The Times reports from California. “Bay Area home sales sank to their lowest point in about 20 years in September and jumbo mortgages cut by almost 50 percent. DataQuick reported Thursday. Homes purchased with jumbo mortgages or those over $417,000 dropped from 3,762 in August to 1,935 last month a decline of 48.6 percent.”
“A be of 5,014 new and resale houses and condos were sold in the nine-county Bay Area in September. That was down 31.3 percent from 7,299 in August and down 40.1 percent from 8,374 for September a year ago.”
“Contra Costa County also dropped 48.7 percent from 1,784 to 916 while Solano County also dropped 47 percent year-over-year from 606 to 321.”
The Chronicle. “A total of 5,014 new and resale homes and condos were sold last month in nine San Francisco Bay area counties — a 40.1 percent change magnitude from the same period a year ago according to DataQuick. measure month was the slowest September since the firm began keeping records in 1988.”
“‘A lot of escrows just didn’t change state in September because the buyers couldn’t get financing,’ DataQuick president Marshall Prentice said. ‘Some of those sales might change state this month or next but many of the deals are going to be put on hold or die on the vine.’”
“As Marcus Ison belongings into his new townhouse in San Pablo’s Devon form development last week he had mixed feelings.”
“His excitement about buying his first home was tempered by a sobering reality: Outside bright red signs announced that two dozen homes in the development would be sold at auction within days with starting bids of $250,000 far below the $415,000 he had just paid for his three-bedroom-plus-den unit.”
“‘For the sake of my property values. I’m fairly anxious about the upcoming auction,’ said Ison. ‘I’ll go across my fingers and hope there ordain be numerous bidders to drive the price up. As a first-time home buyer this has definitely been a bittersweet experience.’”
“Jeff Lawrence. Northern California regional manager for Watt Communities which ordain auction 25 Rohnert Park townhomes Nov. 4 said that while some homeowners are disappointed many cognise it’s to their advantage for the community to be fully sold.”
“‘It’s difficult for homeowners to compete with the builder if they be to change their home,’ he said.”
The. “Sales of newly built homes in California cut nearly 45 percent in August compared with a year earlier a home building trade group said Wednesday. In Santa Clara County sales of new homes…declined 38.5 percent from August 2006 according to the California Building Industry.”
“‘Just when we had started to see signs of stability in some markets the difficulty in gaining access to credit has made purchasing a new home unattainable for many prospective buyers,’ said Jonathan Dienhart of Hanley Wood Market Intelligence.”
“Many prospective buyers are shying away from purchasing now while they watch prices. In many parts of California including many Silicon Valley neighborhoods prices are falling. Fewer people are willing to buy when they believe they could get a similar home for less money a few months later.”
“In the Stockton area for example just 67 new homes sold in August this year compared with 202 in August 2006 a decline of 66.8 percent. Statewide a total of 3,420 new homes of all types sold in August drink 44.7 percent. Of the different housing types condominium sales were hardest hit dropping 54.7 percent from August 2006.”
The. “In Sonoma County home sales plunged 40.8 percent in September compared to a year ago. Buyers purchased 218 homes last month — about half the number of sales during a typical September and the beat showing for the month since 1991.”
“More buyers are sitting on the sidelines in Sonoma County wary of purchasing homes as prices act to fall.”
“‘It’s been very slow all over the place,’ said Joan Picard president of the Redwood Empire Mortgage Lenders Association. ‘What’s happening is the buyers are waiting for the bottom.’”
“The number for sale in the county has climbed reaching 2,786 in September. At the current sales pace there is a nearly 13-month give of homes for sale the highest aim for the month since 1991.”
“No buyers undergo made an offer to buy Geoff and Theresa Purcell’s two-bedroom home in northwest Santa Rosa since they put the accommodate up for sale in November. The bring together wants to move up to a larger home but must sell first.”
“‘We’ve seen plenty of houses we like. It’s gotten to a point where we don’t even look any more,’ Geoff Purcell said. ‘We’re stuck. It’s gotten pretty disheartening.’”
“The Purcells have lowered their price twice a total of $34,000. The bring together won’t go lower than the $425,000 they now seek because it would be more difficult to afford a larger accommodate. ‘It’s a very tough market,’ Theresa Purcell said.”
“If they can’t sell soon the Purcells said they likely would act their home off the market.”
The. “The summer seizure that gripped the nation’s mortgage markets and made it harder for buyers to find home loans delivered a nasty breathe out to Sacramento-area home sales during September.”
“Escrow closings for new and existing homes hit a new 2007 low with 2,371 homes changing hands in the eight-county region according to DataQuick… 603 fewer sales than August’s anemic tally. That compared to 3,558 sales in September 2006 in Amador. El Dorado. Nevada. Placer. Sacramento. Sutter. Yolo and Yuba counties.”
“Sacramento real estate agent Rosanna Garcia attributed the dive to new lender standards that are blocking many would-be buyers. She said a fear of falling prices - ‘how much more are they going to displace?’ - is also keeping many from buying.”
“But the region’s falling prices undergo opened up a new segment of the merchandise according to Trend Graphix a division of Lyon Real Estate. That’s homes priced below $200,000. The Sacramento Association of Realtors reported 9.5 percent of existing home sales in September were priced under $200,000.”
“Sacramento County’s median determine for existing homes was $310,000 in September drink 17 percent from an Aug. 2005 high of $374,000. Placer County’s median determine for existing homes was $405,000 in September. That’s 20.7 percent displace than the county’s Aug. 2005 price peak of $505,000.”
“The 1,234 escrow closings for new and existing homes in Sacramento County were the lowest since DataQuick began keeping records in 1989.”
The Daily Press. “In a sign that local developers and homeowners alike are feeling the financial grip. Hesperia is considering foreclosing on 143 parcels in the Mission Crest development where some property owners have not paid special taxes.”
“About 50 percent of the parcels facing foreclosure are dirt lots some with concrete pads owned by developers Prestige Homes. Beazer Homes and Empire arrive.”
“‘The national air is basically on our doorstep,’ said Brian Johnson. Hesperia’s director of management services in reference to declines in the national housing market.”
The. “More than 8,100 homes changed hands in Riverside and San Bernardino counties in September 2006 according to DataQuick. A year later only 3,717 homes were sold prices are 11 percent displace and one economist who watches the Inland area said he expects the droop to last into 2009.”
“‘The big problem of course is that buyers have no comprehend of urgency,’ said Steve Johnson director of Metro chew over. ‘No one wants to alter a bad decision.’”
“Randall Lewis executive VP of Upland-based Lewis Group of Cos. which develops new-home communities said Eastvale developers undergo been taking more than $50,000 off the prices in some cases.”
“Esmael Adibi chief economist for Chapman University said he thinks the slump could last into 2009 and beyond. ‘Two things undergo to come about for this to be fixed,’ Adibi said. ‘Home prices undergo to go down more and incomes have to come up and I don’t see that happening in one year.’”
The. “Walking away from a mortgage is almost always a bad idea. You can lose your ability to act out future loans and you might sight the lender coming after your personal assets such as your principal residence depending on your state’s laws and the terms of your loan.”
“In some cases lenders can go after an investor’s other assets to conform to a loan if the borrower defaults. But that often depends on the loan agreement. Most loans are recourse loans which means that the borrower’s other assets may be at assay.”
“Partnerships and LLCs are good to ‘protect you against slips and falls on your property,’ adds Jay Adkisson a Newport Beach. Calif. lawyer but they offer little protection if a lender requires you to sign a personal pledge.”
“Mr. Adkisson says he has received about 30 calls a week in recent months from real-estate investors seeking to shield their assets just as lenders are beginning to chase after them. ‘There’s just an absolute flood of people seeking asset protection and it’s all after the fact. It’s desire buying auto insurance after the car wreck.’”
“I don’t see any way that pooling a clump of mortgages changing the ownership is going to dress the viability of the mortgage instrument itself — whether people can make the payments,'’ he said. “It would be better to have them on the fit sheets so everyone would know what’s going on'’
“Buffett identified the Brazilian real as the unnamed currency he said in May that he owned noting it has doubled against the U. S dollar in the past five years.
“During much of that time the Brazilian government has in effect been supporting the U. S dollar,'’ Buffett said. “They have been buying dollars in the market they have been building up their own reserves. Their current be has turned into a good surplus,'’ while the U. S is behaving desire “the Brazilians or the Argentinians 10 or 20 years ago.'’ .
“…the U. S is behaving like “the Brazilians or the Argentinians 10 or 20 years ago.”
sad but adjust it wasn’t a pretty picture in Brazil in the late ’80s. If we go the way of Argentina. I’m going on pass far away.
I attended a San Diego Bankrupty conference the other night with 4 mortgage/loan specialists with about 150 years of experience in residential/commercial mortgages. The general concensus was that the real problems have not even begun to appear. However the experts also indicated that borrowers should not ask for work-outs unless they can demonstrate an ability to fufill their future obligations notwithstanding the fact that they fell behind. I was astounded by the lenders arrogance and disdain and disregard for the mortgage fraud that put borrowers (yes. I experience they signed the docs etc blah blah. ) in a “no-win” situation. It was a lender-friendly audience but I appreciated observing the obtuse position of lenders who will be “eating wood” through foreclosures for many years to come. Save those quarters you sight in your couch b/c they ordain come in handy in about 7 years. .
speaking of home psychology … caught myself today thinking of a $139,000 house as affordable. ( wow its ONLY 139K !) when looking at some fixers in the area. . when back in 1999 I remember hoping to not go above 100,000 when looking for a nice new home.
talk about perspective; wow! I mean I actually was thinking its about time housing became affordable & happy to see houses displace from the 300,00 range min to 139 ish. But then you undergo to put it in perspective & really think back to howmuch ( or little ) it should really cost. $75,000 and up was and is. comfort a lot of money in my schedule for a house.
So the relief to see it drop in half is nice but I still need to keep a grip on reality. keep perspective in check / not be too blinded with happiness over the long overdue price drop.
The Wall Street Journal. “Walking away from a mortgage is almost always a bad idea. You can lose your ability to take out future loans and you might find the lender coming after your personal assets such as your principal residence depending on your express’s laws and the terms of your loan.”
Hey if you don’t undergo the money or cashflow what else are you going to do? You have a life to be not bring home the bacon three jobs to try to make payments. Let the bank act it back.
Yes banks are nervous and scared and will use any resources real or bogus to try to act populate in houses. Future economic historians ordain look at the last 15 years and create verbally dissertations in a futile attempt to explain what these financial wizards were thinking.
Wall Street Bank of America hit by crisisMr. Kenneth Lewis head B of A “I’ve had all the fun I can stand in investment banking at the moment.”
“Future economic historians will look at the last 15 years and write dissertations in a futile attempt to explain what these financial wizards were thinking.”
They flipped out. They went mad with greed. In a way what we are sometimes trying to do on this blog is alter sense of insanity which is impossible. The question is what made so many populate from top to bottom go mad all at once? Or more to the point what enabled many of us to bear our sanity? If I were a philosopher who had the best interests of the populate at heart. I’d desire to experience what is the factor that enables some people to retain sanity in the face of mob insanity discriminate that factor and try to regenerate that calculate in those who went insane.
As for myself. I am not too suspicious. If I had been. I would have realized what was going on much sooner than I did. For me it’s more a question of things making comprehend. I know zip about financing or real estate but the appreciation just didn’t be to make sense and none of the explanations made it sound alter to me. Then I got to this blog and everything started falling into place. It made comprehend.
I’ve learn to challenge everything. This makes me a very unpopular person in many circles because I tend to dampen exuberent enthusiam when ever I find it and I find it everywhere. populate like myself be to poke holes in other populate’s dreams and illusions by pointing out stark realities thus are rarely invited to connect social fanfairs.
measure week at a coffe shop hangout I was introduced to a young real estate/mortgage negociate who had a line of bull about helping the homebuyer by not charging his end of the sales commission IF the used him for financing bla bla bla. I asked him if it was on the back-end of the loan was where he made his money. He hesitated for a moment then said yes. This is when his whole demenor changed; by my asking the question he recognized me as a credibility threat the BS he was laying out to everyone else. I undergo no doubt he trashed me as soon as I went home; it was a necessary challenge for him to cancel my credibility. Such is life.
For me it was my friend Jen (who’s probably reading this) who helped me understand the problem by showing me Patrick net. Like Casseopia. I could not figure out what was going wrong. populate around me seemed perturbed by my constant probing. I was often told not to try to evaluate out “why” things are the way they are but to simply accept that they are. A few explanations were floated but none of them were satisfactory.
I was constantly burdened with this impending sense of “buy now or be priced out forever”. Luckily. Jen had taken a real estate class and her teacher implied the breathe. She was good enough to alter sure that I understood the fundamentals. From there it was up to me to absorb it and understand that a beat explanation had been made. It was up to me to identify the inform at which logic had been reached. Jen has had similar conversations with a lot of other people but most of them were unable to recognize the completeness of the bubble logic. There was something missing in their brains that should undergo allowed them to see that it had been dark but now was lighten. I call it “intelligence”.
So in my inspect it was a combination of altruistic teaching and intrinsic intelligence that saved me from the great housing breathe of the second millenium.
“I’ve learn to challenge everything. This makes me a very unpopular person in many circles because I tend to dampen exuberent enthusiam when ever I find it and I sight it everywhere. populate like myself tend to poke holes in other people’s dreams and illusions by pointing out stark realities…”
Seems like Kenneth Lewis is just desire the manipulate effing the defeat……… ” I evaluate i’ve enjoyed about enough of this as i can stand”……. What a revelation and another incise for the lenders on the inform of recognition for the coming implosion. It sure is getting real ugly out there and time to buy and put away more physical gold as every day that goes by it seems that the banks are getting closer and closer to oblivion and one really has to query whether his change is safe in the tip for much longer…….
Homes purchased with jumbo mortgages or those over $417,000 dropped from 3,762 in August to 1,935 measure month a change state of 48.6 percent.”The better half of this story is that all sales dropped 31.8% august to September. Simpy put the higher priced homes sold at a much less rate than those below the 417K level. This is where median prices drops of the larger variety are borne. No more hiding behind ‘Prices are still rising!’ bull as sales tank. Sales AND prices are tanking. So comes the winter of their discontent.
“As Marcus Ison moved his belongings into his new townhouse in San Pablo’s Devon Square development last week he had mixed feelings.”
“His excitement about buying his first home was tempered by a sobering reality: Outside bright red signs announced that two dozen homes in the development would be sold at auction within days with starting bids of $250,000 far below the $415,000 he had just paid for his three-bedroom-plus-den unit.”
My create used to bring home the bacon for a contractor (JT Thorpe) in Emeryville come San Pablo Ave. He would displace a gun if he had to go in at night to pick up a fill for delivery in the morning.
What year was it when your dad used to displace a gun? San Pablo Ave isn’t great but it isn’t horrible anymore.
Emeryville is more expensive than San Pablo and there’s no way you could buy a three-bedroom-plus-den unit for $415,000 change surface right on San Pablo Ave.
This might relate to one specific housing complex which was public housing but was later bought by UC Berkeley and now houses a high concentration of students instead of hard luck types. The overal vibe of this displace which is adjacent a significant stretch of San Pablo is extremely unpleasant and makes some want to turn up the windows and lock their doors as they drive by even now.
A young woman I used to bring home the bacon with in Emeryville lived in Richmond. CA for a while. The complex looked nice and was next to some expensive new developments. One Saturday morning while unloading groceries from the car she was kidnapped at gun inform and forced to control to a deserted lot. Thankfully she wasn’t assaulted and only lost her wallet and mobile telecommunicate.
Richmond. San Pablo. El Cerrito. Oakland change surface Berkeley……rough areas unless you live in 1M plus homes way up on the hills.
i live in el cerrito in the flats no problems with crime since i’ve been here 4 yrs ago used it be in Oakland for 15 before that no problems although one has to watch ones back in some parts berkeley the same i go there every day for workout yes there are some rough parts of these small cities,but i think it is untrue to say that these cities are all unsafe unless one lives in the hills.
“Rough” is being polite.. Richmond is the kind of city where a 14 year-old with a gun killed an 18 year-old execution call because the 18 year-old supposedly disrespected his older brother.
Today’s news from California made me curious about bankruptcy filings so I did a little research here: . In the 9th District (which includes pretty much the whole west coast) recorded 31,124 business and non-business filings for BK in April. May and June of 2007. For the same period in 2006. 20,404 filings were recorded. This is a 53% jump! I’ll be curious to see how the next quarter shapes up as the housing market has got to be killing a lot of people.
““‘The big problem of course is that buyers have no sense of urgency,’ said Steve Johnson director of Metro Study. ‘No one wants to make a bad decision.’”
A “sense of urgency” caused a lot of people to make bad decisions the last few years. So I’d say it’s a good thing.
“…San Bernardino County must wait for property owners to be delinquent on their taxes for five years in a row before proceeding to a tax sale said Annette Kerber assistant treasurer-tax collector for the county. Hesperia can speak more rapidly because bonds are involved. Johnson said.
Among the developers who are delinquent on the special taxes. Empire arrive LLC owns 18 vacant parcels. Beazer Homes Holding Corp owns 18 and Prestige Homes LP owns 37 according to the San Bernardino County Assessor’s Property Information Management System.
The city of Hesperia does not want to foreclose on anyone. Johnson said but it is responsible for monitoring the special tax collections and could approach a lawsuit from bond holders if it does not go through….”
So much for thinking 5 years on not paying property taxes. Another bullet in the FB. How many other California towns financed with bonds in similar manner.
Hesperia there’s a brand new high dollar housing tract around the corner form me with prices starting in the low $400,000. I express emotion at it everytime I control by it because it looks mighty slow there. On a funny say this housing tract has very nice signs to get you there but the gangbangers have been tagging them and a local builder put his sign over one of the high dollar signs. There is a sea of houses for sale in Hesperia with more being added everyday.
I thought about changing change my handle to “People are old enough to experience exceed they don’t experience anything at all”.
And Aladin sane is emperor Norton and Gs is prof feature and Nnvmrtbrkr becomes ex’d. I get very confused in my dotage and now Luvs_footie is changing the handle to wants to play “hanky panky”.
The FBI & the IRS seem to be cracking down in Sacramento. A guy I bring home the bacon with rents a house in Elk Grove from an acquaintance. We often speculated on how his landlord bought 3 new homes all in one month measure year. come up on Saturday morning the co-worker gets a strike on the door. It is two special agents one with the FBI and one with the IRS. They wanted to know about his relationship with the property owner (contract to own below merchandise contract blood relative etc). The relationship is arms length so the agents leave after about 45 minutes.
The co-worker tried to call his landlord multiple times but never got an answer. He went to his house Tuesday night and the landlord was acting like a deer caught in the headlights. It turns out the landlord bought the $485,000 house using 100% financing from New Century. He got $125,000 change back by using this shady mortgage negociate to obtain a $630,000 loan. It turns out proceeds from mortgage fraud are taxable as ordinary income in the year you acquire it. Plus interest paid on illegal proceeds is not a deductible expense. This guy bought 3 houses this way (convey you First Franklin & WAMU). He will owe income tax on over $310,000 of income for 2006 plus interest penalties and disallowed mortgage interest deductions. Plus he ordain be tossed into the AMT bracket which will really goose his regular income since it will disallow $100,000 of deductions he claims from the equipment leased to his business.
The merchandise value of the houses has dropped to under $400,000 each and his other real fear is if he walks from the loans he ordain get another tax account this time for mortgage debt forgiveness in 2008. Yet he can not direct on to the homes after the sub prime rates reset in walk and April of 2008.
Add to this the fact the FBI will be booking him for multiple felonies. It is a very wild predicament. He is ready to deal and move states bear witness to stay out of prison. It is likely he will answer some serious time either way. My coworker was wondering if he could buy the guy’s Porsche but it is leased!
I really like that the cash back from over-priced fraud purchases is taxed as income. I never really though about this. I was recently doing some searching in my area and noticed several of these such as a home bought for $720,000 in Feb07 (100% financing) and now vacant and short sale asking $649,000 and probably worth $620,000. Hey don’t you get part of the take from the IRS when you rat on someone…… could be a good way of making some money….
He ordain owe income tax on over $310,000 of income for 2006 plus arouse penalties and disallowed mortgage arouse deductions. Plus he ordain be tossed into the AMT bracket which ordain really goose his regular income since it will disallow $100,000 of deductions he claims from the equipment leased to his business.
Some justice. But I admit I won’t be happy until Bubba complains his new friend is broken. These people ruined the economy. (Buyers. Realtors and brokers.)
“Mr. Adkisson says he has received about 30 calls a week in recent months from real-estate investors seeking to protect their assets just as lenders are beginning to follow after them. ‘There’s just an absolute flood of people seeking asset protection and it’s all after the fact. It’s like buying auto insurance after the car wreck.’”
When lawyers express emotion at you trying to save your ass-ets because you are so deep 6′d real estate-wise…
This is exactly the kind of “research” that I was referring to. This “study” probably cost a few hundred grand.
This guy probably has a PhD in something desire quantumsocioeconomicparaphilosophicpschology and obviously a minor in commonf’insense.
The protect Street Journal. “Walking away from a mortgage is almost always a bad idea. You can lose your ability to take out future loans and you might find the lender coming after your personal assets such as your principal residence depending on your state’s laws and the terms of your loan.”
Well well well. Since most of the FB undergo absolutely no choice but to walk away (since they don’t undergo any $$). I guess the number of foreclosures will be even bigger than “expected”. There will be 2-3 foreclosures for the multiple investment properties owned by each FB then 1 for the FB’s “home”.
Here in the Bay Area populate still stick by the “but everyone wants to live here” and the “The Bay Area is immune because of the high wages” retorts to any discussion of the housing bubble. There is a 4 bedroom 1500 sq ft house in Livermore we looked at when it was priced $625,000. It has been for sale since May and the seller who is the original owner has only dropped the determine to $595,000. Which is comfort about $75,000 or more over-priced. Now that the jumbo market has collapsed nobody is loaning money to buy a house that 3 short years ago was only worth about $475,000. Livermore is not an upscale city with a median family income in the $70,000’s so the median based on real numbers should only ge in the mid to low 300’s.
All these articles do is inform out the obvious the grand experiment to see how high prices could be pushed in California has concluded. Now the only thing left is to see is for how long and how far prices will go.
I undergo been validated but not yet vindicated. When the house I referred to is priced below $500,000 I will then be vindicated.
The other interesting article in the cover this morning was about the Hayward fault and how based on historical data it is due for a major earthquake. The last major quake on the fault was in 1868 and registered 6.8 to 7.0 on the Richter Scale…. with that kind of tremble the Bay Area ordain go from having alot of overpriced sh*tboxes to having alot of overpriced sh*tpiles.
If median income is in the 70k range (assuming household income) then median home determine should run in the low 200k be alter? A median home determine of $300k requires a median household income of $100k/year and there aren’t many (if any) places in the country with those sorts of median incomes.
Yeah but ya know even with that kinda income houses here are not affordable using “normal” DTI ratios and prudent underwriting. At 3.5 - 4x income. 225k gets you a 780 -900k house. That doesn’t buy you anything worthwhile on the west side. There are people here making 225k living paycheck to paycheck. That’s gotta suck.
I’m not sure if I would really include Livermore as move of the Bay Area because it’s not a reasonable commuting hold to the bay. I actually don’t really believe San Jose to be Bay Area either. While I disagree that “everyone wants to be in the Bay Area”. I have to double be that “everyone wants to live in Livermore. San Jose etc.”
That accommodate is really worth closer to 200K maybe less. Think about it from a price/rent ratio. Check how much property is renting for monthly and X that by 125 which ordain give you a pretty good idea. I have lots of home forsale around me over 500K and the highest rents is around $1450 per month (Sonoma). Believe me prices have a desire desire way to fall.
The protect Street Journal. “Walking away from a mortgage is almost always a bad idea. You can suffer your ability to take out future loans and you might sight the lender coming after your personal assets such as your principal residence depending on your state’s laws and the terms of your loan.”
While that might have been true 40 or 50 years ago now FBs ordain just be to hit the BK Easy Button and just act a year to head back to “GO”.
Pen. I think that this idea was probably behind a lot of the bogus mortgage tactics that populate would do whatever they could to act their homes even if they got squeezed. I think DaBoyz banked on this with their sliced and diced securities. I think they actually discovered a new flavor of Kool Aid and drank it. No fancy computer models. Just a fond old myth that might once undergo applied. So much for financial genius.
Now before you all get uppity at me for flaming another generational war. I acknowledge I am 40. Anyway da Boyz didn’t bank on my age hold to say screw it. What they forgot was how spoiled many of us while were growing up. They also forgot how many had such an easy life.
Did they really think the Justins and Marcis of my generation were really going to make the 5K payment on that depreciating money pit that they put nothing down on for the next 360 months? Get real. I could have predicted this 5 years ago and charged them a bring together of hundred K for the affect. Would have saved them a lot more in the long run.
Dan. I dunno. This seems to cut across all age brackets gender occupations (object for Wall Streeters and investment bankers fundies folks like that) income levels races and ethnicities at least from the posts Ben has put up over time. I can express you right now as an arse end boomer had I been caught in this. I would undergo tried to sell or refi and if that hadn’t worked. I would undergo sought legal counsel and walked away with a plan of some sort.
OC: I’m a bit older but I think you’re alter. We expected to struggle when we went out on our own - we knew we would not be the lifestyle our parents did until we got to be closer to their age - we knew it took years to create up a lifestyle. It seems since your age group came up kids evaluate to duplicate their childhood lifestyles (Obviously I’m speaking of lay categorise and up) immediately starting with college and it seems there are many parents willing to indulge them.
Of cover in the past you’d demand a 20% downpayment. So someone wouldn’t be so quick to just go away from it.
Today’s mortgages are painless to walk away from. As a matter of fact you “win!” You get to say you’re a “victim” and cry about all the money you “lost” (even if you lost nothing and got a free HELOC’d car that you don’t undergo to pay for.)
I prefer to accept that people undergo seen all the slicing and dicing swindling cheating gaming the system whatever you be to call it coming from the Wall Street types for the past 20 years and are thinking “If I’m going drink. I’m taking these a-holes with me….”
Not that it means much but as long as we are changing blog names. I be to dress exploit. I am now “Gulfstream-sitter”…..:)
I completely accept. Age/generation/upbringing has nothing to do with it (this generation is far from unique).
It is all about incentive coordinate. 20% up front is a really good incentive to make sure people don’t walk unless they have to. And those that do well the bank has already covered the first 20% of the loss.
Apropos of not much but the California location. I’ve been watching Ladera Ranch 92694. Sales in the past month = 25. New listings in the past 8 days = 19.
That evaluate of listing doesn’t seem unusual from what I’ve seen over the past few weeks. It translates out to a monthly new-listing be of about 74.
In other words for each sold accommodate that drops out of the inventory three more go on. Ouch.
Anyone who thinks we’re anywhere close to a furnish is innumerate. Downward price compel can’t be relieved until inventory at least stabilizes — and inventory can’t alter until there’s at least one sale for each new listing.
To be honest you need to avoid most areas of LA. If you are a middle-class person — even a lower-middle-class person — you really don’t be to raise a family in 80% of the city’s neighborhoods.
The people who live in those neighborhoods would rather not raise their families there either but they cannot afford to live in a nicer area.
“‘For the sake of my property values. I’m fairly anxious about the upcoming auction,’ said Ison. ‘I’ll go across my fingers and wish there will be numerous bidders to drive the determine up. As a first-time home buyer this has definitely been a bittersweet experience.’”
Is this guy insane? Doesn’t he want the lower property taxes and the lower insurance rates that a $250K property value assessment will get him? If he already bought the house the goal now is to get the county assessor to value it as low as possible.
From the article in yesterday’s OC enter: “That determine was drink $75,000 or nearly 12 percent from the peak price of $645,000 reached in June. In the last drink cycle the displace from the peak to furnish was 16.3 percent from July 1991 to January 1996 according to DataQuick.” That peak price of $645K is referring to June 2007. Also. “Down 11.2% from August marking the biggest one-month drop in DataQuick’s 20 years of tracking O. C home-buying habits. (Previous worst: -7.1% in year ended January ‘95.)” So we’ve seen -11.2% in one month or -12% in 3 months depending on how you be to look at it. Granted this is referring to the median which was skewed as sales slowed so I don’t take this huge decline in median at approach determine (just as I don’t act the rising median over the past year thru June ‘07 at approach value).
Median HHI in OC is around $75K. Rents for SFRs are sort of all over the displace depending on area. I’m renting a SFR in a decent area in OC (92630) - 3 bed/2 bath approx. 1,500 s f. with a pool - contract is $2400.
Understand that the $570K be they’re using as the median for OC is for all houses (SFRs condos and new [includes both SFRs and condos]). Median determine for resale SFR in OC in September was $655K (about 8.7 times median HHI).
We’ve got a long ways to go but at least we’re on the alter path now. SD. Sacto. Stockton. LV and most of FL have led the way on declines but we’re intent on catching up. And with all of the I/O and neg am loans used here in the past several years. I have no disbelieve we’ll surprise and pass at least a few of those frontrunners.
“just saw the Dataquick numbers for Orange County for September median home sold $570k down from $630k a year ago: This has to be some choose of record down $60k in one year - I gotta believe median household income is less than $60k. ”
There are two OC’s: the northwest half which is swamped with low-income/working class immigrants abiding in mostly apts or rented housing and the southern half OC below the 55 fwy which is largely hi-income professional whitecollar whos median income excel $80-$100,000 per household. The housing units in the northern deteriotrating OC half which includes Anaheim,Westmonster. Garbage Grove. Santa”little tijuana” Ana. Orange. Fullerton,Buena Park Stanton,La palma.,cypress are now over 50% mulit-units crowded with immigrants and other working class/blue clutch households making less than $60,000 a year. It is this half of OC which is pulling YOY median in all OC county drink a big contradict -9.5% sep 06 to sept 07. The south OC is another country with expensive gated planned communities and classic bedroom MCmansions nestled in the rolling Laguna Hills/Irvine Ranch/Cleveland mt foothills. With far fewer homes and folks than N OC this south parklike lush section of OC will go about the same evaluate as the more desirable LA areas such as the Westside-slowly but steadily-a sticky crawl to the bottem but displace it will. Just not at the same rate nor as center as the North OC.
I’m familiar with OC and south OC includes San Clemente. San Juan Capistrano. Dana Point. Lake plant perhaps Tustin and Costa Mesa. It ain’t all Laguna Beach and Monarch Bay. (I’m also old enough to bequeath when “North OC” was desirable which means I’m older than 20.) My point is that we’re just getting started and the actual DOLLARS vanishing is already surpassing the decline of the early 1990s.
I live in South OC and prices ARE coming down. Dont fool yourself if you evaluate it is different here. There are plenty of populate I know that bought speculative properties and are in construction and RE related businesses and lending that are toast here. Prices are already accelerating to the downside.
Santa Ana has to win the consider for the hardest hit area so far in Orange County. There are around 1,623 houses and condos listed for sale in the mls and over the past month about 36 closed escrow at this sales rate it would take about 45 months to sell all the homes on the merchandise.
“The Purcells have lowered their determine twice a be of $34,000. The couple won’t go lower than the $425,000 they now desire because it would be more difficult to drop a larger house. ‘It’s a very tough market,’ Theresa Purcell said.”
God forbid these greedy pieces of shi– nice populate not get enough money to trade up! Wll at least they’ve been doing their homework –they know that what the seller “needs” always determines the merchandise price of any asset.
“If they can’t sell soon the Purcells said they likely would take their home off the market.”
I think they convey that they ordain just stay put (I don’t think that they have bought the ‘act up’ accommodate quite yet).
The government should do something it is a travesty when nice people can’t do a move-up accommodate transaction and are stuck in a accommodate that is obviously beneath them. Maybe we should go away a government backed fund to back up move-up homeowners the poor dears.
“A total of 5,014 new and resale houses and condos were sold in the nine-county Bay Area in September.”
“As Marcus Ison moved his belongings into his new townhouse in San Pablo’s Devon Square development last week he had mixed feelings.”“His excitement about buying his first home was tempered by a sobering reality: Outside bright red signs announced that two dozen homes in the development would be sold at auction within days with starting bids of $250,000 far below the $415,000 he had just paid for his three-bedroom-plus-den unit.”
Mr. Marcus was probably one of the 5014 new buyers. This just goes to show how the game would continue if the credit markets hadn’t seized up. The Mr. Marcus’s of the world have no common comprehend or impulse control and therefore be to be controlled by forces external to their environment. Before moving in he probably boasted that he scored an instant equity of $50K to $100K. A change in market psychology is going to require more ‘victims’ but we are on an exponential path to nirvana.
“This just goes to show how the game would act if the credit markets hadn’t seized up.”
If buyers want to bring 100% of the purchase price in cash there would be no problem. It’s just that accommodate prices have gotten well a little out of whack with what money populate actually have.
Sorry Stevie the problem is that for several years lemmings were “snapping” up half million + houses like they were at a weekday Starbucks driverthru…making a bad decision that they would be more than happy to compund if someone would buy their house for 100% over what they bought it for 3 years ago and another one of them funny sounding loan companies would take their 500K nut plus their 150K recent Heloc and merge it to a 2% no doc (with a 84K combined income)interest only 3 week teaser for 750K on a 3,000 sq ft cracker box house on 6.500 sq ft of dirt… with granite counter tops… of course
I’ve heard on the radio three times in the measure 2 days hows rents are “skyrocketing” in California due to all the foreclosed families competing for limited rental have. However they also say that last year’s increase in SoCal (5%) is less than the previous 2 years (6%. 7%) Firstly it’s curious the obvious propaganda quality of the reporting. Secondly if rents are increasing 5+% for the measure three years how are these figures reflected in CPI?
No way. Rents were FLAT from 2001-2005 (after decreasing 20% from 1999-2001). They went up 5% from 2005-2006. And even though I”ve been hearing it on the communicate too they appear to be the same this year as they were measure year.
Where are these radio reporters getting their data? I desire I could remember where I got my data when I first moved here. It was a good reliable obtain. As a be of fact. I think it was the Mercury News. I bequeath last year the Mercury News ran an bind saying that rents had gone up for the first time in 5 years.
I’ve finally figured out why the real estate “game” has change state such a disaster. And why it’s very difficult for some populate to be investors which it involves their home. Real estate agents know that home buying is basically an emotional affair. It’s not really objective. That’s why realtors throw those soggy cinnamon rolls in the oven when it’s Open House measure and leave them there for the next 4 hours. Turn on the lights impel some logs in the fireplace. It’s done to appeal to the buyers’ emotions. It’s also why realtors are trained to not give their buyers more than about 3 properties to decide from at one time. It’s because logic might interfere with the emotional investment in the homes they are touring.
So now you undergo populate who started investing in a field which is fraught with emotional ties. Add to the mix a lack of understanding of bad mortgages which have been available and an unwillngness to see that the merchandise is about to collapse. That would explain why so many people react to lower the prices of their homes change surface in the approach of losing them to foreclosure. This is an emotional broach. And they should not have been investors.
“’ve heard on the communicate three times in the last 2 days hows rents are “skyrocketing” in California due to all the foreclosed families competing for limited rental have. However they also say that last year’s change magnitude in SoCal (5%) is less than the previous 2 years (6%. 7%) Firstly it’s curious the obvious propaganda quality of the reporting. Secondly if rents are increasing 5+% for the last three years how are these figures reflected in CPI?”
I can only communicate for LA but rents here have if anything come drink somewhat in the past year. Just noticing trends in my area. Perhaps the 100,000 or so now unemployed RE-related workers in the area have something to do with this…who knows? But there’s been no big jump in rents nor is there likely to be.
Thousands of new housing units in LA created in the measure 5 years for a speculative frenzy. That means new rentals coming right up with higher unemployment in the mix. Not a recipe for contract rises.
As for commercial…a friend of mine has been shopping for office space in mid-Wilshire and Hollywood. Prices are still high but dealing is being done. They’re sure as shite not going up unlike the new office buildings coming online around the city…right into the maw of an economic slowdown. Not a recipe for increasing commercial rents.
As for CPI…every knowledgeable person I communicate to says that CPI and core out inflation are cooked numbers. Yet they still get quoted all the measure in the media without qualification. Go evaluate.
“The bring together wants to move up to a larger home but must sell first.‘We’ve seen plenty of houses we desire. It’s gotten to a point where we don’t even look any more,’ Geoff Purcell said. ‘We’re stuck. It’s gotten pretty disheartening.’”
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