a foreclosure moratorium in place?
I’ll give you a hint…not CA.
“There was a new law that altered the foreclosure process that took effect in January 2013″
It’s called a moratorium and it simply replaced the moratorium that was in effect from 2008-2012.
So what do you think will be done with the 4.4 million excess empty and defaulted houses in CA?
“So what do you think will be done with the 4.4 million excess empty and defaulted houses in CA?”
Nothing needs to be done with them. They don’t exist.
You know exactly the disposition of them. They’re coming on the market in a big way.
“….take you back to 1991 and a Japanese middle manager”
Japan Population
1990 = 123 million
2014 = 127 million
Rate of Growth over 24 years = 2.9%
United States Population
1990 = 249 million
2014 = 317 million
Rate of Growth over 24 years = 27.6%
The Japanese story must include factors like a closed society, zero population growth and supply/demand characteristics. There is much more to tell than just citing a lost decade…..well, actually 2.4 decades!
And the unfortunately reality for you J. Fraud is that population growth is the lowest in US history.
Silly fraudster you.
“1990 = 123 million
2014 = 127 million
Rate of Growth over 24 years = 2.9%”
Annual Rate of Growth = ((127/123)^(1/24)-1)*100% = 0.13%.
Or did you mean “percentage increase in the population over 24 years”? Because a ‘Rate of Growth’ with an arbitrary denominator of 24 years is ad hoc and somewhat pointless.
By contrast, the U.S. annual rate of population growth over the period was slightly over 1 percent:
((317/249)^(1/24)-1)*100% = 1.01%.
It doesn’t matter what population growth is — wage growth is what matters. You can have all the population growth you want, but if people can’t afford to buy, then they can’t afford to buy.
Zactly.
Stop looking at the growth in median wage. That doesn’t tell the whole picture. It’s more complicated than that.
The bottom 50% of wage earners have been treading water for a generation or longer.
The top 50% have been doing much better.
See the linked article.
http://www.epi.org/blog/real-hourly-wage-growth-last-generation/
The 50th percentile (the median) has only gone up by 3% in real terms over the past 30 years.
The 60th percentile has gone up by 6.4%;
70th percentile by 11.7%
80th percentile by 21.2%
90th by 31.1%
95th by 35%.
Who are the buyers?
Let’s take CA as an example. Homeownership rate is at 54% last I checked, and a fair number of the 54% are people who own their home free and clear and are retired. I know of at least 4 such people in just my family (uncle, inlaws, parents, and second cousin). They are owners despite having effectively no income other than Social Security.
So, if you assume those with the least income rent, and the most income buy (a broad assumption that probably isn’t too far off), then when comparing the growth in MEDIAN home price, to growth in income, comparing to the MEDIAN income is faulty (because that assumes a situation where ALL income earners buy their home–which simply isn’t true).
You really should you be looking at the growth in the incomes of people HIGHER than the median. Should that be the 60th or 70th percentile of wages? That is more applicable when comparing the price of shelter with the buyers likely to consume that shelter.
Considering the historic long term metric is 2x annual income, housing prices have a very long way to fall.
Japan is pretty packed already. The United States has lots of space available. Space abounds. That probably helps to explain the population dynamics.
What does that have to do with house prices, though? I thought house prices were determined by the supply and demand for houses.
What most affects the demand for houses? People!
That’s right JFraud. 25 million excess empty and defaulted houses and another 35 million just coming on line as boomers expire.
Not to worry though I’m sure they’ll start trucking them in by the bus loads from south ‘o the border to sign ‘em up on 50 year notes!
I think to get across the point, instead of calling them “houses”, we should start calling them “shelter”.
The demand for shelter, the supply of shelter.
What affects the supply? You guys need to take pimping classes.
“What affects the supply?”
Short answer: For the most part, building more shelter (or tearing down old shelter).
Longer answer:
MOST of the homes that are in the foreclosure process (the “shadow inventory”) are full of people who are using them as shelter. “Zombie” foreclosures are the exception and are highly concentrated in Florida.
The process of completing the foreclosure process means that the occupant in the house gets kicked out, and needs to find another place to live.
In other words, for the most part, foreclosing on a house that is in the shadows and reselling it does NOT create a new unit of supply without creating a new unit of demand.
The only way to free up supply without the commensurate increase in demand is to:
1. Sell empty REO back into the market; or
2. Foreclose on a “zombie” foreclosure and sell back into the market.
Let’s quantify those two categories in CA:
1. REOs in CA total approximately 40,000 homes (per Property Radar), Nationally, about half still have occupants (RealtyTrac). A couple of data points in CA show higher numbers (SJ was at 73%, San Diego was at 66%). Let’s assume that it’s 50% in CA for the sake of argument. That’s about 20,000 empty REO.
2. RealtyTrac notes about 5-6,000 zombie foreclosures in California (1 in 10 foreclosures, half the rate of other states that are 1 in 5).
So, in total, making all empty distressed units available for occupants in the entire state of CA would free up a total of 25,000 homes.
25,000…that’s it.
How many jobs did CA create in the last 12 months?
Per the BLS report released 2 days ago…345,000
Well, there must be other vacancy in the state where people can find shelter, right?
Per the Census, homeowner vacancy rates are at 1.1%, and rental vacancy rates at 5%, both near or at lows since 2005.
Releasing ALL of the 25,000 vacant homes in distress onto the market won’t make a dent relative to job creation and the vacancy rate.
The only way to add meaningful supply is to build home more shelter.
(and cue HA regarding 4.4MM empty homes…)
RenTrollHogwash,
Considering the excess empty inventory problem in CA hits too close to your wallet for you to discuss effectively, why not stick with the issue of grossly inflated asking prices of resale housing that are 250% higher than long term trend?
There is a connection between price and supply/demand. Do you know what that is?
I’ll give you a hint, the data showing lack of supply is much more consistent with high home prices than your claim of high home prices with large amounts of supply.
When you can’t be honest about the excess empty inventory, why would be honest about inflated prices?
‘lack of supply is much more consistent with high home prices’
You guys are talking about supply and demand like everyone is paying cash. How do loans figure in, and loan terms like down payments and qualifying? What would the supply curve look like if 90% of the foreclosure were on the market, or if there were no HAMP/HARP loans? What accompanies high house prices in every expensive market? Higher loan caps guaranteed by the government.
HAMP/HARP loans aren’t for new purchases, only for refinancing existing loans–and those loans are waning (ie. fewer being made today).
The difference in rate between Jumbo loans and those backed by the GSEs is pretty low today (private money is coming back).
All of the California REO (about 40k homes) would represent about 1 month worth of sale inventory, and would displace about 20k people who would then need to find a place to live. In other words, the REO doesn’t make much of a dent in supply.
At a 5.1% non-current loan rate, we are pretty close to “normal” in terms of distress in the pipeline. Again, this continues to get pushed through the market, and isn’t making much of a difference.
Now onto what I think is the crux of your question: affordability.
That’s the elephant in the room that in many ways is explained by the lack of supply.
Last year, there were approximately 84k new housing units built in California. 47k of them were rentals. 37k were “for sale”.
There were about 350k new jobs in CA, and there is an existing base of about 6 million renter households.
So, to buy the 37k (a number of which were probably tear-down/rebuilds–I walk past 5-10 on my way to work), less than 1% of renters need to decide to own. And this is in the context of far too many jobs being created relative to shelter being constructed (so rents are rising).
There was an article the other day about people getting pushed out of their rentals in the Bay Area (rents going up too high), and living in their vehicles.
I believe that it is THIS dynamic in California (needing to find a VERY small percentage of renters who want to buy the few marginal houses being built) that has allowed the affordability rate (which is measured against the median income, not the highest-earning renters) to fall to very low levels during each housing cycle over the past couple of decades.
It has also added considerable volatility to the market (ie. a boom/bust market).
Today’s affordability level is 32.
From 1998 through the end of 2005, the housing affordability index in CA was below 32 for 107 out of 216 months…32 is approximately the MEDIAN affordability in California (as insane as that sounds).
Let me be clear on my views about CA housing.
Chronic supply shortages due to structural problems with processing entitlements (see CEQA) drive prices to insane levels on a regular basis (pretty much every business cycle).
I believe we are in the middle one such price drive currently.
As prices rise, more builders will build homes, trying to meet that demand. If we are lucky, they will overbuild, as it will ease the price increases, but I’m not holding my breath.
Once things finally get really cooking on the homebuilding front, there will be another recession, as there inevitably always is. That will cause people to pause, and builders will have problems selling their inventory, prices will fall, some people will lose their jobs due to the recession and default on their mortgages at just a time when those with jobs don’t want to buy, etc., and prices will come back down somewhat.
Eventually the economy will heal, prices will bottom, and start rising again. And the cycle will renew.
Direct your attention back to collapsing demand and massive supply in CA.
Who’s to say that this country won’t have a demographic slowdown, or even a downturn? I get frustrated when I hear people predict, for example, that American life expectancy might be 100 some day. It just as well might be 50. If that happens we’ll have a lot of houses available. Hopefully the Fed won’t be blowing a bubble.
Back in the early 2000s, prices were skyrocketing in Maryland. One theory I heard was that there were simply more people bidding for limited real estate. Plausible. I knew people paying five to ten times what row homes had cost in the past in Baltimore City.
BUT - I looked up the population statistics. Baltimore had been in fact losing population for decades, up till the then present time. So that could not be the driving factor in the price increases.
Supply and demand setting prices obviously exists. But lack of supply, in Baltimore at least, wasn’t the driving factor in the skyrocketing prices.
Back and forth like a windshield wiper, just worry about your fiancial postion. Everyday like the stock market, you ever know what will spur a buy or sell. In buying a house, it is all about searching the location you want and within that two to five mile range concentrate on that markert.
It makes for nice talk and conjecture, but what the China,Japan, Canada, Mars, housing market whatever is not a concern for you. If you get your house at a good price then enjoy it.
On both sides of me, Bob is doing well, the other side Alan isn’t doing so good, that is all I want to know, it doesn’t affect my decisions on anything I purchase?
And you won’t have a “financial position” to worry about if you pay current grossly inflated asking prices of resale housing.
Remember… Reproduction costs for new housing is $55/sq ft (lot, labor, materials and profit).
Realtor®speak
Based on Doom’s grammatical prowess, I think we all know what conclusion to draw about his/her general intelligence.
Doom: It has to do with equity locusts. There are certain cities where an abnormally high percentage of sales is going to foreign investors. When the foreign investors run out of equity or borrowed money or cash, they will stop buying houses here. This puts the lie to the realtoR claim that foreigners will save the housing market, and therefore prices will go up forever.
‘Major players in the construction industry have cautioned about a bubble risk on the real estate market and in the construction sector in eastern Bulgaria in the next few years.’
‘Bubble fears are explained with the fact that the demand for vacation properties, mostly by Russian-speaking citizens, is concentrated there, according to reports.’
Paso Robles, CA Housing Prices Plunge 21% YoY As Inventory Skyrockets 171%
http://www.movoto.com/paso-robles-ca/market-trends/
We’ll drive through there on the way home today. I’m looking forward to seeing lots of “For Sale” signs on the yards around Paso Robles.
They’re growing like weeds in NY and CT. Berkshire Hathaway bought up some scumbag realtor outfit in the northeast and all these new BH signs are going up everywhere… and I mean everywhere.
I don’t know a single person interested in buying a house right now but I know a whole lot of others that want out. And a bunch more who haven’t made mortgage payments in years and years.
‘While the heated sales pace at the Barker Block might make some think the for-sale market is about to explode, it’s not necessarily the case. Bill Witte, president of developer Related California, told Los Angeles Downtown News last year that building a condominium tower can average around $700,000 per unit (though prices are likely lower in shorter buildings not being designed as “luxury” residences). In February, condo sales in Downtown were averaging about $544,000 per unit, according to the Loft Company.’
“I think there’s buyer demand at today’s prices for existing stock, but today’s prices aren’t high enough to justify construction,” said Kerry Marisco, a residential broker with Coldwell Banker. “My understanding from the developers I know is that until the smallest, least desirable entry-level condo units can get $600 a square foot, it doesn’t make sense to build.”
‘Downtown’s limited condo stock is hardly unique. While San Francisco has far higher average prices for new and resale residences ($1,027 and $864 per square foot, respectively), there were only 39 new units available at the end of February, according to the Mark Company. Seattle had 270 units on the market at that time, but 255 of those came from a single project, dubbed Insignia, that began pre-sales in September. ‘
“Typically, in the last few years, we’ve only seen condos being built in strong markets like South Florida and New York,” said Alan Mark, president of the Mark Company. “Yet when we look up and down the West Coast, whether it’s San Francisco or San Diego or L.A., there are thousands of apartments being built.”
It is very hard for me to believe those numbers.
Alameda, CA Housing Prices Collapse 27% YoY As Demand Evaporates
http://www.movoto.com/alameda-ca/market-trends/
“We estimate that only 10 percent of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant.”
At what point will squatting in a home the occupant doesn’t own become illegal?
I’m guessing that it depends on the state in which you live. I was surprised in watching the video on RealtyTrac’s website where the guy noted about a year from the date of the foreclosure and the eviction. Based on my understanding, the bank could have evicted much earlier than that.
I’ll bet that a LARGE percentage of those that are still occupied have arranged something with the lender (leasing back). If the lender doesn’t want them there, I’m sure they have rights to evict.
At what point will squatting in a home that you don’t own make it legally yours?
Common law ownership?
‘As the housing market goes up, up, up, so does the number of people who hope to ride the wave. “We have seen a huge influx of new people coming in the business,” says Rebecca Fletcher, director at the Georgia Institute of Real Estate. “They’re reading articles about how good real estate is. There’s a lot of frenzy. They have decided to get in.”
“In Anderson’s classroom, more than 30 students took notes from an overhead projector and answered questions about why a home’s cost per square foot is higher on the ground floor than the second (because the kitchen is the most expensive room in a house)”
I’m dying laughing here… some funny chit
No wonder realtors are so freaking stupid. It’s built-in and taught by NAR.
2004 -05 reprise.
“Queens! Jim Pappas, the owner of Jackson Heights-based real estate brokerage Rock Realty, told the Daily News many are from China, but buyers from Greece, Brazil, India, Tibet and Nepal are also hitting the market. Some buyers are coming in with all-cash offers and are bidding on properties without seeing them.”
American used home sellers are pretty lucky to have a gargantuan reservoir of greater fools from abroad with buckets of money and boxes of stupid to snap up overpriced investment properties, sight unseen.
I remember the questionable neighborhood purchases at absurd levels in neighborhoods around Phoenix and Los Angeles. It make sense that this would also occur in NYC’s outer boroughs. According to Google maps, the location of this Rock Realty is 4 minutes from the street where I lived until age 10. It was far from special then.
I can confirm from a report by a relative who was selling a place in a nicer area of Queens that Indian cash buyers are a real thing. But in her circumstances, it seemed to be people purchasing for/with extended family members and not something that would be vacant or rented out. More established immigrants along with their still-arriving immigrant relatives. So I guess that is a somewhat different scenario.
‘Ruth, an elderly Black woman, contacted Atlanta Black Star, is about her South Florida home that is underwater with negative equity. In 2005, she purchased the home for 400,000 dollars in Saint Lucie County, an hour north of West Palm Beach, and moved in a year later. Her income is from Social Security and a small pension that is equal to her monthly mortgage payments to PNC Bank.’
“I have done all that I could to pay my mortgage. I used up all my savings and now all I have left is my home,” said Ruth, who doesn’t want her last name revealed. She had fallen behind on her payments and requested assistance through PNC’s Hardship Assistance Program. However, after sending hundreds of documents to the bank in late 2013, it denied her, claiming it did not receive the documentations from her.’
Why is it again that Uncle Sam encourages low-income households to financially ruin themselves by lending them money to buy homes they cannot afford?
It seems racis’…
1) So black journalits don’t speak English either, then?
2) Question: If Ruth lives on a fixed income, then why in the world would she decide to get a loan with payments that she cannot currently afford? It’s not like she can use the “I’ll get a raise” rationale.
This was back in 2005. I smell an option ARM, or teaser rate.
If she’s assured by smart guys in suits who are so nice and looking out for her, that prices only go up, and this is what her payment is going to be, I can see how she was swindled.
Gotta have that killer instinct if you’re going to be a closer.
Anyone paying $400,000 in St. Lucie County was both foolish and got taken for a ride in the most unconscionable way possible. That summer was the bubble peak in much of Florida.
Love the bank denying receipt of hundreds of pages of documentation. And Ruth’s tax dollars helped preserve these institutions!
‘In 2005, she purchased the home for 400,000 dollars in Saint Lucie County, and moved in a year later. Her income is from Social Security and a small pension that is equal to her monthly mortgage payments to PNC Bank’
So she’s elderly and got a loan for a $400k house with the payment eating up all her income. Get some boxes.
To hell with the boxes. I’ve got a 20CY roll off coming. Hold the door open while I pitch the $hit out.
“In 2005, she purchased the home for 400,000 dollars in Saint Lucie County, an hour north of West Palm Beach, and moved in a year later. Her income is from Social Security and a small pension that is equal to her monthly mortgage payments to PNC Bank.”
This is an example of Southern due diligence, the Community Reinvestment Act and a financial predator in a suit.
‘During 2013, this state ranked No. 3 in foreclosures behind Florida and California, according to RealtyTrac. The shame of it is that Illinois would be better off — as would its citizens yearning to buy empty homes — if the state completed more foreclosures. As is, a backlog of distressed and abandoned properties drags down neighborhoods that can least afford vacancies and blight.’
‘Seven years after the housing bust, an estimated 18,000 vacant properties still beset the city of Chicago. In the Englewood neighborhood, at the end of 2013, 18.1 percent of residential addresses had been unoccupied for at least two years, according to the Institute for Housing Studies at DePaul University. In Humboldt Park, the two-year vacancy rate runs 9.3 percent. In Austin, it’s 8.5 percent. Those properties sit, rotting.’
‘March just topped off the third month in a row of declining home sales in Chicago. Compare that to last year at this time when home sales were spiking by double digit percentage growth rates during the entire first quarter. I’m seeing a 4.4% decline in year over year sales for this March.’
‘The IAR will also extol the virtues of the incredible surge of median prices for March - up by almost 27% over last year. However, as I recently pointed out in another post, median home sale prices tell you nothing about home prices. For instance, I’ll leave you with this thought to ponder. While median home sale prices rose by 27% year over year the median sales prices of condos and townhomes rose only 4.4% and the median sales prices of single family homes actually declined by 1.5%.’
‘Home sale contract activity in Chicago continues to point to further declines in sales and you can see it in the 12 month moving average in the graph below and in the fact that March was lower than last year by about 9.1%. If we’re not writing contracts then we won’t be selling homes. And it’s not like we have a lot of pending home sales to feed closings for the next few months either.’
“The shame of it is that Illinois would be better off — as would its citizens yearning to buy empty homes — if the state completed more foreclosures.”
Why is it that Illinoisans want to buy empty homes? What use is an empty home, anyway? (Trying to answer the same question for myself regarding Chinese investors in 60 million empty housing units in their Ghost Cities…)
Presumably, they would move out of their rental units and into the homes. That, of course, would cause an icrease in rental vacancies, leading to a decrease in rents, and a decrease in investor activity, followed by a decrease in house prices. Funny how there’s really no way around it, huh? The value is the value is the value.
“In the Englewood neighborhood, at the end of 2013, 18.1 percent of residential addresses had been unoccupied for at least two years, according to the Institute for Housing Studies at DePaul University. In Humboldt Park, the two-year vacancy rate runs 9.3 percent. In Austin, it’s 8.5 percent. Those properties sit, rotting.’”
Is it really legal for lending institutions to hold homes off the market rotting, in order to artificially prop up prices?
‘Home prices rose in March, as did the number of homes available for sale according to the Greater Las Vegas Association of Realtors. “One of the trends we noticed this month is the increase in our inventory. That helps people looking to buy a home. After dealing with such a tight housing supply last year, we now have more than twice as many homes without pending or contingent offers on them than we did a year ago,” said GLVAR President Heidi Kasama.’
‘Las Vegas housing prices are approaching $200,000 again, after yet another month of gains. Prices have been climbing at one of the fastest rates in the country as investors, looking to capitalize on the housing crash, bought cheap homes in bulk to turn into rentals. So far, used-home prices have jumped 65 percent since hitting bottom at $118,000 in January 2012.’
‘A rising number of sellers, perhaps emboldened by the market’s meteoric rise from the trash heap of the recession, still appear to be asking too much for their homes.’
‘By the end of March, 6,470 single-family homes were listed for sale without any sort of offer attached to them, more than double the number of such homes a year earlier, the GLVAR reported.’
Can you say “collapsing housing demand in Vegas?”
http://www.zillow.com/local-info/NV-Las-Vegas-Metro-home-value/r_394775/#metric=mt%3D30%26dt%3D1%26tp%3D6%26rt%3D6%26r%3D394775%26el%3D0
I could have sworn that meteors fell, not rose. Incidentally, meteors falling to Earth do not contain any material that is not already found on Earth itself. What does this tell you about the laws of physics? (Hint: It isn’t different here.)
What doesn’t sell in Vegas just sits in Vegas. And sits…and sits….and sits…
‘Recent prices spikes have turned Broward County’s housing market into one of the nation’s most overvalued — but it’s still far too soon to worry about another bubble, analysts say. Maureen Mullen and her boyfriend Mark LaRose have been searching several months for a $200,000 home in Deerfield Beach. They’re unimpressed with the quality and size of homes compared with their asking prices.’
“These homes are not elaborate or anything really fancy or special, and to me the buyers are asking a lot of money for them,” Mullen said.’
“…but it’s still far too soon to worry about another bubble, analysts say.”
How many more times are we destined to see that comment in print before the Echo Bubble has definitively popped?
Do real estate people some times feel like they live inside an echo chamber?
They ought to be living in a jail cell considering how corrupt they are.
There’s no professional or social consequence to being wrong. If you are in certain fields, I don’t think being right or wrong even matters anymore.
‘Portland-area homeowners may soon be spending a bigger chunk of their paycheck on mortgage payments than they have historically. Zillow compared the list prices of homes for sale to the percentage of income metro homeowners have historically spent on mortgage payments — 22.7 percent from 1985 to 2000. If a buyer with the median household income would have to spend a greater portion of their income on a given home, it’s considered unaffordable.’
‘By that metric, more than half — 50.3 percent — of Portland area homes are unaffordable, Zillow says.’
‘A new study by Zillow suggests that more than 40 percent of Boston-area homes may be unaffordable for median-income buyers. Around the country, more than half of homes currently on the market in seven major American metros are unaffordable for local residents.’
‘California buyers are among the worst off in terms of affordability, with three cities in the Golden State ranking in the top five for least affordable among the 35 major metros Zillow surveyed. But it was Miami that ranked as the most unaffordable city, with 62.4 percent of homes listed for sale unaffordable. Next in line were Los Angeles (57.2 percent), San Diego (55.3 percent), San Francisco (55.2 percent), Denver (52.8 percent), San Jose (50.9 percent) and Portland, Ore. (50.3 percent). Boston’s 40.1 percent unaffordability rate ties it with Washington, D.C. for 15th place among the 35 largest cities in the U.S.’
‘Nationwide, just one-third of homes (33.6 percent) are currently unaffordable, and in many metro areas, the majority of homes remain more affordable now than they have been historically for buyers making the area’s median income.’
“As affordability worsens, we’re already beginning to see more of the kinds of worrisome trends we saw en masse during the years leading up to the housing crash. These include a greater reliance on non-traditional home financing, smaller down payments and a greater pressure to move further away from urban job centers in order to find affordable housing options,” Zillow Chief Economist Stan Humphries said in a statement. “We’re not in a bubble yet, but we’re beginning to see the early signs of one in some areas.”
This blurb has a problem with the definition of the word “median”, though.
‘Inspired by late-night infomercials, corrections officer Jacques Kelly wanted to become a real estate mogul by picking up rundown properties in New Haven. He was uneducated. Naive. Andrew Constantinou, working as a Madison loan officer at the height of the pre-recession housing bubble, was drowning in a flood of real estate transactions. He was overworked and careless.’
‘Both men were duped by a group of liars and cheats, and ended up arrested for crimes they didn’t commit. That was the picture painted by the two men’s defense attorneys during opening statements.’
‘Special Assistant U.S. Attorney John McReynolds introduced the government’s case in the prosecution’s opening statement.
“Jacques Kelly and his coworkers wanted to invest in real estate,” McReynolds said. “They wanted to buy and sell houses and make millions. Only they didn’t have any money.”
‘So they deceived lenders to giving them money, McReynolds said. “The deception was so complete that lenders gave more” than Kelly and his co-workers were paying for houses. “What that meant was that while they were supposed to bring money to closings, they got money back—$20,000, $30,000, $40,000.”
‘Kelly and his co-workers lied about how much they were paying for homes, about how many mortgages they had, and how much money they had in checking accounts, McReynolds said. “They got appraisers to put higher values on property than they were worth,” he said.’
‘Koffsky held up DVDs for the jury to see, movies on how to get cash at a closing and buy with no money down. These were the kinds of “infomercials” Kelly had been watching, Koffsky said. “These were naive investors,” Koffsky said. Kelly and his correction officer colleagues only had high school educations, maybe a little college.’
‘They “were asked to sign and sign and sign with little understanding of what they were signing,” Koffsky said. Kelly had no intent to defraud or to join any conspiracy. Kelly’s intent, Koffsky said, was just to be a real estate investor.’
‘For several quarters, lenders have been reporting low and falling delinquency rates for credit card, mortgage and auto loan borrowers, and that positive trend has opened up credit products to consumers with lower credit scores. That may be starting to shift.’
‘A greater share of mortgages were 30 to 59 days past due in the fourth quarter of 2013 than at the same time in 2012, and bank risk professionals expect credit card and auto loan delinquencies to follow suit.’
‘In a survey by FICO of bank-risk professionals, nearly half said they expect delinquency rates on all consumer loans to rise to their highest levels since late 2011. “We’ve seen concerns about delinquencies creeping up for a few quarters,” said Andrew Jennings , FICO’s chief analytics officer, in a news release about the survey. “These numbers mean more people are gaining access to credit, but we need to keep a close eye on the risk levels of these new loans. If delinquencies reach an uncomfortable level, we may see lenders pull back again.”
‘The once vibrant dairy industry in the Chino Basin has declined from more than 100 dairies just five years ago, to about 60 today. The decline is also reflected in the number of cows. It has dropped from 85,000 to less than 50,000.’
“The area has been urbanized,” said Ontario dairyman Daryl Koops. “There will still be dairies here for the next 15 years, but there is a time clock on that right now. There’s a housing sales bubble that developers want to take advantage of so they’re pushing hard also, pushing hard to get this land developed.”
It’s OK, the government will provide food.
‘Housing inventory is at an all-time low, holding at 2.6 months supply through February, according to the Houston Association of Realtors. Anderson said that the influx of buyers from out of town contributes to inventory not growing — they’re not listing a house for sale here when they buy.’
‘Morgan said that inventory in the Memorial villages and River Oaks is “astonishingly low” and that the high-end is driving the market right now. “We could sell a lot more homes in Memorial, River Oaks and West U but there’s nothing to sell,” she said. “It’s a feeding frenzy when one comes on the market.” But, she said, the entire market is “hot as pistols.”
“Even homes under $500,000, if it’s in a good school district, will have multiple offers,” Morgan said.’
‘Anderson agrees. “It’s not just a high-end phenomenom,” he said. “It’s all markets.”
‘Can it be possible to have a housing bubble in developing countries? One indication is the soaring price of properties in Jakarta and Bali, especially at the higher end of market. Condominium prices rose between 11 and 17% on average in Jakarta between 2012 and 2013 while luxury-housing prices rose by 38%. In Bali, luxurious housing prices rose by 20% for the same period. Housing on the outskirts of Jakarta is becoming unaffordable for ordinary Indonesians as a small two-room apartment costs nearly as much as USD $80,000 (close to IDR 1 billion).’
‘Bank Indonesia has become concerned with the surge in housing prices and credit bubble. New rules were issued to curb speculation and now it is necessary to make 40% down payment when purchasing a second house or apartment. The cause of major concern is that between June 2012 and May 2013, outstanding loans for apartment purchases doubled; jumping from IDR 6.56 trillion to IDR 11.42 trillion. The Bali branch of Bank Indonesia issued a warning in July that it was on alert for the property bubble in the island to burst.’
‘Bank Indonesia has increased its policy rate to 6.5% defining its inflation fighting and currency stabilizing imperatives. Few properties in Bali are financed and when foreigners invest, they use 100% cash. This does not mean prices cannot go down, but the bank Indonesia suspects that the high prices will be hard to sustain.’
‘Higher income and economic growth may be cited as a justification for the Indonesian property boom, but the fact lies that the economy growth itself is driven by a credit-oriented approach. Anytime the credit bubble bursts, it will take down the housing bubble with it. When this happens, it will not be pretty.’
‘Higher income and economic growth may be cited as a justification for the Indonesian property boom, but the fact lies that the economy growth itself is driven by a credit-oriented approach. Anytime the credit bubble bursts, it will take down the housing bubble with it. When this happens, it will not be pretty.’
Everyone except for members of the global central banking cartel seems to recognize the conundrum of reliance on credit bubbles to propel economic growth.
‘Jamika and her siblings had to leave the house her family was renting in South Central L.A. when the property went into foreclosure. With money so tight, Jamika moved to San Bernardino, along with three of her siblings.’
‘All around the country, the cost of housing is driving people out of places with the most economic opportunity, like L.A. They, like Jamika, are leaving cities with better job markets in search of a cheaper place to live.’
‘Jamika, who works in food service at a nearby hospital, says she probably won’t go back to L.A. In San Bernardino, she says, she can actually save some money. And she says there’s no way she could do that in Los Angeles.’
‘In the city of San Bernardino, where Jamika lives, not much looks good besides the housing prices. “San Bernardino is bankrupt,” says City Council member Jim Mulvihill. “Because of that, we’ve cut back. We had 340 on our police force, now we’re down to 240. And given all that, we’ve had a high crime rate.”
‘Mulvihill, who used to teach urban studies at California State University, San Bernardino, says there are two kinds of people who move here from L.A. There are employed people who want a house but can’t afford one in L.A., and then there are those who don’t have jobs and just need a cheaper place to live.’
‘It’s a national phenomenon, says writer Timothy Noah, whose most recent book, The Great Divergence, covers income inequality. People can’t always afford to live where the work is, he says. “You have to tackle the housing problem, but you also have to tackle the inequality problem,” Noah says.’
‘He says the example of L.A. and San Bernardino, in which people are living far away from the best jobs, shows how inequality is blocking opportunity. “People need to be able to pick up and go to where the jobs are; jobs don’t stay in one place forever,” he says. “To the extent that isn’t happening, the economy is going to stagnate. And guess what, our economy is stagnating right now.”
‘Our graph tracks all Leon County, Florida homes priced over $400,000 since the beginning of 1991, and it is clear that we went from sales in the teens to more than 500 in a single year during the height of the housing market bubble.’
‘To put that into perspective, sales of these high end homes rose 6517% from 1991 to 2005, and we now have an inventory of expensive homes that will require future buyers regardless of future mortgage interest rates. And therein lies a problem.’
‘Again, for more perspective, total home sales in Tallahassee from 1991 to 2005 grew by 112%, meaning we saw them better than double. Yet high end homes did not multiple by 2 like the rest of the market, they multiplied by 66! Are there really 66 new high end families living in Tallahassee today for every one that lived here in 1991?’
‘In 2013, there were fewer homes sold in Tallahassee than were sold in 1991, yet the luxury market was 2450% higher than in 1991.’
There are many realtoRs lying and making the claim that inventory will remain forever low because of underwater sellers who can’t sell. This is bunk because a non-selling seller is also a non-buying buyer. The fact that some people remain in place has no overall effect. The only thing that matters is first-time buyers and last-time sellers. Anything inbetween is so much fluff and nothing.
In a rise the market is set by the greedy on the margin. In a decline, the market is set by the unfortunate on the margin. There are always some in distress who must sell, walk, burn. Right now bank fraud masks this.
It should be noted that, despite the lies of realtoRs, abandoned properties do NOT cause house prices to decline. It’s the other way around. Price declines cause people to abandon properties. You cannot blame your neighbor for your losses, just because that person happened to quit paying their own mortgage.
folks missing mort payments again” yahoo
must be the snow
30 year hostage for a So. Cal crap shack!?!?!? Yer cray cray.
San Diego, CA Housing Prices Crater 9% YoY
http://www.movoto.com/san-diego-ca/market-trends/